Activity 1 COST CONCEPTS AND COST BEHAVIOR

PROBLEM SOLVING

1. Given the following information for A Corporation, prepare the necessary

journal entries assuming the Raw Material Inventory contain both direct and
indirect material
a. Purchased raw material on account P28,500
b. Put material into production P15,000 f direct material and P3,000 of
indirect material
c. Accrued payroll of P90,000 of which 70% was direct and the remainder
indirect.
d. Incurred and paid other overhead items of P36,000
e. Transferred items costing P86,500 to finished goods
f. Sold goods costing P71,300 on account for P124,700
2. Using the information below, prepare a Shedule of Cost of Goods
Manufactured for B Corporation for June 2020

Inventories Beginning Ending

Raw Material P6,700 P8,900
Work in Process 17,700 22,650
Finished Goods 29,730 19,990

Additional Information
Purchases of raw material wer P46,700; 19,700 direct labor hours were
worked at P11.30 per hour, overhead costs wer P13,300

3. In June 2020, C Company has cost of goods manufactured of P296,000;

beginning Finished Goods Inventory of P29,730; and Ending Finished goods
inventory of P19,990. Prepare an Income Statement. The following
additional information is available:
Selling Expenses P40,500
Administrative Expenses 19,700
Sales 475,600

4. The following information is for D Corporation for April 2020

Inventories Beginning Ending
RawMaterial P19,750 P15,400
Work in Process 35,350 32,200
Finished Goods 21,300 27,900

Direct Labor(22,000 DL hours at P14 per hour

Raw Material Purchased P155,000
Indirect Labor 11,600
Factory supplies used 475
Depreciation-Factory Equipment 18,100
 Insurance –office P2,750
Office supplies expense 1,050
Insurance Factory 1,825
Depreciation-office equipment 3,900
Repair and Maintenance-Factory 7,800

Calculate Total Manufacturing Cost, Cost of Goods Manufactured, and Cost of

Goods Sold

5. From rhe following information of E Corp., compute prime cost and

conversion cost

Inventories Beginning Ending

Raw Material P9,900 P7,600

Work in Process 44,500 37,800
Finished Goods 36,580 61,300

Raw material purchased during the period cost P40,800; overhead incurred
And paid or accrued for the period was P21,750 and 23,600 direct labor
hours were incurred at a rate of P13.75 per hour

6. The following data has been for F Corporation for the most recent year ended
Inventories Beginning Ending
Raw Material P50,000 P55,000
Workin Process 40,000 45,000
Finished Goods 60,000 50,000

Cost recorded during the year:

Purchase of raw material P195,000
Direct Labor 150,000
Cost of goods sold 595,000

Required: Prepare statements of Cost of Goods Manufactured and Cost of

Goods Sold showing how all unknown amounts were determined

7. G Company makes disinfectant solution. Various chemicals are mixed

together and bottled in 5 gallon containers. G provided the following
information for 2020.
Raw Materials purchases P750,000
Direct Labor 420,000
Depreciatiion-Factory Building 90,000
Depreciation-Factory Equipment 135,000
Depreciation- Head Office Building 150,000
Factory Insurance 45,000
Property Taxes – Factory 60,000
Property Taxes – Head Office 54,000
Untilities – Factory 102,000
Utilities – Sales Office 5,400
Administrative Salaries 450,000
Indirect Labor Salaries 468,000
Sales Office Salaries 270,000
Raw Materials Inventory, Beginning 372,000
Work in Process Inventory, Beginning 360,000
Finished Goods Inventory, Beginning 252,000
Raw Materials Inventory, Ending 306,000
Work in Process Inventory, Ending 390,000
Finished Goods Inventory, Ending 246,000

Number of units completed 100,000 units. Sales revenue equaled P3,600,000

and G Company paid a sales commission of 5% of sales.

Required:
1. Calculate the direct materials used in production for 2020
2. Calculate total prime cost
3. Calculate total conversion cost
4. Prepare a cost of goods manufactured statement for 2020. Calculate the
unit product cost
5. Prepare a Cost of Goods Sold Statement for 2020
6. Prepare an Income Statement for 2020.