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1. The comparative inventory data for JPE Manufacturing Corporation for the year
ended December 31, 2018 is summarized below:
January 1 December 31
Materials control 495,000 513,000
Work in process – material 138,000 132,000
Work in process – labor 127,000 136,000
Work in process – overhead 184,000 161,000
Finished goods control 525,000 487,000
During the year 2018, the corporation completed, among others, the following
a) Purchases, all on account, direct materials, 2,100,000; indirect materials,
b) The total materials requisitioned for use during the year included 360,000 for
indirect materials, 42,000 for shipping of finished goods deliveries, and 35,000
for general office repairs.
c) The payroll for the year was broken down as follows: direct labor, 1,650,000,
indirect labor, 550,000; sales salaries, 840,000, and office salaries, 460,000.
d) The payroll was vouchered, and analysis disclosed the following details:
Gross W/H Tax SSS Medicare HDMF ECC
Direct labor 1,650,000 80,000 40,000 12,000 38,000 6,000
Indirect labor 550,000 40,000 12,500 3,000 12,000 1,500
Sales salaries 840,000 60,000 20,000 8,000 22,000 4,000
Office salaries 460,000 50,000 11,000 5,000 14,000 2,500
e) The Corporation’s share of the payroll taxes, SSS contribution, Medicare premium,
HDMF premiums and employer compensation contribution was appropriately recorded.
(Assume the same amount of SSS, Medicare and HDMF premiums was contributed by the
f) Other manufacturing expenses vouchered amounted to 920,000, and depreciation
charges were 250,000 on plant assets, 120,000 on delivery trucks and 80,000 on
office equipment.
g) Manufacturing expenses were applied to production at predetermined rate equal
to 130% of direct labor cost.
h) Completed goods were transferred to the finished goods warehouse.
i) All sales are made on terms 2/10, n/30; billing price is at 150% of cost.
j) At the end of the year, any overapplied or underapplied manufacturing expenses
is treated as an adjustment to the cost of goods sold.

1. Prepare entries in general journal form, to record the above transaction of JPE
Manufacturing Corporation for the year 2018.
2. Prepare statement of cost of goods manufactured and sold for the year ended Dec
31, 2018.
3. Determined the following amounts:
a. Prime cost b. Conversion cost
c. Product cost d. Period cost

2. For the year just ended, Royal Corporation reported total manufacturing costs
of 3,600,000 and cost of goods sold of 3,750,000. For the past periods, the factory
overhead had been about 1/2 of materials cost and 2/5 of the conversion costs. Raw
materials on January 1 of 240,000 was 6/5 of the December 31 inventory, while work
in process of 160,000 on January 1 increased by 1/4 at the year-end. The finished
goods inventory decreased by 1/3.

Required: Prepare a statement of cost of goods sold for the year just ended, giving
as much details as can be determined from the information given.
3. You are asked to bring the following incomplete accounts up to date through May
2018. Also consider the additional information that follows:
April 30, 2018 May 31, 2018
Materials control ? 180,000
Work in process control 20,000 ?
Finished goods control 250,000 ?
Accounts payable 100,000 ?
Department factory overhead control 150,000
Factory overhead applied ?
Cost of goods sold ?
Additional information:
a. The overhead is applied by using a predetermined rate that is set at the beginning
at each year by forecasting the year’s overhead and relating it to forecasted direct
labor hours. The budget for 2018 called for a total of 150,000 hours of direct
labor and 2,250,000 of factory overhead.
b. The accounts payable are for direct materials only. The balance on May 31 was
50,000. Payments of 350,000 were made during May.
c. The finished goods inventory as of May 31 was 220,000.
d. The cost of goods sold during the month was 650,000.
e. On May 31 there was only one unfinished job in the factory, cost records show
that 10,000 (400 hours) of direct labor and 20,000 of the indirect materials had
been charged to the job.
f. A total of 9,400 direct man-hours were work during the month of May. All factory
workers earn the same rate of pay.
g. All “actual” factory overhead incurred during May has already been posted.

Required: Compute for the following:

1. Materials purchased during May:
2. Cost of good completed during May:
3. Overhead applied during May:
4. Balance, Work in process, May 31, 2018:
5. Materials used during May:
6. Balance, Stores control, April 30, 2018:
7. Over or under applied overhead for May:

4. The following data refer to Plain & Prints Company for the year 2018:
Sales revenue 950,000
WIP – 12/31/2018 30,000
WIP – 1/1/2018 40,000
Selling and administrative expenses 150,000
Income tax expense 90,000
Purchases of raw materials 180,000
Raw materials – 12/31/2018 25,000
Raw materials – 1/1/2018 40,000
Direct labor 200,000
Utilities – Plant 40,000
Depreciation – Plant and equipment 60,000
Finished goods – 12/31/2018 50,000
Finished goods – 1/1/2018 20,000
Indirect materials 10,000
Indirect labor 15,000
Other manufacturing overhead 80,000

Required: Determine the cost of goods manufactured for 2018.