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BSA Bachelor of Science and Accoutancy University of San Carlos

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University of San Carlos

BSA Bachelor of Science and Accoutancy University of San Carlos

(a) Work in process 630,000
Materials (18,000 x P15) 270,000
Factory payroll (18,000 x P17) 306,000
Applied factory overhead (18,000 x P3*) 54,000
To record materials, labor and overhead charged
Production. Factory overhead control may also
be credited instead of Applied factory overhead.
* (P22,000 + P16,000 + P7,000 + P5,000 + P10,000) / 20,000 = P3
Factory overhead control 56,500
Various credits 56,500
To record actual factory overhead incurred.
Applied factory overhead 54,000
Underapplied overhead 2,500
Factory overhead control 56,500
To record underapplied overhead.
Alternative entry if applied factory overhead is not used.
Underapplied overhead 2,500
Factory overhead control 2,500
(b) Cost of goods sold 2,500
Underapplied overhead 2,500
To close underapplied overhead to cost of goods
sold.
Problem 6-4
1. Actual overhead (P283,400 + P647,426.67) P930,826.67
Applied overhead (168,630 hrs. x P5.49) 925,778.70
Underapplied overhead P 5,047.97
2. Volume variance:
Fixed overhead applied (168,630 x P1.65*) P278,239.50
Fixed overhead budgeted 272,250.00
Volume variance (F) P 5,989.50
*P272,250 / 165,000 = P1.65
Spending variance:
Actual overhead per year P930,826.67
Budgeted overhead:
Fixed P272,250.00
Variable (168,630 x 3.84*) 647,539.20 919,789.20
Spending variance (U) P 11,037.47
*P633,600 / 165,000 = P3.84
Total variance (U) P 5,047.97
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Problem 6-5
Elena Machinery Corporation
Income Statement
Year Ended December 31, 2010
Sales P960,500
Sales returns and allowances 43,700
Net Sales 916,800
Cost of goods sold:
Finished goods inventory, 1/1 P98,700
Cost goods manufactured 641,100
Total available 739,800
Finished goods inventory, 12/31 94,500
Cost of goods sold 645,300
Add overapplied overhead 3,500 648,800
Gross profit 268,000
Operating expenses:
Selling expense P 65,400
Administrative expenses 82,500 147,900
Net income before income tax 120,100
Provision for income tax 36,030
Net income after income tax P 84,070
Problem 6-6
1. Fixed manufacturing overhead P 7,500
Variable manufacturing overhead [(P60,000/12) x P7.50] 37,500
Budgeted manufacturing overhead for the month P 45,000
2. Fixed overhead rate (P7,500 / 5,000 units/mo.) P 1.50
Variable overhead rate 7.50
Total overhead rate P 9.00
Actual output 4,800
Applied manufacturing overhead P 43,200
3. Actual manufacturing overhead P 46,500
Budgeted factory overhead 45,000
Controllable overhead variance (U) P 1,500
Applied manufacturing overhead P 43,200
Budgeted manufacturing overhead 45,000
Volume variance ((U) P 1,800
4. Controllable overhead variance (U) P 1,500
Volume variance (U) 1,800
Net overhead variance (U) P 3,300
Or:
Actual overhead incurred P 46,500
Applied overhead 43,200
Underapplied overhead P 3,300
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BSA Bachelor of Science and Accoutancy University of San Carlos

 

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