PabloBorbon Campus

College of Accountancy, Business, Economics and International Hospitality Management

Semestral Output
ACC 204 – Cost Accounting and Control
First Semester, AY 2023 – 2024

Problem I
Geo Metal Shop Inc.,manufacturesmetalproductsthat require costing, such asengine blocks, pistons,
and engine housing. During the current year, an order of 30,000 custom housing was begun on job
number 202 for Mr. Max. After the job was completed, the housing was inspected and 4% of the units
were determined to be defective. Mr. Max agreed to accept the goods units only at 140% of cost. The
spoiledunitscanbesoldassecondsforP15each.Spoiledgoodsarekeptinaninventoryaccountseparate from
finished goods.

Totalcost charged tojob number 202are:

Materials P 276,000
Labor (6,000hrsxP14/hr) 84,000
FactoryOverhead(P30/laborhr) 180,000

1. Ifthespoilage unitsare theresultofaninternal failure,whatisthe unitcostofgoods units?

2. Ifthespoilage isattributable toJob202only,whatistheunitsellingpriceofthegood units?

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ProblemII
Ebora Jewelry Factory manufacturer a variety of costume jewelry. The owner Jing Ebora had recently
decided to implement a JIT Costing System. Transactions during September were as follows:
a. RawmaterialstotalingP45,000was purchased.
b. Allmaterialspurchasedwererequisitionedfor production.
c. Direct laborcostsofP11,000wereincurred.
d. IndirectlaborcostsamountedtoP120,000
e. UtilitiescoststotaledP15,000
f. Otheractualfactoryoverheadcostsamounted toP85,000
g. Appliedconversioncoststotaled P221,000.Thisincludesthedirectlaborcosts.
h. All unitswere completed.

1. Determine the September 30 balance inthe cost of goodssold amount. No adjustment hasbeen
made for overapplied or underapplied conversion cost.
2. Usingtheinformationabove,whatwastheoverappliedorunderappliedconversioncostsforthe
month?

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ProblemIII
Danny Company is preparing its annual profit plan. As part of its analysis of the profitability of
individual products, the controller estimates the amount of overhead that should be allocated to the
individual product lines from the information give as follows:
WallMirrors Specialty Windows
Unitsproduced 25 25
Materialsmovesperproduct line 5 15
Directlabor hoursper unit 200 200
Budgetedmaterialshandlingcosts P50,000

1. Under a costing system that allocates overhead on the basis of direct labor hours (traditional),
the materials handling costs allocated to one unit of wall mirrors would be:
2. Underactivity based costing(ABC),what isthe materials handling cost allocated toone unit of
wall mirrors?

ProblemIV
You are engaged in the audit of the December 31 financial statements of Lando Corporation, a
manufacturerofdigitalwatches.YouareattemptingtoverifythecostingoftheEWIPandfinishedgoods which
were recorded on Spirit’s books as follows:

Units Cost
WIP(50% completeasto laborandoverhead) 300,000 P660,960
Finishedgoods 200,000 1,009,800

Materialsareaddedtoproductionatthebeginningofthemanufacturingprocess,andoverheadisapplied
toeachproductattherateof60%ofdirectlaborcosts.TherewasnofinishedgoodsinventoryonJanuary
1.AreviewofLando’sinventorycostrecordsdisclosedthe followinginformation:
Costs(in thousands)
Units Materials Labor
WIP,1/1(80% completeasto labor and overhead) 200 P200 P315
Unitsstarted in production 1,000
Materialscosts P1,300
Labor Costs P1,995
Unitscompleted 900

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1. Theequivalentunit forlaborunderFIFOandAverage.
2. The total cost foroverheadunderFIFOandAverage.
3. Thecost perequivalentunitforlabor underFIFOandAverage.
4. Thetotalcostfortheendinginventory offinishedgoodsusingtheweightedaveragemethod.

ProblemV
Wowee Foods produces three supplemental food products simultaneously through a refining process
costing P93,000.

The joint products, Zaza and Sasa, have a final selling price pf P4 per pound and P10 per pound,
respectively, after additional processing costs of P2 per pound of each product are incurred after the
split-off point. Morezasa, a by-product, is sold at the split-off point for P3 per pound.

Zaza 10,000 pounds of Zaza, a popular but relatively rare grain supplement having a caloric
value of 4,400 calories per pound
Sasa 5,000 pounds of Sasa, a flavouring material high in carbohydrates with caloric value of
11,200 calories per pound
Morezasa 1,000poundsofMorezasa,usedasacattlefeedsupplementwithacaloricvalueof1,000 calories
per pound

1. Assuming Wowee Foods inventories Morezasa, the by product, the joint cost to be allocated to
Zaza, using the net realizable value method is:
2. Assuming Wowee Foods inventories Morezasa, the by product, the joint cost to be allocated to
Zaza, using the physical quantity method is:
3. Assuming Wowee Foods inventories Morezasa, the by product, the joint cost to be allocated to
Sasa, using the weighted quantity method based on caloric value per pound is:
4. Assuming Wowee Foods inventories Morezasa, the by product, the joint cost to be allocated to
Zaza, using the gross market value method is:
5. AssumingWoweeFoodsdoesnotadjustthejointcostforthevalueofMorezasa,thebyproduct, the joint
cost to be allocated to Sasa using the net realizable value method is:

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Problem VI
RickyCompanyappliesoverheadonthebasisofdirectlaborhours.Manufacturingoverheadisbudgeted at
P135,000 for the period, of which 20% of the cost is fixed. Two direct labor hours are required for
each product unit. Planned production for the period was set at 9,000 units. The 17,200 hours worked
during the period resulted in production of 8,500 units. Variable manufacturing overhead cost incurred
wasP108,500andfixedmanufacturingoverheadcostwasP28,000.RickyCompanyusesafourvariance
method for analysing manufacturing overhead.

1. Computethevariable overheadspendingvariance.
2. Computethevariableoverheadefficiencyvariance.
3. Compute thefixedoverheadbudgetvariance.
4. Computethefixedoverheadvolume variance.

ProblemVII
The Cooking Department of Jigz Corn, Inc., uses a process costing system. Direct materials are added
atthebeginningofthecookingprocess.Conversioncostsareaddedevenlyduringthecookingprocess.
Consider the following data for the Cooking Department for January:
Physical Direct Conversion
Units Materials Costs
WIP,Jan 1(25% conversion costs) 10,000 P250,000 P30,000
Started inJanuary 74,000
Goodunitscompleted&transferredoutduringJan 61,000
Spoiledunits 8,000
WIP,Jan31 15,000
Costsadded duringJan P1,480,000 P942,000
CostperequivalentunitofworkdoneinJan P20 P12

Jigz Corn usesFIFOmethod of processcosting. Inspection occurswhen productionis100% complete,

normal spoilage is 11% of good units completed during the period.

1. What isthe totalcostofthe unitscompletedandtransferred out?

2. What isthe totalcost oftheunitsinendingworkinprocess?
3. What isthecost ofabnormalspoilage?

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