B A 1 D A 16 B

C 2 D 17
D 3 B/D 18
D 4 C 19
D 5 C B 20 B
A B 6 C 21 C
B A 7 B 22
B 8 C 23
C 9 A D 24
A 10 B 25 C
A 11 D 26 D
C 12 A B 27
D 13 B C 28
B 14 A 29
D B 15 B 30 Sales 500000
COGS 350000 B
Gross margin 150000
Operating expenses 30000
Operating income 120000
31 Cost per unit 1.25 A D 37 Raw mats beg
No of products sold 22000 Purchases
27500 Raw mats end
Raw materials used
32 traceable = direct cost Direct labor
33 Salaries 300000 Conversion cost
Rent 180000
Fixed cost 480000 A 38 Raw mats beg
Purchases
34 75000-15000/20000 = 3 51000 Raw mats end
35 Direct material and labor 700000 Raw materials used
Variable manufacturing 100000 Direct labor
Fixed cost 98000 FOH
898000 Total manufacturing cost
WIP beg
36 Beg 0 WIP end
Purchases 110000 COGM
End -15000 FG beg
Used 95000 FG end
Direct labor 80000 COGS
Factory overhead 120000
Total manufacturing cost 295000 Sales 100%
WIP beg 19000 COGS 60%
WIP end 0 Gross margin 40%
Cost of goods manu… 314000
FG beg 0
FG end 26000
COGS 288000
 4000 B D 39 Direct materials used 120000
90000 Direct labor 144000
0 FOH 164500
94000 Total manufacturing cost 428500
50000 WIP beg 50000
144000 WIP end 62500
COGM 416000
4000 FG beg 72000
90000 FG end 68000
0 COGS 420000
94000 S&A expenses 140000
50000 Total operating cost 560000
75000
219000 C 40 Raw mats beg 58600
21000 Purchases 72000
0 Raw mats end 60200
240000 Raw mats used 70400
0 Direct labor 40000
45000 FOH 64000
195000 Total manufacturing cost 174400
WIP beg 46000
325000 WIP end 62000
195000 COGM 158400
130000 FG beg 87300
FG end 90700
COGS 155000
 Multiple Choice Questions
C 1 A 15
D A 2 Cost
C D 3 Selling.price 13 Allocation
Variable cost 9 Allocation
Contribution Margin 4 Total cost

A 4 B 16
A D 5 Applied Overhead 310000 Cost
Actual Overhead 340,600 Allocation
Underapplied 30,600 Allocaiton
Total cost
A C 6 Cost / Orders
(4,320 - 3,120) 1200 A 17
(1,800 - 1,200) 600 Cost
Variable cost 2 Allocation

A C 7 Cost / Units A 18 Applied overhead

(21,600 - 20,000) 1600 Actual overhead
(18,000 - 10,000) 8000 Overapplied
Variable cost 0.20
C 19 Direct labor hours
D B 8 21,600 = [(1.48571285) x 18,000] + FC Predetermined OH rate
21,600 = [26,742.85713] + FC Applied overhead
FC = 26,742.85713-21,600
FC = 5143 A C 20 Raw mats beg.
Purchases
A D 9 TC = [(1.485714285) x 14,000] + 5,142.85713 Raw mats end
TC = [20,799.99999] + 5142.85713 Raw materials used
TC = 25943 Direct labor
Factory overhead
A 10 Total manufacturing cost
B 11 WIP Beg
C 12 WIP end
C 13 Variable cost 10 CGM
Budgeted labor hours 18000
Variable cost allocation 180000 A 21 Direct labor hour
Predetermined OH rate
B C 14 Fixed cost 80000 Applied overhead
Pre determined OH rate 0.45
Fixes cost allocation 36000 B 22 Direct labor hour
Predetermined OH rate
Applied overhead
 Maintenance Personnel Cutting Molding
120000 60000 140000 150000
-120000 20000 52500 47500
-80000 32000 48000
224500

Maintenance Personnel Cutting Molding

120000 60000 140000 150000
-120000 63000 57000
-60000 24000 36000
227000

Maintenance Personnel Cutting Molding

120000 60000 140000 150000
-120000 20000 52500 47500

plied overhead 600000

tual overhead 500000
100000

ect labor hours 150000

edetermined OH rate 6
plied overhead 900000

w mats beg. 264000

w mats end -310000

w materials used 122000
475000
ctory overhead 285000
tal manufacturing cost 882000
219000
-228000
873000

ect labor hour 20000

edetermined OH rate 0.8
plied overhead 16000
 ect labor hour 25000
edetermined OH rate 0.8
plied overhead 20000
A. DIRECT METHOD
Maintenance Technology Mixing Finishing
Cost 83200 50000
Allocation -83200 31200 52000
Allocation -50000 11111.11111 38888.88889
Total cost 42311.1111 90888.8889

B. STEP-DOWN METHOD
Maintenance Technology Mixing Finishing
Cost 83200 50000
Allocation -83200 16640 24960 41600
Allocation -66640 14808.88889 51831.11111
Total cost 39768.8889 93431.1111

C. ALGEBRAIC
Maintenance Technology Mixing Finishing
Cost 83200 50000
Allocation -90000 18000 27000 45000
Allocation 6800 -68000 13600 47600
Total cost 40600 92600

Computation
M = 83200 + [10/100] x T
T = 50000 + [20/100] x M

M = 83200 + (.10) x [50000 + (.20) x M]

M = 83200 + 5000 + .02M
1M - .02M = 5000 + 83200
.98M = 88200
M = 90000

T = 50000 + (.20) x 90000

T = 50000 + 18000
T = 68000
DIRECT METHOD
Overhead Service departments Revenue Centers
Amount Admin Mainte Loans Checking Savings
Direct cost ₱ 530,000 ₱ 450,000 ₱ 900,000 ₱ 600,000 ₱ 240,500
Admin No. of emplo ₱ (530,000) ₱ 305,769 ₱ 122,308 ₱ 101,923
Maintenance Footage ₱ (450,000) ₱ 208,763 ₱ 46,392 ₱ 194,845
Total cost ₱ 1,414,532 ₱ 768,699 ₱ 537,268

STEP DOWN METHOD

Overhead Service departments Revenue Centers
Amount Admin Mainte Loans Checking Savings
Direct cost ₱ 530,000 ₱ 450,000 ₱ 900,000 ₱ 600,000 ₱ 240,500
Admin No. of emplo ₱ (530,000) ₱ 124,706 ₱ 233,824 ₱ 93,529 ₱ 77,941
Maintenance Footage ₱ (574,706) ₱ 266,616 ₱ 59,248 ₱ 248,842
Total cost ₱ 1,400,440 ₱ 752,777 ₱ 567,283

Getting the percentage of service rendered by admin to maintenance

Admin - Maintenance 8/34 ₱ 0.2353 ₱ 124,706
Maintenance - Admin 30/127 ₱ 0.2362 ₱ 106,299

ALGEBRAIC/RECIPROCAL METHOD
Overhead Service departments Revenue Centers
Amount Admin Mainte Loans Checking Savings
Direct cost ₱ 530,000 ₱ 450,000 ₱ 900,000 ₱ 600,000 ₱ 240,500
₱ (673,655) ₱ 158,507 ₱ 297,201 ₱ 118,880 ₱ 99,067
₱ 143,742 ₱ (608,507) ₱ 215,613 ₱ 47,914 ₱ 201,239
₱ 87 ₱ 0 ₱ 1,412,814 ₱ 766,794 ₱ 540,805
Computation
AP = 530,000 + (30/127) x M
M = 450,000 + (8/34) x AP

AP = 530000 + (30/127) x [450,000 + (8/34) x AP] M = 450,000 (8/34) x 673,655

AP = 530,000 + 106,299 + (240/4328)AP ₱ 608,507 M
AP - .055452865AP = 530,000 + 106,299
.944547135AP = 636,299
₱ 673,655 AP

FULL ABSORPTION VARIABLE COSTING

Sales ₱ 57,000 Sales
Variable Variable
SGA ₱ - SGA
Prod ₱ (15,200) Prod
Fixed ₱ (15,200) (3800/5000) Contribution margin
Gross margin / CM ₱ 26,600 Fixed
OPEX SGA
VSGA ₱ (7,600) (3800/5000) Prod
FSGA ₱ (14,000) FULL Variable Income
Absorption income ₱ 5,000
*For internal purposes
*Producing more units cannot affect in t
Only for revenue centers
 ₱ 57,000

₱ (7,600)
₱ (15,200)
₱ 34,200

₱ (14,000)
₱ (20,000) FULL
₱ 200

e units cannot affect in the income statement

1 RM inventory 150000
Accounts payable 150000

2 WIP 90000
FOH 10000
RM inventory 100000

3 WIP 62000
FOH 20000
Selling Expenses 30000
Administrative Expenses 16000
Withholding taxes payable 19800
SSS payable 7100
PhilHealth payable 2000
HDMF 2600
Salaries payable / cash 96500

4 FOH 8900
Sales Expense 3500
Administrative expense 2000
SSS payable 8800
PhilHealth Payable 2000
EC contribution 900
HDMF payable 2700

5 FOH 42000
Selling expense 30000
Administrative expense 10000
Accounts payable 82000

6 FOH 2000
Depre exp - Sales 1000
Depre exp - Admin 1000
Accumulated depreciation 4000

7 WIP 82900
FOH 82900

8 FG inventory 178000
WIP 178000
 9 COGS 200000
FG inventory 200000

Accounts receivable 320000

Sales 320000

10 Cash 260000
Accounts receivable 260000

11 RM inventory 15000
WIP 15000

12 Accounts payable 190000

Cash 190000

13 Provision for income tax 6000

Income tax payable 6000

P5-2

a Physical output
Factory overhead 429000
Units 12000
Predetermined OH rate 35.75
Units produced 3500
Applied overhead 125125

b Direct labor cost

Factory overhead 429000
Direct labor 330000
Predetermined OH rate 1.3
Labour hours 94000
Applied overhead 122200

c Direct material cost

Factory overhead 429000
Direct material cost 120000
Predetermined OH rate 3.575
 direct material cost 38000
Applied overhead 135850

d Direct labor hours

Direct material cost 0
AMHERST CORPORATION
Statement of cost of goods manufactured
For the month ending Oct. 31, 2015

RM inventory, beg 52000

Purchases 150000
Indirect materials -10000
Rm inventory, end -117000
RM used 75000
Direct labor 62000
FOH - applied 82900
Total manufacturing cost 219900
WIP, beg 36000
WIP, end -77900
Cost of goods manufactured 178000
FG, beg 48000
FG, end -26000
COST OF GOODS SOLD 200000
Actual OH 82900
Applied OH 82900 0
COST OF GOODS SOLD 200000

AMHERST CORPORATION
Statement of profit or loss
For the month ending Oct. 31, 2015

Sales 320000
COGS -200000
Gross profit 120000
Operating expenses
Selling expense -64500
Administrative expense -29000
Operating loss 26500