The beginning and ending balance of selected accounts of Drea Paper Products Inc. for the year 2020 are given below: Ending Balance Beginning Balance Finished goods P400,000 P385,000 Work on process 520,000 495,000 Raw materials 710,000 750,000 Transactions that transpired during the year were: Raw materials costing P280,000 were purchased for cash. Raw materials costing P220,000 were purchased on account. Incurred factory overhed cost, P135,000. Other materials requisitioned for production, P30,000 Factory wages consisted of: Direct labor, P270,000; Indirect labor, P100,000. Finished goods costing 350,000 were sold for P800,000. Required: Prepare the statement of cost of goods manufactured and sold in good form. Determine the following: a. Prime cost b. Conversion cost c. Product cost.
The beginning and ending balance of selected accounts of Drea Paper Products Inc. for the year 2020 are given below: Ending Balance Beginning Balance Finished goods P400,000 P385,000 Work on process 520,000 495,000 Raw materials 710,000 750,000 Transactions that transpired during the year were: Raw materials costing P280,000 were purchased for cash. Raw materials costing P220,000 were purchased on account. Incurred factory overhed cost, P135,000. Other materials requisitioned for production, P30,000 Factory wages consisted of: Direct labor, P270,000; Indirect labor, P100,000. Finished goods costing 350,000 were sold for P800,000. Required: Prepare the statement of cost of goods manufactured and sold in good form. Determine the following: a. Prime cost b. Conversion cost c. Product cost.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The beginning and ending balance of selected accounts of Drea Paper Products Inc. for the year 2020 are given below:
| Ending Balance | Beginning Balance | |
| Finished goods | P400,000 |
P385,000 |
| Work on process | 520,000 | 495,000 |
| Raw materials | 710,000 | 750,000 |
Transactions that transpired during the year were:
Raw materials costing P280,000 were purchased for cash.
Raw materials costing P220,000 were purchased on account.
Incurred
Other materials requisitioned for production, P30,000
Factory wages consisted of: Direct labor, P270,000; Indirect labor, P100,000.
Finished goods costing 350,000 were sold for P800,000.
Required:
- Prepare the statement of cost of goods manufactured and sold in good form.
- Determine the following:
a. Prime cost
b. Conversion cost
c. Product cost.
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