COST ACCOUNTING

ACCOUNTING FOR ELEMENTS OF COST

A 1 TUDORS, Inc. purchases ansd re-sells a single item of product. The inventory at the beginning of Sept, 2009 was
400 units, valued at p 1.80 each Further receipts and sales during the month are as follows:
Units Per unit
8-Sep Receipts 600 P 2.10
14-Sep Receipts 500 ?
25-Sep Sales 1,250 P 4.00

The company uses the FIFO method of stock valuation. Gross margin for Sept, 2009 was P 2,500

What was the cost per unit of the Sept. 14,2009 receipts
a P 2.08 b P 2.00 c P 1.94 d P 1.04

Questions 2-7 are based on the following information:

BUHAY Manufacturing Co., has the following data:
inventories 1-Jun 30-Jun
Raw materials P 123,000 187,954
Work in process 324,020 576,691
Finished goods 598,321 793,639
Equipment parts and supplies 89,300 112,729

Other data for the month of June

Purchases 412,860
Direct labor 214,108
Direct labor man hours 16,470
Overhead per direct labor man hour P 5.50

2 Raw materials used in production amounted to

a P 383,566 b P 365,301 c P 347,906 d P 382,697

3 Prime cost added to production is

a P 562,014 b P 606,975 c P 594,836 d P 582,939

4 Conversion added to production is

a p 345,693 b P 368,693 c P 304,693 d P 652,599

5 Total cost of goods placed in process is

a P 925,450 b P 976,619 c P 908,256 d P 844,678

6 Cost of goods manufactured is

a P 419,924 b P 399,928 c P 371,933 d P 345,898

7 Cost of goods sold is

a P 204,610 b P 190,287 c P 176,967 d P 164,579

8 The following information were taken from the accounting records of YANNI MUSIC, CO for 2009
Increase in raw materials inventory P 45,000
Decrease in finished goods inventory 150,000
Raw materials purchases 1,290,000
Direct labor payroll 600,000
Factory overheasd 900,000
Transportation out 135,000

The cost of raw materials used during the period amounted to

a P 1,245,000 b P 1,290,000 c P 1,335,000 d P 1,380,000

9 UPSILON CO can produce any one of its three product lines with its present equipment set up. Base line costs to be
incurred regardless of which product is produced, included depreciation of P 360,000 and the cost of running the
factory of P 300,000 per year. Additional data follow:
Product Expected revenue Additional cost
111 P 4,350,000 P 2,550,000
222 2,900,000 850,000
333 7,800,000 5,825,000
 To maximize profits, UPSILON CO. should produce
a Product 111 b Product 222 c Product 333 d Any of the three

10 XOTIC Corp., , incurred the following costs in October 2008: direct labor, P 120,000; factory overhead, P 108,000
and direct materials purchases, P 160,000. Inventories are as follows:
Opening Closing
Finished goods P 27,000 P 30,000
Work in process 61,500 57,500
Raw materials 37,500 43,500

The cost of goods manufactured was

a P 382,000 b P 386,000 c P 388,000 d P 443,500

10x2 = 20/20