COST OF GOODS SOLD FORMULA

Cost DM DL MOH SE AE Name of the Company

Statement of Cost of Goods Sold
Direct Materials 220,000 Total For the Year Ended December _____
Factory rent 50,000
Direct Material Used
Direct Labor 180,000
Materials Inventory, Beg. xxx
Purchases xxx
Factory Utilities 8,500 Total Available for use xxx
Less: Materials Inventory, End. (xxx) xxx
Supervision 60,000 Direct Labor xxx
Manufacturing Overhead xxx
Depreciation -FE 20,000 Total Manufacturing Cost - xxx
WIP, Beg. xxx
Sales Commissions 57,000 Total Cost of Goods per into productions xxx
Less: WIP, End. xxx
Advertising 47,000
Cost of Goods Manufactured xxx
Depreciation -OE 10,000
Finished Goods, Beg. xxx
Total Goods Available for Sale xxx
Salary President 25,000 Less: Finished Goods, End. xxx
Cost of Goods Sold- normal xxx
Total 220,000 180,000 138,500 57,000 82,000 Under/Over Applied Factory Overhead xxx
Cost of Goods Sold - actual xxx
Product Cost 220,000 + 180,000 + 138,500 = 538,500
Total Period Cost 57,000 + 82,000 = 139,000 Finished Goods (2,000 units at P3.00) - Commodity X 6,000
Cost Per Unit 538,500 / 40,000 = P13.47 Work in Process – Job No. 101
Materials:
High Low Method A – 200 units at P5.00 1,000
Unit Shipped Shipping Expense B – 175 units at P4.00 700 1,700
High 900 4,000 Direct Labor
Low 200 1,200 290 hours at P5.00 1,450
700 2,800 Factory Overhead Applied – 100% of DL 1,450 4,600
Variable Cost 2,800
700 4 per unit shipped. Materials
Fixed Cost High Low
Shipping Exp 4000 1200 Material A – 600 units at P5.00 3,000
Variable Portion -3600 -800 4x900 4x200 Material B – 350 units at P4.00 1,400
400 400. Indirect Materials 500 4,900
Method of Least Square
X Y XY X2 Work In Process – Job 101 1,000
400 2,200 880,000 160,000 Raw Materials- A 1,000 (200 x 5)
700 3,100 2,170,000 490,000 To record issuance of raw materials to Job 101.
500 2,600 1,300,000 250,000
200 1,200 240,000 40,000 Work In Process – Job 102 4,000
300 2,200 660,000 90,000 Raw Materials- A 3,100 (600-200) x 5 + (200 x 5.5)
600 3,000 1,800,000 360,000 Raw Materials- B 900 (225 x 4)
800 3,500 2,800,000 640,000 To record issuance of raw materials to Job 102.
900 4,000 3,600,000 810,000 Work In Process – Job 103 2,000
Raw Materials- B 2,000 (125 x 4) + (300 x 5)
4,400 21,800 13,450,000 2,840, To record issuance of raw materials to Job 103.
Factory Overhead Control 1,000
Raw Materials 1000
To record issuance of indirect materials.
n=8 Payroll during January amounted to P10,300, of which:
EX = na + bEX
21,800 = 8a + 4,400(b) P2,000 - Job 101
EXY = EXa + bEX2 P4,000 - Job 102
13,450,000 = 4,400a + 2,840,000(b) P2,000 - Job 103
eliminate a: P2,300 indirect labor
13,450,000 4,400a 2,840,000(b) Deductions are as follows:
21,800 8a 4,400(b) -550 SSS Premiums P412
Medicare Contributions P225
13,450,000 4,400a 2,840,000(b) Withholding Taxes P1,050
(11,990,000) -4400a (2,420,000)a
1,460,000 - 420,000a Work In Process – Job 101 2,000
420,000 420,000 divide Work In Process – Job 102 4,000
3.48 a Work In Process – Job 103 2,000
Ex = n + bEX Factory Overhead Control 2,300
21,800 = 8a + 4,400(b) SSS Premium Payable 412
21,800 = 8a + 4,400(3.48) Medicare Contributions Payable 225
21,800 = 8a + 15,312 Withholding Tax Payable 1,050
8a = 21,800 - 15,312 Wages Payable 8,613
8a = 6,488 To record direct and indirect labor costs.
a = 811 -Factory Overhead is applied on the basis of 100% of direct labor.
Y = a + bx Work in Process 8,000
Y = 811 + Factory Overhead Applied 8,000

To record applied factory overhead.

-Jobs completed during the month – Job 101 for 3,000 units of Commodity X and Job 102 for 5,000 units
of Commodity Y.
-Finished Goods 21,600
- Work in Process - Job 101 9,600
- Work in Process- Job 102 12,000
-To record applied factory overhead.
Job 101 Job 102
-WIP, beg balance 4,600
-Direct Materials 1,000 4,000
-Direct Labor 2,000 4,000
-Overhead 2,000 4,000
-Total Costs 9,600 12,000

Financial Accounting- systems that collects and processes financial information about an organization and reports that information to decision makers.
Managerial Accounting-the gathering and preparing of accounting information that is used within a company to help ensure the organization’s goals are met effectively and efficiently.
Cost Accounting-the process of measuring, analyzing, and reporting financial information related to the cost of acquiring or using resources in an organization.
Cost-is the monetary unit value spent by the company to create an offer a product or service.
Expense-for the benefits of your business.
Direct Expense-also known as changeable expenses.
Loss-NO benefits. (Malaki yung expense compare sa income).
Product Cost-attached to the product and include in the stock.
Labor Cost-may be classified as alert or indirect labor.
– all manufacturing cost. (Raw materials, labor, factory overhead).
Prime Cost- Raw materials + Direct labor
Conversion Cost- Direct labor + Factory overhead
Period cost-NOT attached to the product and NOT included in the inventory valuation. (non-manufacturing costs.)
Direct Cost-can be specifically and exclusively identified with a given cost object.
-direct material/-direct labor. Ex. Raw Materials.
Indirect Cost-cannot be specifically and exclusively identified with a given cost object.
Sunk Cost-are always results of decisions taken in the past.
Historical Cost-is incurred in part and is generally recorded in the books of accounts of the company.
Ex. factory overhead, assigned to cost objects by cost allocations.
Total Manufacturing Cost-Prime cost/Manufacturing Overhead.
Manufacturing Overhead-all costs that are not traced to a particular job.
Total Cost-Total Variable Cost + Total Fixed Cost
Total variable cost-Total variable cost per unit + Units Sold.
Contribution Margin- Sales revenue – Variable Cost.
High-low method-identify the fixed and variable elements of semi-variable costs.
Mixed cost-also known as semi-variable costs, it contains both variable and fixed.