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    Cost Accumulation - Assignment

    Uploaded by

    Layla Gomez
    The document contains 3 problems involving inventory accounting and cost of goods sold calculations. Problem 1 provides beginning and ending inventory amounts and costs for July. It asks to calculate the beginning work in process inventory and total manufacturing costs for July. Problem 2 provides incomplete inventory and expense accounts for SYM Company through May 2015 and asks to prepare a cost of goods sold statement and calculate under/over applied overhead based on additional financial information provided. Problem 3 provides various financial information for Peña Manufacturing Company, including inventory amounts, expenses, sales, returns and net income. It asks to prepare a cost of goods sold statement and income statement.

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    Cost Accumulation - Assignment

    Uploaded by

    Layla Gomez
    58 views2 pages
    The document contains 3 problems involving inventory accounting and cost of goods sold calculations. Problem 1 provides beginning and ending inventory amounts and costs for July. It asks to calculate the beginning work in process inventory and total manufacturing costs for July. Problem 2 provides incomplete inventory and expense accounts for SYM Company through May 2015 and asks to prepare a cost of goods sold statement and calculate under/over applied overhead based on additional financial information provided. Problem 3 provides various financial information for Peña Manufacturing Company, including inventory amounts, expenses, sales, returns and net income. It asks to prepare a cost of goods sold statement and income statement.

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    The document contains 3 problems involving inventory accounting and cost of goods sold calculations. Problem 1 provides beginning and ending inventory amounts and costs for July. It asks to calculate the beginning work in process inventory and total manufacturing costs for July. Problem 2 provides incomplete inventory and expense accounts for SYM Company through May 2015 and asks to prepare a cost of goods sold statement and calculate under/over applied overhead based on additional financial information provided. Problem 3 provides various financial information for Peña Manufacturing Company, including inventory amounts, expenses, sales, returns and net income. It asks to prepare a cost of goods sold statement and income statement.

    Copyright:

    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    58 views2 pages

    Cost Accumulation - Assignment

    Uploaded by

    Layla Gomez
    The document contains 3 problems involving inventory accounting and cost of goods sold calculations. Problem 1 provides beginning and ending inventory amounts and costs for July. It asks to calculate the beginning work in process inventory and total manufacturing costs for July. Problem 2 provides incomplete inventory and expense accounts for SYM Company through May 2015 and asks to prepare a cost of goods sold statement and calculate under/over applied overhead based on additional financial information provided. Problem 3 provides various financial information for Peña Manufacturing Company, including inventory amounts, expenses, sales, returns and net income. It asks to prepare a cost of goods sold statement and income statement.

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    Problem 1: The Palmer Company had the following inventories at the beginning and end of July:

    July 1 July 31
    Work in process................................ ? 185,000
    Finished goods........................................ 65,000 115,000

    During July, the cost of materials purchased was P160,000 and factory overhead of P125,000 was applied at a
    rate of 75% of direct labor cost. July cost of goods sold was P240,000. The material inventory at July 31
    increased by P25,000 which represent 125% percent of materials inventory at July 1.
    1. How much was the cost work in process in July 1?
    2. How much would be the total manufacturing cost for July?

    Problem 2
    You are asked to bring the following incomplete accounts of SYM Company updated through May 2015.
    Direct Materials Accounts Payable
    | 5/31/15 P20,000 | 4/30/15 P 10,000
    | |
    Work in Process Factory overhead control
    4/30/15 P2,000 | P55,000 |
    | |
    Finished Goods Cost of Goods Sold
    4/30/15 P25,000 | |
    | |
    Additional information:
    (a) The overhead is applied by using a budgeted rate that is set at the beginning of each year by forecasting
    the years overhead and relating it to forecasted machine hours. The budget for 2015 called for a total of
    15,000 machine hours and P750,000 of factory overhead.
    (b) The accounts payable is for direct materials purchases only. The balance on May 31, was P12,000.
    Payment of P78,000 were made during May.
    (c) The finished goods inventory as of May 31 was P7,000.
    (d) The cost of goods sold during the month was P165,000.
    (e) On May 31, there was only one unfinished Job in the factory. Cost record shows that P1,000 (40 hours)
    of direct labor and P2,000 of direct materials had been charged to Job. Thirty machine hours were used
    on that Job.
    (f) Total of 940 direct labor hours were worked during the month of May. All factory workers earns the
    same rate of pay.
    (g) All ‘actual” overhead incurred during May has already been posted.
    (h) A total of 1,000 machine hours was used during May.
    Required:
    1) Cost of Goods Sold Statement
    2) Compute for the under/over applied overhead

    Problem 3
    Peña Manufacturing Company presented the following data:
     Cost of goods manufactured and cost of goods sold were P375,000 and P300,000 respectively.
     Purchases of raw materials amounted twice as much as net income before taxes.
     Gross margin based on sales was 40%. There were no purchases returns but sales returns amounted to
    P10,000.
     Inventory valuations were as follows:
    o Raw Materials – on hand at end of period was 1/3 as large as at start.
    o Work in process – No beginning inventory, but P25,000 was on hand at the end of period.
    o Finished goods – End of period was four times as large as at start.
     Breakdown of cost incurred in manufacturing was as follows:
    o Raw materials 50%
    o Direct Labor 30%
    o Manufacturing Overhead 20%
     Selling expenses amounted to four times larger than general expenses.
     Net income after taxes amounted to P52,000. Income tax rate is 35%
    Required:
    1. Cost of goods Sold statement
    2. Income statement.

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