CHAPTER 5

MULTIPLE CHOICE
1. D 11. D 21. C
2. B 12. D 22. B
3. B 13. C 23. D
4. D 14. B 24. B
5. D 15. C 25. B
6. D 16. A
7. A 17. C
8. C 18. B
9. C 19. B
10. B 20. B

PROBLEM SOLVING

PROBLEM 1 – ALEXIS COMPANY

A. JOURNAL ENTRIES
1. MATERIALS 56,000
ACCOUNTS PAYABLE 56,000
2. WORK IN PROCESS 44,000
FOH CONTROL 6,000
MATERIALS 50,000
3. MATERIALS 1,600
WORK IN PROCESS 1,000
FOH CONTROL 600
4. ACCOUNTS PAYABLE 2,000
MATERIALS 2,000
5. PAYROLL 78,000
WITHHHOLDING TAXES PAYABLE 6,050
SSS PREMIUMS PAYABLE 3,200
MEDICARE 750
PAG-IBIG FUNDS PAYABLE 2,400
ACCRUED PAYROLL 65,600

ACCRUED PAYROLL 65,600

CASH 65,600
6. WORK IN PROCESS 66,800
FOH CONTROL 11,200
PAYROLL 78,000
7. FOH CONTROL 7,150
SSS PREMIUMS PAYABLE 4,000
MEDICARE CONTRIBUTIONS PAYABLE 750
PAG-IBIG FUNDS PAYABLE 2,400
8. FOH CONTROL 30,000
 ACCUMULATED DEPRECIATION 6,000
PREPAID INSURANCE 1,900
ACCOUNTS PAYABLE 22,100
9. WORK IN PROCESS 53,440
FOH APPLIED 53,440
10. FINISHED GOODS 144,440
WORK IN PROCESS 144,440
11. ACCOUNTS RECEIVABLE 88,816
SALES 88,816

COST OF GOODS SOLD 63,440

FINISHED GOODS 63,440
12. CASH 70,000
ACCOUNTS RECEIVABLE 70,000
B.JOB ORDER COST SHEETS
JOB 401
DIRECT MATERIALS DIRECT LABOR FACTORY OVERHEAD
6,000 5,000 4,000
11,000 20,800 16,640
17,000 25,800 20,640

JOB 402
DIRECT MATERIALS DIRECT LABOR FACTORY OVERHEAD
11,200 6,000 4,800
14,000 25,000 20,000
25,200 31,000 24,800

JOB 403
DIRECT MATERIALS DIRECT LABOR FACTORY OVERHEAD
19,000 21,000 16,800
(1,000)
18,000 21,000 16,800

3.
DIRECT MATERIALS USED
MATERIALS, BEG.
PURCHASES
(LESS) PURCHASE RETURNS
TOTAL MATERIALS AVAILABLE FOR USE
(LESS) MATERIALS, END.
INDIRECT MATERIALS
DIRECT LABOR
FACTORY OVERHEAD
TOTAL MANUFACTURING COST
WORK IN PROCESS, AUG 1
COST OF GOODS PUT INTO PROCESS
(LESS) WORK IN PROCESS, AUG 31
COST OF GOODS MANUFACTURED
FINISHED GOODS, AUG 1
TOTAL GOODS AVAILABLE FOR SALE
(LESS) FINISHED GOODS, AUG 31
COST OF GOODS SOLD – NORMAL
(ADD) UNDER APPLIED FOH
COST OF GOODS SOLD

PROBLEM 2 – GOLDEN SHOWER COMPANY

A. MATERIALS 229,040
ACCOUNTS PAYABLE 229,040
B. PAYROLL 220,000
WITHHOLDING TAXES 31,000
SSS PREMIUMS 7,000
MEDICARE CONTRIBUTIONS 440
PAG-IBIG FUNDS 6,600

ACCRUED PAYROLL 174,960

CASH 174,960
C. WORK IN PROCESS 156,000
FOH CONTROL 24,000
MARKETING & ADMIN. EXPENSE CONTROL 40,000
PAYROLL 220,000
D. WORK IN PROCESS 216,350
FOH CONTROL 15,040
MATERIALS 231,390
E. WORK IN PROCESS 85,500
FOH APPLIED 85,500
F. ACCOUNTS RECEIVABLE 510,000
SALES 510,000

COST OF GOODS SOLD 380,700

WORK IN PROCESS 380,700
G. CASH 494,000
SALES DISCOUNT 26,000
ACCOUNTS RECEIVABLE 520,000
H. MARKETING & ADMIN. EXPENSE CONTROL 30,000
FOH CONTROL 25,600
 CASH 51,600
ACCUMULATED DEPRECIATION 4,000
I. ACCOUNTS PAYABLE 170,000
CASH 170,000
J. FOH APPLIED 85,500
COST OF GOODS SOLD 6,100
FOH CONTROL 79,400

MATERIALS, BEG.
PURCHASES
(LESS) PURCHASE RETURNS
TOTAL MATERIALS AVAILABLE FOR USE
(LESS) MATERIALS, END.
INDIRECT MATERIALS
DIRECT LABOR
FACTORY OVERHEAD
TOTAL MANUFACTURING COST
WORK IN PROCESS, AUG 1
COST OF GOODS PUT INTO PROCESS
(LESS) WORK IN PROCESS, AUG 31
COST OF GOODS MANUFACTURED
FINISHED GOODS, AUG 1
TOTAL GOODS AVAILABLE FOR SALE
(LESS) FINISHED GOODS, AUG 31
COST OF GOODS SOLD – NORMAL
(ADD) UNDER APPLOED FOH
COST OF GOODS SOLD

PROBLEM 3 – J.A.N., INC

A. W/P JOB 101 2,500
W/P JOB 102 3,500
W/P JOB 103 4,600
FOH CONTROL 800
RAW MATERIALS 11,400
B. PAYROLL
ACCRUED PAYROLL
W/P JOB 101 2,900
W/P JOB 102 3,000
W/P JOB 103 5,800
FOH CONTROL 1,200
PAYROLL 12,900
C. W/P JOB 101 2,320
W/P JOB 102 2,400
W/P JOB 103 4,640
FOH CONTROL 9,360
FINISHED GOODS 9,720
W/P JOB 101 9,720

PROBLEM 4 – HERCULES COMPANY

1.
JOB 101 5,200
JOB 102 4,700
WORK IN PROCESS IN END OF APRIL 9,900

JOB 102 (4,700 + 3,800) 8,500

JOB 104 5,800
JOB 105 5,200
WORK IN PROCESS IN END OF MAY 19,500

JOB 105 (5,200 + 3,800)

WORK IN PROCESS IN END OF JUNE 9,000

2.
FINISHED GOODS (JOB 103) – END OF APRIL 1,200
FINISHED GOODS (JOB 101) - END OF MAY 10,600
FINISHED GOODS (JOB 102&104) - END OF JUNE 20,500

3.
GROSS PROFIT: MAY (1.2K x 0.25) 500
JUNE (10.6K x 0.25) 2,650
JULY (20.5K x 0.25) 5,125

PROBLEM 5
1.
WORK IN PROCESS 60,000
MATERIALS 60,000

WORK IN PROCESS 120,000

PAYROLL 120,000

WORK IN PROCESS 75,000

FOH APPLIED 75,000

FINISHED GOODS 255,000

WORK IN PROCESS 255,000

ACCOUNTS RECEIVABLE 340,000

 SALES 340,000

COST OF GOODS SOLD 340,000

FINISHED GOODS 340,000
4.
JOB 110 JOB 220 JOB 30 TOTAL
SELLING PRICE 100,000 140,000 100,000 340,000
DIRECT 15,000 25,000 20,000 60,000
MATERIALS
DIRECT LABOR 40,000 50,000 30,000 120,000
FOH 25,000 30,000 20,000 75,000
TOTAL COST 80,000 105,000 70,000 255,000
GROSS PROFIT 20,000 35,000 30,000 85,000

PROBLEM 6 – ELLERY CORPORATION

1.
MATERIALS 145,000
ACCOUNTS PAYABLE 145,000

WORK IN PROCESS 125,000

MATERIALS 125,000

WORK IN PROCESS 400,000

PAYROLL 400,000

WORK IN PROCESS 320,000

FOH APPLIED 320,000

FINISHED GOODS 820,000

WORK IN PROCESS 820,000

COST OF GOODS SOLD 850,000

FINISHED GOODS 850,000

FOH CONTROL 330,000

VARIOUS ACCOUNTS 330,000

PROBLEM 7 – ABNER CORPORATION

1.
DIRECT MATERIALS USED 205,000
MATERIALS – END 90,000
MATERIALS – BEG (95,000)
DIRECT MATERIALS PURCHASED 200,000
 2.
TOTAL MANUFACTURING COST 675,000
FACTORY OVERHEAD (175,000)
MATERIALS USED (205,000)
DIRECT LABOR COST 295,000
3.
COST OF GOODS AVAILABLE FOR SALE 775,000
FINISHED GOODS – END (110,000)
COST OF GOODS SOLD 665,000
4.
SALES 900,000
COST OF GOODS SOLD (665,000)
GROSS PROFIT 235,000

PROBLEM 8 – CANDY CORPORATION

1.
JOB 101175,000
JOB 102120,000
W/P, JULY 1 295,000
2.
JOB 10180,000 X 125% = 100,000
JOB 10295,000 X 125% = 118,750
JOB 103115,000 X 125% = 143,750
TOTAL 362,500
3.
W/P BEG 175,000 120,000 295,000
COST ADDED
MATERIALS 55,000 80,000 135,000
LABOR 80,000 95,000 175,000
OVERHEAD 100,000 118,750 218,750
TOTAL 410,000 413,750 823,750
4.
JOB 101 410,000
(ADD) UNNDERAPPLIED FOH
ACTUAL FOH 375,000
(LESS) APPLIED FOH 362,500 12,000
COGS – ACTUAL 422,500
5.
FINISHED GOODS – JULY 31 413,750

PROBLEM 9 – MIRACLE COMPANY

1.
COST OF GOODS MANUFACTURED 168,000
W/P, JAN 31 95,000
W/P, JAN 1 (80,000)
TOTAL MANUFACTURING COST 183,000
DIRECT LABOR (84,000)
FACTORY OVERHEAD (63,000)
DIRECT MATERIALS USED 36,000
MATERIALS, JAN 31 50,000
INDIRECT MATERIALS USED 1,000
PURCHASES (46,000)
MATERIALS INVENTORY, JAN 1 41,000

2.
COST OF GOODS SOLD – NORMAL 150,000
FINISHED GOODS, JAN 31 78,000
FINISHED GOODS, JAN 1 (60,000)
COST OF GOODS MANNUFACTURED 168,000
3.
SALES 200,000
SELLING AND ADM. EXPENSES (25,000)
NET INCOME (25,200)
COST OF GOODS SOLD – ACTUAL 149,800
OVERAPPLIED FOH
ACTUAL 62,800
(LESS) APPLIED 63,000 200
COST OF GOODS SOLD - NORMAL 150,000

PROBLEM 10 – NONA COMPANY

1.
UNITS SOLD 12,300
FINISHED GOODS, END 300
FINISHED GOODS, BEG (100)
NUMBER OF UNITS MANUFACTURED 12,500
2.
DIRECT MATERIALS USED
DIRECT MATERIALS USED 1,847,700
DIRECT LABOR 2,125,800
FACTORY OVERHEAD 1,026,500
COST OF GOODS MANUFACTURED 5,000,000
UNITS COMPLETED 12,500
COST OF GOODS MANUFACTURED PER UNIT 400 PER UNIT
3.
FINISHED GOODS, BEG. 43,000
COST OF GOODS MANUFACTURED 5,000,000
FINISHED GOODS, END (120,000)
COST OF GOODS SOLD 4,923,000
PROBLEM 11 -
1.
MATERIALS, BEG. 10,000
PURCHASES 30,000
(LESS) PURCHASE RETURNS (2,000) 28,000
TOTAL MATERIALS AVAILABLE FOR USE 38,000
(LESS) MATERIALS ISSUED (15,000)
MATERIALS, END 23,000
2.
DIRECT LABOR HOURS X DIRECT LABOR RATE PER HOUR
= 10,000 X 1.00
DIRECT LABOR CHARGED TO PRODUCTION
=10,000
3.
DEFECTIVE MATERIALS RETURNED TO SUPPLIERS = 2,000
4.
DIRECT MATERIALS USED 15,000
DIRECT LABOR 10,000
FACTORY OVERHEAD – APPLIED 5,000
TOTAL MANUFACTURING COST 30,000
WORK IN PROCESS, BEG 1,000
COST OF GOODS PUT INTO PROCESS 31,000
(LESS) COG MANUFACTURED (25,000)
WORK IN PROCESS, END 6,000
5.
FINISHED GOODS, BEG 2,500
COST OF GOODS MANUFACTURED 25,000
TOTAL GOODS AVAILABLE FOR SALE 27,000
(LESS) COST OF GOODS SOLD 18,000
FINISHED GOODS, END 9,500

MULTIPLE CHOICE – PROBLEMS

1. A 11. C 21. A
2. A 12. A 22. C
3. C 13. C 23. C
4. D 14. C 24. B
5. A 15. C 25. B
6. B 16. D
7. B 17. C
8. A 18. C
9. A 19. C
10. B 20. B
CHAPTER 6

PROBLEM SOLVING

PROBLEM 1 – STILWATER MANUFACTURING

RAW IN PROCESS 356,000
ACCOUNTS PAYABLE 356,000

FINISHED GOODS 373,700

RAW IN PROCESS 373,700

COST OF GOODS SOLD 390,700

FINISHED GOODS 390,700

COST OF GOODS SOLD 14,400

RAW IN PROCESS 2,400
FINNISHED GOODS 12,000

PROBLEM 2 – MAGNOLIA COMPANY

RAW IN PROCESS 444,000
ACCOUNTS PAYABLE 444,000

FINISHED GOODS 442,460

RAW IN PROCESS 442,460

COST OF GOODS SOLD 730,000

ACCRUED PAYROLL 350,000
FOH APPLIED 380,000
COST OF GOODS SOLD 445,960
FINISHED GOODS 445,960

RAW AND IN PROCESS 660

COST OF GOODS SOLD 660

COST OF GOODS SOLD 1,500

FINISHED GOODS 1,500

PROBLEM 3 – SMART COMPANY

1.
MATERIALS PURCHASED 146,000
MATERIALS IN RIP BEG. (15K-4.4K) 10,600
MATERIALS IN RIP END (24,000-7,800) (16,200)
MATERIALS BACKFLUSHED FROM RIP TP FG 140,400
2.
MATERIALS BACKFLUSHED FROM RIP TO FG 140,400
MATERIALS IN FG BEG. (36K-10.8K) 25,200
MATERIALS IN FG END (18K-6.5K) (11,500)
MATERIALS BACKFLUSHED FROM FG TO COFGS 154,100
3.
RAW AND IN PROCESS 146,000
ACCOUNTS PAYABLE 146,000

COST OF GOODS SOLD 180,000

ACCRUED PAYROLL 80,000
FOH APPLIED 100,000

FINISHED GOODS 140,400

RAW AND IN PROCESS 140,400

COST OF GOODS SOLD 154,100

FINISHED GOODS 154,100

RAW AND IN PROCESS 3,400

COST OF GOODS SOLD 900
FINISHED GOODS 4,300

PROBLEM 4 – CHIZ MANUFACTURING COMPANY

1.
MATERIALS PURCHASED 230,000
MATERIALS IN RIP BEG. 28,000
MATERIALS IN RIP END (12,800)
MATERIALS BACKFLUSHED FROM RIP TP FG 245,200
2.
MATERIALS BACKFLUSHED FROM RIP TO FG 245,200
MATERIALS IN FG BEG. 26,200
MATERIALS IN FG END (6,700)
MATERIALS BACKFLUSHED FROM FG TO COFGS 264,700
3.
RAW AND IN PROCESS 230,000
ACCOUNTS PAYABLE 230,000

FINISHED GOODS 245,200

RAW AND IN PROCESS 245,200

COST OF GOODS SOLD 264,700

FINISHED GOODS 264,700

COST OF GOODS SOLD 405,000

 ACCRUED PAYROLL 180,000
FOH APPLIED 225,000

FINISHED GOODS 4,300

COST OF GOODS SOLD 600
RAW AND INN PROCESS 3,700

CHAPTER 7
PROBLEM SOLVING

PROBLEM 1 – NORMAN COMPANY

A.
2×40×64,000
𝐸𝑂𝑄 = √ = 1,600
2
B.
64,000
𝐴𝑁𝑁𝑈𝐴𝐿 𝑂𝑅𝐷𝐸𝑅𝐼𝑁𝐺 𝐶𝑂𝑆𝑇 = × 40 = 1,600
1,600

1,600
𝐴𝑁𝑁𝑈𝐴𝐿 𝐶𝐴𝑅𝑅𝑌𝐼𝑁𝐺 𝐶𝑂𝑆𝑇 = × 2 = 1,600
2
PROBLEM 2 – ABNER COMPANY
A.
2×13,000×200
𝐸𝑂𝑄 = √ = 1,000
5.20
B.
13,000
𝐴𝑁𝑁𝑈𝐴𝐿 𝑂𝑅𝐷𝐸𝑅𝐼𝑁𝐺 𝐶𝑂𝑆𝑇 = = 13
1,000
C.
1,000
𝐴𝑉𝐸𝑅𝐴𝐺𝐸 𝐼𝑁𝑉. = = 500
2
D.
𝑇𝑂𝑇𝐴𝐿 𝐶𝐴𝑅𝑅𝑌𝐼𝑁𝐺 𝐶𝑂𝑆𝑇 = 500 × 5.20 = 2,600
𝑇𝑂𝑇𝐴𝐿 𝑂𝑅𝐷𝐸𝑅𝐼𝑁𝐺 𝐶𝑂𝑆𝑇 = 13 × 200 = 2,600
PROBLEM 3 – OLIVE CORPORATION
A.
2×16,000×15
𝐸𝑂𝑄 = √ = 400
3
B.
ORDER SIZE NO. OF COST PER TOTAL AVERAGE CARRYING TOTAL TOTAL
ORDERS ORDER ORDERING INVENTORY COST PER CARRYING COST
(ANNUAL
COST (ORDER UNIT COST
ORDER/ORDER
SIZE) SIZE/2)
6,400 2.5 15 37.50 3,200 3 9,600 9,637.50
1,600 20 15 150 800 3 2,400 2,550
400 40 15 600 200 3 600 1,200
200 80 15 1,200 100 3 300 1,500
100 160 15 2,400 50 3 150 2,550
PROBLEM 4 – HEAVYWEIGHT CO.
1.
PRODUCT INVOICE PERCENTAGE SHARE OF TOTAL COST COST PER
FREIGHT POUND
X 125,000 2.5 3,125 128,125 12.81
Y 75,000 2.5 1,875 76,875 12.81
Z 100,000 2.5 2,500 102,500 13.67
TOTAL 300,000 7,500 307,500
2.
PRODUCT WEIGHT FRACTION SHARE OF TOTAL COST COST PER
WEIGHT POUND
X 10,000 10,000/23,500 3,192 128,192 12.82
Y 6,000 6,000/23,500 1,915 76,915 12.82
Z 7,500 7,500/23,500 2,393 102,393 13.65
TOTAL 23,500 7,500 307,500

PROBLEM 5 - MAXIE COMPANY

1.
𝐴𝑀𝑁𝑇. 𝐷𝐸𝐵𝐼𝑇𝐸𝐷 𝑇𝑂 𝑀𝐴𝑇𝐸𝑅𝐼𝐴𝐿𝑆 = 100,000 × 80% × 90% × 90% = 64,800
2.
𝐴𝑀𝑁𝑇. 𝐷𝐸𝐵𝐼𝑇𝐸𝐷 𝑇𝑂 𝑀𝐴𝑇𝐸𝑅𝐼𝐴𝐿𝑆 = 100,000 × 80% × 90% × 90% × 98% = 63,504

PROBLEM 6 -
1. FIFO
MATERIALS ISSUED (4.8K + 4.8K + 1,400) = 11,000
END INVENTORY (1.4K + 3.2K + 5.4K) = 63,504
2. AVERAGE
MATERIALS ISSUED (5,200 + 7,180) = 12,280
END INVENTORY = 8,620

PROBLEM 7 – BEDROCK COMPANY

A.
W/P 12,400
MATERIAL 3,600
PAYROLL 4,000
FOH APPLIED 4,800

SPOILED GOODS 100,000

FOH CONTROL 24,000
WORK IN PROCESS 124,000

FINISHED GOODS 12,276,000

WORK IN PROCESS 12,276,000
B.
W/P 11,600
 MATERIAL 3,600
PAYROLL 4,000
FOH APPLIED 4,000

SPOILED GOODS 100,000

WORK IN PROCESS 100,000

FINISHED GOODS 11,500,000

WORK IN PROCESS 11,500,000

12,400,000−12,400
C. 𝑈𝑁𝐼𝑇 𝐶𝑂𝑆𝑇 (𝐴) = = 1,240
10,000−100
11,500,000
𝑈𝑁𝐼𝑇 𝐶𝑂𝑆𝑇 (𝐵) = = 1,161.61
9,900
MULTIPLE CHOICE
1. A
2. B
3. D
4. C
5. B

MULTIPLE CHOICE – PROBLEMS

1. A 6. C 11. C 16. A 21. C

2. C 7. B 12. D 17. B 22. D
3. B 8. A 13. D 18. D 23. A
4. B 9. A 14. B 19. C 24. A
5. A 10. C 15. B 20. B 25. D

CHAPTER 8

PROBLEM SOLVING

PROBLEM 1 – DENMARK COMPANY

1. 1,000,000 / 800,000 X 100= 125%
2. 1,000,000/20,000= 50 per unit
3. 1,000,000/160,000= 6.25 /machine hours
4. 1,000,000 / 500,000 X 100 = 200%
5. 1,000,000/50,000= 20,000 /direct labor hour
PROBLEM 2 – MARCO COMPANY
1. FOH RATE = 255,000/100,000 = 2.55/DLHR
2. FOH APPLIED = 105,000 X 2.55 = 267,750
3. FOH CONTROL – ACTUAL 270,000
(LESS) APPLIED 267,750
 UNDERAPPLIED 2.250
PROBLEM 3 – MARVIN COMPANY
A.
1. WORK IN PROCESS 473,200
FOH APPLIED (84K X 5.60) 473,200
2. FOH CONTROL 470,800
MISCELLANOUS ACCOUNTS 470,800
3. FOH APPLIED 473,200
COST OF GOODS SOLD 2,400
FOH CONTROL 470,800

FOH RATE (456,120/81,450) = 5.60MHR.

B.
COGS (350,000/473,200 X 2,400) = 1,775
FG (100,000/473,200 X 2,400) = 507
W/P (23,200/473,200 X 2,400) = 118

PROBLEM 4 – ELLERY CORPORATION

1.
JOB DIRECT LABOR RATE TOTAL
123 600 180% 1,080
124 940 1,692
125 1,400 2,520
126 5,120 9,216
2.
JOB MATERIAL COST DIRECT LABOR FOVH TOTAL
123 300 600 1,080 1,980
124 1,080 940 1,692 3,712
125 700 1,400 2,520 4,620
126 4,200 5,120 9,216 18,536
28,840
PROBLEM 5 – THERMAL COMPANY
A. DIRECT METHOD
P1 P2 S1 S2
DIRECT COST 90,000 60,000 20,000 32,000
ALLOCATED
COST
S1 10,000 10,000 (20,000)
S2 20,000 12,000 (32,000)
TOTAL 120,000 82,000
BASE 50,000MHRS. 20,000MHRS.
FO RATE 2.40/MHR. 4.10/DLHR.

B. STEP METHOD
 P1 P2 S1 S2
DIRECT COST 90,000 60,000 20,000 32,000
ALLOCATED
COST
S1 2,000 2,000 (20,000) 16,000
S2 30,000 18,000 (48,000)
TOTAL 122,000 80,000
BASE 50,000MHRS. 20,000DLHRS.
FO RATE 2.44/MHR. 4.00/DLHR.

C. ALGEBRAIC METHOD
P1 P2 S1 S2
DIRECT COST 90,000 60,000 20,000 32,000
ALLOCATED
COST
S1 3.143 3.134 (31,429) 25,143
S2 28,572 17,143 11,429 (57,143)
TOTAL 121,715 80,286
BASE 50,000MHRS. 20,000DLHRS.
FO RATE 2.43/MHR. 4.00/DLHR.

2.
S1 -= 20,000 + 20% S2
S2 = 32,000 + 80% S1

S1 = 20000 + 20%( 32,000 + 80% S1)

= 20,000 + 6,400 + .16 S1
S1 - .16S1 = 26.400
= 26,400/.84
= 31,429
S2 = 32,000 + 80% 31,429
= 32,000 + 25,143
= 57,143

PROBLEM 6 – ABC COMPANY

1.
MACHINERY ASSEMBLY REPAIR CAFETERIA
DIRECT COST 52,500 48,000 14,000 11,000
ALLOCATED
COST
S1 5,600 8,400 (14,000)
S2 6,325 4,675 (11,000)
 TOTAL 64,625 61,075
BASE 1,500MHRS. 1,250DLHRS.
FO RATE 42.95/MHR. 48.86/DLHR.

2.
MACHINERY ASSEMBLY REPAIR CAFETERIA
DIRECT COST 52,500 48,000 14,000 11,000
ALLOCATED
COST
S1 4,119 6,176 (14,000) 3,705
S2 8,455 6,250 (14,705)
TOTAL 65,074 60,426
BASE 1,500MHRS. 1,250DLHRS.
FO RATE 43.38/MHR. 48.34/DLHR.

PROBLEM 7 – CENTRAL PARKWAY CORP.

1.
MACHINERY ASSEMBLY REPAIR CAFETERIA
DIRECT COST 120,000 80,000 25,000 10,000
ALLOCATED
COST
S1 13,333 6,667 (26,667) 6,667
S2 8,333 6,667 1,667 (16,667)
TOTAL 141,666 93,334

S1 = 25,000 + 10% of S2
S2 = 10,000 + 25% of S1

S1 = 25,000 + 10% (10,000 + .25S1)

= 25,000 + 1,000 + .025S1
S1 - .025 S1 = 26,000
= 26,000/.975
= 26,667
S2 = 10,000 + .25(26,667)
= 16,667

PROBLEM 8 – MEGASTAR COMPANY

1. ACTUAL FACTORY OVERHEAD 78,600

(LESS) APPLIED (100Kx.8) 80,000
OVERAPPLIED FACTORY OVERHEAD (1,400)
2.
ACTUAL FOH 78,600
 (LESS) BUDGET ON ACTUAL HOURS
FIXED 34,200
VARIABLE (100Kx.44) 44,000 78,200
SPENDING VARIANCE 400
3.
BUDGET ON ACTUAL HOURS 78,200
(LESS) APPLIED FOH 80,000
IDLE CAPACITY VARIANCE 1,800

PROBLEM 9 – ABNER COMPANY

Fixed 33,840 0.47 (33,840/72,000)

Variable 302400 4.20 (72,000 x 4.20)
Total P336,200 4.67

1. APPLEID FOH = 25,218

2.
ACTUAL FOH 15,910
(LESS) APPLIED FOH 25,218
UNDERAPPLIED FOH (9,308)
3.
ACTUAL FOH 15,910
(LESS) BUDGET ON ACTUAL HOURS 25,218
FIXED (33,840/12 MONTH) 2,820
VARIABLE(5,400 x4.20) 22,680 25,500
SPENDING VARIANCE – FAVORABLE 9,590
4.
BUDGET ON ACTUAL HOURS 25,500
(LESS) APPLIED 25,218
IDLE CAPACITY VARIANCE 282

PROBLEM 10 - NORMAN CORPORATION

270,000 − 252,000
𝑉𝑎𝑟𝑖𝑎𝑏𝑙𝑒𝑟𝑎𝑡𝑒/ℎ𝑜𝑢𝑟 =
60,000 − 48,000

HIGH LOW
TOTAL 270,000 252,000
LESS: VARIABLE
(60,000 X 1.50) 90,000
(48,000 X 1.50) 72,000
FIXED 180,000 180,000

ACTUAL FACTORY OVERHEAD 273,000

LESS: APPLIED (60,000 X 90%) X 5.25 283,500
OVERAPPLIED FO (10,500)

ACTUAL FACTORY OVERHEAD 273,000

LESS: BUDGET ALLOWED ON ACTUAL HOURS
FIXED 180,000
VARIABLE (54,000 X 1.50) 81,000 261,000
SPENDING VARIANCE 12,000

BUDGET ALLOWED ON ACTUAL HOURS 261,000

LESS: APPLIED 283,500
IDLE CAPACITY VARIANCE (22,500)

PROBLEM 11 – STRAWBERRY CORPORATION

ACTUAL FACTORY OVERHEAD 30,500
LESS: APPLIED FACTORY OVERHEAD 39,700
OVERAPPLIED FACTORY OVERHEAD – FAVORABLE (9,200)

APPLIED FACTORY OVERHEAD 39,700

COST OF GOODS SOLD 7,416
FINISHED GOODS INVENTORY 973
WORK IN PROCESS INVENTORY 811
FACTORY OVERHEAD CONTROL 30,500

PROBLEM 12 – TINOR COMPANY

A) PRODUCT A PRODUCT B
DIRECT MATERIALS (50 X P120) 6,000 (100 X P120) 12,000
DIRECT LABOR 1,000 3,000
FACTORY OVERHEAD (100 X P 25) 2,500 (300 X P 25) 7,500
TOTAL MANUFACTURING COST 9,500 22,500
NO. OF UNITS 50 100
COST PER UNIT 190/UNIT 225/UNIT

FACTORY OVERHEAD RATE = P200,750/8,030 DIRECT LABOR OURS = P 25/DLHR.

B)
Product A Product B
DIRECT MATERIALS (50 X P120) P 6,000 (100 X P120) 12,000
DIRECT LABOR 1,000 3,000
FACTORY OVERHEAD
MATERIAL HANDLING (40 X P50) 2,000 (20 X P50) 1,000
SCHEDULING & SETUP (7 X 200) 1,400 ( 5 X 200) 1,000
 DESIGN SECTION (5 X P 107.50) 537,50 ( 3 X 107.50) 322.50
NO. OF PARTS (10 X 100) 1,000 (6 X 100) 600
TOTAL COSTS 11,937.50 17,922.50
NO. OF UNITS 50 100
COST PER UNIT 238.75/UNIT 179.23/UNIT

MULTIPLE CHOICE
1. C 6. D
2. C 7. C
3. D 8. A
4. B 9. D
5. D 10. A

MULTIPLRE CHOICE – PROBLEMS

1. A 6. C 11. D 16. C 21. D 26. C

2. B 7. C 12. A 17. B 22. D 27. D
3. C 8. A 13. B 18. A 23. A 28. C
4. C 9. D 14. C 19. A 24. B 29. D
5. C 10. D 15. C 20. A 25. C 30. D

CHAPTER 9

PROBLEM SOLVING

PROBLEM 1 – EVERGREEN
A. 1.CHARGED TO THE JOB
2. CHARGED TO FACTORY OVERHEAD CONTROL

CHARGGED TO JOB CHARGED TO FOC

JOB 401 JOB 102 JOB 401 JOB 402
DIRECT MATERIALS 28,000 37,000 28,000 37,000
DIRECT LABOR 18,000 23,000 18,000 23,000
FACTORY OVERHEAD 5,600 11,200 7,600 15,200
OVERTIME 6,000
TOTAL 51,600 77,200 53,600 75,200

CHARGED TO FOC
OTHER FACTORY COST 16,800
OVERTIME 6,000
TOTAL 22,800
PROBLEM 2
NO. REGULAR OT OVERTIM TOTAL
E
EMPLOYEE HRS RATE PAY HOURS RATE PREMIUM PAY
AUSTRIA 86 36.00 3,096 6 18.00 108.00 3,204
BAUTISTA 88 36.00 3,168 8 18.00 144.00 3,312
DE SANTOS 88 45.00 3,960 8 22.50 180.00 4,140

MOTUS 80 30.00 2,400 2,400

REYES 80 30.00 2,400 2,400
TOTAL 15,024 432.00 15,456

TOTAL TOTAL NET

EMPLOYEE PAY WTAX SSS PAGIBIG PH DEDUCTIO PAY
N
AUSTRIA 3,204 91.23 109 96.12 100 396.35 2,807.65
BAUTISTA 3,312 102.03 127.20 99.36 100 428.59 2,883.41
DE 4,140 145.30 100 100 345.30 3,794.70
SANTOS
MOTUS 2,000 90.90 72 100 262.80 2,137.20
REYES 2,400 15.85 90.80 72 100 278.65 2,121.35
TOTAL 15,456 209.11 563.10 439.48 500 1,711.69 13,744.31

WITHHOLDING TAX
AUSTRIA 3,204
2,500 20.83
704 X 10% 70.40
91.23

BAUTISTA 3.312
2,500 20.83
812 X 10% 81.20
102.03
REYES 2,400
2,083
317 X 5% 15.85
B.
1. PAYROLL 5,456
WTAX PAYABLE 209.11
SSS PREMIUM PAYABLE 563.10
PAG-IBIG CONTRIBUTIONS PAYABLE 439.48
PHILHEALTH CONTRIBUTIONS PAYABLE 500.00
ACCRUED PAYROLL 13,744.31
2. ACCRUED PAYROLL 13,744.31
CASH 13,744.31

3. WORK IN PROCESS (3,096+3,168+3,960) 10,224

FOC (2,400+2,400+432 ) 5,232
PAYROLL 15,456

PROBLEM 3
1.
NAME UNITS PRODUCED PAY PER UNIT GROSS PAY DIFFERENCE
R. CRUZ 240 1,800 2,000 200
J., BRIONES 286 2,145 2,145
C. DAVID 275 2,062.5 2,062.5
A. MENDOZE 240 1,800 2,000 200
F. RIVERA 225 1,687.5 2,000 312.5
R. TOLENTINO 285 2,137.5 2,137.5
2. 11,632
3. 712.50

PROBLEM 4
EMPLOYE REG HRS. RATE PAY OT HRS. OT RATE PAY TOTAL
E PAY
CASTRO 80 150 12,000 12,000
ARDINA 85 160 13,600 5 80 400 14,000
BRIONES 88 150 13,200 8 75 600 13,000
DAVID 88 150 13,200 8 75 600 13,800
FAJARDO 85 150 12,750 5 75 375 13,125
TOTAL 64,750 1,975 66,725

Castro
Total pay 28,800
22,017 5,208.33
6,783x 32% 2,170.56
7,378.89
Ardina
Total pay 29,500
26,042 5.208.33
3,458 x 32% 1,106.56
6,314.89
Briones
Total pay 28,800
23,958 5,208.33
4,842x 32% 1,549.44
 6,757.77

MULTIPLE CHOICE

1. B 6. A 11. B
2. B 7. D 12. C
3. A 8. D 13. D
4. B 9. A 14. D
5. A 10. C 15. D

CHAPTER 10

PROBLEM SOLVING

PROBLEM 1
PROBLEM 1 - MAT. & CONVERSION
ACTUAL WD EP
A) UNITS COMPLETED 8,000 100% 8,000
UNITS IP END 2,000 1/2 1,000
10,000 9,000

UNITS COMPLETED 21,000 100% 21,000

UNITS IP END 4,000 3/4 3,000
25,000 24,000

UNITS COMPLETED 6,000 100% 6,000

UNITS IP END 1,000 3/4 750
500 2/5 200
7,500 6,950

Units completed 32,000 100% 32,000

Units IP end 1,500 1/5 300
4,000 ¾ 3,000
37,500 35,300

Units started 11,000

Units completed 9,000 100% 9,000
Units in process, end 2,000 ¾ 1,500
11,000 10,500

Materials Labor Overhead

Cost incurred 15,750 40,950 25,200
Equivalent prod. 10,500 10,500 10,500
Unit cost 1.50 3.90 2.40

Case 1 Materials Conversion

Started 5,000 WD EP WD EP
Completed 4,000 100% 4,000 100% 4,000
In process, end 1,000 100% 1,000 ¾ 750
5,000 5,000 4,750

Case 2
Received 50,000
Completed 44,000 100% 44,000 100% 44,000
In process end 6,000 ¼ 1,500
50,000 44,000 45,500

Case 3
Started 35,000
Completed 29,000 100% 29,000 100% 29,000
In process, end 3,000 75% 2,250 1/3 1,000
3,000 100% 3,000 1/2 1,500
35,000 34,250 31,500

Problem 4 - Beautiful Co.

Started 12,000
Completed 10,500 100% 10,500 100% 10,500
In process end 1,500 50% 750 2/5 600
1. EUP 12,000 11,250 11,100
Unit cost
M = 72,000/11,250 = P6.40
CC (P88,800 + P44,400) / 11,100 = P12.00
2. Completed & transferred ( 10,500 x P18.40) 193,200
3. In process, end
Materials ( 750 x P6.40) 4,800
L & OH ( 600 x P12.00) 7,200 12,000
Total cost accounted for 205,200

Problem 5 - ABM Company

Department 1 Department 2
Materials Conversion Materials Conversion
Actual EP EP Actual EP EP
Started/received 60,000 40,000
Completed 40,000 40,000 40,000 30,000 30,000 30,009
IP, end 20,000 20,000 15,000 10,000 5,000 8,000
60,000 60,000 55,000 40,000 35,000 38,000
Costs charged to the department
Cost from preceding dept. 720,000 18.00
Cost added in the dept.
Materials 480,000 8.00 245,000 7.00
Labor 330,000 6.00 190,000 5.00
Overhead 220,000 4.00 114,000 3.00
Total costs added 1,030,000 18.00 549,000 15.00
Total costs 1,030,000 18.00 1,269,000 33.00
Total costs accounted for as follows:
C & T (40,000 x 18) 720,000 (30,000 x 33) 990,000
IP end
Cost from preceding dept. (10,000 x 18) 180,000
Materials ( 20,000 x 8) 160,000 ( 5,000 x 7) 35,000
Labor (15,000 x 6) 90,000 ( 8,000 x 5) 40,000
Overhead (15,000 x 4) 60,000 310,000 ( 8,000 x 3) 24,000 279,000
Total cost as accounted for 1,030,000 1,269,000

PROBLEM 6
ACTUAL STRAWBERRY CHOCOLATE CONVERSION
1. UNITS STARTED 100,000 WD EP WD EP WD EP
COMPLETED 90,000 100% 90,000 100% 90,000 100% 90,000
IP END 10,000 10 0% 10,000 70% 7,000
100,000 100,000 90,000 97,000
2. UNIT COST
STRAWBERRY = 180,000/100,000 = 1.80
CHOCOLATE = 135,000/ 90,000 = 1.50
CONVERSION = 116,400/97,000 = 1.20
3. COMPLETED AND TRANSFERRED (90,000 X 4.50) 405,000
4. IN PROCESS, END
STRAWBERRY (10,000 X 1.80) 18,000
CHOCOLATE
CONVERSION (7,000 X 1.20) 8,400

PROBLEM 8 - BRIONES COMPANY

UNITS RECEIVED 28,000
UNITS COMPLETED 16,000 100% 16,000 100% 16,000
UNITS IP END 10,000 - 60% 6,000
UNITS LOST - NORMAL 800 - 100% 800
UNITS LOST – ABNORMAL 1,200 100% 1,200
28,000 16,000 24,000
COST CHARGED TO THE DEPARTMENT
COST FROM PRECEDING DEPARTMENT 280,000 10.00
COST ADDED IN THE DEPARTMENT
MATERIALS 24,000 1.50
CONVERSION 180,000 7.50
TOTAL ADDED 204,000 9.00
TOTAL COSTS TO BE ACCOUNTED FOR 484,000 19.00
COSTS ACCOUNTED FOR AS FOLLOWS:
COMPLETED & TRANSF. (16,000 X 19) + (800 X 17.50) 318,000
FOC ( 1,200 X 17.50) 21,000
IP END
COST FROM PRECEDING DEPT. ( 10,000 X 10) 100,000
MATERIALS -
CONVERSION (6,000 X 7.50) 45,000 145,000
TOTAL COSTS AS ACCOUNTED FOR 484,000

PROBLEM 9 - SLEX CORPORATION

STARTED/RECEIVED 60,000 36,000
INCREASE IN UNITS 9,000
60,000 45,000
COMPLETED 36,000 36,000 36,000 39,000 39,000 39,000
IP, END 9,000 9,000 3,000 6,000 6,000 2,400
LOST 15,000 - - - -
60,000 45,000 39,000 45,000 45,000 41,400

COST CHARGED TO THE DEPARTMENT

COST FROM PREC. DEPT. 230,400 5.12
COST ADDED IN THE DEPT.
MATERIALS 180,000 4.00 135,000 3.00
LABOR 78,000 2.00 82,800 2.00
OVERHEAD 15,600 0.40 41,400 1.00
TOTAL ADDED 273,600 6.40 259,200 6.00
TOTAL COSTS 273,600 6.40 489,600 11.12
COSTS ACCOUNTED FOR AS FOLLOWS:
COMPLETED ( 36,000 X 6.40) 230,400 (30,000 X 11.12) 433,680
IP END
COST FROM PREC. DEPT. (6,000 X 5.12) 30,720
MAT. ( 9,000 X 4) 36,000 (6,000 X 3.00) 18,000
LABOR (3,000 X 2) 6,000 (2,400 X 2.00) 4,800
OH ( 3,000 X 0.40) 1,200 43,200 (2,400 X 1.00) 2,400 55,920
273,600 489,600
PROBLEM 10
RECEIVED 5,000
COMPLETED 3,800 100% 3,800 100% 3,800
IP END 800 40% 320 20 160
LOST 400 100% 400 100% 400
5,000 4,520 4,360
COST FROM PREC. DEPT 60,000 12.00
COST ADDED IN THE DEPT.
MATERIALS 22.600 5.00
CONVERSION COST 17,440 4.00
TOTAL ADDED 40,040 9.00
TOTAL COSTS AS ACCOUNTED FOR 100,040 21.00
COSTS ACCOUNTED FOR AS FOLLOWS

COMPLETED ( 3.800 X 21) 79,800

SPOILED GOODS ( 400 X 15) 6,000
FOC 400 X (21 –15) 2,400
IP END
COST FROM PREC. DEPT. ( 800 X 12) 9,600
MAT. ( 320 X 5) 1,600
CONVERSION ( 160 X 4 ) 640 11,840
TOTAL COSTS AS ACCOUNTED FOR 100,040

Problem 11 - Diamond Company

UNITS RECEIVED 55,000
INCREASE IN UNITS 5,000
60,000
UNITS COMPLETED 45,000 100% 45,000 100% 45,000
UNITS CMPLT & ON HAND 3,000 100% 3,000 100% 3,000
UNITS IP END 12,000 100% 12,000 70% 8,400
60,000 60,000 56,400
COSTS CHARGED TO THE DEPARTMENT

COST FROM DEPARTMENT 24,750 0.4125

COST ADDED IN DEPT.
MATERIALS 7,200 0.12
CONVERSION COST 53,580 0.95
TOTAL ADDED 60,780 1.07
TOTAL COST 85,530 1.4825

MULTIPLRE CHOICE

1. C 6. B 11. D 16. A 21. C 26. A

2. C 7. C 12. B 17. D 22. C 27. B
3. B 8. C 13. B 18. C 23. B 28. D
4. B 9. B 14. D 19. B 24. C 29. D
5. C 10. D 15. D 20. D 25. D 30. B