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
Marvin Manufacturing Company
Cost of Goods Sold Statement
For the year ended December 31, 2014
Direct materials used
Materials, January 1
Purchases
Total available for use
Less> Materials, December 31
Direct labor
Factory overhead
Total manufacturing costs
Work in process, January 1
Cost of goods put into process
Less: Work in process, December 31
Cost of goods manufactured
Finished goods, January 1
Total goods available for sale
Less: Finished goods, December 31
Cost of goods sold

175,000
250,000
425,000
125,000

300,000
270,000
324,000
894,000
90,000
984,000
120,000
864,000
100,000
964,000
80,000
884,000

Problem 3 Donna Company ( Cost of goods sold should P 550,000)

Donna Company
Cost of Goods Sold Statement
For the month of May, 2014
Direct materials used
Materials, May 1
Purchases
Total available
Less> Material - May 31
Direct labor
Factory overhead
Total manufacturing costs
Work in process, May 1
Cost of goods put into process
Less: Work in process, May 31
Cost of goods manufactured
Finished goods May 1
Total goods available for sale
Less: Finished goods May 31
Cost of goods sold
Problem 4 - Ram Company
1, Entries
a. Materials
Accounts payable
b. Payroll
Withholding taxes payable
SSS Premiums payable
Phil Health contributions payable
Pag-ibig funds contributions payable
Accrued payroll
Work in process
Factory overhead control
Payroll
c. Materials
Accounts payable
d. Factory overhead control
SSS premiums payable
Phil Health contributions payable
Pag-ibig funds contributions payable
e. Work in process
Factory overhead control
Materials

124,000
107,800
231,800
115,000

116,800
160,000
240,000
516,800
129,200
646,000
124,000
522,000
150,000
672,000
122,000
550,000

180,000
180,000
80,000
11,200
2,400
375
1,620
64,405
60,000
20,000
80,000
20,000
20,000
5,595
3,600
375
1.620
120,000
10,000
130,000

f. Accounts payable
Materials

5,000

g. Accounts payable
Accrued payroll
Cash

148,300
64,405

5,000

212.705

h. Factory overhead control

Miscellaneous accounts

24,900

i. Work in process
Factory OH Applied (56,000 x 120%)

72,000

24,900
72,000

j. Finished goods
Work in process

180.000
180,000

k. Accounts receivable
Sales

210,000
210,000

Cost of goods sold

Finished goods

140,000
140,000

2. Statement of cost of goods sold

.
Direct materials used
Purchases
Less: Purchase returns
Total available for use
Less: Ind. Mat. used
Mat.- October 31
Direct labor
Factory overhead
Total manufacturing costs
Less: Work in process, October 31
Cost of goods manufactured
Less: Finished goods March 31
Cost of goods sold, normal
Less: OA-FO
Cost of goods sold, actual
Actual factory overhead (FO Control )
Less: Applied factory overhead
Over applied factory overhead
Problem 5 Darvin Company
1. Entries
a. Materials
Accounts payable
b. FOControl
Accounts payable

200,000
5,000
195,000
10,000
65,000

75,000

120,000
60,000
72,000
252,000
72,000
180,000
40,000
140,000
11,705
128,295

60,495
72.000
( 11,705)

200,000
200,000
35,000
35,000

c. Payroll
W/Taxes payable
SSS Premium payable
Phil Health contributions payable
PFC payable
Accrued payroll
Work in process
Factory Overhead control
Selling expense control
Adm. expense control
Payroll

210,000
18,520
8,400
1,125
6,300
175,655
140,000
30,000
25,000
15,000
210,000

d. Accrued payroll
Cash

175,000

e. FO Control
Selling expense control
Adm. Expense control
SSS prem. Payable
MC payable
PFC payable

14,200
2,375
1,350

175,000

10,500
1,125
6,300

f. Work in process
FO Control
Materials

185,000
35,000

g. Work in process
FO Applied (140,000x80%)

112,000

h. Finished goods
Work in process

410,000

i. Accounts receivable
Sales

539,000

Costs of goods sold

Finished goods

385,000

j. Cash

220,000
112,000
410,000
539,000
385,000
405,000

Accounts receivable
k. Accounts payable
Cash

405,000
220,000
220,000

2. Cost of goods sold statement

Direct materials used
Materials, January 1
Purchases
Total available
Less> Mat.- Jan. 31
Ind. Materials
Direct labor
Factory overhead
Total manufacturing costs
Work in process, January 1
Cost of goods put into process
Less: Work in process, January 31
Cost of goods manufactured
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. Income Statement
Sales
Less: Cost of goods sold
Gross profit
Less: Operating expenses
Selling
Administrative
Net income
4 Balance sheet
Cash
Accounts receivable
Finished goods
Work in process
Materials

110,000
194,000
60,000
45.000
30,000

Total

_______
439,000

Problem 6 - Blanche Corporation

1, Income Statement
Sales
Less: Cost of goods sold
Gross profit
Less: Operating expenses
Marketing
Administrative
Net income

50,000
200,000
250,000
30,000
35,000

65,000

185,000
140,000
112,000
437,000
18,000
455,000
45,000
410,000
35,000
445,000
60,000
385,000
2,200
387,200
539,000
387,200
151,800

27,375
16,350

Accounts payable
Accrued payroll
W/tax payable
SSS Prem. payable
Medicare Cont. payable
PFC payable
Common stock
Retained earnings

43,725
108,075
25,000
8,655
18,520
18,900
2,250
12,600
200,000
153,075
439,000

1,200,000
755,230
444,770
60,000
12,000

72,000
372,770

2. Cost of goods sold statement

Direct materials used
Materials, March 1
Purchases
Total available
Less> Mat.- March 31
Direct labor
Factory overhead
Total manufacturing costs
Work in process, March 1
Cost of goods put into process
Less: Work in process, March 31
Cost of goods manufactured
Finished goods March 1
Total goods available for sale
Less: Finished goods March 31
Cost of goods sold
Problem 7
1.
Cost of goods manufactured
Work in process, December 31
Cost of goods put into process
Total manufacturing costs
Work in process, January 1

50,000
400,000
450,000
47,485

402,515
210,000
140,000
752,515
102,350
854,865
117,135
737,730
100,000
837,730
82,500
755,230

800,000
87,000
887,000
( 790,000)
97,000

2.

Cost of goods manufactured

Finished goods, January 1
Total goods available for sale
Cost of goods sold
Finished goods, December 31

800,000
80,000
880,000
(750,000)
130,000

4.

Direct materials used

Materials, December 31
Total available for sale
Materials, January 1
Materials purchased

590,000
150,000
740,000
(100,000)
640,000

Problem 8 Madelyn Company

1. The company is using job order costing because the it is manufacturing a unique and
custom made furniture
2. Manufacturing is allocated based on the direct labor cost incurred
Factory overhead rate - 24,000,000/20,000,000 = 120% of direct labor cost
3. Actual factory overhead ( 500,000 + 750,000+1,000,000+11,000,000+2,000,000) 22,000,000
Applied ( 20,000,000 x 120%)
24,000,000
Overapplied overhead
( 2,000,000)

4. Direct materials used

Direct labor
Factory overhead applied
Total manufacturing cost
Work in process, January 1
Work in process, December 31
Cost of goods manufactured
Finished goods, January 1
Finished goods, December 31
Cost of goods sold normal
Problem 9 - Alonzo Company
1. Purchases
Increase in raw materials inventory
Direct materials used
Direct labor
Factory overhead
Total manufacturing cost
Decrease in work in process inventory
Cost of goods manufactured
Decrease in finished goods inventory
Cost of goods sold

30,000,000
20,000,000
24,000,000
74,000,000
5,000,000
( 4,000,000)
75,000,000
13,000,000
(11,000,000
77,000,000
180,000
( 15,000)
165,000
220,000
200,000
585,000
8,500
593.500
5,000
598,500

2. Cost per unit manufactured (593,500/10,000 units)

59.35

3. Sales
Less Cost of goods sold
Gross profit

980,000
598,500
381,500

Problem 10 Janice Company

1,
Sales (50,000/10%)
Selling & administrative expenses
Net income
Cost of goods sold

500,000
( 50,000)
( 50,000)
400,000

2.

Cost of goods sold

Finished goods, March 31
Finished goods, March 1
Cost of goods manufactured

400,000
180,000
( 120,000)
460,000

3.

Cost of goods manufactured

Work in process, March 31
Work in process, March 1
Total manufacturing costs
Factory overhead
Direct labor (126,000/75%)
Direct materials used
Materials, March 31
Purchases
Materials, March 1

460.000
100,000
( 90,000)
470,000
(126,000)
(168,000)
176,000
20,000
(100,000)
96,000

Problem 11 - Beautiful Corporation

a.
Direct materials requested (used)
Materials inventory, end
Materials inventory, beginning
Materials purchased

82,320
38,910
( 36,240)
84,990

b.

Direct labor cost (53,200/80%)

79,000

c.

Cost of goods sold

Finished goods inventory, end
Finished goods inventory, beg.
Cost of goods completed

209,050
47,940
( 44,260)
212,730

d.

Direct materials
Direct labor
Factory overhead applied
Total manufacturing costs
Work In process inventory, beg.
Cost of goods put in to process
Cost of goods completed
Work in process inventory, end

e.
f.
g.

Materials inventory, beg

Work in process inventory, beg.
Finished goods inventory, beg.

h.

Materials inventory, beg.

Purchases
Materials inventory, end
Materials requested (used)

i.

Factory applied (72,250 x 80%)

j.

Cost of goods completed

Finished goods inventory, beg.
Finished goods inventory, end
Cost of goods sold

221,400
47,940
( 51,180)
218,160

k.

Direct materials inventory used

Direct labor
Factory overhead applied
Total manufacturing cost
Work in process, beg.
Cost of goods completed
Work in process inventory, end

93,080
72.250
57,800
223,130
58,270
(221,400)
60,000

82,320
79,000
53,200
214,520
56,480
271,000
( 212,730)
58,270
38,910
58,270
47,940
38,910
96,120
( 41,950)
93,080
57,800

Problem 12 Ravena Compny

Materials Inventory________
Bal. beg.
21,360 b)
76,190
a)Purchases 93,640

Work in Process Inventory

Bal. beg.
15,112
e) 185,063
b) DM
76,190
c) DL
49,640
d) FO
64,532

Finished Goods Inventory_____

Bal. beg.
17,120
f)
182,857
e) Cof GM 185,063

Factory Overhead Applied______

d)
64,532

Accounts Receivable________
320,000

Payroll Payable_________
c)
49,640

f) Sales

Sales________________
f)
320,000
2.

f) CofGS

Direct materials used

Direct labor
Factory overhead applied
WP inventory, beg.
Cost of goods put into process
Less: WP inventory, end
DM
DL
FO
Cost of goods completed

3.

Cost of goods sold (320,000/175%)

4,

Job No. 1
Balance Oct. 1(1,596 + 1,290 + 1,677)
Cost added
Direct labor
Overhead (960 x 130%)
Total costs

Cost of goods sold________

182,857
76,190
49,640
64,532
15,112
205,474
6,680
6.970
7,761

20,411
185,063
182,857
3,402

960
1,248

Product unit cost (5,610/1,200)

Job. No. 3
Balance Oct. 1 (1,984 + 1,760+ 2,288)
Cost added
Direct labor
Overhead (1,610 x 130%)
Total costs

4.675

Product unit cost (9,735/900)

10.82

2,208
5,610

6,032
1,610
2,093

3,703
9,735

Multiple choice
THEORIES
1. A
11. D
2. C
12. C
3. B
4. C
5. B
6. B
7. C
8 C
9. D
10.D

PROBLEMS
1. B
2. 970,000
3. D
4. B
5. D
6. C
7. B
8. B
9. B
10. C

11.
12.
13.
14.
15.
16.
17.
18.
19.
20.

B
C
C
D
B
B
B
B
B
D

21.
22.
23.
24.
25.
26.
27.
28.
29.
30.

A
B
B
B
A
D
D
B
A
A