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Costing Accounting Problems

The document provides examples of basic cost accounting computations including calculating cost of goods sold, cost of goods manufactured, prime cost and conversion cost. It also includes journal entries to record overhead application and adjustments for under or overapplied overhead.

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trixie mae
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102 views3 pages

Costing Accounting Problems

The document provides examples of basic cost accounting computations including calculating cost of goods sold, cost of goods manufactured, prime cost and conversion cost. It also includes journal entries to record overhead application and adjustments for under or overapplied overhead.

Uploaded by

trixie mae
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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BASIC COST ACCOUNTING COMPUTATION

1. Killua Co. provided you the following(in thousands):


Sales P910
Raw Mats, beg 80
Raw Mats, end 20
Purchases 100
Direct Labor 130
Mftg. OH 200
Admin Exp 160
Selling Exp 140
WIP, beg 40
WIP, end 10
Finished Goods, beg 130
Finished Goods, end 150
Compute:
Cost of Raw Materials Used P160
Cost of Goods Manufactured P520
Cost of Goods Sold P500
Net Income P110

2. Last month, Gon Co. placed P60T of materials into production. The printing dept used 8000 hours at
P5.60 per hour and the Binding Dept used 4600 hours at P6.00 per hr. Factory OH is applied at a rate
of P6.00 per labor hour in the Printing Dept and P8.00 per labor hr in the Binding Dept. Gon’s inventory
accounts show the following balances:
Beg Ending
Finished Goods 22,000 17,000
WIP 15,000 17,600
Materials 20,000 18,000

What is the total Cost of Goods Sold? P219,600


3. Hisoka Co. had the following inventories:
June 1 June 30
Direct Materials P36,000 P45,000
WIP 18,000 26,000
Finished Goods 54,000 72,000

The following info were available for June, 2019:


Direct Labor P60,000
DL rate per hour P7.50
OH rate per hr P10.00
Cost of Goods Manufactured 153,650

What is the Prime Cost and the Conversion Cost? P81,650 and P140,000

4. The breakdown of payroll is:


Direct Labor P100,000
Indirect Labor 30,000
Marketing Salaries 20,000
Administrative Sal 10,000

The journal entry to record such breakdown is:


WIP P100,000
Factory OH Control 30,000
Marketing Expense Control 20,000
Administrative Expense Control 10,000
Payroll P160,000

5. The two compnents of actual factory overhead are the following:


Depreciation P35,000
Expired Insurance 5,000
The journal entry is:
Factory Overhead Control P40,000
Accumulated Depreciation 35,000
Prepaid Insurance 5,000

6. What is the entry to journalize the incurrence of P50,000 general factory overhead and paynebt of
90%?
Factory Overhead Control P50,000
Cash P45,000
Accounts Payable 5,000
7. Overhead is charged to work in process based on 50% of direct labor cost. Actual overhead
accumulated in the overhead control account is P100,000 and direct labor cost is P180,000. What is
the journal entry to record the application of overhead if the company uses two overhead accounts?
Work in Process P90,000
Factory Overhead Applied P90,000

8. Netero Co. has underapplied overhead of P45,000 for the year ended December 31, 2018. Before
disposition or the underapplied overhead, selected December 31, 2018, balances from Netero’s
accounting records are as follows:
Sales P1,200,000
Cost of Goods Sold 720,000
Inventories:
Direct Materials 36,000
Work in process 54,000
Finished Goods 90,000

Under Netero’s cost accounting system, over or underapplied overhead is adjusted to cost of goods
sold. In his 2018 Income Statement, Netero should report cost of goods sold of: P765,000

9. Netero Co. has underapplied overhead of P45,000 for the year ended December 31, 2018. Before
disposition or the underapplied overhead, selected December 31, 2018, balances from Netero’s
accounting records are as follows:
Sales P1,200,000
Cost of Goods Sold 720,000
Inventories:
Direct Materials 36,000
Work in process 54,000
Finished Goods 90,000

Under Netero’s cost accounting system, over or underapplied overhead is allocated to appropriate
inventories and cost of goods sold based on year-end balances. In his 2018 Income Statement, Netero
should report cost of goods sold of: P757,500

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