On December 31, 2016, after closing, the ledgers of Premium Company contained these accounts and balances: Cash P 93,000 Accounts Receivable P 105,000 Retained Earnings P74,000 Finished Goods P 65,000 Work In Process P 15,000 Materials P 44,000 Machinery P 70,000 Accounts Payable P 118,000 Common Stock P 200,000 Details of the three inventories are: Finished Goods Inventory: Materials Inventory: Item A- 2,000 units at P 12.50 P 25,000 Material X (P5/ unit) P 20,000 Item B- 4,000 units at P 10.00 40,000 Material Y (P3/ unit) 24,000 Work in Process Inventory: JOB 101 JOB 102 Direct Materials: 1,000 units at P 5.00 P 5,000 400 units at P 3.00 P 1,200 Direct Labor: 1,000 hours at P 4.00 4,000 400 hours at P 5.00 2,000 Factory Overhead: Applied at P 2.00/hour 2,000 800 During January, 2012, these transactions were completed: a. Purchases on account: Material X- 20,000 units at P 5.60; Material Y- 24,000 units at P 3.75; indirect materials- P 35,040. b. Payroll totaling P 220,000 was paid. Of the total payroll P 40,000 was for marketing and administrative salaries. Payroll deductions consisted of P 31,000 for withholding taxes, P 7,000 for SSS, P 440 for Medicare Contributions, and P 6,600 for Pag-ibig Funds. c. Payroll is to be distributed as follows: Job 101- 10,000 direct labor hours at P 4.00, Job 102- 16,000 direct labor hours at P 5.00, Job 103- 12,000 direct labor hours at P 3.00, indirect labor- P 24,000, Marketing and administrative salaries- P 40,000. Employer’s Payroll taxes are: SSS Premium 5%, Medicare Contribution 0.2%, and Pag-ibig Funds 3%. d. Materials were issued on a FIFO basis as follows: Material X- 20,000 units ( charged to Job 101), Material Y- 24,000 units ( charged to Job 102), Material X- 2,000 units and materials Y- 5,000 units (charged to Job 103). (Note: Transactions are to be taken in consecutive order). Indirect Materials amounted to P 15,040. e. Factory Overhead was applied to Jobs 101, 102 and 103 based on a rate of P 2.40 per direct labor hour. f. Jobs 101 and 102 were completed and sold on account for P 240,000 and P 270,000, respectively. g. After allowing a 5% cash discount, a net amount of P 494,000 was collected on accounts receivable. h. Marketing and administrative expenses (other than salaries) paid during the month amounted to P 30,000. Miscellaneous factory overhead of P 20,900 was paid. Depreciation for the month P 12,000 (20% pertains to factory machinery). i. Payments on account, other than payroll paid, amounted to P 170,000. j. The over or under-applied factory overhead is to be closed. 1. Total Manufacturing cost 2. COGM 3. Over/Under-applied OH
On December 31, 2016, after closing, the ledgers of Premium Company contained these accounts and balances:
Cash P 93,000
Finished Goods P 65,000 Work In Process P 15,000
Materials P 44,000 Machinery P 70,000
Accounts Payable P 118,000 Common Stock P 200,000
Details of the three inventories are:
Finished Goods Inventory: Materials Inventory:
Item A- 2,000 units at P 12.50 P 25,000 Material X (P5/ unit) P 20,000
Item B- 4,000 units at P 10.00 40,000 Material Y (P3/ unit) 24,000
Work in Process Inventory: JOB 101 JOB 102
Direct Materials: 1,000 units at P 5.00 P 5,000
400 units at P 3.00 P 1,200
Direct Labor: 1,000 hours at P 4.00 4,000
400 hours at P 5.00 2,000
Factory
During January, 2012, these transactions were completed:
a. Purchases on account: Material X- 20,000 units at P 5.60; Material Y- 24,000 units at P 3.75; indirect
materials- P 35,040.
b. Payroll totaling P 220,000 was paid. Of the total payroll P 40,000 was for marketing and administrative
salaries. Payroll deductions consisted of P 31,000 for withholding taxes, P 7,000 for SSS, P 440 for
Medicare Contributions, and P 6,600 for Pag-ibig Funds.
c. Payroll is to be distributed as follows: Job 101- 10,000 direct labor hours at P 4.00, Job 102- 16,000 direct
labor hours at P 5.00, Job 103- 12,000 direct labor hours at P 3.00, indirect labor- P 24,000, Marketing
and administrative salaries- P 40,000. Employer’s Payroll taxes are: SSS Premium 5%, Medicare
Contribution 0.2%, and Pag-ibig Funds 3%.
d. Materials were issued on a FIFO basis as follows: Material X- 20,000 units ( charged to Job 101), Material
Y- 24,000 units ( charged to Job 102), Material X- 2,000 units and materials Y- 5,000 units (charged to Job
103). (Note: Transactions are to be taken in consecutive order). Indirect Materials amounted to P 15,040.
e. Factory Overhead was applied to Jobs 101, 102 and 103 based on a rate of P 2.40 per direct labor hour.
f. Jobs 101 and 102 were completed and sold on account for P 240,000 and P 270,000, respectively.
g. After allowing a 5% cash discount, a net amount of P 494,000 was collected on accounts receivable.
h. Marketing and administrative expenses (other than salaries) paid during the month amounted to P
30,000. Miscellaneous factory overhead of P 20,900 was paid.
pertains to factory machinery).
i. Payments on account, other than payroll paid, amounted to P 170,000.
j. The over or under-applied factory overhead is to be closed.
1. Total Manufacturing cost
2. COGM
3. Over/Under-applied OH
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