The objective of this assignment is for you to review the previous discussions related to this topic, apply

the necessary concepts, research, and analyze the given situation/problem, then come up with your
answer based on the knowledge that you have. Take note that in the process, try to identify your "weak
points" so you can improve on them. This can only be achieved if you are honest in the learning process.
"It is important to pass but it is more important to learn" Good luck!

PROBLEM 1.

COMPANY ABC manufactures espionage equipment. COMPANY ABC uses a job-order cost system and
applies overhead to jobs on the basis of direct labor-hours. For the current year, COMPANY ABC
estimated that it would work 100,000 direct labor-hours and incur P20,000,000 of manufacturing
overhead cost. The following summarized information relates to January of the current year. The raw
materials purchased include both direct and indirect materials.

Raw materials purchased on account..............................

P1,412,000

Direct materials requisitioned into production................

P1,299,500
Indirect materials requisitioned into production.............

P98,000

Direct labor cost (7,900 hours @ P40 per hour).............

P316,000

Indirect labor cost (10,200 hours @ P16 per hour).........

P163,200

Depreciation on the factory building...............................

P190,500
Depreciation on the factory equipment...........................

P890,700

Utilities for the factory....................................................

P79,600

Cost of jobs finished........................................................

P2,494,200

Cost of jobs sold..............................................................

P2,380,000
Sales (all on account)......................................................

P3,570,000

Required:

Prepare journal entries to record COMPANY ABC's transactions for the month of January. Do not
close out the manufacturing overhead account.

PROBLEM 2.

COMPANY XYZ is a manufacturing firm that uses job-order costing. The company's inventory balances
were as follows at the beginning and end of the year:
Beginning Balance

Ending Balance

Raw materials..............................

P26,000

P20,000

Work in process...........................

P71,000

P53,000
Finished goods.............................

P66,000

P81,000

The company applies overhead to jobs using a predetermined overhead rate based on machine-
hours. At the beginning of the year, the company estimated that it would work 44,000 machine-hours
and incur P176,000 in manufacturing overhead cost. The following transactions were recorded for the
year:

Raw materials were purchased, P459,000.

Raw materials were requisitioned for use in production, P465,000 (P431,000 direct and P34,000
indirect).

The following employee costs were incurred: direct labor, P296,000; indirect labor, P63,000; and
administrative salaries, P157,000.

Selling costs, P134,000.

Factory utility costs, P14,000.

Depreciation for the year was P119,000 of which P114,000 is related to factory operations and P5,000 is
related to selling and administrative activities.

Manufacturing overhead was applied to jobs. The actual level of activity for the year was 47,000
machine-hours.

Sales for the year totaled P1,287,000

Required:
Prepare a schedule of cost of goods manufactured in good form.

Was the overhead under-or overapplied? By how much?

Prepare an income statement for the year in good form. The company closes any under-or overapplied
overhead to Cost of Goods Sold.

PROBLEM 3

COMPANY 123 manufactures stereo speakers in two factories; one in BAGUIO and another in LA
TRINIDAD. The BAGUIO factory uses DLP for its overhead rate and the LA TRINIDAD factory uses
machine-hours (MHs) for its overhead rate. Information related to both plants for last year is presented
below:

BAGUIO factory

LA TRINIDAD factory
Estimated manufacturing overhead...........

P1,000,000

P1,600,000

Estimated amount of allocation base.........

(a)______________

200,000 MHs

Predetermined overhead rate.....................

P10 per DLP

(d)______________
Actual amount of allocation base..............

(b)______________

190,000 MHs

Actual manufacturing overhead................

P1,092,500

P1,472,500

Applied manufacturing overhead..............

P1,010,000

(e)_______________

Under or overapplied overhead.................

(c)______________

(f)_______________

Required:

Fill in the lettered blanks above. SHOW YOUR CALCULATIONS.

PROBLEM 4.

ABC Company has a job-order costing system. The company applies manufacturing overhead to jobs
using a predetermined overhead rate based on direct labor cost. The information below has been taken
from the cost records of ABC Company for the past year:
Direct materials used in production...................................................

P1,250

Total manufacturing costs charged to production during the year (includes direct materials, direct labor,
and applied factory overhead)........................................................................................

P6,050

Manufacturing overhead applied.......................................................

P2,800

Selling and administrative expenses..................................................

P1,000
Inventories:

Direct materials, January 1.............................................................

P130

Direct materials, December 31.......................................................

P80

Work in process, January 1.............................................................

P250
Work in process, December 31.......................................................

P400

Finished goods, January 1...............................................................

P300

Finished goods, December 31.........................................................

P200

Required:

Compute the cost of direct materials purchased during the year.

Compute the predetermined overhead rate that was used during the past year.
Compute the Cost of Goods Manufactured for the past year.

Compute the Cost of Goods Sold for the past year.

PROBLEM 5

The following cost data relate to the manufacturing activities of the XYZ Company last year:

Manufacturing overhead costs:

Property taxes......................................................
P 1,500

Utilities, factory...................................................

2,500

Indirect labor........................................................

5,000

Depreciation, factory...........................................

12,000

Insurance, factory................................................
 3,000

Total.....................................................................

P24,000

Other costs incurred:

Purchases of direct materials...............................

P16,000
Direct labor cost...................................................

P20,000

Inventories:

Direct materials, January 1..................................

P4,000
Direct materials, December 31............................

P3,500

Work in process, January 1..................................

P3,000

Work in process, December 31............................

P3,750

The company uses a predetermined overhead rate to apply manufacturing overhead cost to
production. The rate last year was P5.00 per machine-hour; a total of 5,000 machine-hours were
recorded for the year.
 Required:

Compute the amount of under-or overapplied overhead cost for the year.

Prepare a schedule of the Cost of Goods Manufactured for the year.

PROBLEM 6

CHAM-CHAM uses a job-order costing system with a predetermined overhead rate based on machine-
hours. The company closes out any under- or overapplied overhead to Cost of Goods Sold.

Required:

If overhead is overapplied, what adjustment does the company make to the Cost of Goods Sold?
Is Cost of Goods Sold increased or decreased? Why?

Math100

Statistics - Collection of methods for planning experiments, obtaining data, and then organizing,
summarizing, presenting, analyzing, interpreting, and drawing conclusions.
Variable-Characteristic or attribute that can assume different values

Random Variable -A variable whose values are determined by chance.

Population -All subjects possessing a common characteristic that is being studied.

Sample-A subgroup or subset of the population.

Parameter-Characteristic or measure obtained from a population.

Statistic (not to be confused with Statistics)-Characteristic or measure obtained from a sample.

Types of Statistics

Descriptive Statistics-Collection, organization, summarization, and presentation of data.

Inferential Statistics-Generalizing from samples to populations using probabilities. Performing

hypothesis testing, determining relationships between variables, and making predictions.

Types of Variables

Qualitative Variables-Variables which assume non-numerical values.

Quantitative Variables-Variables which assume numerical values.

Types of Quantitative Variables

Discrete Variables-Variables which assume a finite or countable number of possible values. Usually
obtained by counting.

Continuous Variables-Variables which assume an infinite number of possible values. Usually obtained by
measurement.

Level of Measurements

Nominal Level

Level of measurement which classifies data into mutually exclusive, all inclusive categories in which no
order or ranking can be imposed on the data.

Ordinal Level

Level of measurement which classifies data into categories that can be ranked. Differences between the
ranks do not exist.

Interval Level

Level of measurement which classifies data that can be ranked and differences are meaningful.
However, there is no meaningful zero, so ratios are meaningless.

Ratio Level

Level of measurement which classifies data that can be ranked, differences are meaningful, and there is
a true zero. True ratios exist between the different units of measure.

Types of Sampling
Random Sampling

Sampling in which the data is collected using chance methods or random numbers.

Systematic Sampling

Sampling in which data is obtained by selecting every kth object.

Convenience Sampling

Sampling in which data is readily available is used.

Stratified Sampling

Sampling in which the population is divided into groups (called strata) according to some characteristic.
Each of these strata is then sampled using one of the other sampling techniques.

Cluster Sampling

Sampling in which the population is divided into groups (usually geographically). Some of these groups
are randomly selected, and then all of the elements in those groups are selected.

Math 100

THE MEASURE OF CENTRAL TENDENCY

Mean is also known as the average

Population Mean
pop mean

Sample Mean

sample mean

Weighted Mean

The mean when each value is multiplied by its weight and summed. This sum is divided by the total of
the weights.

The median is the midpoint of the data array. The symbol for the Median is MD.

Steps in computing the median of a data array

Step 1 Arrange the data in order.

Step 2 Select the middle point.

The value that occurs most often in a data set is called the mode.
The midrange is defined as the sum of the lowest and highest values in the data set, divided by 2. The
symbol MR is used for the

midrange.

MR = (lowest value + highest value )/2

Properties

Mean

The mean is found by using all the values of the data.

The mean varies less than the median or mode when samples are taken from the same population and
all three measures are computed for these samples.

The mean is used in computing other statistics, such as the variance.

The mean for the data set is unique and not necessarily one of the data values.

The mean cannot be computed for the data in a frequency distribution that has an open-ended class.

The mean is affected by extremely high or low values, called outliers.

Median

The median is used to find the center or middle value of a data set.

The median is used when it is necessary to find out whether the data values fall into the upper half or
lower half of the distribution.

The median is used for an open-ended distribution.

The median is affected less than the mean by extremely high or extremely low values.

The Mode

The mode is used when the most typical case is desired.

The mode is the easiest average to compute.

The mode can be used when the data are nominal, such as religious preference, gender.

The mode is not always unique. A data set can have more than one mode, or the mode may not exist for
a data set.

The Midrange

The midrange is easy to compute.

The midrange gives the midpoint.

The midrange is affected by extremely high or low values in a data set

EXAMPLES:

The data represent the number of days off per year for a sample of individuals selected from nine
different countries. Find the mean.

20, 26, 40, 36, 23, 42, 35, 24, 30

Mean = 20 + 26 + 40 + 36 + 23 + 42 + 35 + 24 + 30

9
 Mean = 30.67

The number of rooms in the seven hotels is 713, 300, 618, 595, 311, 401, and 292. Find the median.

713 618 595 401 311 300 292

Median = 401

If an investor purchased 50 shares of stock at P85 per share, 90 shares at P105 per share, 120 shares at
P110 per share, and another 75 shares at P130 per share, what is the mean cost per share?

Mean = 50 ( 85 ) + 90 ( 105 ) + 120 ( 110 )+ 75(130)

335

=4250 + 9450 + 13200 + 9750

335

=LaTeX: \frac{36650}{335}

=P 109.40

The following table shows the vehicle color survey

Color
Number of vehicles

red

35

blue

65

yellow

50

For this data, blue is the mode, since it is the data value that occurred the most frequently

Reviewers were asked to rate a product on a scale of 1 to 5. Find the mean rating, the median rating and
the mode rating

Rating

Frequency

1
4

Mean= 1(4) + 2(7) + 3(8) + 4(5) + 5(1)

25
 = 4 + 14 + 24 + 20 + 5

25

= LaTeX: \frac{67}{25}

= 2.68

Median = 3

Mode = 3