Management Accounting Exercise Material

NATIONAL UNIVERSITY OF ASUNCION
SCHOOL OF ECONOMICS
MANAGEMENT ACCOUNTING
Application exercise.
UNIT II
1. Classification of Industrial Company Costs
The MARGLOBE company manufactures canned tomatoes, in two different sizes. Below
is a list of some of the expenses registered in the month of March:
1) Rental of factory premises

2) Depreciation of furniture and office equipment
3) Document collection expenses
4) Buying tomatoes
5) Depreciation of production machinery
6) Purchase of packaging
7) Salaries of the company's administrative staff
8) Maintenance and repairs of machinery
9) Interest paid on loans
10) Value Added Tax
11) Purchase of a new machine for the factory
12) Consumption of preservative chemicals
13) MOD bonuses for production
14) Salary of the production manager
15) Commissions paid on sales
16) Purchase of a new machine for the administrative office
17) Monthly salary of machine operators

18) Maintenance of the factory premises
19) Discount of customer documents
20) Administrative office telephone account
21) Consumption of tomatoes
22) Document collection expenses
Classify the expenses from the previous list, writing next to each item the initials of the
type of cost or expense that corresponds: fixed cost (CF), variable cost (CV), direct
cost (CD), indirect cost (CI ), fixed expense (GF), variable expense (GV), administrative
expense (GA), financial expense (GN), sales and distribution expenses (GD) or none of
the above (X).
2. Classification of costs and tables.
Dr. Graciela Marecos 1

Lic. Cynthia Egusquiza
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Classify the following items into Cost, Expense, Loss or Asset and when possible,
classify them into Direct or Indirect and Fixed and Variable. If more than one
alternative is valid, assign all the ones you consider most predominant.
1) Purchase of raw materials
2) Power consumption
3) Direct labor
4) Fuel consumption- Delivery vehicles
5) Telephone- monthly bill
6) Industrial water consumption
7) Billing staff
8) Acquisition of machinery
9) Depreciation of production machinery
10) Painting of the factory premises
11) Computer installation
12) Removal of deposit materials
13) Consumption of various materials in administration
14) General accounting staff
15) Cost accounting staff
16) Administration Fees
17) Industrial director fees

18) Depreciation of the company property
19) Consumption of raw materials
20) Acquisition of packaging
21) Deterioration of raw materials due to neglect
22) Paid sick staff time
23) Application of insulating material on the factory premises
24) Building remodeling
3. Classification of costs and expenses.

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The company Sal Yodada SA manufactures salt enriched with iodine, in different sizes
and presentations. The company has two departments: Preparation and Packaging.
The product is distributed by order. Below, a list of the company's expenses is detailed
and you are asked to classify them as follows: Fixed Costs (CF), Variable Costs (CV),
Direct Costs (CD), Indirect Costs (IC), Fixed Expenses (GF), Variable Expenses (GV),
Administrative Expenses (GA), Financial Expenses (GF), Distribution and Sales
Expenses (GDV) or none of the above (X).
Items
1) Warehouse rental for finished products
2) Cash purchase of new machinery
3) Iodine consumption
4) Monthly salary of a machinist
5) Payment of interest on a loan
6) Social bonuses for workers
7) Machine depreciation
8) Commercial Manager Salary
9) Purchase of a vehicle for distribution
10) Fuel consumption of machines
11) Vehicle fuel consumption
12) Salary of the delivery vehicle driver
13) Production Manager Salary
14) Repayment of loan capital
15) Electricity consumption for machines
16) Depreciation of administrative offices
17) Administrative secretary salary

18) Piece-rate salary of packers
19) Salt consumption
4. Classification of Industrial Company Costs.

Porter Company manufactures furniture, including tables. Below is a selection of costs:
1) The wooden tables cost G 100,000 each

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2) Tables assembled by workers have a salary cost of G
40,000 per table
3) The workers who assemble the tables are supervised by a
factory supervisor, who is paid G 25,000,000 per year
4) Electricity costs are G 2,000 Gs per machine-hour. It takes
four machine hours to produce one table
5) The depreciation cost of the machines to manufacture the
tables amounts to G 10,000,000 per year
6) The salary of the president of Porter Company is G
100,000,000 per year
7) Porter Company spends G250,000,000 per year to
advertise its products
8) Sellers are paid G 30,000 commission for the sale of each
table
9) Instead of producing tables, Porter Company could rent
the factory floor space in exchange for an income of G
50,000,000 per year
Is required:
Classify these costs according to the different cost terms seen in the chapter. Carefully
study the classification of each cost.
5. Classification of Industrial Company Costs.

The Administrator of the Graphics “Graficos y Cia.” is considering the need to carry out
a correct classification of the expenses incurred periodically, and for this purpose it has
provided the following list from which it must be identified whether they correspond to:
 Costs – Expenses – Income
 Direct – Indirect
 Fixed - Variable
 Administrative – Financial – Commercial
1. Fees paid to graphic designers, which are standard
monthly amounts.
2. Illustration paper consumption, according to the
details recorded in the records of the raw materials
warehouse
3. Purchase of inks, of different colors and for 3
processes where this material is required. For 2
months of work.
4. Payment of fuel receipts, of the accountability of
the company's collectors.
5. Estimation of the monthly depreciation fee for
machines: guillotines and die-cutting machines.
6. Acquisition and payment to a service provider, for
three matrices for the same number of specific jobs.
7. Commissions paid on sales to company promoters.
8. Estimation of the depreciation rate of the vehicle
intended for the activities of the General
Management.
6. Classification of Service Company Costs

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UNIVIAJES is a wholesale company that sells vacation packages to Europe from Latin
America; These packages include round trip tickets, hotel, breakfast and excursions.
As a work system, UNIVIAJES organizes promotional groups for hotels and retail travel
agencies, which are led by a team of 5 specialists (four salespeople and a group
leader). Each contracted seller is paid G 40, per package sold; The group leaders are
professionals on the UNIVIAJES staff and receive a monthly salary of G 3,000.
Considering the volume of transactions carried out by the company, it was possible to
obtain an important reserve in their name from suppliers, including monthly
settlements based on the quotas actually used.
Analyzing the changes recorded in the total costs and expenses of UNIVIAJES as the
number of vacation packages sold changes, classify the following items.
Costs / Fixed/ Direct /

Items Expenses Variable Indirect
Rent payment for administrative and
commercial offices
Prints used to promote the different travel
packages.
Fees paid to promotion group leader

Commissions paid to each group of sellers on
completed sales
Fuel cost of the vehicle used to transport

passengers from their home to the airport.
Monthly transfer to the account of the airline

used to transport passengers.
Fixed salary of the receptionist
7. Classification of Service Company Costs.
The collection company Nexos SA is in charge of calling and collecting debtors as the
documents delivered by clients accrue. For this purpose, it has a staff of 5 secretaries
in charge of making telephone calls, 2 collectors who carry out visits to debtors, 1
accountant who performs the functions of Administrator and Accountant at the same
time, and 1 orderly to perform the functions of Administrative and Accounting
Assistant. They rent an office in Asunción, since the coverage area is the Central
Department.
The office was equipped with six telephone lines with their respective consoles, air
conditioning, etc. Likewise, motorcycles were purchased for each of the collectors,
through a bank loan worth G 15,000,000.
According to the records for the month of July 2004, the result of your first month of
negotiations was as follows, classify the items:

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 Salary of secretaries – operators: g 610,000 each
 Electricity: G 120,000 (20% corresponds to the administrative offices)
 Motorcycle fuel: G 110,000 each
 Assistant salary: G 450,000
 General Manager Salary: G 1,500,000
 Office rental: G 500,000 (40% occupied by offices and the rest by consoles)
 Interest on loan: G 350,000
 Office Supplies: G 198,000
 Collectors' commissions: 3.5% on collections
 Telephone consumption: G 422,500 (average per line)
8. Preparation of the Income Statement.

The company Carburadores SA has the following data corresponding to the month of
August (in thousands of guaraníes):
Sales 122.850
Production cost
direct labor 32.400

Indirect materials 2.560
Indirect labor 8.450
Machinery depreciation 3.490
Factory rental 4.200
Firewood for the boilers 1.200
Electric power factory 1.900
Factory maintenance and cleaning 5.800
Raw material purchases 61.400
Stock valuation as of July 31:

Raw Materials 18.400
Products in process 8.200
Finished products 19.800
Stock valuation as of August 31:

Products in process 7.430
Finished products 25.600
Determine:
a) The production cost of the period (CPP)
b) The cost of finished production (CPA)
c) The cost of production sold (CPV)
d) The prime cost
e) The conversion cost
f) The gross profit

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9. Commercial Company Income Statement.
MONITORES is a company that is dedicated to the import and marketing of electrical
items. After its first year in the market, the Directors are eager to know the results
achieved. To do this, they have the following information (in G):
Merchandise Stocks:
Initial: 392,000
Final: 464,000
Merchandise Purchases: 742,000
Marketing Expenses: 72,000
Administration Expenses: 23,000
Financial Expenses: 34,200
Sales: 961,000
Prepare the income statement, taking into account that the income tax is 20% of the
profit.
10. Income Statement Commercial Company.
The SANCO company buys rice wholesale and distributes it without carrying out any
transformation process. The first two years of operation recorded the following figures
(in G):
1st year 2nd year

Purchases of merchandise 48.400 41.600
Administrative expenses 1.320 1.380
Distribution and Sales Expenses 4.320 4.750
Financial expenses 2.160 2.260
Sales 49.200 59.040
Initial Stock of Finished Products —0— 7.840
Final Stock of Finished Products 7.840 —0—
Prepare the Income Statements of the SANCO Company.
11. Income Statement.
Commercial NAILIL, provides the following information in G.
Initial Final
Merchandise stocks 196.000 232.000
Purchases of merchandise 371.000

Administrative expenses 11.000
Distribution and sales expenses 36.000
Financial expenses 18.000
Sales 410.000
Make an Income Statement.
12. Industrial Company Income Statement.

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La Casona Company currently manufactures and sells tiles and bricks; It wants to have
a monthly results report in order to periodically monitor operations. To do this, provide
the following data.
* Income:
Total Cash Invoices: G 78,350,000.
* Expenditures:
Factory workers' daily wage: G 17,600,000.
Material purchases: G 35,600,000.
Salesperson salary: G 2. 500.000.
Depreciation of machinery: G 3,600,000.
Basic Factory Services: G 1,200,000.
Basic Office Services: G 800,000.
Advertising: G 3,500,000.
Administrative salaries: G 4. 600.000.
Social Benefits on Remunerations: 25.5%
Indirect Materials: G 1,800,000.
Maintenance of mixing machines: G 450,000.
* Inventories
Initial Final
Raw material G 8,600,000 G 13,900,000
Products in process G 1,200,000 G 1. 850.000
Finished products G2,300,000 G 2,085,000
Make an Income Statement.
13. Production cost of the period, finished and sold.
A goods producing company has the following information extracted from the
accounting books:
Raw materials purchased in the month G500,000

Return of raw materials in the same month 20%
Labor paid in the month G 600,000
Indirect manufacturing costs incurred in the month G400,000
Calculate the values.
a) Production cost in the month
b) Cost of finished production in the month
c) Cost of production sold in the month
The aforementioned calculations are requested for each of the following alternatives.
1- There were no beginning or ending inventories of finished products or products
in progress or raw materials.
2- The initial stock of raw materials was G 120,000 in the month, there were no
other beginning or ending inventories.
3- The initial stock of raw materials was G 120. 000 and the end of G 150.00;
There were no initial or final stocks of finished products or products in
progress.
4- The initial stock of raw materials was G 120,000, the initial inventory of
products in progress was G 180. 000, the ending inventory of finished goods
was G 200,000 and there were no other beginning or ending inventories.

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5- The beginning inventory of finished products was G 300,000, the beginning
inventory of products in progress was G 160,000, and the ending inventory of
products in progress was G 200. 000 and there were no other beginning or
ending inventories.
6- The beginning inventory of work in progress was G200,000, the beginning
inventory of finished goods was G800,000, and the ending inventory of work in
process was G220. 000 and the ending inventory of raw materials of G 70,000
and there were no other beginning or ending inventories.
7- The initial stock of raw materials was G 150,000 and the final stock was G
220,000; The initial inventory of products in progress was G 170. 000 and the
final was G 230,000; The initial inventory of finished products was G 130,000
and the final inventory was G 190. 000.
14- Determination of costs.
The following information corresponds to the company Rustica SA (in G).
Direct materials 25.000

Indirect Materials 5.000
direct labor 30.000
Indirect labor 4.500
Indirect manufacturing costs 15.000
Calculate: * Prime cost * Conversion cost * Product cost.
15- Determination of costs.
Chensson makes wallets. The following information is available for the period ending
December 31, 2xxx
Materials used in production G 82,000, of which G 72,000 was considered indirect
materials.
Manufacturing labor cost for period G 71. 500 of which G 12,000 correspond to indirect
labor.
Indirect manufacturing costs due to factory depreciation G 50. 000
Selling, general and administrative expenses G 62,700.
Units completed during the period 18,000
Calculate: * Prime cost * Conversion cost * Product cost * Period cost
16. Production Cost.
The company “El Volcán SA” presents the following cost table expressed in G for the
production of 2,000 units of an article called “A”, for a certain month, it is as follows:
cost class Total cost Unit cost
Variable cost 640.000 320
Fixed structure costs 1.240.000 620
Fixed operating costs 800.000 400

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Total 2.680.000 1.340
Fixed operating costs increase by G200,000 for every additional 1,000 units of
production. Indeed, for the production of 3,000 units it would be G 1,000,000; for
4,000 units G 1,200,000, etc.
It is requested to calculate the cost for a production of 1,800 and 3,500 units.
17. Income Statement
Pita and Company produced 75,000 units in the year ending December 31, 2xxx. There
were no units in process at the beginning or end of the period. The cost of the
manufactured items was G 300,000
During the year the following occurred:
59,000 units were sold at G 5 each; It is still expected to sell 14,000 units. 2,000
defective units were found.
There was no beginning inventory of finished goods. Prepare an income statement for
Pita.
18. Determine income, expenses and loss.
Magnetic began activities on January 1, 2xxx. The following transactions took place
during the month of January.
Amount Price by unit

Description buys sale Compa Cost of
cost G sale G
Machine For pressures 3 2 500 800
Machine For abdominal 5 3 400 700
exercises
Machine For leg pressure 6 2 600 1.000
Machine For arm exercises 4 0 200 --------
The machines for practicing arm exercises were found defective. Since the
manufacturer of these machines has gone out of business and they cannot be
returned, they will be discarded as worthless.
Calculate for the month of January:
a) the total income
b) total expense (cost of goods sold)
c) the total loss
“A La Lona SA”
The company “A La Lona SA” that manufactures jeans pants, presents the following
data in G in its records:
Fabrics in stock as of 11/01/07 250.000

Fabrics in stock as of 11/30/07 80.000
Fabric purchases of the period amounted to 2.200.000
The initial stock of finished jeans was 1,200 units at 350 each

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The final stock of finished jeans was 800 units
The Direct Labor paid in the period was 1.000.000
The Indirect Manufacturing Costs were 927.000
15,000 jeans were sold for an amount of 11.250.000
REQUESTED:
Determine 1) Production cost of the period 2) Cost of finished products 3) Gross sales
profit
The company “Costosísimo SA” has the following information:
Initial inventory of raw materials G200,000

Raw material purchases G 920,000
direct labor G 310,000
Initial inventory of products in process G210,000
Consumption of raw materials G 680,000
Manufacturing indirect cost for the month G 1,040,000
Initial inventory of finished products G 100,000
Final inventory of products in process G 156,000
Sales of the month (2000 ua G 700 each) G 1,400,000
Final inventory of finished products G90,000
REQUESTED:
Determine 1) Production cost of the period 2) Cost of finished products 3) Gross sales
profit 4) Prime Cost 5) Conversion Cost
21. Cost of production for the period, completed and sold.
The following data were taken from the accounting of an industrial company, for a
certain period:
Initial stock of raw materials G 3. 000

Raw material purchases G 57. 000
Final stock of raw materials G4,000
Labor and social charges G42,000
factory load G22,000
Initial existence of product in process G12,000
Final existence of products in process G8,700
Initial stock of finished products G 6,450
Final stock of finished products: 20 units
Production completed in the period: 300 units
The company uses the FIFO method to cost its products.
It is requested to calculate the production cost of the period, the cost of finished
products and the cost of products sold.
22. Consumption of raw materials.
Imaginaria SA establishes a policy of valuing its inventories using the UEPS method.
He bought a batch of 100 units at G 10 each.

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On the second opportunity, he bought 200 units at G 15 each.
The records indicate that there were no losses, shrinkage, theft, or waste. The raw
material consumed was 180 units. There were no initial and final inventories. Calculate
the cost of the raw materials consumed.
Unit IV-V-VI
23- Consumption of materials.
The BARRÖ company wants to know the cost of its only material used in production,
for this purpose the relevant data is attached in order to carry out the corresponding
calculations:
Initial stock of 200 kg. at G 1,500 x kg

06/10/x1 Purchase of 500 kg. at G 1,550 x kg.
06/15/x1 Consumption of 400 kg.
06/22/x1 Purchase of 350 kg. at G 1,600 x kg,
To calculate the cost, develop the inventory sheet and propose the entries
corresponding to the item, using the methods: FIFO
24- Consumption of materials.
The University photocopier keeps an efficient inventory of the sheets used to provide
its services. Below are the operations that affected the recently closed month and that
you will have to use to prepare said Sheet Sheet:
08/01/x1 Buy 20 reams at G 12. 500 each

08/06/x1 Consumption 15 reams
08/12/x1 Buy 20 reams at G 13,000 each
1) Prepare the corresponding file under the FIFO method

2) Make the corresponding entries.
25. Record in the Journal.
Casa Fiesta was established on September 29, 2xxx
The president of the company provided the following data related to the inventory of
materials for use in the month of February:
February 2 Cash purchase of 1,000 units of direct materials at a cost of G 20

each and 30 units of indirect materials at G 5 each.
February 5 400 units of direct materials were used in production.
February 20th 10 units of indirect materials were used in production.
Record the previous transactions in the journal.
26. Recording in the journal and calculation of materials used.

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The president of Mayo SA provided the following data related to the company's paper
pulp inventories for the month of January. The company evaluates its ending inventory
using the FIFO method.
January 1 Initial inventory, 1000 Kg of paper pulp at a cost of G 0.50 per

Kg.
January 10 It is purchased, 300 Kg. AG 0.55 each kg
January 16 300 kg were used
26 of January 750 kg were used
January 28 400 kg were purchased at G 0.60 per kg
January 31 350 kg were used
All purchases are made in cash.
a) Record the previous transactions in the journal.
b) Calculate the cost of the materials used.
27. Consumption of materials.
The following information related to the materials inventory account was provided by
SHEILA Corporation, who used a perpetual inventory system:
Initial balance G 100,000
Additional debits added to the account during the period G300,000
The ending balance exceeded the beginning balance in G 20.
000
Calculate the cost of materials used.
28. Record in the Journal.
Manufactura Pilar SA uses a periodic system and provides the following data:
Cost of materials used G 12. 000
Purchase of materials G15,000
Available material G 19,000
Calculate by how much the ending materials inventory exceeded the beginning
materials inventory.
29. Labor
A company recently adopted an incentive plan, factory workers are paid G 0.75 per
unit produced with a guaranteed minimum wage of G 200 per week ending May 19,
2xxx, the following is a report on employee productivity for the ending week. All
workers have worked 40 hours a week.
Weekly summary.
Name Units produced
J. Medina 240
M. Jimenez 275
TO. Vargas 250
V. Rivera 285
R. See 225
S. Caceres 265
Total 1.540
1. Calculate the gross salaries for each employee.

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2. What quantity should be charged to work in process inventory.
3. What amount should be charged to manufacturing overhead costs.
4. Record in journal.
30. Labor.
One entity in particular has had an incentive plan in place in recent years. Factory
workers are paid G2. 25 per unit produced with a guaranteed minimum wage of G 175
per week. Below is the report on the productivity of each of them for the week ending
September 21, 2xxx. All employees worked 40 hours a week.
Weekly summary
Name of the employee Units produced
Francisco Chimelli 72
Marcos Dominguez 80
Gregory Duchene 78
Nisvaldo Grimaldy 82
Roberto Soto 68
Sergio Britos 73
Total 453
a) Calculate gross salaries for each employee
b) What quantity should be charged to work in process inventory.
c) What amount should be charged to manufacturing overhead costs?
31. Labor Cost.
The Industrial Azucarera Paraguaya SA Company currently has an important Human

Resources structure in the Production Department, which is why it wants you to show
it a payroll system in order to settle salaries monthly, and to do so it provides you with
the following data:
 There are two production departments: Mixing and Assembly
 We worked in two shifts: the first from 7:00 a.m. to 12:00 p.m. and 1:30 p.m. to
5:00 p.m., the second from 12:00 p.m. to 4:00 p.m. and 5:00 p.m. to 9:00 p.m.
 In the 1st shift, 10 technical operators work and in the 2nd shift, 13 assistants
work.
 Technicians earn G 9,000 per hour and assistants G 5,500 per hour.
 In a month there are 26 working days.
 In addition to salaries, social benefits must be considered, which represent 25% of

salaries.
1. Determine the total labor cost, by employee category.

2. Make the relevant entry knowing that 60% corresponds to direct labor and the rest
to indirect labor. (take this information into account only for the seat).
32. Labor Cost.
Corporación Mercantil is a manufacturing company that has two work teams, the first
is from 7:00 a.m. to 4:00 p.m. And the second from 4:00 p.m. to 12:00 p.m., in each
of them 40 workers with category A and 20 workers with category B work.

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The hourly rates are: G 9,000 per hour for category A and G 7,500 per hour for
category B. They work 25 days a month.
The company pays 25% of salaries as social benefits. (Amount that must be added to
the value mentioned above)
Determine the total cost of direct labor, indirect labor.
Make the relevant entry.
33. Indirect manufacturing costs.
Olga y Cia has provided the following information on indirect manufacturing costs and
production levels:
Normal capacity 350,000 units
Expected capacity 310,000 units
Fixed costs G 610,000
Variable costs G 1.76 per unit
Calculate the application rate of manufacturing indirect costs based on production units
for normal capacity and expected actual capacity.
Assume the following information for Lola & Cia (all figures are estimates).
Indirect manufacturing costs G425,000
Production units 500.000
Direct materials costs G 1,000,000
Direct labor cost G 1,500,000
Direct labor hours 250.000
Machine hours 110.000
Calculate the manufacturing overhead application rate for this company based on the
following:
a) Production unit d) Direct material costs
b) Direct labor costs c) Direct labor hours
e) Hours – Machine
The distribution of indirect manufacturing costs is the most complicated task for
Compañía Luna Blanca SA, since they do not know how to do it. Therefore it provides
you
information related to the sector, so that you can propose a calculation system.
COURT ARMED MAINTENA DEPOSIT TOTAL

NCE
Indirect Materials 14.000 13.000 1.700 1.200 29.900
Electrical Energy -
Factory 16.000
Indirect labor
Factory Insurance 22.000
Machinery 7.000

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Depreciation
14.000
Total G 88.900
The statistical information that accompanies the Indirect Costs table is the following:
COURT ARMED MAINTENAN DEPOSIT
CE
Hours, man 6.000 4.000 2.000 400
Surface (m2) 500 200 100 300
Machinery Value (G) 1.600.00 600.000 150.000 60.000
Machine Hours
Value of Stored 0 900 200 60
Inputs (G)
1.500 15.000 4.500 ---
40.000
The costs, times and manufacturing volume, by product, were as follows:

PRODUCT A PRODUCT B PRODUCT C
MP Cost (G) 25.000 18.000 22.000
MOD Cost (G) 18.000 21.000 16.000
Dep. Cote (Hs.
Machine.) 1.750 2.250 1.500
Armed Dept. (Hrs.
Machine) 1.750 1.250 1.500
Production Volume
(units) 2.500 3.000 2.000
1. Calculate the Indirect Costs that must be allocated to each product using the direct
secondary distribution method.
2. Calculate the total production costs by product.
3. Make journal entries.
FOOD INDUSTRY SA
The following is the information for production order no. 2002,
*units to be produced 100,000
*start date March 1
*ends March 31/06
1. Raw materials are purchased on credit with invoice no. 012 to suppliers del norte
Ltda. for a value of G 3,000,000, freight for a value of G 100,400 and insurance costs
for a value of G 93,120, commercial discount of 3.45% for raw materials.
2. Raw material worth G 3000 is transferred to the production plant
3. The factory payroll amounted to G 1,304,120 and deductions were made.

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4. The payroll is distributed as follows: G 1,014,000 As direct labor excluding social
benefits and social security, this value includes transportation assistance for G
102,000.
5. This value also includes the unproductive time of direct personnel and idle time,
which is equivalent to G 65,900.
6. The actual indirect manufacturing costs excluding the above are as follows:
depreciation of plant buildings G 125,000 Depreciation of plant equipment G 75,000
Utilities G 90,940,
7. Applied manufacturing overhead costs are calculated at 80% of the direct labor cost
8. Sales were G 7,700,000
9. Sales expenses total G 500,000
10. Administration expenses total G 300,000
11. The beginning inventories are as follows Inventory of finished products 814,500
Inventory of products in process 319,200 Inventory of raw materials 707,100
All Accounting is required. Registration in T accounts Cost statement Income statement
COMESTRIBLES LA ROSA SA RC, whose main activity is the production of saltin-type

cookies, has the following information for the month of October 2004
Budgeted indirect manufacturing costs G 2,100,000
1. It is planned to produce 100 boxes of 200 units each.
2. The ending inventory of finished goods is 20 boxes.
3. The initial inventory is 30 boxes with a unit cost of G 13,000, of which G 6. 500 are fixed
4. The initial inventory of materials is G 2,224,000
5. 1050 kilos of flour are purchased, at G 1,200 kilo, freight value G 600
6. 1400 kilos of butter are purchased at a rate of G 1,000 kilo, freight value G 35.
9. 1500 kilos of sugar are purchased at a rate of G 450 kilo.
10. labor is paid at G 100 per unit, work performed by four operators actual working hours
215
11. Actual manufacturing overhead costs are detailed below Leases G 600 Depreciation G
200 Materials Indirect G 20 per unit Indirect Labor G 22.5 per case
12. The sales price is calculated based on the cost of the manufactured products, with a
profit of 35%
All Accounting is required.
Helena Corporation applies manufacturing indirect costs using the following rates:
Department G x MOD Time Actual MOD Hours
Had 3.10 7.600
Tissue 6.04 11.000
Print 0.85 2.200
The actual indirect costs for the period were G 91,900.
Prepare journal entries for the application of applied manufacturing overhead costs.
Assume that the corporation uses underapplied or overapplied manufacturing overhead
accounts when closing applied manufacturing overhead. Use T account.
39- Indirect manufacturing costs
Santiago SA has the following information regarding real and applied indirect
manufacturing costs.
Control of indirect manufacturing costs G30,500

SCHOOL OF ECONOMICS
Applied manufacturing indirect costs G 39. 700
The applied manufacturing indirect costs appear in the following accounts:

Cost of items sold G32,000
Final Inventory of Work in Process G3,500
Final Inventory of Finished Goods G4,200
a) Allocate underapplied or overapplied manufacturing overhead costs to those
accounts distorted by the use of an incorrect manufacturing overhead application rate.
b) Prepare the entry at the end of the period.
UNIT VII
40. Costs for work orders.
Letras SA is a printer that operates according to the request of its clients. Use the job
order costing system.
The following data summarizes operations with production for the month of June.
a) Materials purchased on credit G 317,500
b) Materials and labor used:
Materials G G labor
OT 101 45.000 27.000
OT 102 29.500 20.000
OT 103 39.900 14.500
OT 104 59.500 38.000
OT 105 32.500 19.000
OT 106 12.500 8.500
Not individualized 6.800 5.000
to orders
c) Miscellaneous indirect costs, credit G 60. 250
d) Depreciation of machinery and equipment G 17,500
e) The indirect cost rate is 70% of the direct labor cost.
f) The completed works were OT: 101,102,103 and 105.
g) Work orders 101, 102 and 103 were dispatched and clients were invoiced for G
129,500; G 70,550 and G 111,950, respectively.
Instructions:
1- Make general journal entries for summary operations for the month of
June.
2- Open T accounts and wholesale those corresponding to products in
process and finished products.
3- Prepare a list of unfinished work orders and verify if it agrees with the
major.
4- Prepare a list of completed work orders in stock and reconcile them with
the general ledger account balance.
41. Cost per Work Orders.
Confectiones Real SRL wants you to prepare the Work Order related to the
manufacture of 10 jackets, for which the following inputs were used
Fabric: 1.60 meters. per garment, at G 20. 000 the mt.
Closure: 1 per garment, at G 1,800 unit
Cord: 0.7 meters. to G 1,500 mt.

SCHOOL OF ECONOMICS
Cutter Remuneration: G 10,000 garment
Seamstress Remuneration: G 8,500 garment.
Indirect Costs: 30% of the cost of direct materials is allocated.
Determine the total cost of the Order and the price to be set taking into account that
30% of the intended profit must be charged.
42. Cost per Work Orders
The industrial firm “Todo Madera” is dedicated to the manufacture of furniture

according to special requests from its clients. Your cost accounting department has
provided the following information, corresponding to five OTs for the month of August.
1- Cedar woods sent to production during the month:
for order No. 10 G 1,350,000
No. 11 G 1,480,000
No. 12 G 1,650,000
No. 13 G 1,550,000
No. 14 G 1,320,000
2- From the recapitulation of the individual time sheets the following distribution
of direct labor emerged.
for order No. 10 250 hours to G 1,500 per hour
No. 11 500 hours to G2,500 per hour
No. 12 1,300 hours to G2,000 per hour
No. 13 730 hours to G 1,800 per hour
No. 14 750 hours to G 1,750 per hour
3- The indirect manufacturing costs are distributed among the OTs based on G
2,500 per hour of direct labor, with the actual indirect costs for the month of
June being the sum of G 11,000,000.
4- OT No. 10 was started in the month of May, accumulating in said month the
following costs:
a) Raw materials G300,000
b) Labor G90,000
c) Factory load G 150,000
5- OT No. 14 was left unfinished at the end of the month
6- OT No. 10, 11 and 12 were sent and invoiced to the client, with a margin of
25% on the production price.
Requested:
 Determine the cost of each of the work orders.
 Journalize the following operations.
a) Reopening of the cost accounts for the initial inventory of work in process for
OT No. 10.
b) Allocation of the cost of the MP, MO and CIF of the OT.
c) Accounting for variations between real and applied.
d) Accounting for finished production.
e) Sales accounting.
f) Accounting for sales costs.
g) Accounting for variations.
43. Costs for Work Orders.
Printers Duarte & Cia., uses a job order costing system. The following data summarizes
operations with last month's production:

SCHOOL OF ECONOMICS
a) Materials purchased on credit, G 59,820
b) Requirements for materials and labor used:
Materials G G Labor
OT N°1 12.150 9.540
OT N°2 3.480 2.048
OT N°3 12.200 7.820
OT N°4 2.020 452
OT N°5 8.100 3.020
OT N°6 2.060 1.540
For factory use 430 680
Without identifying
yourself to OT's
c) Indirect manufacturing costs incurred on credit, G 4,270
d) Depreciation of machinery and equipment, G 5. 640.
e) The indirect cost rate is 25% of the direct labor cost.
f) Completed work orders: 1,2,4 and 6.
g) The work orders dispatched to clients and invoiced were:
OT N°1 G 28,500
OT N°2 G 8,000
OT N°4 G 3,100
Instructions.
1- Make general journal entries for the operations summarized above.
2- Open T accounts for work in process and finished goods and transfer the journal
entries to the ledger, identifying the dates by letters.
3- Enter the account balances at the end of the month.
4- Prepare a list of unfinished work orders to reconcile with the respective ledger
account balances.
5- Prepare a list of completed work orders to reconcile with the respective general
ledger account balance.
Gardenia SA wishes to implement the Cost Determination System through Work

Orders, and for this purpose it provides you with the following data:
 Work: manufacturing 100 pairs of Guillermina model shoes, and 200 pairs of fine-
toe shoes.
 Start Date: May 15, 20x1
 Completion date: May 28, 20x1
 Manufacturing hours: 48 hours.
 Client: Gacel
 Direct material costs
Guillerminas Fine point

Dept. Cutting G 1,500,000 G 3,200,000
Dept. sewing G 100,000 G 195,000
Dept. determination G80,000 G 180,000
Dept. Packaging G 120,000 G 240,000
 Direct Labor Costs

SCHOOL OF ECONOMICS
Guillerminas Fine point
Dept. Cutting G800,000 G 1,700,000
Dept. sewing G250,000 G 610,000
Dept. determination G350,000 G 600,000
Dept. Packaging G 100,000 G 180,000
 Indirect Manufacturing Costs

The estimated indirect costs for the year total G 168,000,000, taking into account that
they are distributed to each Work Order based on the available capacity, under normal
production conditions, which represents 2,800 hours per year.
Mr. Matías CAREAGA was the owner of a metallurgical company, but due to his
advanced age, Mr. CAREAGA decided to convert it into a small but fruitful service
company. He liquidates the metallurgical company, but decides to keep two bending
machines and three employees to care for the machines. The work system of the new
company consists of renting the machines to other metallurgists.
A client requests a quote to rent one of the machines for a period of 8 days, for
bending drain gutters. The following information is available to prepare the order
budget:
- The operating cost of the machine is G 150,000 / day
- The exclusive assistance of an operator will be required, whose working hours
will be from 7:30 a.m. to 6:00 p.m., with an intermediate break between 12:00
p.m. and 1:30 p.m.; The hourly wage of this operator is G 5,000 / hour, to
which 30% will be added for social benefits.
Determine the rental price of the machine, per hour and the total price of the contract,
in such a way that it includes 4% to cover Direct Taxes and a profit of 20%, both on
the price.
UNIT VIII
46. Cost per Process.
"The Fox"
This is the production of an article in two consecutive processes, without materials
being incorporated in the second process - there are initial and final inventories of
partially manufactured production.
ARTICLE “THE FOX”
Process No. 1
Initial Inventory: 1000 liters with the following percentages of progress and costs.
Items % progress Units Unit costs Total cost
Equivalents equivalents
Raw material 100 1.000 20,00 20.000
Labour 60 600 8,00 4.800
Indirect charges 60 600 15,00 9.000
G 43.00 G 33,800
Costs incurred in the period (process No. 1);
-Raw Materials: 40,000 liters mat. “A” to G 16 G 640,000
25,000 kilos mat. “B” to G 25 G 625,000 G 1,265,000
-Labour: 50,000 hours at G 10.- G500,000

SCHOOL OF ECONOMICS
-Indirect charges: G 950,000
G 2,715,000
Production completed and transferred to the next process: 60,000 liters.
Final inventory: 3,000 liters; with the following by hundreds of progress.
- Raw material 80% (because part of the “B” material has not been
required)
-Labor 50%
-Indirect charges 50%
Process No. 2
Initial inventory: 5,000 liters, with the following percentages of progress and costs:
Items % progress Units Costs for Total cost
Equivalents equivalent units
Semi-product 100 5.000 44.00 220.000
“X” (received
from the
previous process
(replaces the
raw material of
process No. 2))
Labour 50 2.500 10.00 25.000
Indirect charges 40 2.000 68.00 136.000
G122.00 G 381,000
Costs incurred in the second process (conversion only) G 4,720,000
Labour 80,000 hours at G 9.00 G 720,000
Indirect charges G 4,000,000
Production completed in the second process and transferred to the finished products
warehouse: 59,000 liters
Final inventory: 4,000 liters with the following percentages of progress:
It is requested:
1) Determination of computable processed production
2) Calculation of the unit cost of computable processed production
3) Calculation of the cost of the final inventory of production in process
The costs of department C of the IMPREX company show the following figure.
DEPARTMENT C
Cost transferred from previous department G 4,500,000
Labor cost G 1,200,000
Factory load cost G800,000
Department Total G 6,500,000
The department's production data indicates the following data:
Production received from previous department 1,200 units
Finished production in the department 850 units
Production in process, 50% 320 units
Normal loss in the apartment 30 units
It is requested to calculate the departmental unit cost
48. Cost per process or department.

SCHOOL OF ECONOMICS
The accumulated costs of company XYZ, during the period corresponding to the month
of June 2xxx, show the following figures:
Raw Materials - Department A G 5,200,000
Labor - Department A G800,000

Labor – Department B G 600,000
Labor – Department C G400,000
Labor – Transportation Service G 420,000
Labor – Workshop Services G300,000
Labor – Common Costs G 360,000
Factory Load – Department A G 340,000

Factory Load – Department B G 280,000
Factory Load – Department C G 320,000
Factory Load – Transportation Service G 240,000
Factory Load – Workshop Service G200,000
Factory Load – Common Costs G 180,000
Total accumulated costs for the month G 9,640,000
The company's costing policy indicates the following procedures:
a) Common costs are distributed to cost centers based on labor cost.
b) The cost of the workshop service is distributed to the other centers based on
the actual hours used for said service by each of them, which in the month of
June were as follows: Department. A: 200 hours; Dept. B: 144 hours; Dept. C:
96 hours, and Transportation Service: 360 hours
c) The transportation service is used 40% for the transportation of raw materials
and the remaining 60% for the distribution of finished products.
It is requested: to form the cost distribution table by departments.
The REFEMESA company is dedicated to the assembly of ceiling fans, and has two
departments: Assembly and Finishing. In the past month, the following production
figures were recorded:
Dept. Assembly Dept. Finishing
Unit movement:
Entered into the process (u. ing) 8.000 6.000
Terminated and transferred (u. 6.000 5.000
term) 2.000 1.000
In process, at the end of the month 50% 70%
(ugh)
Completion Degree
Production costs G
Direct materials 10.000 0
direct labor 6.500 3.505
Indirect manufacturing costs 9.520 1.512
Calculate the cost of each unit produced, as well as the value of the transferred and in-
process production of each department.

SCHOOL OF ECONOMICS
The CONDOR clothing company has decided to implement a rigorous costing system to
be able to exercise good control over product stocks, as well as their valuation. To do
this, it has collected the following information corresponding to the month of January:
Movement of units.
Units in process as of 01/01: 400
Degree of completion as of 01/01: 60%
Value of production in process as of 01/01: Gs 10,200
Units completed in the month of January: Gs 3,200
Units in process as of 01/31: 500
Degree of completion as of 01/31: 50%
Production cost
Materials Gs 95,300
Direct labor Gs 58,500
Indirect manufacturing costs Gs 29,100
Other data for the month of January:
Stock value of finished products as of 01/01: Gs 25,280, equivalent to 460 units (the
value of the finished units was calculated by the FIFO method)
Units sold: 3,200
Sale price: Gs 75/unit
The factory has a single production department, from which products are transferred
directly to the stock of finished products.
a) Calculate the cost of each unit manufactured, and the value of finished and in-
process production for the month of January, using the FIFO method.
b) Determine the gross profit for the month of January.
51. Costs by process or department.
In a company that uses the cost system by process or departments.

At the end of a certain period, the following cost structure was found:
Centers Production Dept. of Services
Department
Classes TO b Yo II
Labour 20.000 12.000 8.000 6.000
Factory Load 12.000 8.000 7.500 5.800
Common Costs.
Costs Services II 5.000
Costs Services I 7.000
Total 12.000
It is requested:
a) Distribute the common costs used to the method you consider convenient.
b) The Dept. Service I uses 30% of Service II and this 20% of Service I.
Determine the costs of both service departments and then distribute to the production
departments as follows:
1- The costs of the department. of Services II to the departments. From production A
and B in 50% and 50%.
2- The costs of the department. of Services I to the departments. Of production A and
B in a ratio of 60% and 40% respectively.
c) Determine the total cost per production department.
52. Costs by process or department.

SCHOOL OF ECONOMICS
The overall cost of the Department. B from a company that operates the departmental
cost system, shows the following figures:
 Cost transferred from Department A G 2. 250.000
 Cost of the Department.
- Labour G 817,920
- Factory Load G 752,600
The production received in the Department was 3,000 units of semi-finished products
at G 750.
In this department. 2,700 units were completed and 280 units remained in
process with 50% completion. There was a loss of 20 units, which is considered
normal.
Complete the following production table:
OVERALL COST UNIT COST
Cost transferred from the Department. TO ………………………
………………………..
Loss adjustments ……………………… ………………………..
Adjusted cost ……………………… ………………………..
Department cost
Labour ………………………. ………………………...
factory load ………………………. …………………………
Total Department Cost ………………………… …………………………..
………………………… …………………………..
UNIT IX
53. Joint Production
The food products industry “Alterosa SA” consumed 4,000,000 liters of milk in the year
2xxx, in the production of cheese and butter. The price per liter of milk was G 4 (unit
price).
The total production for the year was 400,000 kg of cheese and 50,000 kg of butter.
The joint costs for the year in addition to raw materials were G 3,590,000. There will
still be other specific costs for each product.
Specific costs of butter.
Labour G 100,000
Packaging G25,000
Indirect costs G250,000
Cheese-specific costs.
Labour G 2,000,000
Packaging G80. 000
Indirect costs G800,000
Calculate the total and unit cost of the cheese and butter based on the market value,
knowing that the sales prices for the finished products are:

SCHOOL OF ECONOMICS
Butter G 80 per kg, Cheese G 120 per kg.
54. Joint Production.
“Arturitos SRL”
The company “Arturitos SRL” produces a product in 4 forms of presentation: A, B, C
and D; and in the manufacturing process, waste material is produced that becomes a
by-product. Its commercial value is estimated at G 7.50 per kg.
Appropriate cost:
Raw material 150,000
Labor 70,000
factory load 100.000
G 320,000
The total production was discriminated as follows:
At 3,600 Kg
B 3,100 Kg.
C 1,900 Kg.
D 1,240 Kg.
Discard 1,660 Kg .
11,500 Kg
The normal sales prices per kg of product in the market are:
AG 50
BG 48
CG 42
DG 40
There are proportional marketing costs that amount to 5% of the sales amounts.
REQUESTED:
Assign the costs of each product, assuming the following alternative criteria:
1. Consider the sale of discards as extraordinary income for the period in which it is
sold.
2. Consider discard as a by-product whose net commercial value is credited to the cost
of the main products.
3. Idem 2, but assuming that the discard is only marketed after an additional specific
sub-production process that represents G 5,000 per fixed month
“Naranjada SA”
The company “Naranjada SA” buys orange essential oil. From the treatment of this oil,
four products are produced:
OIL “A”
“B” OIL
“C” OIL
“D” OIL
The joint production cost was G 1,200. - the liter.
The company has the following information:
Product Production in Sales unit Cost Dec. after the Dept.
liters value G separation G
"TO" 1.000 2.000. - 600. -
“B” 300 600. - 200. -
“C” 300 300. - 200. -

SCHOOL OF ECONOMICS
“D” 50 100. - -------------
1.650
There are no initial and final inventories of products in progress.
REQUESTED:
1) Determine the cost of products “A”, “B”, “C” and “D”. For resolution, use the
conventional relative value of sales method to attribute sales to joint costs.
2) Determine the cost of products “A”, “B”, “C” and “D” considering “C” and “D” as by-
products. For resolution use the inverse cost method.
Piedra Buena is a ceramic that makes bricks with 2, 3 and 6 holes. The raw materials
used and labor costs amounted to G6,000,000.
The quantity of 2-hole bricks was 35,000 units with a weight of 1.5 kilograms.
With 4 holes 50,000 units with a weight of 2 kilograms.
With 6 holes, 30,000 units with a weight of 3 kilograms.
In addition, there are other costs identified for each of the products and they are as
follows:
For brick with 2 holes it is G 280,000
It is requested to determine the unit cost of each of the products.
Doña Angela is a company that manufactures dairy products. It requires determining

the production cost of 200 cc, 400 cc and 600 cc yogurt. It is not possible to define the
cost of real consumption of the raw materials used, as well as the cost of labor. These
together amount to G 2,500,000. It produces the same quantity as for the month,
which was 5,000 units for each product. The market sale price of each product is as
follows:
200 cc yogurt G 500, 400 cc yogurt G 900, 600 cc yogurt G 1,200.
When the relative value method of the product in the market is applied, it determines
the unitary value of each one.
UNIT
58. Direct and absorption costing.
The “Violines Afinados SA” industry began its production in October 2xxx, and had the
following movement:
Production Sale
October 8.000 unit 7.000 unit
November 16.000 unit 7.000 unit
December 4.000 unit 14.000 unit
Raw materials and indirect materials are the company's only variable costs and were
respectively G 2,560,000 and G 440,000 in October. Variable expenses and sales
totaled G 74 per unit and each violin is sold G 1. 080.
Your cost and fixed expense per month have been as follows:
Labour G 3. 500.000
Equipment depreciation G 112,000
Factory rental G50,000

SCHOOL OF ECONOMICS
Miscellaneous factory costs G 916,000
Administrative Salaries G870,000
Propaganda G 716,000
Calculate the result and final stock of each month by the variable costing method and
absorption costing using the FIFO method (FIFO)
59. Direct and Absorption Costing.
Seller is dedicated to the manufacture and sale of Troculas. For a volume of 3,500
units, it has budgeted fixed production costs of G 7,000.- and G 1,200.- for marketing.
Each trocula is sold for G 20.- and its total unit production cost is G 6.-. During the
year 20X0, no initial inventory of exchange goods was recorded, 3,400 units were
manufactured and 3,300 were sold. While in 20X1 3,600 were manufactured and 3,700
were sold.
It is requested:
Prepare the Income Statement using the absorption costing methodology for the two
years and by reconciliation determine the result through variable costing.
60. Direct and Absorption Costing.
Manufacturas del Oriente SA is interested in comparing the net profits

corresponding to two periods. Below is the company's operating data:
Period 1 Period 1
Real Production (units)
Sales (units) 30.000 25.000
Unit Sales Price G 25.000 30.000
Variable Costs per unit G: 15 15
Direct materials 1,5
Direct labor 2,5
c. YO. Manufacturing Variables 2,0
Total Unit Variable Cost G 6 6
Fixed manufacturing overhead costs (G 120.000 120.000
4.0 per unit)
Administration and sales expenses G (all 50.000 60.000
fixed)
61. Direct and adsorption costing.
An Industry that produces a single product has the following movements.

Period Production Sales Final Existence
Yo 60.000 40.000 20.000
II 50.000 60.000 10.000
The characteristics of production costs are:

Variable costs and expenses
Raw material G 20/unit
Energy G 6/unit
Indirect materials G 4/unit
Total G 30/unit

SCHOOL OF ECONOMICS
Variable expenses G 5 per unit sold
Fixed costs and expenses.

Labour G 1,300,000/year
Depreciation G 200,000/year
Rentals G 300,000/year
Miscellaneous G 100,000/year
Fixed expenses imposed G 200,000/year
Total G 2,100,000/year
Sale price G 75 per unit
The industry uses the FIFO method to value its existence.
Determine the result and the final existence by variable costing and by adsorption.
62. Result Chart.
The following data is available in relation to the operation of a company:
Sales G 4,000,000
Contribution margin G 1,600,000
Operative result G400,000
Calculate sales at the break-even point.


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NATIONAL UNIVERSITY OF ASUNCION

1. Classification of Industrial Company Costs

1) Rental of factory premises

17) Monthly salary of machine operators

2. Classification of costs and tables.

Dr. Graciela Marecos 1

17) Industrial director fees

3. Classification of costs and expenses.

Dr. Graciela Marecos 2

17) Administrative secretary salary

4. Classification of Industrial Company Costs.

Dr. Graciela Marecos 3

5. Classification of Industrial Company Costs.

6. Classification of Service Company Costs

Dr. Graciela Marecos 4

Costs / Fixed/ Direct /

Fees paid to promotion group leader

Fuel cost of the vehicle used to transport

Monthly transfer to the account of the airline

7. Classification of Service Company Costs.

Dr. Graciela Marecos 5

8. Preparation of the Income Statement.

direct labor 32.400

Stock valuation as of July 31:

Stock valuation as of August 31:

Raw Materials 31.200

Dr. Graciela Marecos 6

10. Income Statement Commercial Company.

1st year 2nd year

Prepare the Income Statements of the SANCO Company.

11. Income Statement.

Commercial NAILIL, provides the following information in G.

Purchases of merchandise 371.000

12. Industrial Company Income Statement.

Dr. Graciela Marecos 7

13. Production cost of the period, finished and sold.

Raw materials purchased in the month G500,000

Dr. Graciela Marecos 8

14- Determination of costs.

The following information corresponds to the company Rustica SA (in G).

Direct materials 25.000

15- Determination of costs.

16. Production Cost.

cost class Total cost Unit cost

Variable cost 640.000 320

Fixed structure costs 1.240.000 620

Fixed operating costs 800.000 400

Dr. Graciela Marecos 9

17. Income Statement

During the year the following occurred:

18. Determine income, expenses and loss.

Amount Price by unit

19. Production cost of the period, finished and sold.

Fabrics in stock as of 11/01/07 250.000

Dr. Graciela Marecos 10

20. Production cost of the period, finished and sold.

The company “Costosísimo SA” has the following information:

Initial inventory of raw materials G200,000

21. Cost of production for the period, completed and sold.

Initial stock of raw materials G 3. 000

The company uses the FIFO method to cost its products.

22. Consumption of raw materials.

He bought a batch of 100 units at G 10 each.