Problem 10 - Valdez Motors Co.

Month Mchine Hours Ovehead Cost

(n) (X) (Y) (XY)
1 175 4,500.00 787,500.00
2 170 4,225.00 718,250.00
3 160 4,321.00 691,360.00
4 190 5,250.00 997,500.00
5 175 4,800.00 840,000.00
6 200 5,100.00 1,020,000.00
7 160 4,450.00 712,000.00
8 150 4,200.00 630,000.00
9 210 5,475.00 1,149,750.00
10 180 4,760.00 856,800.00
11 170 4,325.00 735,250.00
12 145 3,975.00 576,375.00
Total 2,085 55,381.00 9,714,785.00

Requirements:
1.) Variable Cost per unit = P5,475.00 - 3,975.00
210 - 145

High
Total Cost 5,475.00
Variable Cost:
High = 210 x P23.08 4,846.60
Low = 145 x 23.08
Fixed Cost 628.40

2.) Fixed Cost 628.40

Variable Cost = 200 x P23.08 4,616.00
Estimated FOH Cost next month 5,244.40

3.) Equations:
b = N x (sumXY) - (sumX)(sumY)
N x (sumX squared) - (sumX)Squared
 = 12 x (9,714,785) - (2,085)(55,381)
12 x (366,375) - (2,085 x 2,085)

= 116,577,420 - 115,469,385
4,396,500.00 - 4,347,225.00

= 1,108,035.00
49,275.00

= 22.49

a= (sumY) - b(sumX)
n

= 55,381.00 - (22.49)(2,085)
12

= 55,381.00 - 46,891.65
12

= P707.44

Total Estimated Cost for the 200 machine hours:

Fixed Cost 707.44

Variable Costs (200 x P22.49) 4,498.00
Estimated FOH Costs 5,205.44
 (XX or X squared)
30,625
28,900
25,600
36,100
30,625
40,000
25,600
22,500
44,100 High
32,400
28,900
21,025 Low
366,375

= P23.08

Low
3,975.00

3,346.60
628.40

Where b = Variable Cost per unit

)Squared a = Fixed Cost
Problem 2 - Marvin Mfg. Co.

Marvin Mfg. Company

Statement of Cost of Goods Sold
For the Year Ended December 31, 2019

Raw Materials Used:

Raw Materials Inventory, Beg. 175,000.00
Add: Purchases 250,000.00
Total Raw Materials Available 425,000.00
Less: Raw Materials Inventory, End 125,000.00
Raw Materials Used 300,000.00
Direct Labor 270,000.00
Factory Overhead Applied (P270,000 x 120%) 324,000.00
Total Manufacturing Cost 894,000.00
Add: Work in Process Invty. Beg 90,000.00
Total Goods put into Process 984,000.00
Less: Work in Process Invty. End 120,000.00
Cost of Goods Manufactured 864,000.00
Add: Finished Goods Invty, Beg, 100,000.00
Total Goods Available for sale 964,000.00
Less: Finished Goods Invty, Beg, 80,000.00
Total Costs of Goods Sold - Normal 884,000.00

Problem 3 - Donna Company

Donna Company
Statement of Cost of Goods Sold
For the Month Ended May 31, 2019

Raw Materials Used:

Raw Materials Inventory, Beg. 124,000.00
Add: Purchases 107,800.00 ????
Total Raw Materials Available 231,800.00
Less: Raw Materials Inventory, End 115,000.00
 Raw Materials Used 116,800.00
Direct Labor 160,000.00
Factory Overhead Applied (P160,000 x 150%) 240,000.00
Total Manufacturing Cost 516,800.00
Add: Work in Process Invty. Beg 129,200.00
Total Goods put into Process 646,000.00
Less: Work in Process Invty. End 124,000.00
Cost of Goods Manufactured 522,000.00
Add: Finished Goods Invty, Beg, 150,000.00
Total Goods Available for sale 672,000.00
Less: Finished Goods Invty, Beg, 122,000.00
Total Costs of Goods Sold - Normal 550,000.00

Problem 5 – Darvin Company

1. Entries
a. Materials 200,000.00
Accounts payable 200,000.00

b. FO Control 35,000.00
Accounts payable 35,000.00

c. Payroll 210,000.00
W/Taxes payable 18,520.00
SSS Premium payable 8,400.00
Phil Health contributions payable 1,125.00
PFC payable 6,300.00
Accrued payroll 175,655.00

Work in process 140,000.00

Factory Overhead control 30,000.00
Selling expense control 25,000.00
Adm. expense control 15,000.00
Payroll 210,000.00
d. Accrued payroll 175,000.00
Cash 175,000.00

e. FO Control 14,200.00
Selling expense control 2,375.00
Adm. Expense control 1,350.00
SSS prem. Payable 10,500.00
Phil Health contributions payable 1,125.00
PFC payable 6,300.00

f. Work in process 185,000.00

FO Control 35,000.00
Materials 220,000.00

g. Work in process 112,000.00

FO Applied (140,000x80%) 112,000.00

h. Finished goods 410,000.00

Work in process 410,000.00

i. Accounts receivable 539,000.00

Sales(P385,000 x 40%) + 385,000 539,000.00

Costs of goods sold 385,000.00

Finished goods 385,000.00

j. Cash 405,000.00
Accounts receivable 405,000.00

k. Accounts payable 220,000.00

Cash 220,000.00
l. Cost of Goods Sold 2,200.00
FO Applied 112,000.00
FO Control 114,200.00

2. Darvin Company
Cost of goods sold statement
For the Month of January 2019

Direct materials used

Materials, January 1 50,000.00
Purchases 200,000.00
Total available 250,000.00
Less: Mat.- Jan. 31 30,000.00
Indirect Materials 35,000.00 65,000.00
Direct labor
Factory overhead
Total manufacturing costs
Add: Work in process, January 1
Cost of goods put into process
Less: Work in process, January 31
Cost of goods manufactured
Add: Finished goods – January 1
Total goods available for sale
Less: Finished goods – January 31
Cost of goods sold - normal
Underapplied factory overhead
Cost of goods sold – actual
3. Darvin Company
Statement of Comprehensive Income
For the month of January 2019

Sales 539,000.00
Less: Cost of goods sold 387,200.00
Gross profit 151,800.00
Less: Operating expenses
Selling 27,375.00
Administrative 16,350.00 43,725.00
Net income 108,075.00

4. Darvin Company
Statement of Financial Statement
January 31, 2019

ASSETS:
Cash 110,000.00
Accounts receivable 194,000.00
Finished goods 60,000.00
Work in process 45,000.00
Materials 30,000.00
Total 439,000.00

LIABILITIES and SHE:

Accounts payable 25,000.00
Accrued payroll 8,655.00
W/tax payable 18,520.00
SSS Prem. payable 18,900.00
 Phil Health contributions payable 2,250.00
PFC payable 12,600.00 85,925.00
Common stock 200,000.00
Retained earnings 153,075.00
Total 439,000.00

Problem 7 – Madelyn Company

1. The company is using job order costing because the manufacturing is unique a
2. Manufacturing overhead is applied based on the direct labor cost incurred

Factory overhead rate - 26,000,000/20,000,000 = 130% of direct labor co

3. Actual factory overhead ( 500,000 + 7,500,000+2,000,000+11,000,000+2,000,00

Applied ( 18,000,000 x 130%)
Overapplied overhead

4. Direct materials used 30,000,000.00

Direct labor 18,000,000.00
Factory overhead applied 23,400,000.00
Total manufacturing cost 71,400,000.00
Work in process, January 1 5,000,000.00
Work in process, December 31 (4,000,000.00)
Cost of goods manufactured 72,400,000.00
Finished goods, January 1 13,000,000.00
Finished goods, December 31 (11,000,000.00)
Cost of goods sold – normal 74,400,000.00
Overapplied FO (400,000.00)
Cost of goods sold – actual 74,000,000.00
Problem 8 - Revier Company

1.) Inventory, Beg. 260,000.00

Add: Purchases 500,000.00
Total Goods Available 760,000.00
Less: Inventory, End (P200,000 / 80%) 250,000.00
Estimated Cost of Goods Sold 510,000.00

2.) Inventory Lost by Fire (P200,000 / 80%) 250,000.00

Less: Proceeds from Insurance 200,000.00
Loss due Fire 50,000.00

Problem - Krouger Company

Raw Materials Used:

Raw Materials Invty., Beg. 450,000.00
Add: Purchases (P2,000,000 + P50,000) 2,050,000.00
Purchases Returns (120,000.00)
Freight In 25,000.00 1,955,000.00
Total Materials Available 2,405,000.00
Less: Raw Materials Invty., End 400,000.00
Total Materials Issued 2,005,000.00
Less: Indirect Materials Issued 25,000.00
Direct Labor
Factory Overhead:
Indirect Labor 30,000.00
Indirect Materials 25,000.00
Power, Light & Water (P40,000 x 80%) 32,000.00
Depreciation Expense - Plant 55,000.00
Depreciation Expense - Machineries 30,000.00
 Tools Expense 10,000.00
Repais & Maintenance - Machineries 5,000.00
Other Factory Expenses 6,000.00
Total Manufacturing Costs
Add: WIP, Beg.
Costs of Goods put into Process
Less: WIP, End
Costs of Goods Manufactured
Add: Finished Goods, Beg.
Total Goods Available for Sale
Less: Finished Goods
Cost of Goods Sold
2

5
 2

FO Control
35,000.00 2
30,000.00
14,200.00
35,000.00 2
 114,200.00

185,000.00
140,000.00
112,000.00
437,000.00
18,000.00
455,000.00
45,000.00
410,000.00
35,000.00
445,000.00
60,000.00
385,000.00
2,200.00
387,200.00 20
7

6
 10

ufacturing is unique and the product is a custom made furniture 2

bor cost incurred

30% of direct labor cost 2

+11,000,000+2,000,000) 23,000,000.00
23,400,000.00
(400,000.00) 3

12
 5

1,980,000.00
720,000.00
 193,000.00
2,893,000.00
150,000.00
3,043,000.00
180,000.00
2,863,000.00
500,000.00
3,363,000.00
550,000.00
2,813,000.00 29

140
 2000
4000
6000
8000
10000
12000

Problem 1.
6 –FIRST
FIFO/Average
Ba l a nce

-IN, FIRSTDate
-OUT
Issued

Received
1
1 ,60 0 x 6.0 0

1 ,6 0 0 x 6 .0 0

5
2800
400 x 7.00
4 00 x 7 .00

1 ,6 00 x 6 .0 0

9
4 00 x 7 .00

3200
400 x 8.00
4 0 0 x 8 .0 0

8 00 x 6 .0 0

4 0 0 x 7 .00
16
4800
800 x 6.00

4 0 0 x 8 .0 0

8 00 x 6 .00

4 0 0 x 7 .0 0
24
5400
600 x 9.00

4 00 x 8 .00

6 0 0 x 9 .0 0

2 00 x 7 .0 0
4800

4 0 0 x 8 .0 0
27
1400

60 0 x 9 .0 0
800 x 6.00 200 x 7.00
Column G
Problem 3 - Olive Corporation

a. Answe is 400 units - show solution

b.
Order No. of Cost per Ordering Average Carrying
Size Orders order cost Inventory cost per unit
6,400 2.5 P 15 37.50 3,200.00 P3.00
1,600 10 P 15 150.00 800.00 P3.00
EOQ ==> 400 40 P 15 600.00 200.00 P3.00
200 80 P 15 1,200.00 100.00 P3.00
100 160 P 15 2,400.00 50.00 P3.00

No. of Orders = Annual demand / Order size

Average inventory = Order size / 2

Problem 4 – Heavyweight Co.

1. Allocation based on cost
Invoice %age share Share on Total Cost per
Product Price on Freight Freight Cost Pound
X ### 2.50% 3,125.00 128,125.00 12.81
Y 75,000.00 2.50% 1,875.00 76,875.00 12.81
Z ### 2.50% 2,500.00 102,500.00 13.67
### 7,500.00 307,500.00

Percentage = 7,500/300,000

2. Allocation based on shipping weight

Share on Total Cost per
Product Weight Rate Freight Cost Pound
X 10,000.00 0.3191 3,191.00 128,191.00 12.82
Y 6,000.00 0.3191 1,915.00 76,915.00 12.82
Z 7,500.00 0.3191 2,394.00 102,394.00 13.65
23,500.00 7,500.00 307,500.00

Freight per weight = 7,500.00 = 0.3191

23,500.00
Problem 5 - Maxie Company
 1. Amount debited to Materials = P100,000 x 80% x 90% x 90% = 64,800

2. Amount debited to Materials = P100,000 x 80% x 90% x 90% x 98% = 63,504

Problem 6 – FIFO/Average
1. FIRST-IN, FIRST-OUT
Date Received Issued Balance

1 1,600 x 6.00 9,600.00

5 400 x 2,800.00 1,600 x 6.00 9,600.00
7.00 400 x 7.00 2,800.00
9 400 x 3,200.00 1,600 x 6.00 9,600.00
8.00 400 x 7.00 2,800.00
400 x 8.00 3,200.00
16 800 x 6.00 4,800.00 800 x 6.00 4,800.00
400 x 7.00 2,800.00
400 x 8.00 3,200.00
24 600 x 5,400.00 800 x 6.00 4,800.00
9.00 400 x 7.00 2,800.00
400 x 8.00 3,200.00
600 x 9.00 5,400.00
27 800 x 6.00 4,800.00 200 x 7.00 1,400.00
200 x 7.00 1,400.00 400 x 8.00 3,200.00
600 x 9.00 5,400.00

Cost of materials issued = 4,800 + 4,800 + 1,400 = 11,000

Cost of ending inventory = 1,400 + 3,200 + 5,400 = 10,000

2, AVERAGE
Date Received Issued Balance

1 1,600 x 6.00 9,600.00

5 400 x 2,800.00 2,000 x 6.20
7.00 12,400.00
9 400 x 3,200.00 2,400 x 6.50
8.00 15,600.00
16 800 x 6.50 5,200.00 1,600 x 6.50 10,400.00
24 600 x 5,400.00 2,200 x 7.18
9.00 15,800.00
27 1,000 x 1,200 x 7.18
7.18 7,180.00 8,620.00

Cost of materials issued = 5,200 + 7,180 = 12,380

Cost of ending inventory = 8,620

Problem 7 – Bedrock Company

a. Loss due to spoiled work is spread over all jobs
1 Work in process 12,400,000
Materials 3,600,000
Payroll 4,000,000
FO Applied (P4.0M x 120%) 4,800,000
Unit cost = 12,400,000 = P1,240
" 10,000

2 Spoiled Goods (100 x P1,000) 100,000

FO Control 24,000
Work in process (100 x P1,240) 124,000

3. Finished goods (P12.40M - P124,000) 12,276,000

Work in process 12,276,000
Unit cost = 12,400,000 - P124,000 = P1,240
10,000 - 100

b. Loss due to spoiled work is charged to the specific job

1 Work in process 11,600,000

Materials 3,600,000
Payroll 4,000,000
FO Applied (4,000,000 x 100%) 4,000,000
Unit cost = 11,600,000/10,000 = P1,160
 2. Spoiled Goods 100,000
Work in process 100,000

3. Finished goods P11.60M - P100,000) 11,500,000

Work in process 11,500,000
Unit cost = 11,500,000/9,900 = 1,161.62

The increase in the unit cost is due to the loss absorbed by the remaining
good units computed as follows :
Cost (100 x 1,160) 116,000.00
Selling price 100,000.00
Loss 16,000.00
Loss per unit 16,000/9900 = 1.62

Problem 8 – Kyralei Co.

A)1. RAGC is charged with the cost of defective units
a. Work in process ###
Materials (2,000 x 400) ###
Payroll (2,000 x 200) ###
FO Applied (400,000 x 140%) ###

b. Work in process 232,000

Materials (2,000 x 20) 40,000
Payroll (2,000 x 40) 80,000
FO Applied (80,000 x 140%) ###

c. Finished goods (P1.76M + P232,000) ###

Work in process ###

2. Cost of correcting defective work is not charged to RAGC

a. Work in process 1,800,000
Materials 800,000
Payroll 400,000
FO Applied (400,000 x 150%) 600,000

b. FO Control 240,000
Materials 40,000
Payroll 80,000
FO Applied (P80,000 x 150%) 120,000

c. Finished goods 1,800,000

Work in process 1,800,000
B)
1 Original cost 2.000 units 1,760,000
Additional cost 232,000
Total costs 1,992,000
Divide by 2,000
Cost per unit 996

2 Original cost 2,000 units 1,800,000

Divide by 2,000
Cost per unit 900
Carrying Total
Costs Costs
9,600.00 9,637.50
2,400.00 2,550.00
600.00 1,200.00
300.00 1,500.00
150.00 2,550.00
Prob 1 - Denmark Company
Estimated FOH rate Based on:
1 Material Cost = 1,000,000.00 = 1.25 or 125% of DMC
800,000.00

2 Units of Production = 1,000,000.00 = P50.00 per unit

20,000 units

3 Machine Hours = 1,000,000.00 = P6.25 per machine hours

160,000

4 Direct Labor Cost = 1,000,000.00 = 2.0 or 200% of DLC

500,000.00

5 Direct Labor Hours = 1,000,000.00 = P20.00 per DLH

50,000

Prob 2 - Marco Company

1 FOH Application Rate = P510,000 = P2.55 per DLHr
200,000 DLHr

2 Actual Direct Labor Hours 210,000

X FOH Rate 2.55
Applied FOH 535,500.00

3 Actual FOH 540,000.00

Less: Applied FOH 535,500.00
Under-applied 4,500.00

Prob 3 - Marvin Company

Estimated FOH rate = 456,120.00 = P5.60 per MHr

81,450MHrs
Requirement A:
1 Work in Process 473,200.00
FOH Applied (84,500MHrs x P5.60) 473,200.00

2 FOH Control 470,800.00

Various Accounts 470,800.00

3 FOH Applied 473,200.00

FOH Control 470,800.00
Cost of Goods Sold 2,400.00

Requirement B: Allocated
Amount Fraction OverApplied FOH
Cost of Goods Sold 350,000.00 350/473.2 1,775.00

Finished Goods 100,000.00 100/473.2 507.00

Work in Process 23,200.00 23.2/473.2 118.00

473,200.00 2,400.00

Prob 4 - Ellery Corporation

1 Job 123 Job 124 Job 125

Direct Labor Cost 600.00 940.00 1,400.00
X FOH Rate 180% 180% 180%
Applied FOH 1,080.00 1,692.00 2,520.00

2 Job 123 Job 124 Job 125

Direct Materials 300.00 1,080.00 720.00
Direct Labor 600.00 940.00 1,400.00
Applied FOH 1,080.00 1,692.00 2,520.00
Total Cost 1,980.00 3,712.00 4,640.00
 Actual FOH
348,225.00

99,493.00

23,082.00
470,800.00

Job 126
5,120.00
180%
9,216.00

Job 126 Total

4,200.00 6,300.00
5,120.00 8,060.00
9,216.00 14,508.00
18,536.00 28,868.00
Chapter 9 - Accounting for Labor

Prob 1 - Evergreen
Charged to JOB Charged to FOC
Job 401 Job 402 Job 401 Job 402
Direct Materials 28,000.00 37,000.00 28,000.00 37,000.00
Direct Labor 18,000.00 23,000.00 18,000.00 23,000.00
Factory Overhead 5,600.00 11,200.00 7,600.00 15,200.00
Overtime 6,000.00 -
Total 51,600.00 77,200.00 53,600.00 75,200.00

Prob 2 - Payroll Computation

a.) Employee # Of Hours Rate/hr Regular Pay OT Hours
Austria 40 36.00 1,440.00 2
Bautista 40 36.00 1,440.00 3
De Santos 40 45.00 1,800.00 4
Motus 40 30.00 1,200.00
Reyes 40 30.00 1,200.00
Total 7,080.00

Employee Class Total Pay SSS Pagibig

Austria DL 1,548.00 120.00 50.00
Bautista DL 1,602.00 120.00 50.00
De Santos DL 2,070.00 150.00 50.00
Motus IL 1,200.00 100.00 50.00
Reyes IL 1,200.00 100.00 50.00
Total 7,620.00 590.00 250.00
50% 50%
b.) Journal Entries:
a. Payroll 7,620.00
Withholding Tax Payable -
SSS Prems Withheld 590.00
Pagibig Contribution withheld 250.00
Philhealth Contribution withheld 424.80
Accrued Payroll 6,355.20

b. Accrued payroll 6,355.20

 Cash 6,355.20

c. Work in Process 5,220.00

Factory Overhead 2,400.00
Payroll Control 7,620.00

d. SSS Premiums 1,130.00

Pagibig Premiums 250.00
Philhealth Contribution 424.80
SSS Premiums payable 1,130.00
Pagibig Premiums payable 250.00
Philhealth Contr payable 424.80

Prob 3 - Norman Company

Guaranteed
1.) Employee Wage Total Pay - piece rate Deficiency
Cruz 2,000.00 240 x 7.50 1,800.00 200.00
Briones 2,000.00 286 x 7.50 2,145.00
David 2,000.00 275 x 7.50 2,062.50
Mendoze 2,000.00 240 x 7.50 1,800.00 200.00
Rivera 2,000.00 225 x 7.50 1,687.50 312.50
Tolentino 2,000.00 285 x 7.50 2,137.50
Total 12,000.00 11,632.50 712.50

2.) Charged to Work in Process ===> 11,632.50

3.) Charged to FOH =============> 712.50

Problem 4 - Ty-Nee Trailer

Additional Assumptions:
1 For the computation of government statutory deductions, The average basic rate per month of all
2 That overtime hour is a time and half per day for the first 5 working day.
3 Overtime or premium pay is 25% on top of the basic hourly rate.

1.) Employee Reg Hours Rate/Hour Regular Pay OT Hours

Castro 42 40.00 1,680.00 7.5
Ardina 45 50.00 2,250.00 7.5
 Briones 48 40.00 1,920.00 7.5
David 48 40.00 1,920.00 7.5
Fajardo 45 40.00 1,800.00 7.5
Tomas 42 40.00 1,680.00 7.5
Villas 40 40.00 1,600.00 7.5
Total 12,850.00

Continuation:
Employee Total Pay SSS Prems Philhealth Pagibig
Castro 2,055.00 400.00 300.00 100.00
Ardina 2,718.75 440.00 330.00 100.00
Briones 2,295.00 400.00 300.00 100.00
David 2,295.00 400.00 300.00 100.00
Fajardo 2,175.00 400.00 300.00 100.00
Tomas 2,055.00 400.00 300.00 100.00
Villas 1,975.00 400.00 300.00 100.00
Total 15,568.75 2,840.00 2,130.00 700.00
100% 100% 100%
2.)
a. Payroll 15,568.75
Withholding Tax withheld -
SSS Prems withheld 2,840.00
Pagibig Premiums wirhheld 700.00
Philhealth Contribution withheld 2,130.00
Accrued Payroll 9,898.75

b. Accrued payroll 9,898.75

Cash 9,898.75

c. Work in Process 13,513.75

Factory Overhead 2,055.00
Payroll Control 15,568.75

d. SSS Premiums 5,750.00

Pagibig Premiums 700.00
Philhealth Contribution 2,130.00
SSS Premiums payable 5,750.00
Pagibig Premiums payable 700.00
Philhealth Contr payable 2,130.00
(16,800 + 6,000)x 1/3 or 2/3

Rate/hr OT Premium Total Pay

54.00 108.00 1,548.00
54.00 162.00 1,602.00
67.50 270.00 2,070.00
1,200.00
1,200.00
540.00 7,620.00

PH Total Deduct Net Pay SSS ER

86.40 256.40 1,291.60 250
86.40 256.40 1,345.60 250
108.00 308.00 1,762.00 310
72.00 222.00 978.00 210
72.00 222.00 978.00 110
424.80 1,264.80 6,355.20 1130
50%
 Total
Payroll
2,000.00
2,145.00
2,062.50
2,000.00
2,000.00
2,137.50
12,345.00

asic rate per month of all workers is P10,000, except for Ardina's which is P11,000.

OT Rate OT Pay Total Pay

50.00 375.00 2,055.00
62.50 468.75 2,718.75
 50.00 375.00 2,295.00
50.00 375.00 2,295.00
50.00 375.00 2,175.00
50.00 375.00 2,055.00
50.00 375.00 1,975.00
2,718.75 15,568.75

Total Ded Net Pay SSS ER

800.00 1,255.00 810
870.00 1,848.75 890
800.00 1,495.00 810
800.00 1,495.00 810
800.00 1,375.00 810
800.00 1,255.00 810
800.00 1,175.00 810
5,670.00 9,898.75 5750