2022 1st Semester

ACCTG 312N – Cost Accounting and Control

Assignment 1 (Total pts – 50 pts) Topics:

(1) Cost Accounting Cycle (2) Cost Behavior Analysis

Instructions: Show your computation/presentation and answers coherently in a separate sheet of yellow
paper (handwritten). Decimals should be up to the hundredths. No erasures.

Problem 1 (Total pts – 28 pts)

The Inventory accounts of Aced Company at the beginning of 2022 are as follows:

Raw Materials Inventory P15,000 Finished Goods Inventory P20,000

Work-In-Process Inventory 10,000

The following transactions occurred in January 2022:

a. Materials (lumber, paint, screws, lubricants and solvents) were purchased on account at a cost of
P28,000.
b. Direct materials (lumber and paint) costing P30,000 and indirect materials (screws, lubricants and
solvents) costing P2,000 were issued to the factory.
c. Total payroll of the company for the month amounted to P35,000, consisting of P20,000 earned
by laborers working on the product; P6,000 for factory supervision; P4,000 for sales personnel
and P5,000 for office personnel. [Show the journal entries for payment of salaries, and
distribution/classification of payroll to production/expense accounts.]
d. Depreciation expense for the building costing P700,000 is 6% per year. The sales office and
general office occupies one-tenth of the building each, and the factory operation occupies the rest
of the building.
e. Depreciation expense for the machinery and equipment costing P200,000 is 12% per year. The
machinery and equipment are used for production purposes.
f. The cost of the heat, light and power in the building was P5,000. These are paid next month. Take
note of how the building is distributed to offices and factory operation.
g. Miscellaneous expenses for telephone, office supplies, travel and rental of office furniture and
equipment totaled P2,000. These are paid next month.
h. Other manufacturing overhead costed P1,000. These are paid next month.
i. 80% of the production for the month were finished. Included in the products finished were
products that were still in process at the beginning of the year.
j. 75% of the total finished goods are sold on account at 20% gross profit.

Use the following account titles:

Statement of Financial Position Statement of Financial Performance
Cash Sales
Accounts Receivable Cost of Goods Sold
Raw Materials Inventory Factory Overhead Control
Work-In-Process Inventory Selling Expense Control
Finished Goods Inventory Administrative Expense Control
Accumulated Depreciation - Building Payroll
Accumulated Depreciation - Machinery and
Equipment
Accounts Payable

Required:
1. Prepare the journal entries for each transaction above (1 pt each).
2. In proper format, prepare the Statement of Cost of Goods Manufactured and Sold (15 pts).

Problem 2 (Total pts – 22 pts)

Clone Machinery had the following experience regarding power costs:

Month Machine hrs Cost Month Machine hrs Cost

January 600 P910 April 500 P820
February 650 980 May 450 766
March 420 704

Required:
1. Determine the cost function for power cost using the high-low method and least squares method
(5 pts each).
2. Assuming that the management expects 500 machine hours in June, calculate Clone's power cost
(using machine hours as the basis for prediction using high-low method (3 pts).
3. Using regression analysis, determine the coefficient of correlation, coefficient of determination,
and the standard error of the estimate (3 pts each).