CH 1 - Exercises & Problems

ACCO 20073 – COST ACCOUNTING & CONTROL
EXERCISES
Ex. 1. Journalize the following:
1. Purchased raw materials on account, P500,000
2. Materials requisitioned for the period: For production, P400,000 and for indirect
factory use, P60,000
3. Total gross payroll for the period, P800,000 was paid.
4. Distribution of the payroll: Direct labor, 65%; Indirect labor, 35%
5. Factory overhead costs, P131,700. 70% was paid in cash and the balance was
credited to accounts payable.
6. Other factory overhead: Depreciation, P106,500 and expired insurance, P6,000
7. The total factory overhead was charged to the job in process
8. 80% of the total costs put into process were completed.
9. 75% of goods manufactured were sold at 40% above cost, 60% on account while
40% on cash basis.
Required:
Journalize the above transactions then prepare a Statement of Costs of Goods

Manufactured and Sold.
Ex. 2. Prepare a Statement of Costs of Goods Manufactured & Sold
Selected data for a period:

Work in process, beg. 180,000
Work in process, end 280,000
Finished Goods, beg 120,000
Finished Goods, end 300,000
Raw Materials, beg. 100,000
Raw Materials, end 325,000
Raw materials purchases 700,000
Freight In 25,000
Return to suppliers 30,000
Direct labor 500,00
Factory overhead 425,000
Ex. 3. Actual Costing
During the month of July, the following transactions were completed and reported by
Old Navy Manufacturing Company"
a. Raw materials purchased on account, P240,000
b. Materials requisitioned for the month was P180,000, P12,000 of which were factory
supplies.
c. Factory payroll for the month was P150,000 of which P30,000 was for indirect
laborers
d. Depreciation of factory plant and equipment was P12,000
e. Factory taxes amounted to P15,00
f. Factory insurance expired amounted to P4,320
g. Factory utilities for the month amounted to P5,000
Additional information:
a. Actual overhead was charged to production
2
b. 75% of the jobs put into process were completed
c. All beginning inventories plus 75% of the goods completed during the period were
delivered to customers at 50% mark-up on cost. The company's terms on all sales are
30 days.
d. Inventories at the beginning of the month were: Raw Materials, P80,000; Work in
Process, P100,000; Finished goods, P60,000
Required:
a. Journal Entries to record the above transactions
b. Post the entries to T-Accounts (RM, WIP, FG, FOH, COS, Sales, AR )
c. Prepare Statement of Cost of Goods Manufactured and Sold
Ex. 4.
At the beginning of July, Burnham Company had the following account balances:
RM Control, P16,000; WIP inventory, P26,000; FG inventory, P10,000
During July, the following transactions were:
1. RM purchased on account, P150,000
2. Direct materials of P42,400 and indirect materials of P5,000 were issued to
production
3. Factory payroll consisted of P100,000 for direct labor employees and P14,000 for
indirect labor employees
4. Office salaries totaled P42,200 for the month
5. Utilities were accrued, of which 60% is for the factory area.
6. Deprecation of P18,000 was recorded on factory plant and equipment and P10,000
for office equipment
7. Rent of P24,000 was paid on the building. The factory occupies 60% of the building.
8. At the end of July, unfinished jobs amounted to P16,600 and P19,800 of finished
goods on hand. Burnham Company uses an actual cost system.
3
Determine the following:
1. Period Cost
2. Total factory cost
3. Gross profit, assuming a gross profit rate of 50%
Ex. 5 – Normal Costing
CC Company’s cost of goods sold for the month ended September 30, was P345,000.
Ending Work in process inventory was 90% of the beginning work in process inventory.
Factory overhead was 50% of direct labor cost. Other information pertaining to CC
Company’s inventories and production for the month of September is as follows:
Beginning inventories – September 1:
Direct Materials, P20,000; Work in Process, P40,000; Finished Goods, P102,000
Direct material purchases for the month, P110,000
Ending inventories, September 30:
Direct materials, P26,000; Work in process, ?; Finished goods, P105,000
Determine the total factory cost for the month.

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ACCO 20073 – COST ACCOUNTING & CONTROL

Ex. 1. Journalize the following:

1. Purchased raw materials on account, P500,000

3. Total gross payroll for the period, P800,000 was paid.

4. Distribution of the payroll: Direct labor, 65%; Indirect labor, 35%

6. Other factory overhead: Depreciation, P106,500 and expired insurance, P6,000

7. The total factory overhead was charged to the job in process

8. 80% of the total costs put into process were completed.

Journalize the above transactions then prepare a Statement of Costs of Goods

Selected data for a period:

Ex. 3. Actual Costing

a. Raw materials purchased on account, P240,000

d. Depreciation of factory plant and equipment was P12,000

e. Factory taxes amounted to P15,00

f. Factory insurance expired amounted to P4,320

g. Factory utilities for the month amounted to P5,000

a. Actual overhead was charged to production

a. Journal Entries to record the above transactions

c. Prepare Statement of Cost of Goods Manufactured and Sold

RM Control, P16,000; WIP inventory, P26,000; FG inventory, P10,000

During July, the following transactions were:

1. RM purchased on account, P150,000

4. Office salaries totaled P42,200 for the month

2. Total factory cost

3. Gross profit, assuming a gross profit rate of 50%

Ex. 5 – Normal Costing

Beginning inventories – September 1:

Direct Materials, P20,000; Work in Process, P40,000; Finished Goods, P102,000

Direct material purchases for the month, P110,000

Ending inventories, September 30:

Direct materials, P26,000; Work in process, ?; Finished goods, P105,000

Determine the total factory cost for the month.

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