. At the beginning of the year, Primer Manufacturing Company had the following balances in its inventory accounts: Raw Materials Php 100,000.00 Work in Process 232,000.00 Finished Goods 720,000.00 The work in process subsidiary ledger shows the following balances: Job 500 consists of Materials, Php 22,000.00, direct labor Php 48,000.00, and factory overhead of Php 72,000.00. Job 600 consist of Php 15,000.00 Materials, 30,000.00 of direct labor, and 45,000.00 factory overhead. The finished goods inventory contains Job 400 with a total cost of P320,000 and Job 300 with a total cost of P400,000. Summary of transactions for the 3-months ended Sept. 20, of the current year are given below: a. Raw materials purchased on cash, P450,000. b. Materials issued to production, P400,000, distributed as follows: Job. 500 (20%), Job 600 (25%), Job 700 (30%), Job 800(15%) and the balance represent factory supplies consumed. c. Labor costs for the period: Direct labor - P200,000 distributed as follows: Job 500 (25%); Job 600 (30%); Job 700(20%) and the balance to Job 800 Indirect labor - P75,000 Selling and administrative expenses - P125,000. d. Administrative expenses and Manufacturing overhead incurred other than indirect materials and indirect labor follows: P30,000 60,000 12,000 5,000 Factory insurance expired Factory rent Factory maintenance Office equipment maintenance Electricity costs, 60% to factory, 40% to selling and administration Taxes & Licenses, 60% to factory, 40% to selling & administration Miscellaneous factory costs 60,000 20,000 20,000 Additional information: a. Normal Costing: Overhead is applied to the job at the same rate used in the prior period and the overhead variance is closed to cost of sales. b. Only Job no. 700 is unfinished at the end of the period. Job 600 is in the warehouse and all other were sold at production cost plus% mark- up on a 30- day term. What is the ending balance of Raw Materials Inventory?
. At the beginning of the year, Primer Manufacturing Company had the following balances in its inventory accounts: Raw Materials Php 100,000.00 Work in Process 232,000.00 Finished Goods 720,000.00 The work in process subsidiary ledger shows the following balances: Job 500 consists of Materials, Php 22,000.00, direct labor Php 48,000.00, and factory overhead of Php 72,000.00. Job 600 consist of Php 15,000.00 Materials, 30,000.00 of direct labor, and 45,000.00 factory overhead. The finished goods inventory contains Job 400 with a total cost of P320,000 and Job 300 with a total cost of P400,000. Summary of transactions for the 3-months ended Sept. 20, of the current year are given below: a. Raw materials purchased on cash, P450,000. b. Materials issued to production, P400,000, distributed as follows: Job. 500 (20%), Job 600 (25%), Job 700 (30%), Job 800(15%) and the balance represent factory supplies consumed. c. Labor costs for the period: Direct labor - P200,000 distributed as follows: Job 500 (25%); Job 600 (30%); Job 700(20%) and the balance to Job 800 Indirect labor - P75,000 Selling and administrative expenses - P125,000. d. Administrative expenses and Manufacturing overhead incurred other than indirect materials and indirect labor follows: P30,000 60,000 12,000 5,000 Factory insurance expired Factory rent Factory maintenance Office equipment maintenance Electricity costs, 60% to factory, 40% to selling and administration Taxes & Licenses, 60% to factory, 40% to selling & administration Miscellaneous factory costs 60,000 20,000 20,000 Additional information: a. Normal Costing: Overhead is applied to the job at the same rate used in the prior period and the overhead variance is closed to cost of sales. b. Only Job no. 700 is unfinished at the end of the period. Job 600 is in the warehouse and all other were sold at production cost plus% mark- up on a 30- day term. What is the ending balance of Raw Materials Inventory?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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Question
Transcribed Image Text:'. At the beginning of the year,
Primer Manufacturing
Company had the following
balances in its inventory
accounts: Raw Materials Php
100,000.00 Work in Process
232,000.00 Finished Goods
720,000.00 The work in
process subsidiary ledger
shows the following balances:
Job 500 consists of Materials,
Php 22,000.0O, direct labor
Php 48,000.00, and factory
overhead of Php 72,000.00.
Job 600 consist of Php
15,000.00 Materials,
30,000.00 of direct labor, and
45,000.00 factory overhead. *
The finished goods inventory contains Job 400 with a total cost of
P320,000 and Job 300 with a total cost of P400,000.
Summary of transactions for the 3-months ended Sept. 20, of the current
year are given below:
a. Raw materials purchased on cash, P450,000.
b. Materials issued to production, P400,000, distributed as follows:
Job. 500 (20%), Job 600 (25%), Job 700 (30%), Job 800(15%) and the
balance represent factory supplies consumed.
c. Labor costs for the period:
Direct labor - P200,000 distributed as follows: Job 500 (25%); Job
600 (30%); Job 700(20%) and the balance to Job 800
Indirect labor - P75,000
Selling and administrative expenses - P125,000.
d. Administrative expenses and Manufacturing overhead incurred other
than indirect materials and indirect labor follows:
P30,000
60,000
12,000
5,000
Factory insurance expired
Factory rent
Factory maintenance
Office equipment maintenance
Electricity costs, 60% to factory, 40% to
selling and administration
Taxes & Licenses, 60% to factory, 40%
to selling & administration
Miscellaneous factory costs
60,000
20,000
20,000
Additional information:
a. Normal Costing: Overhead is applied to the
job at the same rate used in the prior period
and the overhead variance is closed to cost of
sales.
b. Only Job no. 700 is unfinished at the end of
the period. Job 600 is in the warehouse and all
other were sold at production cost plus% mark-
up on a 30- day term.
What is the ending balance of Raw Materials
Inventory?
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