CHAPTER 5-Cost

1
CHAPTER 5
Multiple Choices Theoretical
1.
2.
3.
4.
5.
c
b
a
a
a
6.
7.
8.
9.
10.
a
a
a
d
a
Multiple Choices Computational

1.
(a)
Regular pay (46 hours x P45)
Overtime pay (6 hours x P22.50)
Gross earnings
2.
(a)
Overtime pay (2 hours x P20)
Gross earnings
Deductions:
Withholding tax (3%)
SSS contributions (2%)
Phil. Health contributions (1%)
Pag-ibig contributions (1%)
Net pay
3.
P2,070
135
P2,205
P1,680.00
40.00
1,720.00
P51.60
34.40
17.20
17.20
(b)
Charge to work in process
4.
P9,000.00
900.00
P9,900.00
(a)
Regular pay, charge to work in process account
5.
120.40
P1,599.60
P9,000.00
(b)
Bonus pay [(P100 + P320) x 40 hours x 4 weeks] / 50 =
Vacation pay [(P100 + P320) x 40 hours x 2)] / 50
=
Total charge to Manufacturing Overhead Control
6.
(b), P1,344
7.
(d), P672
P 1,344
672
P 2,016
2
8.
(d)
Gross earnings
Less regular pay (80 hours x P48)
Overtime pay
Divided by overtime rate (P48 x 150%)
Overtime hours
P4,560
3,840
720
72
10
Regular pay (80 + 10) x P46 = P4,320

9.
(d)
Benefits
Overtime premium (P4,560 - P4,320)
Charged to Manufacturing Overhead Control
10.
(b)
Bonus (P14,904 / 11.5 mos.)
Vacation [(P14,904 x ) / 11.5 mos.]
Pension (P2,070 / 12)
Total monthly liability
11.
P1,092.80
240.00
P1,332.80
(c) , 7 hours x P20 = P140
P1,296
648
180
P2,124
3
PROBLEMS
Problem 5-1
(1)
(2)
Factory Payroll
Withholding tax payable
SSS contribution payable
Phil. Health contribution payable
Pag-ibig contribution payable
Payroll payable
To record labor incurrence
Work in process
Factory overhead control
Selling expenses
Administrative expenses
Factory Payroll
To record payroll distribution.
480,000
4,800
19,200
4,800
7,200
444,000
288,000
66,000
72,000
54,000
480,000

Selling expenses
SSS Contribution payable
ECC payable
Phil health contribution payable
To record employers contribution.
SSS
ECC
Phil. Health
Pag-ibig
Direct
Labor
(P288,000)
P17,280
5,760
2,880
4,320
P30,240
Indirect
Labor
(P66,000)
P3,960
1,320
660
990
P6,930
28,800
9,600
4,800
7,200
Sales
Salaries
(P72,000)
4,320
1,440
720
1,080
P7,560
Office
Salaries
(P54,000)
3,240
1,080
540
810
P5,670
Problem 5-2
(1)
(2-a)
Factory Payroll
Payroll payable
18,000
Factory Payroll
To record distribution of payroll.
18,000
2,400
720
180
270
14,430
18,000
Total
(P480,000)
P28,800
9,600
4,800
7,200
P50,400
4
Problem 5-2 (continued)
(2-b) Administrative expenses
SSS Contribution payable
ECC payable
To record employers share for payroll taxes.
1,890
1,080
360
180
270
Problem 5-3
(1)
(2)
Work in process
Factory Payroll
To record labor cost for:
Total
10,400
10,400
P 9,600
800
P10,400
Work in process (regular pay)

Factory overhead control (overtime pay)
Factory Payroll
9,600
800
10,400
Problem 5-4
(a)
(b)
(c)
Factory Payroll
Payroll payable
To record labor cost.
Work in process
Factory Payroll
To record labor distribution.
27,600
27,600
27,600
27,600

3,600
Estimated liability for bonus
Estimated liability for vacation
To record liability for bonus and vacation pay:
Bonus: P27,600 x 11.5 months = P2,400
Vacation: P27,600 / 2) P13,800 / 11.5 months = P1,200.
2,400
1,200
Problem 5-5
Estimated liability for bonus
Estimated liability for vacation
To record vacation and bonus pay for one
Weeks production.
7,104
4,736
2,368
Bonus [(P200 + P1,280) x 40 hours x 4 weeks] / 50 weeks = P4,736

Vacation [P200 + P1,280) x 40 hours x 2 weeks] / 50 weeks = 2,368
5
Problem 5-6
(1)
(2)
(3)
(4)
Factory Payroll
Payroll payable
112,000
9,488
4,920
1,400
2,240
93,952
Payroll payable
Cash
To record payment of the payroll.
93,952

Marketing expenses
ECC payable
To record employers payroll taxes.
6,216
2,072
2,072
93,952

ECC payable
Cash in bank
To record payment of payroll taxes.
5,600
1,400
2,240
1,120
43,488
22,280
3,960
6,912
1,120
77,760
Problem 5-7
Employee
J. Sy
F. Lim
H. Ong
W. Tao
Regular Earnings
Overtime Premium
P1,872.00
1,702.00
1,453.60
1,188.00
P -0185.00
94.80
66.00
Gross Earnings
P 1,872.00
1,887.00
1,548.40
1,254.00
Problem 5-8
(1)
Nov. 7:
Nov. 14:
Factory Payroll
Payroll payable
WTP (P2,760 + P10,680) x 3%
10,680.00
Factory Payroll
Withholding tax payable (3%)
Payroll payable
11,040.00
403.20
10,276.80
331.20
10,708.80
Problem 5-8 (continued):

Nov. 21:
Nov. 28:
(2)
(3)
Factory Payroll
Payroll payable
10,800.00
324.00
10,476.00
Factory Payroll
10,560.00
SSS contribution payable (45,840 x 3%)
Phil. Health cont. payable (P45,840 x 2%)
Payroll payable
Work in process
Factory Payroll
316.80
1,375.20
916.80
7,951.20
35,880.00
7,200.00
43,080.00

4,523.40
SSS contribution payable (P43,080 x 4.5%)
Phil. Health cont. payable (P43,080 x 2%)
Estimated liability for vacation pay (P43,080 c 4%)
1,938.60
861.60
1,723.20
Problem 5-9
(1)
E
Employe
e
Reyes
Santos
Manalo
Cruz
Sanchez
Webb
(2)
a r n i n g
Regular
Earnings
560.00
1,196.00
752.50
442.90
382.50
920.00
4,253.90
Overtime
Premium
78.00
26.25
15.45
21.25
140.95
Gross
Earnings
560.00
1,274.00
778.75
458.35
403.75
920.00
4,394.85
D
With.
Tax
84.00
191.10
116.81
68.75
60.56
138.00
659.23
d
SSS
34.72
78.99
48.28
28.42
25.03
57.04
272.48
Phil.
Health
8.40
19.11
11.68
6.88
6.06
13.80
65.92
Factory Payroll
4,394.85
Union dues deduction payable
Payroll payable
To record payroll for the week ending October 31, 2010.
o
PagIbig
8.40
19.11
11.68
6.88
6.06
13.80
65.92
s
Others
10.00
10.00
10.00
10.00
10.00
10.00
60.00
659.23
272.48
65.92
65.92
60.00
3,271.30
Net
Amount
422.88
955.69
580.30
337.42
296.04
687.36
3,271.30
7
Problem 5-10
(1)
(2)
(3)
Factory Payroll
658,150
Payroll payable or Wages payable
To record payroll for the week ending April 20, 2010.
40,805
9,872
98,723
9,800
498,950
Payroll payable
Vouchers payable
To record payroll voucher.
498,950
498,950
Voucher payable
Cash in bank
To record payment of the payroll.
498,950
498,950
Problem 5-11
(1)
(2)
(3)
(4)
Factory Payroll
84,380
Pension plan contribution payable
Payroll payable or salaries and wages payable
To record payroll.
Work in process
Factory payroll
12,700
5,232
1,266
1,680
4,200
59,302
62,140
19,460

9,958
ECC payable
To record employers payroll taxes on factory wages
for the month.
84,380
2,532
1,688
1,688
4,050
The balance of the Factory Payroll account if any represents the amount of factory
wages earned and charged to production but unpaid at the end of the month. The
balance is shown the balance sheet under the current liability section.
8
Problem 5-12
(1)
ETG Corporation
Summary of Factory Payroll Taxes
For the month ended March 31, 2010
Department
Factory Supply
Factory Adm.
Cutting
Assembly
Finishing
Total
(2)
SSS
P 3,273.60
3,302.12
4,487.56
4,954.42
5,246.44
P21,264.14
Phil. Health
P 792.00
798.90
1,085.70
1,198.65
1,269.30
P5,144.55
Factory payroll
ECC payable
To record employers payroll taxes.
Pag-ibig
P 792.50
798.90
1,085.70
1,198.65
1,269.30
P5,144.55
ECC
P528.00
532.60
723.80
799.10
846.20
P3,429.70
40,132.54
21.264.14
5,144.55
5,144.55
3,429.70
5,149.60
Problem 5-13
2010
Sept. 15:
30:
Factory payroll
32.500
Salaries and wages payable
To record factory payroll, Sept. 1-15.
2,015
487
487
4,900
24,611

Vouchers payable
24,611
24,611
Voucher payable
Cash in bank
To record payment of payroll.
24,611
Factory payroll
83.200
To record factory payroll, Sept. 16-30.
24,611
2,058
498
498
5,120
75,026
With. Tax
P 825.33
496.51
1,174.24
1,383.75
1,269.77
P5,149.60
9
Sept. 30

Voucher payable
75,026
Voucher payable
Cash in bank
To record payment of payroll.
75,026
Work in process
Factory payroll
75,026
75,026
46,240
19,460
65,700

8,237.00
ECC contribution payable
To record employers payroll taxes on
Factory wages for the month of September.
4,073
985
1,579
1,600
Problem 5-14
JOB COST SHEET

Customer Delta Dept. Store
Description On file
Quantity 200
DATE
MATERIALS
REQ.
NO.
AMOUNT
Job 479
Date Started 9/10/2010
Date Completed _______
DIRECT LABOR
DATE
9/23
9/30
REF.
TTA
TTA
HOURS
207
732
939
APPLIED FACTY OVERHEAD

AMOUNT
1,034.00
3,568.00
4,602.00
DATE
HOURS
RATE
AMOUNT
10
JOB COST SHEET
Customer Educational Toys
Description On file
Quantity 300
DATE
MATERIALS
REQ.
NO.
AMOUNT
Job 480
DIRECT LABOR
DATE
9/23
9/30
REF.
TTA
TTA
HOURS
183
447
630

AMOUNT
858.00
2,182.00
3,040.00
DATE
HOURS
RATE
AMOUNT
JOB COST SHEET

Customer Peter Pan Toys Store
Description On file
Quantity 350
DATE
MATERIALS
REQ.
NO.
AMOUNT
Job 481
DIRECT LABOR
DATE
9/23
9/30
REF.
TTA
TTA
HOURS
247
1,006
1,253

AMOUNT
1,237.00
2,772.00
4,009.00
DATE
HOURS
RATE
AMOUNT
JOB COST SHEET

Customer Joses Specialty Store
Description On file
Quantity 200
DATE
MATERIALS
REQ.
NO.
AMOUNT
Job 482
DIRECT LABOR
DATE
9/30
REF.
TTA
HOURS
387

AMOUNT
1,949.00
DATE
HOURS
RATE
AMOUNT
11

JOB COST SHEET
Customer Pablo Toys Shop
Description On file
Quantity 150
DATE
MATERIALS
REQ.
NO.
AMOUNT
Job 483
DIRECT LABOR
DATE
9/30
REF.
TTA
HOURS
96

AMOUNT
490.00
DATE
HOURS
RATE
AMOUNT
DEPARTMENTAL OVERHEAD ANALYSIS SHEET

Department __________________
DATE
Sept 2
9
15
16
23
30
30
REF.
TTA
TTA
TTA
TTA
TTA
TTA
SPT
TOTAL
1,917.00
2,801.00
7,320.00
3,430.00
3,722.00
3,163.00
7,979.27
30.332.27
INDIRECT
MATERIALS
Month of September, 2010

INDIRECT
LABOR
1,917.00
2,801.00
7,320.00
3,430.00
3,722.00
3,163.00
22,353.00
PAYROLL
TAXES
7,979.27
7,979.27
DEPN.
REPAIRS
&MAINT.
UTILITIES
OTHER
ITEM
AMOUNT
12

Work in Process
DATE
2010
SEPT. 30
EXPLANATION
POST
REF.
DEBIT
J9-33
50,171.00
No.
CREDIT
BALANCE
DR.
CR.
50,171.00
Dr.
SSS Contribution Payable

DATE
2010
SEPT. 30
EXPLANATION
POST
REF.
DEBIT
J9-34
No.
CREDIT
4,961.99
EXPLANATION
POST
REF.
DEBIT
J9-34
CREDIT
1,200.48
DR.
CR.
4,961.99
Cr.
No.
EXPLANATION
POST
REF.
J9-34
DEBIT
CREDIT
385.45
211
BALANCE
DR.
CR.
1,200.48
Cr.
Pag-ibig Contribution Payable

DATE
2010
SEPT. 30
210
BALANCE
Phil. Health Contribution Payable

DATE
2010
SEPT. 30
122
No.
212
BALANCE
DR.
CR.
385.45
Cr.
13
Withholding Tax Payable

DATE
2010
SEPT. 30
EXPLANATION
POST
REF.
DEBIT
J9-34
CREDIT
1,431.35
Factory Payroll
DATE
2010
SEPT. 1
2
9
15
16
23
30
30
30
EXPLANATION
Balance
POST
REF.
WP
WP
WP
WP
WP
WP
SP
J9-33
DEBIT
CREDIT
13,740.00
16,190.00
7,320.00
14,950.00
15,130.00
14.124.00
7,508.00
80,032.00
2010
SEPT. 30
30
EXPLANATION
POST
REF.
J9-33
DEBIT
29,861.00
7,979.27
CREDIT
213
BALANCE
DR.
CR.
1,431.35
Cr.
No.
Manufacturing Overhead Control

DATE
No.
BALANCE
8,930.00
4,810.00
21,000.00
28,320.00
43,270.00
58,400.00
72,524.00
80,032.00
-0-
500
DR.
CR.
Cr.
Dr.
Dr.
Dr.
Dr.
Dr.
Dr.
Dr.
No.
501
BALANCE
DR.
CR.
29,861.00
37,840.27
Dr.
Dr.
14

DOLLS, INC.
Summary of Factory Wages
September 2010
PAYROLL PERIOD
Sept. 1-2
3-9
1-15
10-16
17-23
24-30
16-30
DIRECT LABOR
2,893.00
13,389.00
11,520.00
11,408.00
10,961.00
50,171.00
Summary
Direct Labor
Indirect Labor
Total
INDIRECT LABOR
1,917.00
2,801.00
7,320.00
3,430.00
3,722.00
3,163.00
7,508.00
29,861.00
TOTAL
4,810.00
16,190.00
7,320.00
14,950.00
15,130.00
14,124.00
7,508.00
80,032.00
50,171.00
29,861.00
80,032.00
GENERAL JOURNAL
DATE
2010
Seot. 30
30
ACCT
NO.
REF
Work in process
Manufacturing overhead control
Factory payroll
To record labor cost distribution.
122
501
500
50,171.00
29,861.00
Manufacturing overhead control

Phil. Health cont. payable
Pag-ibig cont. payable
With. Tax payable
To record employers payroll
taxes on factory wages for the
month.
501
210
211
212
213
7,979.27
ACCOUNT
DEBIT
CREDIT
80,032.00
4,961.99
1,200.48
385.45
1,431.35
15

Requirement 12:
JOB
HOURS
479
480
481
482
483
TOTAL
TOTAL COST
939
632
806
387
96
P 4,602.00
3,109.00
4,009.00
1,949.00
490.00
P14,158.00
2,860
Requirement 13:
Indirect labor
Payroll taxes
Total
P29,861.00
7,979.27
P37,840.27
Requirement 14:
NO. AND ACCOUNT NAME
122
210
211
212
213
500
501
DEBIT BALANCE
Work in process
50,171.00
Factory payroll
-0Manufacturing overhead control
CREDIT BALANCE
P 4,961.99
1,200.48
385.45
1,431.35
-037,840.27

CHAPTER 5-Cost

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CHAPTER 5-Cost

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1

Multiple Choices Computational

Regular pay (80 + 10) x P46 = P4,320

(c) , 7 hours x P20 = P140

Factory overhead control

Work in process (regular pay)

Factory overhead control

Bonus [(P200 + P1,280) x 40 hours x 4 weeks] / 50 weeks = P4,736

Factory overhead control

Withholding tax payable

Problem 5-8 (continued):

Factory overhead control

Factory overhead control

Salaries and wages payable

Salaries and wages payable

Factory overhead control

JOB COST SHEET

APPLIED FACTY OVERHEAD

APPLIED FACTY OVERHEAD

JOB COST SHEET

APPLIED FACTY OVERHEAD

JOB COST SHEET

APPLIED FACTY OVERHEAD

Problem 5-14 (continued)

APPLIED FACTY OVERHEAD

DEPARTMENTAL OVERHEAD ANALYSIS SHEET

Month of September, 2010

Problem 5-14 (continued)

SSS Contribution Payable

Pag-ibig Contribution Payable

Phil. Health Contribution Payable

Problem 5-14 (continued)

Withholding Tax Payable

Manufacturing Overhead Control

Problem 5-14 (continued)

Manufacturing overhead control

Problem 5-14 (continued)

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