CHAPTER 10 – SUPPLEMENTARY PROBLEMS
P10-01 Classify the items listed below as to direct or indirect materials or labor
overhead.
1. Leather used to manufacture shoes
2. Wood used to manufacture furniture
3. Power used to run factory machines.
4. Salary of the accountants in a manufacturing plant
5. Salary of an engineer in an engineering firm
6. Income taxes paid by a company
7. Water used in making ice
8. Wages of a mechanic in a car repair shop
9. Government permit to start a business
10. Payment for engineering supplies in a consulting firm
11. Cost of delivery trucks of a manufacturing company
12. Wages of the truck drivers delivering finished products
13. Wages of a bulldozer driver in highway construction.
P10-02 In completing the final phases for the plans of a multi-story building, the
technical department of an engineering consulting firm employs one architect, 6
engineers of different expertise, and 7 draftsmen. These men worked 8 hours day for 15
days during a certain month. The entire technical department employs 25 men working
8 hours a day 26 days a month. The records of the accounting department indicated
that the total overhead expenses for this month for the technical department was
₱28,600. Determine what part of the total overhead is chargeable to the above-named
project.
P10-03 A factory manufactures plastic products. During a certain month it manufactured
four types of products: A, B, C, and D, with total production and sales of 6,000; 10,000;
15,000; and 8,000 units, respectively. The weights in grams of plastic material used in
the production of each product are as follows: 3.5; 8.2; 12.4; and 6.9, respectively. If the
company used a total of 344.2 kilograms during the month costing ₱86,050, compute
the total cost of direct materials used for each product.
P10-04 Three workers, Jose, Juan, and Pedro, are performing identical tasks making a
certain product. Each can finish, on the average, the following number of units per hour,
respectively: Jose, 10; Juan, 12; and Pedro, 8. During a certain week of 48 working
hours, the total wages paid to these men is ₱2,592.00. The company wage policy is
based on the number of pieces finished. How much was each man paid at the end of
the week?
P10-05 A small factory manufactures three different products: A, B, and C. The
production and sales each month for each product is as follows: 7,500; 6,900; and
8,100 units, respectively. The total overhead expenses for the month include taxes,
supervision, depreciation, etc. is ₱38,325.00. Since these products are made on one
type of machine, the cost accountant makes it the practice to charge overhead based
on the machine hours used. The time spent to produce one unit is as follows:
A. 30 minutes; B. 45 minutes; and C. 15 minutes.
Using the machine-rate method of apportioning overhead, determine the total overhead
to be charged for each product.
P10-06 For cost accounting purposes, a manufacturing plant is divided into four
departments. Data for these departments are given below.
Departmen Direct Labor
Direct Labor Cost Direct Materials Cost
t Hours
W 12,150 ₱ 28,920 ₱ 54,350
X 15,600 ₱ 42,670 ₱ 67,800
Y 10,460 ₱ 24,570 ₱ 42,780
Z 8,250 ₱ 18,980 ₱ 37,530
The following overhead items are to be distributed to the four departments: Manager's
salary, ₱72,000; depreciation of equipment, ₱65,300; power, light, and telephone,
₱27,600; taxes, ₱24,800; other overhead expenses, ₱9,500.
Apportion the total for overhead to each of the departments according to the following:
direct labor hour method, direct labor cost method, and direct materials cost method.
P10-07 The Regal Manufacturing Company is divided into three departments for
accounting purposes. The records of the cost accountant last year indicated the
following data:
Department Department Y Department Z
X
Direct material cost ₱ 86,500 ₱ 42,340 ₱ 56,250
Direct labor cost ₱ 38,200 ₱ 24,600 ₱32,450
Direct labor hours 16,150 12,180 14,560
Overhead ₱ 25,360 ₱ 8,340 ₱ 15,480
expenses
For Production Order No. 82 which was also completed last year, the job cost ledger
indicated the following:
Department Department Y Department Z
X
Direct material ₱ 8,340 ₱ 5,490 ₱ 6,780
cost
Direct labor cost ₱ 4,200 ₱ 2,890 ₱3,200
Direct labor hours 1,850 1,290 1,420
Determine the cost for each department and the total cost for Production Order No. 82,
assuming that overhead is applied based on (a) direct materials cost, (b) direct labor
cost, and (c) direct labor hours.
P10-08 A manufacturer has the following inventory of the purchase and usage of a
certain material:
June 1 Balanced on hand 4,000 units at ₱5.20/unit
12 Purchased 2,500 units at ₱5.80/unit
26 Delivered to plant 5,000 units
July 2 Purchased 3,000 units at ₱5.00/unit
15 Purchased 2,000 units at ₱5.10/unit
24 Delivered to plant 4,500 units
August 4 Purchased 6,000 units at ₱4.90/unit
10 Delivered to plant 3,500 units
Determine the value of the inventory on August 11 using each of the following methods:
(a) First-in first-out (FIFO) method; method;
(b) Last-in first-out (LIFO)
(c) Weighted-Average method.