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Exercise 7.5 The following information relates to ABC Manufacturing Company for the year ended December 31,2018: Beginning Ending RM inventory.
21,000
RM purchases........................................................................................................200,000
Direct labor.............................................................................................................100,000
Indirect materials.....................................................................................................5,000
Indirect labor...........................................................................................................47,000
Factory utilities.......................................................................................................18,000
Factory rent............................................................................................................36,000
Depreciation - factory equipment............................................................................24,000
Sales......................................................................................................................960,000
Selling expenses....................................................................................................120,000
administrative expenses.........................................................................................240,000
Income tax rate..........................................................................................................30%
Required:
A. Calculate the RM(DM) used.
B. Develop a schedule of cost of goods manufactured.
C. Construct an income statement.
D. Prepare journal entries. Assume that all purchases and sales were made on credit and that all expenses were paid in cash.
Execise 7.6
DEF Manufacturing company used P150,000 of direct materials and incurred P60,000 of direct labor costs during 2018. Indirect
labor amounted to P5,000 while indirect materials used totaled P3,000. Other factory costs included Utilities of P6,000; maintenance of
P8,000; supplies of P4,00; Depreciation of P16,000 and propery taxes of P5,000. Work in process inventory began the year with a
P12,000 balance and ended the year with an P16,000 balance.
Required:
Prepare a schedule of cost of goods manufactured for DEF Manufacturing company for the year ended December 31,2018
