Problem #1

a.Purchased raw material on account, P56,700.

Dr Cr
Raw Materials Inventory 56,700
Accounts Payable 56,700
To Record the Acquisition of Raw Materials

b. Requisitioned raw material for production as follows: direct material-80 percent of purchases; indirect material-15 percent of

Work in Process Inventory 45360

Factory Overhead-Control 8505
Raw Materials 53865
To record the requisition of Materials to WIP

C. Direct labor wages of P33,100 are accrued as are indirect labor wages of P12,500.
Type 1
Salaries Expense 45600
Salaries Payable 45600
To record the Salaries Expense

Work In Process Inventory 33100

Factory Overhead Control 12500
Salaries Expense 45600
To Record charging of Labor to WIP

Type 2
Work in Process Inventory 33,100
Factory Overhead Control 12,500
Salaries Payable 45,600
To Record Charging of Labor to WIP

d. Overhead incurred and paid for is P66,900

Factory Overhead Control 66,900

Cash 66,900
to Record other actual FOH

e. Overhead is applied to production based on 110 percent of direct labor cost

Work in Process Inventory 36410

Factory Overhead-Controls(Applied) 36410
To record the application of Overhead

f. Goods costing P97,600 were completed during the perio

Finished Goods Inventory 97,600
Work in Process Inventory 97,600
To record the Transfer of Work in Process to Finished Goods

g.Goods costing P51,320 were sold on account for P77,600

Accounts Receivable 77,600

Sales 77,600

Cost of Goods Sold 51,320

Finished Inventory 51,320
To record the Sales of Goods and the Cost of Goods Sold.
indirect material-15 percent of purchases.
Step #1
Determine Predetermined Overhead Rate? Raw Materials
Beg 40,000
DL 13000 7000 29500
FOH 20800 11200 4000
1.6 1.6 C. 33500
Application will be 1.6 pesos per Direct Labor Cost

Entries

Work in Process 29500

Factory Overhead Control 4000
Raw Materials 33500
To record Material Requisition
Factory Overhead Control
Work in Process 20,000 Actual 31,000 32000
Factory Overhead Control 8000 1,000
Salaries Payable 28,000
To record Labor Charged to Production

Factory Overhead Control 19,000

Various Accounts/Cash 19,000
To record other Overhead

Factory Overhead Control Appli 32,000

Overapplied 1000
Factory Overhead Control Actual 31,000
To record over applied Inventory

Overapplied 1000
Cost of Goods Sold 1000
To close the Overapplied Overhead
 Raw Materials Work In Process
Job#205
Direct Materials Used DM 16500 16500
Indirect Materials Used DL 13000 17000
Total RMU FOH 20800 27200
Total 50300 60700
60700
Job #206
DM 9300 17500
DL 7000 13000
FOH 11200 20800
Total 27500 51300

ory Overhead Control Total Beginning Balance 77800

Applied 21300
Overapplied Job #205 10000
DL 4000 16000
FOH 6400 47300
Total 10400

Job #206
DM 8200
DL 6000
FOH 9600
Total 23800

Job #207
DM 21300
DL 10000
FOH 16000
Total 47300

Total Manufacturing Cost 81500 98600

Total Cost Put into Process 159300 159300

n Process Finished Goods
Job#205 Beg 85,000
DM D. Job #205 60700
DL
FOH
Total
Cost of Goods Manufactured
Job#206
DM
DL
FOH
Total

Job #207
DM
DL
FOH
Total

Total Ending Inventory e.

Total Cost Put into Process

Entries Factory Overhead
Actual
Dep Ex 10,000
Indirect Labor 4000
Utilities 12,000
Misc 24,000
Total Actual 50,000 23,100 Applied
Under Applied 26,900
 Work In Process
Job #705 Job #705
DM 5000 5000 DM
DL 4000 6000 DL
FOH 4400 6600 FOH
Total 13400 17600 Total

Job #706 Job #706

DM 8000 8000 DM
DL 3000 7000 DL
FOH 3300 7700 FOH
Total 14300 22700 Total

Total Beginning Inventory 27700 40300 Cost of Goods Manufactured

Job#705 13500 Job 707

DL 2000 22,600 Job 708
FOH 2200 15400 Job 709
Total 4200 51500 Total Ending Work in Process

Job 706
DL 4000
FOH 4400
Total 8400

Job 707
DM 3000
DL 5000
FOH 5500
Total 13500

Job #708
DM 10,000
DL 6000
FOH 6600
Total 22,600

Job #709
DM 7000
DL 4000
FOH 4400
Total 15400

Total Manufacturing Cost 64,100

Total work put into Process 91,800 91800 Total work put into Process
 Raw Materials
Beg 0 4,200 Ending
Purchases 30000 25,800 Direct
Raw Materials Availble for Use 30000 30,000 Raw Materials Availble for Use

Factory Overhead Controls

Actual 33,500 36,000 Applied

2,500 Over Applied

If Immaterial
COGS 60,500
Less:Overaplied -2500
COGS Adjusted 58,000

What if Material? Ratio Overapplied

WIP 16100 18% 444.26
FG 14000 15% 386.31
COGS 60,500 67% 1669.43
Total 90,600 100% 2500

Adjusted:
WIP 15655.74
FG 13613.69
COGS 58,830.57
 Work In Process
Beg 0 17,500 Job 101
15,750 Job 102
Job 101 27,250 Job 103
DM 4000 14000 Job 104
DL 6000 74,500 Cost of Goods Manufactured
FOH 7500
Total 17500 16100 Job 105
16100 Ending Inventory
Job 102
DM 3600
DL 5400
FOH 6750
Total 15750

Job 103
DM 7000
DL 9000
FOH 11250
Total 27250

Job 104
DM 3200
DL 4800
FOH 6000
Total 14000

Job 105
DM 8000
DL 3600
FOH 4500
Total 16100
TMC 90600
Total work put into Process 90600 90,600 Total work put into Process
 Finished Goods Inventory
Beg 0
Job 101 17,500 17,500 Job 101
Job 102 15,750 15,750 Job 102
Job 103 27,250 27,250 Job 103
Job 104 14000 60,500 Cost of Goods Sold
Cost of Goods Manufactured 74,500
14000 Job 104
14000 Ending Balance
COGAS 74,500 74,500 COGAS
#5

Budgeted Overhead 100300

Budgetted Hrs 85000
Rate 1.18
Overhead Applied
Job #177 55250 65195
Job #179 29750 35105

#6

Raw Materials 63000

Job #177 54% 34020
Job #179 38% 23940
Indirect 8% 5040
Total 100% 63000

#7
Direct Labor 50,000
JOB 177 25%
Job 179 70%
Indirect 5% 2500
Total 100%
If the spoilage is normal we Identify if?
#1 Charged to Production? Charged to Cost of Goods Sold
#2 Charged to a Specific Job? Added to the Specific Job

Problem #1

Spoiled Units 1500

Cost of Spoiled Units
DM 45000
DL 30,000
FOH 6975
Total Cost 81,975
Less: Selling Price 30000
Total Spoilage 51,975

a. Charged to Cost of Goods Sold

b. Add Cost to Job #101

DM 750000
DL 500000
FOH 465000
Total Cost 1715000
Add Loss on Spoilage 51,975
New Cost of Job 1,766,975

c. Abnormal Spoilage
Expense Outright 51,975

Problem 2
DM 15000
DL 22500
FOH 33750
Total Cost to Rework 71250

a. Add to Cost of Goods Sold

b. Customer Specification
Job
DM 500000
DL 750000
FOH 1125000
Total 2375000
Add:
Spoilage 71250

New Cost of Job 2446250

Cost per unit 97.85

C. Charge to Expense

Problem #A Rate OverapplieAdjusted

FG 3000 30% 270 2730
WIP 2000 20% 180 1820
COGS 5000 50% 450 4550
Total 10000 100% 900

Actual 2100
Applied 3000
Overapplied -900

Problem B

If all units of Production is charged = COGS

Cost will remain Constant

DM 20
DL 18
FOH 18
Total 56

What if it is a specfic Job?

Total Cost of Units Spoiled
DM 20
DL 18
FOH 17
Total Cost 55 11000
Less: Sales 6000
Spoilage 5000

Job 501
DM 20
DL 18
FOH 18
Total Cost 56 112000
Add: Spoilage 5000
Total Cost 117000
Divide by : 2000 58.5
Deduct Allowance for spoilage -1
Total Cost per unit 57.5

Problem C
Total Cost
DM 3.3 660
DL 4 800
FOH 6 1200

Cost Per unit if

Charged to Production 13.3 x 2660

Rework
DM 100
DL 160
FOH 240
Total Rework Cost 500 500
Total Cost of Job 3160
Divide by 200
Total Cost per unit if Charged to Job 15.8

Problem D
Unts Total
DM 400 200 80000
DL 175 200 35000
FOH 280 200 56000
Total Cost per unit 855 171000
#6

Rework
DM 50 15 750
DL 80 15 1200
FOH 128 15 1920
Total Cost of Rework 258 3870

Total Cost 174870

Divide by Units of Job @200 874.35

Problem E
DM 10
DL 5
FOH 10
Total 25

Abnormal Spoilage Expensed OUTRIGHT!

Problem F
DM 10
DL 10
FOH 10
Total 30

Problem G

DM 20000
DL 40000
FOH 20000
Total 80000

Silent therefore Charged to Production

Problem H
DM 10000
DL 10000
FOH 10000
Total 30000
Rework Cost 150
Total Cost 30150
Divide by Units Produc 1000
Cost per unit 30.15