Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

ABC Company realized too late that it had made a mistake locating its controllers office and its electronic data processing system in the basement. Because

ABC Company realized too late that it had made a mistake locating its controllers office and its electronic data processing system in the basement. Because of the heavy rains, the Cagayan River overflowed its banks on November 2 and flooded the companys basement. Electronic data storage was destroyed, and the company had not provided off-site storage of data. Some of the paper printouts were located but were badly faded and only partially legible. On November 3, when the flooding subsided, company accountants were able to assemble the following factory-related data from the debris and from discussions with various knowledgeable personnel. Data about the following accounts were found:

image text in transcribed

image text in transcribed

Raw Material (includes indirect material) Inventory: Balance October 1 was P9,600. Work in Process Inventory: Balance October 1 was P15,400. Finished Goods Inventory: Balance October 31 was P13,200. Total company payroll cost for October was P58,400. Accounts payable balance October 31 was P36,000. Indirect material used in October cost P11,600. Other nonmaterial and nonlabor overhead items for October totaled P5,000. Payroll records, kept at an across-town service center that processes the company's payroll, showed that October's direct labor amounted to P36,400 and represented 8,800 labor hours. Indirect factory labor amounted to P10,800 in October. The president's office had a file copy of the production budget for the current year. It revealed that the predetermined overhead application rate is based on planned annual direct labor hours of 100,800 and expected factory overhead of P302,400. Discussion with the factory superintendent indicated that only two jobs remained unfinished on October 31. Fortunately, the superintendent also had copies of the job cost sheets that showed a combined total of P4,800 of direct material and P9,000 of direct labor. The direct labor hours on these jobs totaled 2,144. Both of these jobs had been started during October A badly faded copy of October's Cost of Goods Manufactured and Sold Schedule showed cost of goods manufactured was P96,000, and the October 1 Finished Goods Inventory was P16,800. The treasurer's office files copies of paid invoices chronologically. All invoices are for raw material purchased on account. Examination of these files revealed that unpaid invoices on October 1 amounted to P12,200; P56,000 of purchases had been made during October; and P36,000 of unpaid invoices existed on October 31. As accounting policy, any overhead variance is closed at the end of the month to cost of goods sold. Based on the information above, answer the following: 1. Calculate the cost of direct material used in October. 2. Calculate the cost of raw material issued in October. 3. Calculate the total manufacturing costs for October. 4. What is the cost of Goods Sold for October? 5. If a balance sheet is to be prepared as at October 31, at what amount should inventory be reported

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Intermediate Accounting

Authors: James D. Stice, Earl K. Stice, Fred Skousen

16th Edition

324376375, 0324375743I, 978-0324376371, 9780324375749, 978-0324312140

More Books

Students also viewed these Accounting questions

Question

Find the sum of the sequence. 20 2 (5k + 3) k=1

Answered: 1 week ago