II. M&M Company M&M Company had raw materials on hand on January 1 of the current year of P540,000 and on June 30 of P570,000. Work in process inventory was P600,000 on January 1 and P440,000 on June 30. The balance of finished goods inventory was P580,000 on January 1 and P400,000 on June 30. The company purchased materials for the period amounting to P1,620,000. Of the raw materials issued, 20% are indirect materials. The labor charges for the period were: direct labor, P840,000; indirect labor, P180,000; office salaries, P140,000, and sales salaries of P80,000. The total factory utilities expense incurred for the period was P360,000, repair and maintenance of factory equipment, P20,000 and depreciation on factory equipment was reported to be P120,000. The company uses the actual costing method of accumulating costs and it maintains a 35% markup on costs for establishing its selling price. Compute for: 1) The total factory costs for the period. 2) The cost of goods sold for the period. 3) The net income or (loss) for the period.

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Chapter1: Financial Statements And Business Decisions
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ll GOMO
12:57 PM
@ 50%
X COST ACCO_A...
II. M&M Company
M&M Company had raw materials on hand on January 1 of the current year of P540,000 and on
June 30 of P570,000. Work in process inventory was P600,000 on January 1 and P440,000 on
June 30. The balance of finished goods inventory was P580,000 on January 1 and P400,000 on
June 30. The company purchased materials for the period amounting to P1,620,000. Of the raw
materials issued, 20% are indirect materials. The labor charges for the period were: direct labor,
P840,
,000; indirect labor, P180,000; office salaries, P140,000, and sales salaries of P80,000.
The
total factory utilities expense incurred for the period was P360,000, repair and maintenance
of factory equipment, P20,000 and depreciation on factory equipment was reported to be
P120,000. The company uses the actual costing method of accumulating costs and it maintains
35% markup on
ablishing its selling price.
Compute for:
1) The total factory costs for the period.
2) The cost of goods sold for the period.
3) The net income or (loss) for the period.
4) Assuming normal costing is used, the basis of which is 120% of Direct Labor, how much is
the cost of goods sold?
5) In connection with number 4, compute for the total goods manufactured by the company.
III. MILAN COMPANY
The following costs were actually incurred in the production of 10,000 units of Loofah:
P1,200,500
Raw materials, of which 10% is indirect
Factory labor, of which 20% is indirect labor
Factory overhead, other than direct materials and
1,045,000
indirect labor
900.000
Factory overhead charged to production is equivalent to 110% of direct labor costs. At the end
of the period, inspection revealed that the total cost of goods manufactured is equal to
P2,837,500 while costs of unfinished job is 20% of total factory costs.
1. Compute for the work in process at the beginning.
2. How much is the Cost of Goods Sold for the period if 60% remained as inventory?
3. What is the proper entry for adjustments assuming the difference is considered as
immaterial?
Transcribed Image Text:ll GOMO 12:57 PM @ 50% X COST ACCO_A... II. M&M Company M&M Company had raw materials on hand on January 1 of the current year of P540,000 and on June 30 of P570,000. Work in process inventory was P600,000 on January 1 and P440,000 on June 30. The balance of finished goods inventory was P580,000 on January 1 and P400,000 on June 30. The company purchased materials for the period amounting to P1,620,000. Of the raw materials issued, 20% are indirect materials. The labor charges for the period were: direct labor, P840, ,000; indirect labor, P180,000; office salaries, P140,000, and sales salaries of P80,000. The total factory utilities expense incurred for the period was P360,000, repair and maintenance of factory equipment, P20,000 and depreciation on factory equipment was reported to be P120,000. The company uses the actual costing method of accumulating costs and it maintains 35% markup on ablishing its selling price. Compute for: 1) The total factory costs for the period. 2) The cost of goods sold for the period. 3) The net income or (loss) for the period. 4) Assuming normal costing is used, the basis of which is 120% of Direct Labor, how much is the cost of goods sold? 5) In connection with number 4, compute for the total goods manufactured by the company. III. MILAN COMPANY The following costs were actually incurred in the production of 10,000 units of Loofah: P1,200,500 Raw materials, of which 10% is indirect Factory labor, of which 20% is indirect labor Factory overhead, other than direct materials and 1,045,000 indirect labor 900.000 Factory overhead charged to production is equivalent to 110% of direct labor costs. At the end of the period, inspection revealed that the total cost of goods manufactured is equal to P2,837,500 while costs of unfinished job is 20% of total factory costs. 1. Compute for the work in process at the beginning. 2. How much is the Cost of Goods Sold for the period if 60% remained as inventory? 3. What is the proper entry for adjustments assuming the difference is considered as immaterial?
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