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Problem 1

The document outlines the inventory data and financial performance of Abner Corporation, including beginning and ending balances for finished goods, work in process, and direct materials. It provides calculations for direct materials purchased, direct labor cost incurred, cost of goods sold, and gross profit, along with a gross profit rate of 26%. Additionally, it details steps for creating and completing T-Accounts to analyze manufacturing costs and balances.

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61 views6 pages

Problem 1

The document outlines the inventory data and financial performance of Abner Corporation, including beginning and ending balances for finished goods, work in process, and direct materials. It provides calculations for direct materials purchased, direct labor cost incurred, cost of goods sold, and gross profit, along with a gross profit rate of 26%. Additionally, it details steps for creating and completing T-Accounts to analyze manufacturing costs and balances.

Uploaded by

Celine
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Sample Problem (1 Job)

The following inventory data relate to Abner Corporation:

Inventories
Beg Ending
Finished Goods 90,000.00 110,000.00
Work in Process 80,000.00 70,000.00
Direct Materials 95,000.00 90,000.00

Revenues and Cost for the period:


Sales 900,000.00
Cost of Goods Available for Sale 775,000.00
Total Manufacturing Costs 675,000.00
Factory Overhead 175,000.00
Direct materials used 205,000.00

Required:
1. Direct Materials purchased 200,000.00
2. Direct Labor cost Incurred 295,000.00
3. Cost of Goods Sold 665,000.00
4. Gross Proft 235,000.00

To get this. Subtract lang ung Cost of Goods Sold sa Sales/Revenue


Sales 900,000.00
Cogs 665,000.00
Gross Profit 235,000.00
Gross Profit Rate 26% Gross Profit / Sales
Direct Materials
Beginning 95,000.00 90,000.00 Ending
Purchases 200,000.00 205,000.00 Used, DM
Purchase Returns & Allow.
Purchase Disc.

Work In Process
Beginning 80,000.00 70,000.00 Ending
Used, DM 205,000.00 685,000.00 Cost of Goods Manufactured
Check Step 4 Direct Labor 295,000.00
Factory Overhead - APPLIED 175,000.00

Finished Goods
Beginning 90,000.00 110,000.00 Ending
Cost of Goods Manufactured 685000 665,000.00 Cost of Goods Sold
Step 1: Create T-Account.
Step 2: fill in parts of T-Account
Beginning Balance should be place sa normal side ng Account.
** not mandatory Ending Balance should be placed sa opposite side ng Account
** not mandatory
If ang given ay:
1. "Increased by" - assumption is zero ang beginning balance
example:
Work in Process is increased by 10,000
Work in Process
Beg 0 10,000.00 Ending

ufactured 2. "decreased by" - assumption is zero ang ending balance


example:
Work in Process is decreased by 10,000
Work in Process
Beg 10,000.00 - Ending

Step 3: Fill up items based on given information


Step 4: Complete T- Account
** Manufacturing Cost - Take note that manufacturing cost are consist of three items:
1. Used, Direct materials
2. Direct materials
3. Factory Overhead - applied

In the problem, given na ung total Manufacturing Cost.


If Manufacturing Cost = 675,000
We can compute for Direct labor by subtracting FOH-Applied and DM Used sa total manufacturing cost
Manufacturing Cost 675,000.00
Less: FOH - Applied 205,000.00
Less: DM Used 175,000.00
Direct Labor 295,000.00

*** To know the value of the missing parts of T-Accounts


1. Check kung nasang side ung missing.
2. Then add all the figures dun sa opposite side nung kissing item
3. After ma-total, isusubtract lahat ng figures sa side kung nasan ung missing item

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