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Chapter 1
TRUE/FALSE
1. TRUE 6. FALSE
2. TRUE 7. TRUE
3. FALSE 8. FALSE
4. TRUE 9. TRUE
5. TRUE 10.TRUE
MULTIPLE CHOICE
1. B 6. D 11. D
2. C 7. A 12. B
3. A 8. A 13. B
4. C 9. B 14. A
5. C 10.D 15. D
Cost Accounting - 2014
Chapter 2 - Costs – Concepts and classification
Problem 1- Ram Corporation
- Manufacturing overhead
- Manufacturing overhead
- Direct materials
- Direct labor
- Manufacturing overhead
- Manufacturing overhead
- Direct materials
- Manufacturing overhead
- Manufacturing overhead
- Manufacturing overhead
Problem 2
- Manufacturing 6. Manufacturing
- Selling 7. Administrative
- Manufacturing 8. Seling
- Selling 9. Administrative
- Administrative 10.Selling
Problem 3-Rocco Product Cost Period Cost
Direct mat. Direct labor Mfg. OH Selling Adm
- DM 220,
- Factory rent 50,
- Direct labor 180,
- Factory utilities 8,
- Supervision 60,
- Depreciation-FE 20,
- Sales Commission 57,
- Advertising 47,
- Depreciation-OE 10,
- Salary - pres. 250,
1. TOTAL PRODUCT CST = 220,000 + 180,000 + 138,
2. TOTAL PERIOD COST = 57,000 + 307,
- COST PER UNIT = 538,500/ 40,000 units = P 13,
Problem 4 – Bug Company
- Fixed Period 6. Variable Period
- Fixed Inventoriable 7. Variable Inventoriable
- Fixed Inventoriable 8. Fixed Inventoriable
- Variable Inventoriable 9. Fixed Period
- Fixed Inventoriable 10. Fixed Inventoriable
Problem 5 – Mighty Muffler, Inc.
a. P 50,
- Total period costs - 305,
Problem 8 –
a. c - fixed (total amount is constant) b. a – variable (4,480/3,200 = 1.40; 6,300/4,500 = 1.40 per unit is constant) c. d - mixed ( 3,950/3,200 = 12.34; 5,250/4,500 = 1.16) total amount and amount per unit varies in relation to units sold)
Problem 9 - Blanche Corporation
` 1. Direct materials used P 32.
Direct labor 20.
Variable manufacturing overhead 15.
Variable marketing 3.
Total variable cost per unit 70.
X No. of units produced and sold 12,
Total variable costs per month P 840,
- Fixed manufacturing overhead P 6.
Fixed marketing costs 4.
Total fixed cost per unit 10.
X No. of units produced and sold 12,
Total fixed costs per month P 120,
Problem 10
- Direct materials P 60.
Problem 11 – Johnson Corporation
= 7.80 per machine hour
- Controllable direct fixed costs Supervisory salaries P 45,000 P 55,
- Uncontrollable direct fixed costs: Depreciation – machinery and Equipment P 100,000 P 180,
- Controllable direct fixed cost P 45,000 P 55, Uncontrollable direct fixed cost 100,000 180, Total direct fixed cost P 145,000 P 235,
- Allocated costs from headquarters P 120,000 P 180, Allocated repairs & maintenance 40,000 80, Allocated factory rent – bldg. 60,000 140, Allocated plant executive’s salaries 140,000 210, Total indirect costs P 360,000 P 610,
- Allocated costs from headquarters P 120,000 P 180, Allocated factory rent – bldg. 60,000 140, Allocated plant executive’s salaries 140,000 210, Depreciation- mach. & equipment 100,000 180, Total unavoidable costs P 420,000 P 710,
True/False Questions
- False 6. True 11. False 16. True
- False 7. False 12. False 17. False
- True 8. True 13. True 18. True
- False 9. False 14. False 19. False
- False 10. True 15. False 20. True
Multiple choice
1. B 11. C 21. A
2. C 12. D 22. C
3. B 13. C 23. A
4. C 14. B 24. C
5. D 15. A 25. D
6. A 16. B 26. B
7. D 17. B 27. A
8. D 18. A 28. B
9. B 19. D 29. C
10. C 20. B 30. B
CHAPTER 3 - COST ACCOUNTING CYCLE
Problem 1
1. A
2. A
3. A, C
4. A
5. A
6. B
7. A
8. A, C
9. A
10. A
11. A
12. C
13. A
14. A
15. C
Problem 2 - Marvin Manufacturing Company
Problem 3 – Donna Company
Donna Company
Problem 4 - Ram Company
Over applied factory overhead ( 7,705)
Problem 5 – Darvin Company
Problem 6 - Blanche Corporation
- Cost of goods manufactured 800,
Finished goods, January 1 80,
Total goods available for sale 880,
Cost of goods sold (750,000)
Finished goods, December 31 130,
- Direct materials used 590,
Materials, December 31 150,
Total available for sale 740,
Materials, January 1 (100,000)
Materials purchased 640,
Problem 8 – Ellery Company
- The company is using job order costing because the it is manufacturing a unique and custom made furniture
- Manufacturing is allocated based on the direct labor cost incurred Factory overhead rate - 24,000,000/20,000,000 = 120% of direct labor cost
- Actual factory overhead ( 500,000 + 750,000+1,000,000+11,000,000+2,000,000) 22,000, Applied ( 20,000,000 x 120%) 24,000, Overapplied overhead ( 2,000,000)
- Direct materials used 30,000, Direct labor 20,000, Factory overhead applied 24,000, Total manufacturing cost 74,000, Work in process, January 1 5,000,
Work in process, December 31 ( 4,000,000)
- Direct labor 30. - Variable manufacturing overhead 9. - Total variable manufacturing cost per unit P 99.
- ` 2. Total variable manufacturing cost per unit P 99. - Variable marketing and administrative 6. - Total variable costs per unit 105.
- Total variable manufacturing cost per unit P 99, - Fixed manufacturing overhead (30,000/1,200) 25.
- Full manufacturing cost per unit 124.
- Full manufacturing cost per unit 124.
- Variable marketing and administrative 6.
- Fixed marketing and administrative 20.
- Full cost to make and sell per unit 150.
- Variable cost per machine hour = 35,600 – 20, - 4,000 - 2,
- Total electricity expense 35,600 20, 2. 4,000 hours 2000 hours
- For the year ended December 31, Cost of Goods Sold Statement
- Materials, January 1 175, Direct materials used
- Purchases 250,
- Total available for use 425,
- Less> Materials, December 31 125,000 300,
- Direct labor 270,
- Factory overhead 324,
- Total manufacturing costs 894,
- Work in process, January 1 90,
- Cost of goods put into process 984,
- Less: Work in process, December 31 120,
- Cost of goods manufactured 864,
- Finished goods, January 1 100,
- Total goods available for sale 964,
- Less: Finished goods, December 31 80,
- Cost of goods sold 884, - For the month of May, Cost of Goods Sold Statement
- Materials, May 1 124, Direct materials used
- Purchases 107,
- Total available 231,
- Less> Material - May 31 115,000 116,
- Direct labor 160,
- Factory overhead 240,
- Total manufacturing costs 516,
- Work in process, May 1 129,
- Cost of goods put into process 646,
- Less: Work in process, May 31 124,
- Cost of goods manufactured 522,
- Finished goods – May 1 150,
- Total goods available for sale 672,
- Less: Finished goods – May 31 122,
- Cost of goods sold 550,
- a. Materials 150, 1, Entries - Accounts payable 150,
- b. Payroll 75, - Withholding taxes payable 11, - SSS Premiums payable 2, - Phil Health contributions payable - Pag-ibig funds contributions payable 1, - Accrued payroll 59, - Work in process 56, - Factory overhead control 19, - Payroll 75,
- c. Materials 20, - Accounts payable 20,
- d. Factory overhead control 5, - SSS premiums payable 3, - Phil Health contributions payable - Pag-ibig funds contributions payable 1.
- e. Work in process 120,
- Factory overhead control 10,
- f. Accounts payable 2, - Materials 2,
- g. Accounts payable 148,
- h. Factory overhead control 24, - Miscellaneous accounts 24,
- i. Work in process 67, - Factory OH Applied (56,000 x 120%) 67,
- j. Finished goods 175. - Work in process 175,
- k. Accounts receivable 2200, - Sales 2200,
- Cost of goods sold 140,
- Finished goods 140,
- Purchases 170, Direct materials used
- Less: Purchase returns 2,
- Total available for use 168,
- Less: Ind. Mat. used 10,
- Mat.- October 31 38,000 48,000 120,
- Direct labor 56,
- Factory overhead 67,
- Total manufacturing costs 243,
- Less: Work in process, October 31 68,
- Cost of goods manufactured 175,
- Less: Finished goods – March 31 35,
- Cost of goods sold, normal 140,
- Less: OA-FO 7,
- Cost of goods sold, actual 132,
- Actual factory overhead (FO Control ) 59,
- Less: Applied factory overhead 67,
- a. Materials 200, 1. Entries
- b. FOControl 35,
- c. Payroll 210,
- W/Taxes payable 18,
- SSS Premium payable 8,
- Phil Health contributions payable 1,
- PFC payable 6,
- Accrued payroll 175,
- Work in process 140,
- Factory Overhead control 30,
- Selling expense control 25,
- Adm. expense control 15,
- d. Accrued payroll 175, - Cash 175,
- e. FO Control 14, - Selling expense control 2, - Adm. Expense control 1, - SSS prem. Payable 10, - MC payable 1, - PFC payable 6,
- f. Work in process 185,
- FO Control 35, - Materials 220,
- g. Work in process 112, - FO Applied (140,000x80%) 112,
- h. Finished goods 410, - Work in process 410,
- i. Accounts receivable 539, - Sales 539,
- j. Cash 405, - Accounts receivable 405,
- k. Accounts payable 220, - Cash 220,
- Materials, January 1 50,
- Purchases 200,
- Total available 250,
- Less> Mat.- Jan. 31 30,
- Ind. Materials 35,000 65,000 185,
- Direct labor 140,
- Factory overhead 112,
- Total manufacturing costs 437,
- Work in process, January 1 18,
- Cost of goods put into process 455,
- Less: Work in process, January 31 45,
- Cost of goods manufactured 410,
- Finished goods – January 1 35,
- Total goods available for sale 445,
- Less: Finished goods – January 31 60,
- Cost of goods sold - normal 385,
- Underapplied factory overhead 2,
- Cost of goods sold – actual 387,
- Sales 539, 3. Income Statement
- Less: Cost of goods sold 387,
- Gross profit 151,
- Selling 27, Less: Operating expenses - Administrative 16,350 43,
- Cash 110,000 Accounts payable 25, 4 Balance sheet
- Accounts receivable 194,000 Accrued payroll 8,
- Finished goods 60,000 W/tax payable 18,
- Work in process 45.000 SSS Prem. payable 18,
- Materials 30,000 Medicare Cont. payable 2, - PFC payable 12, - Common stock 200, - _______ Retained earnings 153,
- Total 439,000 439, - Sales 1,200, 1, Income Statement - Less: Cost of goods sold 755, - Gross profit 444, - Marketing 60, Less: Operating expenses - Administrative 12,000 72,
- Net income 372, - Materials, March 1 50, Direct materials used - Purchases 400, - Total available 450, - Less> Mat.- March 31 47,485 402,
- Direct labor 210,
- Factory overhead 140,
- Total manufacturing costs 752,
- Work in process, March 1 102,
- Cost of goods put into process 854,
- Less: Work in process, March 31 117,
- Cost of goods manufactured 737,
- Finished goods – March 1 100,
- Total goods available for sale 837,
- Less: Finished goods – March 31 82,
- Cost of goods sold 755,
- Problem
- Cost of goods manufactured 800,
- Work in process, December 31 87,
- Cost of goods put into process 887,
- Work in process, January 1 97, Total manufacturing costs ( 790,000)
- Cost of goods manufactured 75,000,
- Finished goods, January 1 13,000,
- Finished goods, December 31 (11,000,
- Cost of goods sold – normal 77,000,
- 1, Materials, October 1 25, Problem 9 - Norman Company
- Purchases 180,
- Direct materials used 165, Materials, October 31 (40,000)
- Direct labor 220,
- Factory overhead 200,
- Total manufacturing costs 585,
- Total manufacturing costs 585,
- Work in process, Oct. 1 23,
- Cost of goods manufactured 593, Work in process, Oct. 31 ( 15,000)
- Cost of goods manufactured 593,
- Finished goods, Oct. 1 37,
- Cost of goods sold 599, Finished goods, Oct. 31 ( 31,000)
- Sales 980,
