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XYZ company is a manufacturing firm that uses job-order costing. On January 1, the beginning of its fiscal year, the company's inventory balances were as follows: Raw Materials WIP Php 20,000 15,000 30,000 Finished Goods The company applies overhead cost to jobs on the basis of machine- hours worked. For the current year, the company estimated that it would work 75,000 machine-hours and incur php 450,000 in manufacturing overhead cost. The following transactions were recorded for the year:

XYZ company is a manufacturing firm that uses job-order costing. On January 1, the beginning of its fiscal year, the company's inventory balances were as follows: Raw Materials WIP Php 20,000 15,000 30,000 Finished Goods The company applies overhead cost to jobs on the basis of machine- hours worked. For the current year, the company estimated that it would work 75,000 machine-hours and incur php 450,000 in manufacturing overhead cost. The following transactions were recorded for the year:

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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XYZ company is a manufacturing firm that uses job-order costing. On January 1, the beginning of its fiscal year, the company's inventory balances were as follows: Raw Materials Php 20,000 15,000 30,000 WIP Finished Goods The company applies overhead cost to jobs on the basis of machine- hours worked. For the current year, the company estimated that it would work 75,000 machine-hours and incur php 450,000 in manufacturing overhead cost. The following transactions were recorded for the year: a) Raw materials were purchased on account, Php 410,000. b) Raw Materials were requisitioned for use in production, Php 380,000 (Php 360,000 direct and Php 20,000 indirect). c) The following costs were incurred for employee services: labor Php 75,000; indirect labor Php 110,000; sales commissions Php 90,000; and administrative salaries Php 200,000. d) Sales travel cost were incurred Php 17,000. e) Utility cost were incurred in the factory Php 43,000. f) Advertising costs were incurred Php 180,000. g) Depreciation was recorded for the year, Php 350,000 ( 80% relates to factory operations and 20% relates to selling and administrative activities). h) Insurance expired during the year Php 10,000 ( 70% relates to factory operations and the remaining 30% relates to selling and administrative activities). i) Manufacturing Overhead was applied to production. Due to greater than expected demand for its products, the company worked 80,000 machine-hours during the year. j) Goods costing Php 900,000 to manufacture were completed during the year. k) Goods were sold on account to customers during the year at a total selling price of Php 1,500,000. The goods cost Php 870,000 to manufacture. Required: 1. Compute for the COGM (Cost of Good Manufactured) 2. Prepare an Income Statement for XYZ Company.
Transcribed Image Text:XYZ company is a manufacturing firm that uses job-order costing. On January 1, the beginning of its fiscal year, the company's inventory balances were as follows: Raw Materials Php 20,000 15,000 30,000 WIP Finished Goods The company applies overhead cost to jobs on the basis of machine- hours worked. For the current year, the company estimated that it would work 75,000 machine-hours and incur php 450,000 in manufacturing overhead cost. The following transactions were recorded for the year: a) Raw materials were purchased on account, Php 410,000. b) Raw Materials were requisitioned for use in production, Php 380,000 (Php 360,000 direct and Php 20,000 indirect). c) The following costs were incurred for employee services: labor Php 75,000; indirect labor Php 110,000; sales commissions Php 90,000; and administrative salaries Php 200,000. d) Sales travel cost were incurred Php 17,000. e) Utility cost were incurred in the factory Php 43,000. f) Advertising costs were incurred Php 180,000. g) Depreciation was recorded for the year, Php 350,000 ( 80% relates to factory operations and 20% relates to selling and administrative activities). h) Insurance expired during the year Php 10,000 ( 70% relates to factory operations and the remaining 30% relates to selling and administrative activities). i) Manufacturing Overhead was applied to production. Due to greater than expected demand for its products, the company worked 80,000 machine-hours during the year. j) Goods costing Php 900,000 to manufacture were completed during the year. k) Goods were sold on account to customers during the year at a total selling price of Php 1,500,000. The goods cost Php 870,000 to manufacture. Required: 1. Compute for the COGM (Cost of Good Manufactured) 2. Prepare an Income Statement for XYZ Company.
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