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Review of COGS and CGM

The document contains 10 problems providing various accounting data for different companies. The data includes inventory balances, costs like direct materials, direct labor, manufacturing overhead, selling expenses, purchases, and sales. The problems ask to calculate items like cost of goods manufactured, cost of goods sold, net income, and missing values based on the provided information.

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Chloe Ann Cabaylo
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416 views4 pages

Review of COGS and CGM

The document contains 10 problems providing various accounting data for different companies. The data includes inventory balances, costs like direct materials, direct labor, manufacturing overhead, selling expenses, purchases, and sales. The problems ask to calculate items like cost of goods manufactured, cost of goods sold, net income, and missing values based on the provided information.

Uploaded by

Chloe Ann Cabaylo
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Problem I

The accounting records of Westcott Company revealed the following costs:

Factory utilities P35,000


Wages of assembly-line personnel 170,000
Customer entertainment 45,000
Indirect materials used 19,000
Depreciation on salespersons' cars 51,000
Production equipment rental costs 110,000

1. Costs that would be considered in the calculation of manufacturing overhead total?

Problem II
2. Kansas Plating Company reported a cost of goods manufactured of P260,000, with the firm's
year-end balance sheet revealing work in process and finished goods of P35,000 and
P67,000, respectively. If supplemental information disclosed raw materials used in
production of P40,000, direct labor of P70,000, and manufacturing overhead of P120,000,
the company's beginning work in process must have been?

Problem III
3. Baxter Company, which pays a 10% commission to its salespeople, reported sales revenues
of P210,000 for the period just ended. If fixed and variable sales expenses totaled P56,000,
what would these expenses total at sales of P168,000?

Problem IV
Panama Manufacturing had the following data for the period just ended:

Work in process, Jan. 1 P 21,000


Work in process, Dec. 31 40,000
Finished goods, Jan. 1 70,000
Finished goods, Dec. 31 61,000
Direct materials used 126,000
Direct labor 260,000
Factory depreciation 80,000
Sales 945,000
Advertising expense 52,000
Factory utilities 27,000
Indirect materials 19,000
Indirect labor 35,000

4.Calculate Panama's cost of goods manufactured.


5.Calculate Panama's cost of goods sold.
Problem V
Hampton Company had the following inventory balances at the beginning and end of the year:

January 1 December 31
Raw material P 50,000 P 35,000
Work in process 130,000 170,000
Finished goods 280,000 255,000

During the year, the company purchased P100,000 of raw material and spent P340,000 on
direct labor. Other data: manufacturing overhead incurred, P450,000; sales, P1,560,000;
selling and administrative expenses, P90,000; income tax rate, 30%.

6.Calculate cost of goods manufactured.


7.Calculate cost of goods sold.
8.Determine Hampton's net income.

Problem VI
The following selected information was extracted from the 2013 accounting records of Miami
Products:

Raw materials used P284,000


Direct labor 178,000
Indirect labor 35,000
Selling and administrative salaries 250,000
Building depreciation* 330,000
Other selling and administrative expenses 80,000
Other factory costs 620,000

*Seventy percent of the company's building was devoted to production activities; the
remaining 30% was used for selling and administrative functions.

Miami's beginning and ending work-in-process inventories amounted to P306,000 and


P245,000, respectively. The company's beginning and ending finished-goods inventories
were P450,000 and P440,000, respectively.

9.Calculate Miami's manufacturing overhead for the year.


10. Calculate Miami's cost of goods manufactured.
11. Compute the company's cost of goods sold.

Problem VII
The Morton Company recorded the following transactions for February 20x1:

Materials Work in Process Finished Goods


Purchases P100,000
Beginning inventory 18,000 P 8,000 P E
Ending inventory A 20,000 30,000
Direct materials used 90,000
Direct labor B
Manufacturing overhead
(includes indirect materials
used of P10,000) 115,000
Transferred to finished goods C
Cost of goods sold D

Sales were P560,000, with sales prices determined by adding a 40% markup to the firm's
cost of goods sold. The total cost of direct materials used, direct labor, and manufacturing
overhead during the month was P285,000.

12. Calculate the missing values.

Problem VIII
KC Manufacturing, which began operations on January 1 of the current year, produces an industrial
scraper that sells for P325 per unit. Information related to the current year's activities
follows.

Number of scrapers produced 20,000


Number of scrapers sold 17,000
Variable costs per unit:
Direct materials P25
Direct labor 35
Manufacturing overhead 60
Annual fixed costs:
Manufacturing overhead P400,000
Selling and administrative 140,000

KC carries its finished-goods inventory at the average unit cost of production. There was no
work in process at year-end.

13. Compute the company's pre-determined overhead.


14. Determine the cost of the December 31 finished-goods inventory.
15. Compute the company's cost of goods sold.

Problem IX
The following information has been taken from the cost records of Wilson Company for the past
year:

Raw material used in production P326


Total manufacturing costs charged to production during the year (includes direct 686
material, direct labor, and overhead equal to 60% of direct labor cost)

Cost of goods available for sale 826


Selling and Administrative expenses 25
Inventories Beginnin Ending
g

Raw Material P75 P 85


Work in Process 80 30
Finished Goods 90 110
16. The cost of raw material purchased during the year was?
17. Direct labor cost charged to production during the year was?
18. Cost of Goods Manufactured was?
19. Cost of Goods Sold was?

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

Beginning
Ending
Raw Material Inventory P 6,000 P 7,500
Work in Process Inventory 17,300 11,700
Finished Goods Inventory 21,000 16,300

Direct labor is P9.60 per hour and overhead for the month was P9,600. There were
1,500 direct labor hours and P21,000 of raw material was purchased.

20. Compute total manufacturing costs for June.


21. Prime cost & conversion cost would
amount to?
22. Cost of Goods Manufactured is?
23. How much is Cost of Goods Sold?

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