Question

PROBLEM 1

The Ram Manufacturing Company produced P100, 000 units during the year ended December 31, 2009. It incurred the following costs for the year

Materials​​P75, 000 (10% is indirect materials)

Labor​​​P97, 000 (7% is indirect labor)

Factory Overhead​125% of direct labor cost

WIP – January 1​​P25, 500

WIP – December 31​P27, 000

Required: How much is the Company’s cost of goods manufactured?

Problem 2

Donna Company submits the following data for May 2013

Direct labor cost​​P80, 000

Purchases​​P100, 000

Factory overhead​​Applied at 150% of direct labor cost

Inventories​​​May 1​​May 31

​Finished goods​​P45, 000​P24, 000

​Work in Process​​P25, 800​P18, 000

​Materials​​P22, 000​P25, 000

Required: How much is the Company’s Cost of goods sold?

Problem 3

Kyle Manufacturing Company produces various types of fertilizers. No beginning work in process or finished goods were on hand on January 1, 2012. The following are data provided by the company:

30, 000 finished goods were on hand on December 31, 2012.

95, 000 units were sold during the year

No units in work in process inventories on December 31, 2012.

Materials put into production amounts to P300, 000, 75% were direct materials

(No beginning or ending materials inventory)

Labor costs were P350, 000, 40% was for indirect labor

Factory overhead costs other than indirect material and indirect labor were the following:

​Heat, light, water​​P120, 000

​ Depreciation​​P75, 000

​Property Taxes​​P65, 000

​Repairs and maintenance​P40, 000

Selling Expenses were P80, 000 and general and administrative expenses were P50, 000.

Required: Compute the following:

1.

2. Cost of goods manufactured

3. Unit Cost (cost per unit of goods manufactured)

4. Prime Cost

5. Conversion cost

6. Period cost

7. Cost of Goods Sold

8. Net Income

Problem 4

Sharp Enterprises

Inventories:​​March 1​​March 31

Raw material​​$18,000​​$15,000

Work in process​​9,000​​6,000

Finished goods​​27,000​​36,000

Additional information for March:​​

Raw material purchased​​​$42,000​

Direct labor payroll​​​30,000​

Direct labor rate per hour​​​7.50​

Overhead rate per direct labor hour​​10.00

Required:

1. For March, prime cost incurred was

2. For March, conversion cost incurred was

3. For March, Cost of Goods Manufactured was

Problem 5

Brandt Company manufactures wood file cabinets. The following information is available for June 2001:

​​​​Beginning​Ending​

Raw Material Inventory​​$ 6,000​​$ 7,500

Work in Process Inventory​​17,300​​11,700

Finished Goods Inventory​​21,000​​16,300

Required:

1. Refer to Brandt Company. Direct labor is $9.60 per hour and overhead for the month was $9,600. Compute total manufacturing costs for June, if there were 1,500 direct labor hours and $21,000 of raw material was purchased.

2. Refer to Brandt Company. Direct labor is paid $9.60 per hour and overhead for the month was $9,600. What are prime costs and conversion costs, respectively if there were 1,500 direct labor hours and $21,000 of raw material was purchased?

3. Refer to Brandt Company. Direct labor is paid $9.60 per hour and overhead for the month was $9,600. If there were 1,500 direct labor hours and $21,000 of raw material purchased, Cost of Goods Manufactured is:

4. Refer to Brandt Company. Direct labor is paid $9.60 per hour and overhead for the month was $9,600. If there were 1,500 direct labor hours and $21,000 of raw material purchased, how much is Cost of Goods Sold?

Problem 6

Donna Company submits the following data for May 2013

Direct labor cost​​P80, 000

Purchases​​P100, 000

Factory overhead​​Applied at 150% of direct labor cost

Inventories​​​May 1​​May 31

​Finished goods​​P45, 000​P24, 000

​Work in Process​​P25, 800​P18, 000

​Materials​​P22, 000​P25, 000

Actual factory overhead amounts to P80,000.

Required:

1. How much is the Company’s Cost of goods sold adjusted?

2. How much is the amount transferred out from Work in process and transferred in to Finished Goods?

3. How much is the amount transferred out from Finished Goods?

4. How much is the adjustment posted on the Cost of Goods sold Account? (indicate if debit or credit)

5. If there are 1,000 units sold, how much is the cost per unit of product?

Answer 1

Answer to Problem 1:
Indirect Materials = P75,000 * 10%
Indirect Materials = P7,500

Direct Materials used = P75,000 – P7,500
Direct Materials used = P67,500

Indirect Labor = P97,000 * 7%
Indirect Labor = P6,790

Direct Labor = P97,000 – P6,790
Direct Labor = P90,210

Factory Overhead = 125% of Direct Labor Cost
Factory Overhead = 125% * P90,210
Factory Overhead = $112,762.50

Manufacturing Overhead = Indirect Materials + Indirect Labor + Factory Overhead
Manufacturing Overhead = P7,500 + P6,790 + P112,762.50
Manufacturing Overhead = P127,052.50

Manufacturing Cost incurred during the year = Direct Materials + Direct Labor + Manufacturing Overhead
Manufacturing Cost incurred during the year = P67,500 + P90,210 + P127,052.50
Manufacturing Cost incurred during the year = P284,762.50

Cost of Goods Manufactured = Beginning WIP + Manufacturing Cost incurred during the year – Ending WIP
Cost of Goods Manufactured = P25,500 + P284,762.50 – P27,000
Cost of Goods Manufactured = P283,262.50

Answer 2

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