Exercise 5: USE OF COST SHEETS

Siboney Furniture, Inc. started its operation in 200C and has requested for your assistance in
costing the different jobs it processed during the first two months of the year. Based on estimated
factory overhead figures, the same should be charged at the rate of ₱25 per direct labor hour. Desired
gross profit is 33-1/3% of selling price.

The jobs worked on in January and February and the corresponding direct charges are as follows:

January, 200M

Jobs accepted:
Job Order No. 001: 250 narra chairs for Lauro Miguel
Ordered January 5 and needed on February 10
Date started: January 7
Date finished: February 8

Job Order No. 002: Ten (10) of mahogany bar stools for Delia Ruiz
Ordered January 8 and needed on January 30
Date started: January 10
Date finished: January 26

February, 200M

Jobs accepted:
Job Order No. 003: 10 narra sala sets for Interiors Supreme, Inc.
Ordered February 10 and needed on March 20
Date started: February 12

Job Order No. 004: 5 mahogany and narra beds for Milan Furniture, Inc.
Ordered February 15 and needed on March 31
Date started: February 16

Direct Materials issued:

Date Requisition No. Job Order No. Amount

Jan. 7 R-001 001 ₱ 12, 000
10 R-003 002 6,000
12 R-004 001 8,000
26 R-006 002 3,000
₱ 29,000

Feb. 5 R-009 001 ₱ 5,500

12 R-012 003 15,500
16 R-015 004 8,200
21 R-018 004 2,600
28 R-029 003 5,800
₱ 37, 600

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 Direct Labor costs per time tickets

Date Job Order No. Labor Hours

Jan. 6-12 001 50 ₱ 1,800
002 30 1,200
13-19 001 100 3,000
002 120 4,600
20-26 001 80 2,700
002 200 3,800
27-28 001 50 1,600
630 ₱ 29,000

Feb. 3-9 001 120 ₱ 4,100

10-16 003 210 4,050
004 10 400
17-23 003 160 5,800
004 120 4,300
24-28 003 70 2,500
004 55 1,950
745 ₱ 23,100

Required:

a. Cost sheets
b. T-accounts for work-in process for January and February,200C
c. Proof of work in process inventory, January 31, 200M
d. Statement of cost of goods manufactured for February, 200M (supported by job order costs)
e. Proof of work in process inventory, February 28, 200M

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 Exercise 3: Materials Cost – Use of the 5-Column Stock Control

The Yakal Mfg. Co. maintains five-column stock cards for materials that are considered critical.
One of them is the piano hinge (item # 023) located in bin # 51 with reorder quantity of 50 units and
minimum and maximum balances of 20 and 80 units, respectively. Freight charges on purchases are
treated as additional cost of the item purchased. As of May 1, 200C the inventory of this item consists of:

20 units @ ₱ 60

45 units @ ₱ 70

The following data are given for this month:

May 2 - PO # 631 is issued for 50 units at ₱ 75.

8 - Requisition # 356 is issued for 30 units to be chargeable to job # 056
Required date of issuance is May 15th
9 - Requisition # 357 is issued for the immediate issuance of 15 units for job # 054
10 - Return shipping order # 010 is issued for 5 units. Purchase cost was at ₱ 70
12 - Receiving and inspection report # 256 is issued for 35 units ordered per P.O. #631.
Freight cost is ₱ 21
14 - Return shipping order # 021 is issued for 10 units previously received per RIR #256
15 - Requisition # 356 is complied with
17 - Requisition # 360 is issued and immediately complied with. Accordingly, 12 units are
charged to job # 058
24 - An order for 50 units @ ₱ 80 is made per P.O. #636
26 - Five units previously issued to job #054 (per requisition no. 357) are returned to the
stockroom per returned materials report # 08
28 - Requisition # 365 is issued for 20 units that are to be charged to job # 065 and needed
on June 5
29 - RIR # 270 is issued for 30 units ordered per P.O. 636. Freight in is ₱12
30 - Ten units are returned to supplier (P.O. # 636 per return shipping order # 025

Instruction: Make the corresponding entries on the five-column stock card as provided.

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 Exercise 6: Cost of Production Report – Even Application of Costs

Bohol Mfg. Co. operates a single-department factory in the processing of its sole product.
Assignment of unit cost is based on the FIFO method. The following data are given on its August, 19H
production:

Quantity data:
In process, August 1 8,000 units, 1/4 done
Placed in process 70,000
In process, August 31 12,000 units, 2/3 done

Cost data:
In process, August 1 ₱ 1,100
Factory costs:
Materials 23,760
Labor 15,840
Factory Overhead 12,240

Required:

a. Cost of production report supported by the schedule of equivalent production

b. T-account for work in process

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