PROBLEM 3

AAA Company manufactures two products, X-MAN and Machman. AAA Companys overhead costs consist of setting-up machines, P400,000; machining P900,000; and inspecting, P300,000.

Information on the two products is as follows:

	X-MAN	Machman
Direct labor hours	15,000	25,000
Machine setups	600	400
Machine hours	24,000	26,000
Inspections	800	700

Requirement:

1. Using traditional costing method, compute for the total overhead cost of X-Man.
2. Using traditional costing method, compute for the total overhead cost of Machman.
3. Using activity-based costing method, compute for the total overhead cost of X-Man.
4. Using activity-based costing method, compute for the total overhead cost.

PROBLEM 4

AAA Inc. is engaged in the business of manufacturing. The company employs actual costing system. The company uses a single account for direct and indirect materials. The following are provided for the year ended December 31, 2019:

Gross sales	10,000,000
Sales returns	500,000
Gross purchases	2,000,000
Purchases, returns, allowances and discount	400,000
Freight in	400,000
Factory labor direct and indirect	2,000,000
Depreciation of factory assets	300,000
Insurance on factory assets	100,000
Utilities expense on factory	500,000
Total administrative expenses	1,000,000
Total marketing expenses	2,000,000

Inventories are as follows:

	January 1	December 31
Raw Materials	100,000	300,000
Work-in-Process	?	200,000
Finished Goods	500,000	600,000

Additional Data:

1. Net profit ratio is 10% of net sales.
2. The diect labor cost was four times the cost of indirect labor
3. Cost of indirect materials used was P100,000

Compute for the following: (5 pts)

1. Total prime cost
2. Total conversion cost
3. Cost of goods manufactured
4. Cost of goods sold
5. Cost of work in process on January 1

PROBLEM 5

BBB Inc. is employing normal costing for its job orders. The overhead is applied using a predetermined overhead rate. The following information relates to BBB Inc. for the year ended December 31, 2019:

	Job No. 101	Job No. 102	Job No. 103
Job in Process, 01/01/2019
Direct Materials	P80,000	P60,000	P0
Labor	120,000	80,000	0
Factory Overhead	60,000	40,000	0
Costs added during 2019
Materials	P40,000	P20,000	P200,000
Labor	200,000	400,000	800,000
Factory Overhead	200,000	200,000	400,000

Additional information:

1. Actual overhead for the year 2019 amounted to P800,000.
2. Jobs No. 101 and 102 were completed and transferred to finished goods during year 2019.
3. Job No. 102 was sold during 2019.
4. The gross profit rate based on cost is 20%.

Compute: (6 pts)

1. Total manufacturing cost
2. Cost of goods manufactured for 2019
3. Cost of goods sold 2019
4. Gross profit for 2019
5. Work-in process for December 31, 2019
6. Cost of finished goods for December 31, 2019

PROBLEM 6

CCC Inc. has completed Job 101, containing 1,100 shoes, during 2016 at the following unit costs:

Direct Materials 2,000 Direct Labor 1,000

Factory Overhead (including an allowance of P300 for spoiled work - 1,300

Final inspection of Job 101 disclosed 100 spoiled shoes which were sold to a department store for P200,000.

1. What is the unit cost of the good shoes produced on Job 101 if spoilage loss is charged to all production? (2 pts)
2. What is the unit cost of the good shoes produced on Job 101 if spoilage loss is charged specifically to Job 101? (2 pts)