P1-8 During the year 2015, Lowell Manufacturing Corporation purchased raw materials of P126,000 and incurred manufacturing overhead (including indirect materials of P10,000) totaling P210,000 which is equal to 150% of direct labor cost. During the year, Lowell generated total sales of P617,000 with 40% gross margin. Selling expenses were 10% of sales while general and administrative expenses amounted to P40,000. Inventories are summarized below: Finished goods Work in process January 1 P 80,000 150,000 December 31 P 132,000 275,000 150,000 Raw materials ? Assume 30% effective income tax rate. Required: а. Calculate the amount of raw materials inventory at January 1, 2015 b. Calculate the net income for the year 2015.

P1-8 During the year 2015, Lowell Manufacturing Corporation purchased raw materials of P126,000 and incurred manufacturing overhead (including indirect materials of P10,000) totaling P210,000 which is equal to 150% of direct labor cost. During the year, Lowell generated total sales of P617,000 with 40% gross margin. Selling expenses were 10% of sales while general and administrative expenses amounted to P40,000. Inventories are summarized below: Finished goods Work in process January 1 P 80,000 150,000 December 31 P 132,000 275,000 150,000 Raw materials ? Assume 30% effective income tax rate. Required: а. Calculate the amount of raw materials inventory at January 1, 2015 b. Calculate the net income for the year 2015.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

At the beginning of 2012, Conway Manufacturing Company had the following account balances: WIP Inventory - DR 2,000 FG Inventory - DR 8,000 Manufacturing overhead Dr – 0 ( All T accounts) During the year the following transactions took place: Direct materials placed in production $80,000 Direct labor incurred $190,00 Manufacturing OH incurred $300,000 Manufacturing OH allocated to production $295,000 Costs of jobs completed $500,000 Selling price of jobs sold $750,000 Cost of jobs sold $440,000 As a result of these transactions how gross profit will Conway report? A) 310,000 B) 305,000 C) 515,000 D) 345,000
Helza manufacturing provided that for last year, cost of goods sold is 565, 000, factory overhead is applied on the basis of 80% of direct labor cost. Material used during the process is 115,000. The following addition information is as under:Opening Ending Inventory InventoryDirect material 25,000 35,000 Work in Process 30,000 40,000Finished goods 35,000 25,000During the period the following expenses incurred:Depreciation of Plant and Machinery 82,000Security charges of factory 20,000Fuel and power 110,000Charge FoH under or over applied to entire productionRequired: Complete cost of goods sold statement?
he following information is obtained from the company’s records for 2014:a. Total manufacturing costs, P8,000,000b. Cost of finished goods manufactured, P7,920,000c. Manufacturing overhead applied, P3,600,000d. Manufacturing overhead was applied to production at a rate of 200% of direct laborcostse. The peso amount of work in process inventory on January 1, 2014 was P320,000.What is the peso amount of work in process inventory on December 31, 2014?a. P400,000b. P800,000c. P500,000d. P320,000
Selected data for Lemon Grass Company for 2015 is provided below: Factory Utilities $ 1,500 Indirect Materials Used 37,500 Direct Materials Used 300,000 Property Taxes on Factory Building 6,900 Sales Commissions 85,000 Indirect Labor Incurred 25,000 Direct Labor Incurred 150,000 Depreciation on Factory Equipment 6,500 What is the total factory overhead? A) $450,000 B) $612,000 C) $77,400 D) $62,400
At the beginning of 2012, Conway Manufacturing Company had the following account balances: WIP Inventory - DR 2,000 FG Inventory - DR 8,000 ( All T accounts) During the year the following transactions took place: Direct materials placed in production $80,000Direct labor incurred $190,00Manufacturing OH incurred $300,000Manufacturing OH allocated to production $295,000Costs of jobs completed $500,000Selling price of jobs sold $750,000Cost of jobs sold $440,000 After recording all these transaction the adjusted cost of goods sold account is: A) Debit of $445,000B) Debit of $440,000C) Credit of $445,000D) Debit of $435,000
CVP Industries recorded the below transactions for the month just been ended. PKR 700,000 in raw materials were purchased on account. 600,000 in raw materials were used in production. Of this amount, 520,000 was for direct materials and the remainder was for indirect materials. Labor wages of PKR 280,000 were paid in cash. Of this amount, PKR 200,000 was for direct labor and the remainder was for indirect labor. Depreciation of PKR 175,000 incurred on factory equipment. Journalize the above entries.
ree Co., a manufacturer of heating units, summarized the following information for the year 2022:a) Materials cost of P270,000 includes indirect materials and supplies of P75,000; b) Labor cost of P360,000 includes direct labor of P240,000; c) Factory overhead of P120,000 represents power and light; d) Selling and administrative overhead total P180,000.Conversion costs for 2022 amounted to:
29. Tippy Cup Co. also incurred $10,550 for factory overhead and 250 hours of direct labor at $10.30 per hour. Using the cost of direct materials used calculated in Exercise 28, determine the total manufacturing costs incurred for the year. 30. As of January 1, 2018, Tippy Cup Co.'s work in process inventory had a beginning balance of $98,750. The ending balance of work in process inventory totaled $92,350. Using the information calculated in Exercise 29, calculate the cost of goods manufactured for the year.
Fostoria Corporation began the current period with $21,975 of raw materials, purchased $97,950 of raw materials during the period, and ended the period with $30,205 of raw materials. Indirect materials used and indirect labor totaled $16,950 and $25,320, respectively. The total amount of raw materials put into production during the current period was: a. $97,950 b. $89,720 c. S106,670 d. 119,925
The following information is obtained from the company’s records for 2014: Total manufacturing costs, P8,000,000 Cost of finished goods manufactured, P7,920,000 Manufacturing overhead applied, P3,600,000 Manufacturing overhead was applied to production at a rate of 200% of direct laborcosts The peso amount of work in process inventory on January 1, 2014 was P320,000.What is the cost of direct materials used in 2014?a. P2,600,000b. P2,500,000c. P1,800,000d. P3,600,000