ACCTG 201 Finals

G02 - Group Activity 2 (Comprehensive)

Prepared by: Group 2

PROBLEMS

1. The Josenian Company had the following information on January 31, 2019:

Materials, beg. P 13,000

Materials, end 2,100

Indirect Materials 1,000

WIP, beg. 13,500

WIP, end 5,100

Purchases 16,000

Purchase Returns 500

Direct Labor 11,800

Manufacturing Overhead 15,000

Finished Goods, beg. 6,000

Finished Goods, end 3,700

Under-applied Factory Overhead 750

How much is the Cost of Goods Manufactured for the month ended January 31, 2019? 7

A. 60,600 C. 52,200

B. 62,900 D. 63,650

2. Diamond Star Machine Shop is a manufacturer of electronic bikes or e-bikes for vacation
resorts. Peter Dante, the plant manager of Diamond Star, obtains the information for Job #05
in September 2018. A total of 99 units were started, and 14 spoiled units were detected and
rejected at final inspection, yielding 85 good units. The spoiled units were considered to be
normal spoilage. Costs assigned prior to the inspection point are 1,999 per unit. The current
disposal price of the spoiled units are 230 per unit. When the spoilage is detected, the spoiled
goods are inventoried at 230 per unit. Assume that the 14 bad units of Diamond Star Machine
Shop's Job #05 can be reworked for a total cost of 1,700.A total cost of 10,150 associated with
these units has already been assigned to Job #05 before the rework.

Assuming the spoilage is common to all job, how much is the normal spoilage? 4

A. 3,220 C. 27,986

B. 24,766 D. 12,620

3. SelectMe Company uses a job order costing system. At the beginning of the year, the
company had three jobs in process with the following costs:
 Direct Material Direct Labor Overhead

Job#123 P 350 000 P 40 150 P 20 075

Job#143 P 135 000 ? P 14 300

Job#163 P 73 650 P 12 500 ?

SelectMe pays its workers P 550 per hour and applies overhead on a direct labor hour basis.
What is the overhead application rate per direct labor hour? 11

A. P 73.00 C. P 17.43

B. P 275.00 D. P 550.00

4. Refer to the information below:

Opening inventory 7,000 units

Completion %
Materials All
Labor 60%
Overhead 70%
Put in process 26,000
Materials
Labor
Overhead is 90% of Labor cost
Units completed and transferred to stock 30, 400
In process at the end 2,600
Materials All
Labor 80%
Overhead 75%

The production equivalent for Labor is:

Weighted Average FIFO
A. 33, 000 28, 280
B. 32, 480 28, 280
C. 32, 480 29, 680
D. 33, 000 29, 680

5. The Mercedes Corporation has two production departments and maintains a process cost
system. The following is a summary of the costs for the month of December 2019:

Units Department 1 Department 2

Beginning WIP Inventory (Dec.1) 2,100 800

Complete as to material 90% 0%

 Complete as to conversion 85% 40%

Units started in December 3,800 ?

Units completed in December ? 3,000

Ending WIP Inventory (Dec. 31) 2,000 ?

Complete as to material 80% 0%

Complete as to conversion 50% 60%

Costs

Beginning WIP Inventory

Transferred In - P10,800

Material P5,000 0

Conversion 4,520 980

Current

Transferred In - ?

Material 40,420 5,300

Conversion 32,860 10,750

Requirements:

A. Using the Weighted Average Method, compute for the Cost per EUP of Department 1.

B. Using the FIFO Method, compute for the Cost per EUP of Department 2. 9

Requirement A Requirement B

A. TOTAL: 15.89 TOTAL: 20.55

DM: 8.258 Trans. In:15.89

OH: 7.628 DM: 1.76

OH: 2.90

B. TOTAL: 20.55 TOTAL: 15.89

Trans. In:15.89 DM: 8.258

DM: 1.76 OH: 7.628

OH: 2.90

C. TOTAL: 16 TOTAL: 20.55

DM: 9 Trans. In:15.89

 OH: 7 DM: 1.76

OH: 2.90

D. TOTAL: 14 TOTAL: 20.55

DM: 8 Trans. In:15.89

OH: 6 DM: 1.76

OH: 2.90

6. The Sweet Temptations Company has two processing departments, Cooking and
Packaging. Ingredients are place into production at the beginning of the process in Cooking,
where they formed into various shapes. When finished, they transferred into Packaging, where
the candy placed into heart and tuxedo boxes and covered with foil. All material added in
Packaging considered as one material for convenience. Since, the boxes contain a variety of
candies, they considered partially complete until filled with the appropriate assortment. The
following information relates to the two departments for February 2018:

COOKING DEPARTMENT:

Beginning WIP (40% complete as to conversion 8,000 units

Unit started this period 36,000 units

Ending WIP (70% complete as to conversion) 3,600 units

PACKAGING DEPARTMENT:

Beginning WIP (0% complete as to material, 65% complete as to 2,500 units

conversion)

Unit started during period ? units

Ending WIP (0% complete as to materials, 70% complete as to 1,200 units

conversion)

Transferred In Material Conversion

COOKING DEPARTMENT

Beginning Work in Process Inventory $293,000 $80,000

Current Period $1,379,000 $1,293,440

PACKAGING DEPARMENT

Beginning Work in Process Inventory $166,420 $0 $7,623

Current Period $383,640 $245,490

What is the cost of ending inventory under packaging department under FIFO method? 2
A. $89,040 C. $88,900

B. $88,000 D. $89,000

7. The Dasig Department is the first of a two-stage production process. Spoilage is identified
when the units have completed the Dasig process. Cost of spoiled unuts are assigned to units
conpleted and transferred to the second department in the period spoilage is identified. The
foolowing information concerns Dasig's conversion costs in September:

Units Conversion Cost

Beginning work in process (50% complete) 4,000 P 20,000

Units started in September 16,000 151,000

Spoilage-Normal 1,000

Units completed and transferred 14,000

Ending work in process ( 80% complete) 5,000

Using the weighted average method, what was the Dasig's conversion cost transferred to the
second production department? 8

A.119,700 C.128, 250

B.135,000 D.142, 500

8. Lambo Company, which has a standard cost system, had 1,700 cans of pineapple juice in
its inventory at January 1, purchased in February for P10 per can of pineapple and carried at a
standard cost of P13. The following information pertains to cans for the month of January:

Actual number of units purchased 2,300

Actual number of units used 2,400

Standard number of units allowed for actual production 2,200

Standard cost per unit P13.00

Actual cost per unit P9.00

The favorable materials purchase price variance for cans in June was? 6

A. 8,000 C. 9,000

B. 7,500 D. 9,200
9. KAYA Company uses a standard costing system. The following cost functions apply to its
manufacturing overhead items:

OVERHEAD ITEMS Cost

Indirect material $0.60 per DLH
Indirect Labor $1.00 per DLH
Utilities $0.50 per DLH
Insurance $7 200
Depreciation $29 000

Information for the month of September is as follows:

Actual Overhead Cost Incurred:

Indirect Material $20 600
Indirect Labor $25 000
Utilities $8 400
Insurance $7 600
Depreciation $29 000
TOTAL $90 600

Actual Direct Labor Hours worked ------------------------------------------------ 23 000

Standard Direct Labor Hours allowed for Production achieved ----------------26 000

KAYA Company uses expected capacity to calculate Stanfard Overhead Rates. The monthly
expected capacity is 25 000 hours.

A. Calculate the following Standard OH rate based upon expected capacity:

1. Variable Overhead Rate
2. Fixed Overhead Rate
B. Calculate the following Variances:
1. Variable Overhead Spending Variance
2. Variable Overhead Efficiency Variance
3. Fixed overhead Spending Variance
4. Fixed overhead Volume Variance 12
Req. A.1 Req. A.2 Req. B.1 Req. B.2 Req. B.3 Req. B.4
A. 2.10 2.10 800 F 6 000 F 400 U 1 200 F
B. 1.95 1.95 700F 6 300 U 350 F 1 450 U
C. 2.10 1.45 700 U 6 300 F 350 U 1 450 F
D. 1.45 2.10 350 U 1 459 F 700 U 6 300 F

10. Luv Pearls Inc. produces a three-topping milk tea and uses a standard cost system. The
three toppings are Boba, Rainbow Jelly and Mango Pop. To some extent, discretion may be
used to determine the actual mix of these toppings. The standard cost card for a milk tea
follows:

Boba 4 ounces at 5.23 per ounce

Rainbow Jelly 4 ounces at 18.29 per ounce

Mango Pop 4 ounces at 26.13 per ounce

During September 2019, the company produced 8,800 milk teas and used the following
inputs:

Boba 400

Rainbow Jelly 600

Mango Pop 400

What are the Material Mix and Material Yield Variances?

Material Mix Variance Material Yield Variance

A. 6,000 F 6,000 F

B. 6,272 F 6,630 U

C. 6,272 U 6,630 U

D. 6,630 F 6,272 F

11. Riego Company can make 1,000 toy robots with the following costs:

Direct Material P 364, 000

Direct Labor 135, 200

Variable Overhead 78, 000

Fixed Overhead 78, 000

The company can purchase the 1,000 robots externally for P 650, 000. The avoidable fixed
costs are P 26, 000 if the units are purchased externally.

What is the cost savings if the company makes the robots? 15

A. 5, 200 C. 52, 000

B. 10, 400 D. 20, 800

12. Abante Company produces metal straws that is retailed through local department stores.
The company has the capacity to produce 20,000 metal straws per year. It is operating at 85
percent of annual capacity and, at this level of operation, the cost per straw is as follows:

Direct Material P 150,000

Direct Labor 65,000

Variable Overhead 35,000

Fixed Overhead 46,200

Total 296,200

The average sales price for the output produced by Abante Company is P350,000 per year.
USJR has approached the company to supply 1,000 metal straws for the Josenians for P15
per straw. What would be the peso effect on pre-tax income if this order were accepted? 14
A. P2,000 C. P2,500

B. P1,500 D. P3,500

13. Reigo Realty manages five complexes in its city. Below are the summary income
statements for each apartment complex:

Salazar Jimenez Elizalde Rivas Montefalco

Rental Income 5,000 5,210 6,347 5,878 5,065

Expenses 3,800 6,300 7,600 7,400 7,300

Operating 1,200 (1,090) (1,253) (1,522) (2,235)

Income

Included in the expenses is 6,200 of common corporate expenses that have been allocated to
the apartment complexes based on rental income. These common corporate expenses would
have to be incurred regardless of how many apartment complexes Reigo Realty manages.

The apartment complex (es) that Reigo Realty should consider dropping is (are): [5] [3]

A. Jimenez, Elizalde, Rivas, Montefalco

B. Elizalde, Rivas, Montefalco
C. Rivas, Montefalco
D. Rivas

14. Bagraid Company has only 12 000 hours of machine time each month to manufacture its
products- Shoulder Bag and Hand Bag. Shoulder Bag has a contribution margin of P 100, and
Hand Bag has a contribution margin of P 375. Shoulder Bag requires 1 hour of machine time,
and Hand Bag requires 1 hour and 30 minutes of machine time. If Bagraid allocated 90% of its
machine time to Shoulder Bag. What is the Total Contribution Margin of the Company? 12

a. P 1 380 000 c. P 300 000

b. P 1 080 000 d. P 5 700 000

15. Lawmalaban Co. has material cost in August 1 Raw and In Process (RIP) of P16, 750,
materials received during the month of August of P371, 060 and materials cost in August 31
Raw and In Process(RIP) of P19,740. What would be the amount to be backflushed from RIP
to Finished Goods at the end of August? 18

A 390, 800 C 371, 060

B 387, 810 D 368, 070

16. Foxtrot Corporation makes a single product— sofa chairs, that it sells to offices and
homes. The company uses an activity-based costing system that is used for internal decision
making. The company has two overhead departments whose costs are listed below:

Manufacturing Overhead P1,000,000

 Selling and Administrative Overhead 400,000

Total P1,400,00

Distribution of Resource Consumption Across Activity Cost Pools

Assembling Units Processing Orders Other Total

Manufacturing Overhead 60% 30% 10% 100%

Selling and Administrative OH 30% 40% 30% 100%

Total Activity 5,000 units 300 orders - -

Requirements:

A. Compute the activity rates for the activity cost pools. 10

Assembling Units Processing Orders

A. P120 per unit P1,500 per order

B. P144 per unit P1,533 per order

C. P1,533 per order P144 per unit

D. P1,000 per order P1,600 per order

17. Dave Corporation produces and sells a single product, a wooden hand from weaving small
items such as scarves. Selected cost and operating data relating to the product for two years
are given below:

Selling Price per unit ………………………………………………………. $100

Manufacturing Costs:

Variable per unit produced:

Direct Materials …………………………………………………..$20

Direct Labor …………………………………………………………$10

Variable manufacturing overhead …………………………………$7

Fixed manufacturing overhead per year ………………………………….$130,000

Selling and administrative expenses:

Variable per unit sold ………………………………………………………$5

Fixed per year ………………………………………………………………$80,000

Year 1 Year 2

Units in beginning inventory 0 12,000

Units produced during the year 20,000 16,000

Units sold during the year 18,000 18,000

Units in ending inventory 12,000 0

How much the unit product cost in each year using absorption costing and variable costing
respectively? 1

A. Year 1 = 43.5, Year 2 = 37

Year 1 = 45.125, Year 2 = 37

B. Year 1 = 43.5, Year 2 = 45.125

Year 1 = 37, Year 2 = 37

C. Year 1 = 37, Year 2 = 43.5

Year 1 = 45.125, Year 2 = 37

D. Year 1 = 37, Year 2 = 37

Year 1 = 45.125, Year 2 = 43.5

18. Data concerning S Company’s activity for the first 4 months of the year appears below:

Month Machine Hours Electrical Cost

January 8,000 2,500

February 2,000 1,750

March 6,500 2,300

April 5,000 1,950

Required: Using high-low method of analysis, estimate the variable electrical cost per
machine hours. 8

A. 0.28
B. 0.01
C. 0.13
D. 0.1

19. Galisod Company has two support departments (Power and Maintenance) and two
producing departments (Assembly and Finishing). The direct allocation method was used to
assign support department costs to the producing departments. The causal factor for the power
costs is kilowatt hours; the causal factor for the maintenance costs is repair hours. Assume the
following information:

Power Maintenance Assembly Finishing

Direct costs P90,000 P130,000 P 60,000 P40,000

Kilowatt hours 15,000 80,000 95,000

Repair hours 450 1,200 1,000

What would be the Power Department allocation to the Assembly Department? 22

a. P54,000 c. P60,000

b. P41,143 d. P59,429

20. Pasar Production Manufactures four joint products in a single process. The following
information is available for June 2019. 13

Sales Value at
Cost After Split- Final Selling
Product Gallons Split-off per
off Price
Gallon

1 9,120 12 5 19

2 4,500 16 10 30

3 13,700 9 8 21

4 11,200 7 3 13

Allocate the joint cost of $712,000 to the production based on the: 7

A. Number of Gallons

B. Sales Value at Split-off

C. Approximated Net Realizable Value at Split-off

How much joint cost is to be allocated to Product 3 ?

Requirement A Requirement B Requirement C

A. 203 229 245 450 249 729

B. 235 229 253 350 245 229

C. 249 729 229 132 253 229

D. 253 229 229 132 249 729

ACCTG 201 Finals
G02 - Group Activity 2 (Comprehensive)
Prepared by: Group 2

THEORIES

1. It occurs when the actual overhead cost exceeds the amount of overhead cost applied to
Work in Process inventory during the period.

A. Over-applied Overhead C. Under-applied Overhead

B. Application of Overhead D. Actual Overhead for the period

2. Sometimes, the outcome of a loss can be sold for a small value. For example, in the
production of screws there may be a loss such as metal wastage. This may be sold to a scrap
merchant for a fee.

A. Waste Value C. By-product cost

B. Zero Value D. Scrap Value

3. A standard cost system may be used20

A. Process costing, but not job order costing

B. Job order coating, but not process costing
C. Either job order costing or process costing
D. Neither job order nor process costing

4. A cost not relevant to deciding whether to purchase a new machine is: 16

A. Additional training required for operating the new machine

B. The cost of the new machine
C. Lower maintenance costs for the new machine
D. The cost of the old machine

5. The split-off point is the point at which22

A. output is first identifiable as individual products

B. some products may first be sold
C. All of the above
D. None of the above
ACCTG 201 Finals
G02 - Group Activity 2 (Comprehensive)
Prepared by: Group 2

ANSWERS (PROBLEMS)

1. A. (by Harriette Mae Labrada)

2. B. (by Aira Aton)

3. B. (by Allyn Marie Alonsagay)

4. B. (by Aya Indino)

5. A. (by Candace Lato)

6. A. (by Faith Aline Ancajas)

7. B. (by Germalyn J. Ligan)

8. D. (by Kresha Jean Despi)

9. C. (by Nova Cabizares)

10. B. (by Nova Jane Mallari)

11. D. (by Vivian Marie Edullantes)

12. C. (by Harriette Mae Labrada)

13. C. (by Aira Aton)

14. A. (by Allyn Marie Alonsagay)

15. D. (by Aya Indino)

16. B. (by Candace Lato)

17. B. (by Faith Aline Ancajas)

18. C. (by Germalyn J. Ligan)

19. B. (by Kresha Jean Despi)

20. D. (by Nova Cabizares)

ANSWERS (THEORIES)

1. C. (by Nova Jane Mallari)

2. D. (by Nova Jane Mallari)

3. C. (by Vivian Marie Edullantes)

4. D. (by Vivian Marie Edullantes)

5. C. (by Vivian Marie Edullantes)

 ACCTG 201 Finals
G02 - Group Activity 2 (Comprehensive)
Prepared by: Group 2

SOLUTIONS

1.

Direct Materials:

Materials, beg. P 13,000

Purchases P 16,000

Less: Purchase Returns 500 15,500

Total available for use 28,500

Less: Materials, end 2,100

Indirect Materials 1,000 3,100 25,400

Direct Labor 11,800

Manufacturing Overhead 15,000

Total Manufacturing Cost 52,200

WIP, beg. 13,500

Cost of goods put into process 65,700

Less: WIP, end 5,100

COST OF GOODS MANUFACTURED 60,600

2. The cost incurred on the bad unit is already part of the balance in WIP which is a total of
27,986 and the spoiled goods at current disposal value is 3,220.

14 * 1,769 = 24,766

3. Direct Labor Hours: P 40 150/ P 550 73 hours

Overhead Application Rate: P 20 075/ 73 hours P 275

4.

Completed Units 30, 400

Add: Work in Process; End (2,600 units)
Labor (80% × 2,600) 2, 080
Equivalent unit production, WEIGHTED AVERAGE 32, 480
Less: Work In Process; Beg. (7,000 units)
Labor (60% × 7000) 4, 200
Equivalent unit production, FIFO 28, 280
5. Requirement A:

DM OH

Beg WIP Inventory 2,100

Units Stated 3,800

Total Units to Acc For 5,900

Beg WIP Inventory 2,100 2,100 2,100

Started and Completed 1,800 1,800 1,800

Units Completed 3,900 3,900 3,900

Ending WIP Inventory 2,000 1,600 1,000

Total Units to Acc For 5,900 5,500 4,900

Cost Data:

Beg WIP Cost 9,520 5,000 4,520

Current Period Cost 73,280 40,420 32,860

Total Units to Acc For 82,800 45,420 37,380

Divided by EUP 5,500 4,900

Cost per EUP 15.89 8.258 7.628

Requirement B:

Trans In DM OH

Beg WIP Inventory 800

Trans In 3,900

Total Units to Acc For 4,700

Beg WIP Inventory 800 0 800 480

Started and Completed 2,200 2,200 2,200 2,200

Units Completed 3,000 2,200 3,000 2,680

Ending WIP Inventory 1,700 1,700 0 1,020

Total Units to Acc For 4,700 3,900 3,000 3,700

Cost Data:

Beg WIP Cost 11,780

Current Cost 78,021 61,971 5,300 10,750

Total Cost to Acc For 89,801 61,971 5,300 10,750

Divided by EUP 3,900 3,000 3,700

 Cost per EUP 20.55 15.89 1.76 2.90

6. Packaging Department:

Transferred In Materials Conversion

Beginning Work in Process $174,043

Current Cost $3,457,130

Total Cost $3,634,173 $2,828,000 $383,640 $245,490

Divide EUP $40,400 $41,700 $40,915

Total EUP $85.20 $70 $9.20 $6

Cost Assignment:

Beginning Work in Process

Cost to Complete $174,043

Material (2,500*$9.20) $23,000

Conversion (875*$6) $5,250 $28,250

Started & Completed (39,200*85.20) $3,339,840

Ending Work in Process

Material (1,200*$70) $84,000

Conversion (840*$6) $5,040 $89,040

$3,631,173

7.

Conversion

Completed and transferred 14,000

Spoilage-Normal 1,000

Ending work in process (5,000 ×80%) 4,000

Equivalent unit production- Weighted Average 19,000

Conversion cost per equivalent unit [(P20,000 + 151,000) / 19,000 units) P9.00

Total cost to be accounted for (P20,000 + 151,000 ) P171,000

LESS: ending work in process ( 5,000 × 80% × 9) 36,000

CONVERSION COST TRANSFERRED TO THE SECOND PRODUCTION P135,000

DEPARTMENT
8.

AQ x AP AQ x SP

2,300 x 9 2,300 x 13

20, 700 29,900

9,200F

Material Price Variance

9.
1. Variable Overhead rate:
Indirect Material $0.60
Indirect Labor $1.00
Utilities $0.50
$2.10
2. Fixed Overhead Rate:
Insurance $7 200
Depreciation $29 000
$36 200
÷ $25 000
$1.45

Actual VOH SR×AQ SRxSQ

$2.1 x 23 000 $2.1 x 26 0000

$54 000 $48 300 $54 600

$700 U $6 300 F

VOH Spending Variance VOH Effeciency variance

Actual FOH SRxAQ SRxSQ

$1.45 x 25 0000 $1.45 x 26 000

$36 600 $36 250 $37 700

$350 U $1 450 F

10. AM x AQ x SP

Boba (400 x P5.23) 2,092

Rainbow Jelly (600 x P18.29) 10,974

Mango Pop (400 x P26.13) 10,452

23,518
SM x AQ x SP

Boba (1/3 x 1,800 x P5.23) 3,138

Rainbow Jelly (1/3 x 1,800 x P18.29) 10,974

Mango Pop (1/3 x 1,800 x P26.13) 15,678

29,790

SM x SQ x SP

Boba (1/3 x 1,400 x P5.23) 2,442

Rainbow Jelly (1/3 x 1,400 x P18.29) 8,541

Mango Pop (1/3 x 1,400 x P26.13) 12,177

23,160

Material Mix Variance

23,518 – 29,790 = 6272 F

Material Yield Variance

29,790 – 23160 = 6,630 U

11. Purchase Cost of 1, 000 robots externally 650, 000

Avoidable Fixed cost 26, 000 P 676, 000

Direct Material P 364, 000

Direct Labor 135, 200
Fixed Overhead 78, 000
Variable Overhead 78, 000 (655, 200)
COST SAVINGS P 20 800

12. 150,000 + 65,000 + 35,000 = 250,000 / 20,000 = P12.50

Incremental revenue: P15 × 1,000 P 15,000

Incremental costs: P12.50 × 1,000 (12,500)

Incremental profit P2,500

Profits would increase by P2,500 if this special order was accepted.

13. Total Rental= 5,000+5,210+6,347+5,878+5,065= 27,500

Salazar Jimenez Elizalde Rivas Montefalco

Rental Income 5,000 5,210 6,347 5,878 5,065

Less: Expenses 3,800 6,300 7,600 7,400 7,300

Add: Proportional 1,127 1,175 1,431 1,325 1,142

Share of common
expenses
 Apartment 2,327 85 178 (197) (1,093)
Complex Margin

Since Rivas and Montefalco have negative margin, Reigo Realty should consider dropping
these two divison.

14. 12 000 hours of machine time x 90% = 10 800 hours for Shoulder Bag

x 10%= 1 200 hours for Hand Bag

Shoulder Bag: 10 800 hrs/ 1 hr per 10 800 units x P 100 CM/unit P 1 080 000
unit
Hand Bag: 1 200 hrs/ 1 hr and 30 800 units x P 375 CM/unit P 300 000
mins per unit
TOTAL P 1 380 000

15.

Raw and In Process inventory, August 1 P 16, 750

Add: Materials received during August 371, 060
Total 387, 810
Less: Raw and In Process inventory, August 31 19, 740
Amount to be backflushed 368, 070

16. Requirement A:

Assembling Processing Other Total

Units Orders

Manufacturing OH P600,000 300,000 100,000 1,000,000

Selling and Administrative 120,000 160,000 120,000 400,000

OH

Total P720,000 P460,000 P220,000 P1,400,000

Total Cost Total Activity Activity Rate

Assembling Units P720,000 5,000 units P144 per unit

Processing Orders P460,000 300 orders P1,533 per order

17. Under absorption costing:

Year 1 Year 2

Direct Materials $20 $20

Direct Labor 10 10

Variable manufacturing overhead 7 7

Fixed manufacturing overhead

(130,000 /20,000) 6.5

(130,000 /16,000) 8.125

Absorption costing unit product cost $43.5 $45.125

Under Variable Costing:

Year 1 Year 2

Direct Materials $20 $20

Direct Labor 10 10

Variable manufacturing overhead 7 7

Variable costing unit product method $37 $37

18. High point - Low point = Change

Cost $ 2,500 1,750 750

Activity 8,000 2,000 6,000

Change in cost $ 750 = 0.13 variable cost

Change in Activity 6,000

19. P90,000 × 80,000 / (80,000 + 95,000) = P41,143

20.

A. Number of Gallons

1 (9 120 / 38 520) x $712 000 = $168 573

2 (4 500 / 38 520) x 712 000 = 83 178

3 (13 700 / 38 520) x 712 000 = 253 229

4 (11 200 / 38 520) x 712 000 = 207 020

$712 000

B. Sales Value at Split-off

1. 9 120 x $12 = $109 440 ($109 440 / $383 140) x $712 000 = $203 375

2. 4 500 x $16 = $72 000 ($72 000 / $383 140) x 712 000 = $133 800

3. 13 700 x $9 = $123 300 ($123 300 / $383 140) x 712 000 = $229 132

4. 11 200 x $7 = $78 400 ($78 400 / $383 140) x 712 000 = $145 693

$383 140 $712 000

C. Approximated Net realizable value at Split-off

1. 9 120 x ($19-$5) = $127 680 ($127 680 / $507 780) x $712 000 = $179 031

2. 4 500 x ($30-$10) = $90 000 ($90 000 / $507 780) x $712 000 = $126 196

3. 13 700 x ($31-$8) = $178 100 ($178 100 / $507 780) x $712 000 = $249 729

4. 11 200 x ($13-$3) = $112 000 ($112 000 / $507 780) x 712 000 = $157 044

$ 507 780 $ 712 000

1Brewer, P.C., Garrison, R.H., & Noreen, E.W (OAD). Introduction to Managerial Accounting
7th edition.

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Kinney,M.R & Raiborn, C.A (2011) Cost Accounting Foundations and Evolutions 8th Edition,
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