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AE4 Strategic Cost Management
Assignment 1
Review of Cost Accounting Cycle

description

beg balances 12.31.20xx

cash
accounts receivable
building
machinery and equipment
accounts payable
stockholders' equity

Transactions for the month:

materials, both direct and indirect, were purchased on account basis-200,000.00, using the
perpetual system
direct materials of 150,000.00 and indirect materials of 5,000.00 were issued to the factory
during the same month
payroll for the month: 80,000.00 for laborers working on the product, 30,000.00 for factory
supervision and 40,000.00 for sales and administrative employees; 12,000.00 is for
witholding taxes while 10,000.00 is for SSS/Philhealth and Pag-ibig (record the payroll set-
up, payroll payment and payroll allocation)

depreciation expense for the month for the building is 15,500.00; related depreciation for the
factory is 13,500.00, the rest is for office use
depreciation expense for the month for the machinery is 12,500.00 (all machinery is for
factory/production use)
paid heat, light and power for the month is 15,500.00; 80% is for factory use while the rest
is for office
paid other SAE for the month -8,500.00
factory overhead is charged to production at 88% of DL cost
Only 90% of goods started in process were completed; 1,200 pcs were produced
50% of the total units produced were sold on account basis at 563.25 each item - recognized
both sales and cost of sales

Collected 50% of outstanding accounts receivables

Paid 50% of outstanding accounts payable

Required: Compute for the correct amount after effecting the cost accounting cycle.
INCOME STATEMENT
sales
less: cost of goods manufactured and sold
gross profit
less: selling and administrative expenses
net income

COST OF GOODS MANUFACTURED AND SOLD SCHEDULE

Direct Materials used:
total material purchased for the month
less: raw materials, end
add: indirect materials
total cost to be deducted from total materials purchased
total direct materials used
add: total direct labor used
add: total FOH appplied
total manufacturing cost
work in process, end

less: finished goods inventory, end

total cost of goods manufactured and sold-normal

add if under applied FOH or deduct if over applied FOH

FOH applied
FOH actual
difference
total cost of goods manufactured and sold-actual

STATEMENT OF FINANCIAL POSITION

current assets
cash
accounts receivable
finished goods inventory
work in process inventory
raw materials inventory
total current assets

non-current assets
building
accumulated depreciation - building
net book value -building
machinery and equipment
accumulated depreciation -machinery and equipment
net book value - machinery and equipment
total non-current assets

total assets

total liabilities and shareholders' equity

accounts payable
accrued expenses
witholding taxes payable
SSS/Philhealth/pag-ibig payable
total liabilities

stockholders' equity
retained earnings
total shareholders' equity

total liabilities and shareholders' equity

unit cost of finished goods (per piece)

 300,000.00
1,020,000.00
3,000,000.00
600,000.00
-1,220,000.00
-3,700,000.00
No. Particulars
1 Raw Materials
Accounts Payable
to record purchaae of raw materials

2 Work in Process
Manufacturing Overhead
Raw Materials
to record issuance of direct and indirect materials

3 Payroll
Withholding Taxes
SSS/PhilHealth/Pag-IBIG
Accrued Payroll
to record accrual of payroll

Work in Process
Factory overhead - control
Sales to administrative expense
Payroll
to record payroll allocation

Accrued Payroll
Cash
to record payment of payroll

4 Manufacturing Overhead
Depreciation Expense
Accumulated Depreciation- Building
to record Depreciation for the period

5 Factory Overhead Control

Accumulated Depreciation - Machineries and Equipment
to record depreciation of machineries

6 Factory Overhead Control

Manufacturing Overhead
Cash
To record payment of utilities

7 Selling and Administrative Expense

Cash
 To record payment of SAE.

8 Work in Process
Factory Overhead - Applied
To apply overhead to the production.

9 Finished Goods
Work in Process
To record goods completed

10 Accounts Receivable
Sales
To record sales of units produced

Cost of Sales
Finished Goods
To record cost of units sold

11 Cash
Accounts Receivables
To record collection of outstanding accounts receivable

12 Accounts Payable
Cash
To record payment of outstanding accounts payable
Debit Credit
200,000.00
200,000.00

150,000.00
5,000.00
155,000.00

150,000.00
12,000.00
10,000.00
128,000.00

80,000.00
30,000.00
40,000.00
150,000.00

128,000.00
128,000.00

13,500.00
2,000.00
15,500.00

12,500.00
12,500.00

12,400.00
3,100.00
15,500.00

8,500.00
8,500.00
 70,400.00
70,400.00

270,360.00
270,360.00

337,950.00
337,950.00

135,180.00
135,180.00

678,975.00
678,975.00

710,000.00
710,000.00
No. Description

Beginning Balance

1 materials, both direct and indirect, were purchased on account

basis-200,000.00, using the perpetual system

2 direct materials of 150,000.00 and indirect materials of 5,000.00

were issued to the factory during the same month

payroll for the month: 80,000.00 for laborers working on the

3 product, 30,000.00 for factory supervision and 12,000.00 is for
witholding taxes while 10,000.00 is for SSS/Philhealth and Pag-
ibig (record the payroll set-up, payroll payment and payroll
allocation)40,000.00 for sales and administrative employees;

depreciation expense for the month for the building is 15,500.00;

4 related depreciation for the factory is 13,500.00, the rest is for
office use

5 depreciation expense for the month for the machinery is

12,500.00 (all machinery is for factory/production use)

6 paid heat, light and power for the month is 15,500.00; 80% is for
factory use while the rest is for office

7 paid other SAE for the month -8,500.00

8 factory overhead is charged to production at 88% of DL cost

9 Only 90% of goods started in process were completed; 1,200 pcs

were produced

10 50% of the total units produced were sold on account basis at

563.25 each item - recognized both sales and cost of sales

10
11 Collected 50% of outstanding accounts receivables

12 Paid 50% of outstanding accounts payable

TOTAL

TRIAL BALANCE
Cash
Accounts Receivables
Building
Accumulated Depreciation - Building
Raw Materials Inventory
Accrued Expense
Work in process Inventory
Machinery and Equipment
Accumulated Depreciation - Machinery and Equipment
Finished Goods Inventory
Accounts Payable
Witholding Tax Payable
SSS/Philhealth Payable
Accrued Payroll
Stockholder's equity
FOH - Actual
FOH - Applied
Payroll
Sales
Cost of sales
SAE

TOTAL

INCOME STATEMENT
sales
less: cost of goods manufactured and sold
gross profit
less: selling and administrative expenses
net income

COST OF GOODS MANUFACTURED AND SOLD SCHEDULE

Direct Materials used:
total material purchased for the month
less: raw materials, end
add: indirect materials
total cost to be deducted from total materials purchased
total direct materials used
add: total direct labor used
add: total FOH appplied
total manufacturing cost
work in process, end

less: finished goods inventory, end

total cost of goods manufactured and sold-normal

add if under applied FOH or deduct if over applied FOH

FOH applied
FOH actual
difference
total cost of goods manufactured and sold-actual

STATEMENT OF FINANCIAL POSITION

current assets
cash
accounts receivable
finished goods inventory
work in process inventory
raw materials inventory
total current assets

non-current assets
building
accumulated depreciation - building
net book value -building
machinery and equipment
accumulated depreciation -machinery and equipment
net book value - machinery and equipment
total non-current assets

total assets

unit cost of finished goods (per piece)

 Accumulated
Cash Accounts Receivables Building Depreciation -
Building

300,000.00 1,020,000.00 3,000,000.00

(128,000.00)

(15,500.00)

(15,500.00)

(8,500.00)

337,950.00
 678,975.00 (678,975.00)

(710,000.00)

116,975.00 678,975.00 3,000,000.00 (15,500.00)

116,975.00
678,975.00
3,000,000.00
-15,500.00
45,000.00
0.00
30,040.00
600,000.00
-12,500.00
135,180.00
-710,000.00
-12,000.00
-10,000.00
0.00
-3,700,000.00
73,400.00
-70,400.00
0.00
-337,950.00
135,180.00
53,600.00

4,868,350.00 -4,868,350.00

337,950.00
135,180.00
202,770.00
53,600.00
149,170.00

D SCHEDULE

200,000
45,000
 5,000 50,000.00
150,000.00
150,000.00
80,000
70,400.00
300,400.00
30,040

135,180
135,180.00

70,400.00
73,400.00
3,000.00 under applied
138,180.00

total liabilities and shareholders' equity

116,975.00 accounts payable 710,000.00
678,975.00 accrued expenses 0.00
135,180.00 witholding taxes payable 12,000.00
30,040.00 SSS/Philhealth/pag-ibig p 10,000.00
45,000.00 total liabilities 732,000.00
1,006,170.00
stockholders' equity 3,700,000.00
retained earnings 146,170.00
3,000,000.00 total shareholders' equity 3,846,170.00
15,500.00
2,984,500.00 total liabilities and shar 4,578,170.00
600,000.00
12,500.00
587,500.00
3,572,000.00

4,578,170.00

225.3
Raw Materials Accrued Work in process Machinery and
Inventory Expense Inventory Equipment

600,000.00

200,000.00

(155,000.00) 150,000.00

80,000.00

70,400.00

(270,360.00)
45,000.00 0.00 30,040.00 600,000.00
Accumulated Depreciation Finished
Witholding Tax
- Machinery and Goods Accounts Payable
Payable
Equipment Inventory

(1,220,000.00)

(200,000.00)

(12,000.00)

(12,500.00)

270,360.00

(135,180.00)
 710,000.00

(12,500.00) 135,180.00 (710,000.00) (12,000.00)

 Stockholder's FOH -
SSS/Philhealth Payable Accrued Payroll FOH - Actual
equity Applied

(3,700,000.00)

5,000.00

(10,000.00) (128,000.00)

128,000.00

30,000.00

13,500.00

12,500.00

12,400.00

(70,400.00)
(10,000.00) 0.00 (3,700,000.00) 73,400.00 (70,400.00)
 Retained
Payroll Sales Cost of sales SAE
Earnings

150,000.00

(150,000.00) 40,000.00

2,000.00

3,100.00

8,500.00

(337,950.00)

135,180.00
0.00 0.00 (337,950.00) 135,180.00 53,600.00