Problem 1 NESTLE Inc., is employing a sophisticated just-in-time manufacturing system. The company uses backflush costing for recording its production. The following transactions occurred for the year ended December 31, 2016: a. Purchased P170,000 of raw materials on account. b. All materials purchased were requisitioned for production. c. Incurred direct labor costs of P80,000. d. Actual factory overhead costs amounted to P122,000. e. Applied conversion costs totaled P202,000 including direct labor cost of P80,000. f. All telephones were completed and sold. Req: What is the cost of goods sold for the year ended December 31, 2016? Problem 2 HONDA Inc, is using Just-in-Time Production System and Backflush Cost Accounting System for the year ended December 31, 2016. The following information was provided for the year 2016: a. Raw materials purchased for year 2016 totaled P1,000,000. b. Direct labor for the year 2016 totaled P500,000. c. Actual overhead for the year 2016 totaled P300,000 and the standard overhead rate is 50% of direct labor cost. d. The production report for year 2016 showed that the Finished Goods Inventory at December 31 was P200,000 consisting of: Direct Materials 110,000 Direct Labor 60,000 Factory Overhead 30,000 Req: What is the Cost of Goods Sold for the year ended December 31, 2016? Problem 3 SMC Inc. employs Just-in-Time and Backflush Costing Systems for the production of goods for the year ended December 31, 2016. The following transactions summarize the major steps in SMC's production during the year of 2016: a. Raw materials received from suppliers amounted to P4,000. b. Direct labor costs of P10,400 and overhead costs of P7,800 were incurred and applied, respectively, during the year of 2016. c. The cost of work-in-process at December 31, 2016 was P3,600, This cost was determined through the production report and is composed of the following elements of cost Direct materials 1,500 Direct labor 1,200 Overhead 900 d. In addition, the finished goods inventory at December 31, 2016 was P6,500 consisting of Direct materials 1.500 Direct labor 2,850 Overhead 2,150 Requirements: 1. What is the amount of direct materials backflushed from raw and in process account to finished goods? 2. What is the amount of direct materials backflushed from finished goods to cost of goods sold? 3. What is the amount of cost of goods sold for the year ended December 31, 2016?
Problem 1
NESTLE Inc., is employing a sophisticated just-in-time manufacturing system. The company uses backflush costing for recording its production. The following transactions occurred for the year ended December 31, 2016:
a. Purchased P170,000 of raw materials on account.
b. All materials purchased were requisitioned for production.
c. Incurred direct labor costs of P80,000.
d. Actual
e. Applied conversion costs totaled P202,000 including direct labor cost of P80,000.
f. All telephones were completed and sold.
Req: What is the cost of goods sold for the year ended December 31, 2016?
Problem 2
HONDA Inc, is using Just-in-Time Production System and Backflush Cost Accounting System for the year ended December 31, 2016. The following information was provided for the year 2016:
a. Raw materials purchased for year 2016 totaled P1,000,000.
b. Direct labor for the year 2016 totaled P500,000.
c. Actual overhead for the year 2016 totaled P300,000 and the standard overhead rate is 50% of direct labor cost.
d. The production report for year 2016 showed that the Finished Goods Inventory at December 31 was P200,000 consisting of:
Direct Materials 110,000 Direct Labor 60,000 Factory Overhead 30,000
Req: What is the Cost of Goods Sold for the year ended December 31, 2016?
Problem 3
SMC Inc. employs Just-in-Time and Backflush Costing Systems for the production of goods for the year ended December 31, 2016. The following transactions summarize the major steps in SMC's production during the year of 2016:
a. Raw materials received from suppliers amounted to P4,000.
b. Direct labor costs of P10,400 and overhead costs of P7,800 were incurred and applied, respectively, during the year of 2016.
c. The cost of work-in-process at December 31, 2016 was P3,600, This cost was determined through the production report and is composed of the following elements of cost
Direct materials 1,500 Direct labor 1,200 Overhead 900
d. In addition, the finished goods inventory at December 31, 2016 was P6,500 consisting of
Direct materials 1.500 Direct labor 2,850 Overhead 2,150
Requirements:
1. What is the amount of direct materials backflushed from raw and in process account to finished goods?
2. What is the amount of direct materials backflushed from finished goods to cost of goods sold?
3. What is the amount of cost of goods sold for the year ended December 31, 2016?
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