CHAPTER 3 - COST ACCOUNTING CYCLE

Problem 1 - Ram Manufacturing Company

Direct materials used (75,000 x 90%)
Direct labor (97,000 x 93% )
Factory overhead (90,210 x 12%)
Total manufacturing costs
Work in process, January 1
Cost of goods put into process
Less: Work in process, January 31
Cost of goods manufactured

67,500.00
90,210.00
112,762.50
270,472.50
25,500.00
295,972.50
27,000.00
268,972.50

Problem 2 - Donna Company

Direct materials used
Materials, May 1
Purchases
Total available
Less> Mat.- May 31
Direct labor
Factory overhead
Total manufacturing costs
Work in process, May 1
Cost of goods put into process
Less: Work in process, May 31
Cost of goods manufactured
Finished goods May 1
Total goods available for sale
Less: Finished goods May 31
Cost of goods sold

22,000
100,000
122,000
25,000

97,000
80,000
120,000
297,000
25,800
322,800
18,000
304,800
45,000
349,800
24,000
325,800

Problem 3 Blanche Corporation

1, Income Statement
Sales
Less: Cost of goods sold
Gross profit
Less: Operating expenses
Marketing
Administrative
Net income

1,200,000
751,000
449,000
60,000
12,000

72,000
377,000

Blanche Corporation
2.
Direct materials used
Materials, March 1
Purchases
Total available
Less> Mat.- March 31
Direct labor
Factory overhead
Total manufacturing costs
Work in process, March 1
Cost of goods put into process
Less: Work in process, March 31
Cost of goods manufactured
Finished goods March 1
Total goods available for sale
Less: Finished goods March 31
Cost of goods sold
Problem 4 - Roy Company
1, Entries
a. Materials
Accounts payable
b. Payroll
Withholding taxes payable
SSS Premiums payable
Phil Health contributions payable
Pag-ibig funds contributions payable
Accrued payroll
Work in process
Factory overhead control
Payroll
c. Materials
Accounts payable
d. Factory overhead control
SSS premiums payable
Phil Health contributions payable
Pag-ibig funds contributions payable

50,000
400,000
450,000
42,000

408,000
210,000
140,000
758,000
100,000
858,000
95,000
763,000
90,000
853,000
102,000
751,000

120,000
120,000
54,000
11,200
2,400
375
1,620
38,405
45,000
9,000
54,000
25,000
25,000
5,595
3,600
375
1.620

e. Work in process
Factory overhead control
Materials

75,000
14,000

f. Accounts payable
Materials

1,000

89,000
1,000

Page 2 Chapter 3
g. Accounts payable
Accrued payroll
Cash

136,500
38,405
174,905

h. Factory overhead control

Miscellaneous accounts

16,900

i. Work in process
Factory OH Applied (45,000 x 120%)

54,000

16,900
54,000

j. Finished goods
Work in process

116.000
116,000

k. Accounts receivable
Sales

150,000
150,000

Cost of goods sold

Finished goods

90,000
90,000

2. Statement of cost of goods sold

.
Direct materials used
Purchases
Less: Purchase returns
Total available for use
Less> Mat.- October 31
Direct labor
Factory overhead
Total manufacturing costs
Less: Work in process, October 31
Cost of goods manufactured
Less: Finished goods March 31
Cost of goods sold, normal
Less: OA-FO
Cost of goods sold, actual
Problem 5 Darvin Company
1. Entries
a. Materials
Accounts payable
b. FOControl
Accounts payable
c. Payroll
W/Taxes payable
SSS Premium payable
Phil Health contributions payable
PFC payable
Accrued payroll

145,000
1,000
144,000
55,000

89,000
45,000
54,000
188,000
72,000
116,000
26,000
90,000
8,505
81,495
200,000
200,000
35,000
35,000
210,000
18,520
8,400
1,125
6,300
175,655

Page 4
Work in process
Factory Overhead control
Selling expense control
Adm. expense control
Payroll

140,000
30,000
25,000
15,000
210,000

d. Accrued payroll
Cash

175,000

e. FO Control
Selling expense control
Adm. Expense control
SSS prem. Payable
MC payable
PFC payable

14,200
2,375
1,350

175,000

10,500
1,125
6,300

f. Work in process
FO Control
Materials

185,000
35,000

g. Work in process
FO Control

114,200

h. Finished goods
Work in process

410,000

i. Accounts receivable
Sales

539,000

Costs of goods sold

Finished goods

385,000

j. Cash

220,000
114,200
410,000
539,000
385,000
405,000

Accounts receivable
k. Accounts payable
Cash

405,000
220,000
220,000

Page 5
2. Cost of goods sold statement
Direct materials used
Materials, January 1
Purchases
Total available
Less> Mat.- Jan. 31
Ind. Materials
Direct labor
Factory overhead
Total manufacturing costs
Work in process, January 1
Cost of goods put into process
Less: Work in process, January 31
Cost of goods manufactured
Finished goods January 1
Total goods available for sale
Less: Finished goods January 31
Cost of goods sold
3. Income Statement
Sales
Less: Cost of goods sold
Gross profit
Less: Operating expenses
Selling
Administrative
Net income
4 Balance sheet
Cash
Accounts receivable
Finished goods
Work in process
Materials

110,000
194,000
60,000
47,200
30,000

Total

_______
441,200

Problem 6
1.
Cost of goods manufactured
Work in process, December 31
Cost of goods put into process
Total manufacturing costs
Work in process, January 1

50,000
200,000
250,000
30,000
35,000

65,000

185,000
140,000
114,200
439,200
18,000
457,200
47,200
410,000
35,000
445,000
60,000
385,000
539,000
385,000
154,000

27,375
16,350

43,725
110,275

Accounts payable
Accrued payroll
W/tax payable
SSS Prem. payable
Medicare Cont. payable
PFC payable
Common stock
Retained earnings

25,000
8,655
18,520
18,900
2,250
12,600
200,000
155,275
441,200

800,000
87,000
887,000
( 790,000)
97,000

Page 6
2.
Cost of goods manufactured
Finished goods, January 1
Total goods available for sale
Cost of goods sold
Finished goods, December 31
4.

Direct materials used

Materials, December 31
Total available for sale
Materials, January 1
Materials purchased

Problem 7 Kyle Manufacturing Company

1.
Direct materials used ( 300.000 x 75%)
Direct labor (350,000 x 60%)
Factory overhead actual
Indirect materials (300,000 x 25%)
75,000
Indirect labor (350,000 x 40%)
140,000
Heat, light, and water
120,000
Depreciation
75,000
Property taxes
65,000
Repairs and maintenance
40,000
Total manufacturing costs/cost of goods manufactured
2,
3.
4.
5

800,000
80,000
880,000
(750,000)
130,000
590,000
150,000
740,000
(100,000)
640,000
225,000
210.000

515,000
950,000

Unit cost = 950,000/125,000 = P7.60 per unit

Prime cost = 225000 + 210,000 = P 435,000
Conversion cost = 210,000 + 515,000 = P 725,000
Period cost = 80,000 + 50,000 = P 130,000

Problem 8 - Norman Company

1,
Materials, October 1
Purchases
Materials, October 31
Direct materials used
Direct labor
Factory overhead (80,000 = 12,500 x 8.00)
6,40
Total manufacturing costs

48,000
112,000
(40,000)
120,000
80,000
100,000
300,000

2.

Total manufacturing costs

Work in process, Oct. 1
Work in process, Oct. 31
Cost of goods manufactured

300,000
24,000
( 16,000)
308,000

3.

Cost of goods manufactured

Finished goods, Oct. 1
Finished goods, Oct. 31
Cost of goods sold

308,000
72,000
( 80,000)
300,000

Page 7
4.
Sales
Cost of goods sold
Marketing and administrative expenses
Net income
Problem 9 Janice Company
1,
Sales (50,000/10%)
Selling & administrative expenses
Net income
Cost of goods sold

400,000
( 300,000)
( 40,000)
60,000
500,000
( 50,000)
( 50,000)
400,000

2.

Cost of goods sold

Finished goods, March 31
Finished goods, March 1
Cost of goods manufactured

400,000
180,000
( 120,000)
460,000

3.

Cost of goods manufactured

Work in process, March 31
Work in process, March 1
Total manufacturing costs
Factory overhead
Direct labor (126,000/75%)
Direct materials used
Materials, March 31
Purchases
Materials, March 1

460.000
100,000
( 90,000)
470,000
(126,000)
(168,000)
176,000
20,000
(100,000)
96,000

Problem 10 - Selina Corporation

1.
Cost of goods manufactured
Work in process, December 31
Cost of goods put into process

2.
3.

1,700,000
500,000
2,200,000

Cost of goods manufactured + WP, end = TMC + WP, beg

1700,000 + X
= 1,800,000 + .80X
X - .80X
= 1,800,000 1,700,000
X
= 100,00/.20
= 500,000
WP, Dec. 31 = 500,000
Total manufacturing cost
Factory overhead ( (1,800,000 x 25% )
Direct labor (450,000/72%)
Direct materials used

Problem 11 - Kyra Alexis Corporation

1.
Materials put into process
Materials, Aug. 31
Materials, Aug. 1
Materials purchased

1,800,000
( 450,000)
( 625,000)
725,000
120,000
75,000
( 60,000)
135,000

Page 8
2.
Materials put into process
Direct labor ( 70,000 + 80,000)
Factory overhead - A (70,000 x 120%)
B ( 80,000 x 80%)
Total manufacturing cost

120,000
150,000
84,000
64,000

148,000
418,000

3.

Total manufacturing cost

Work in process, Aug. 1
Work in process, Aug. 31
Cost of goods manufactured

418,000
80,000
( 64,000)
434,000

4.

Cost of goods manufactured

Finished goods, Aug. 1
Finished goods, Aug. 31
Cost of goods sold

434,000
54,000
( 60,000)
428,000

Multiple choice
1. A
2. C
3. B
4. A
5. D
6. B
7. D
8 C
9. B
10.B

11.
12.
13.
14.
15.
16.
17.
18.
19
20.

B
C
B
C
C
D
B
B
B
B

21.
22.
23.
24.
25.
26.
27.
28.
29.
30.

B
D
A
B
116,000
A (No. 5 should be 73%
D
A
A
B