COSTING & PRICING

COSTING & PRICING:

Instructions:
Answer the problem with show your solutions in a separate of paper.

Problem 1: (10 pts)

Ulysses Typhoon Co. employs a job order cost system. Its manufacturing activities in July 2020, its first
month of operation, are summarized as follows:

JOB NUMBERS
1201 1202 1203 1204
Direct Materials Php 7,000.00 5,800.00 11,600.00 5,000.00
Direct Labor Cost 6,600.00 6,000.00 8,400.00 2,400.00
Direct Labor Hours 1,100.00 1,000.00 1,400.00 400.00
Units Produced 200 100 1,000 300

Manufacturing overhead is applied at a rate of Php2.00 per direct labor hour for variable overhead,
Php3.00 hours for a fixed overhead.

Jobs 1201, 1202 and 1203 were completed in

July. What is the Cost of the completed jobs?

total job cost = direct materials + direct labor + applied overhead

total job cost = 7,000+ 6,600 + applied overhead

Problem 2: (10pts)
The following cost data were taken from the records of a manufacturing company:

Depreciation on factory equipment Php 1,000.00

Depreciation on sales office 500.00
Advertising 7,000.00
Freight-out (shipping) 3,000.00
Wages of production workers 28,000.00
Raw Materials used 47,000.00
Sales salaries and commissions 10,000.00
Factory rent 2,000.00
Factory insurance 500.00
Materials Handling 1,500.00
Administrative salaries 2,000.00

Based upon the above information, the manufacturing cost incurred during the year was.

Problem 3: (10pts)
The Rolly Typhoon Company manufactures widgets. During the fiscal year just ended, the
company incurred prime cost of Php1,500,000.00 and conversion cost of Php1,800,000.00 Overhead
is applied at the rate of 200% of direct labor cost. How much of the above costs represent material
cost?

Problem 4: (10pts)
If 100 units are 70% complete, 30 units 60% complete, 200 units 40% complete and 60 units 5%
 complete. How many Equivalent Units of Production have been produced?

100 x 70 % = 70
30 x 60% = 18
200 x 40% = 80
60 x 5% = 3

Problem 5: (10pts)
What are the components of production are allocable as joint costs when a single manufacturing process
produced several salable products?

- The following components of production that are allocable as a joint cost when a single
manufacturing process produced several salable products are Direct materials, direct labor and
overhead. The joint products may be defined as two or more different products that are produced at
the same time by processing one or more raw materials through a common production process. A
joint cost is the result of producing two or more different products from a single cost factor. A fact
based of joint cost is always permanent whereas a common cost is divisible. My example for this is
the derivation of gasoline results in the production of various products like kerosene, naphtha and
distillate fuel oils that we have seen in gasoline station like Petron, shell, phoenix petroleum and
metro oil.
Mr. Romualdo Farrah M. Amihan MIDTERM
BMAT - Professor EXAMINATION
 COSTING & PRICING
Problem 6: (20pts)
Ondoy Typhoon Company Manufactures Product X in a two-storage production cycle in Departments
A and B. Materials are added at the beginning of the process in Department B. Conversion cost for
Department B were 50% complete as to the 6,000 units in Beginning Work in Process and 75%
complete as to the 8,000 units in End Work in Process, 12,000 units were complete and transferred out
of Department B during February. An analysis of the cost relating to Work in Process and production
activity in Department B for February follows:

Transferred Materials Conversion

In Cost Cost Cost
WIP, February 1:
Costs Attached 12,000 2,500 1,000
Feb. Activity:
Cost Added 29,000 5,000 5,000

The Total Cost per Unit transferred-out for February of Product X, rounded to the nearest

peso: FIFO ?

Average ?

Problem 7: (30pts)
On April 1, 2011, the Yolanda Typhoon Company had 6,000 units of work-in-process in Department
B, the second and last stage of their production cycle. The cost attached to these 6,000 units were
Php12,000 of cost transferred in from Department A, Php2,500 of material cost added in Department
B and Php2,000 of conversion cost added in Department B. Conversion was 50% complete on April 1,
2011. During April, 14,000 units were transferred in from Department A at a cost of Php27,000; and
materials cost of Php3,500 and conversion cost of Php3,000 were added in Department B. On April
30, 2011. Department B had 5,000 units of work-in-process 60% complete as to conversion costs.

The cost attached to these 5,000 units were Php10,500 of cost transferred in from Department A.
Php1,800 of material cost added in Department B and Php800 of conversion cost added in Department
B.

Using the weighted average method, what are the unit

cost? Transferred in ?

Materials

? Conversion

Cost

*** E n D ***

Mr. Romualdo Farrah M. Amihan MIDTERM

BMAT - Professor EXAMINATION