Faculty of Business Sciences

Accounting Area

Exercise Guide

COST ACCOUNTING

February 2022

San Ignacio de Loyola University

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 Exercise Guide - Week 1
Chewy Chocolate Chip Company uses the following materials to produce
your cookies with chocolate flakes:
MD/MI
A. White Flour.
B. Sugar.
C. Chocolate Flakes.
D. Solvents for cleaning machines.
E. Partially hydrogenated soybean oil.
F. Lubricants for the machines.
G. Eggs.
H. Self-adhesive labels for cookie boxes.
Skim milk.
Indicate whether these details constitute Direct Materials (DM) or Materials
Indirects (MI).

2. Mr. Luis Pinto Patrón, a surgeon by profession, wishes to establish his

medical office, for which it has the following information:
Medical material.
b. Laser equipment.
c. Disbursements for constitution.
d. Rental of premises, where the medical office operates.
e. Furniture (Bed, patient care chair).
f. Advertising.
g. Payment to the nurse.
h. Purchase of medicines.
i. Acquisition of a computer to keep the patients' medical records up to date.
j. Monthly payment for water, electricity, and telephone (consultation office and service office)
public).
k. Payment of operating license, taxes, etc.
It is requested:

Classify the relationship detailed above into costs and expenses.

3. Suppose a company incurs the following costs in manufacturing

wooden tables

Oak Wood $150,000

Rental of factory premises S/. 70,000
MO by Woodcut S / . 180,000
General Plant Services $20,000
Pine Wood $110,000
Rental of Administrative Office S/. 16,000
MO by Assembled $190,000
Administration Salaries 80,000
Indirect Materials (Glue, etc.) S/. 800
MO for Wood Sanding S/ . 170,000
Depreciation of plant machinery S/. 21,000

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 Plant supervision $20,000
Depreciation of Administrative Equipment S/. 8,000
Security - Plant S/. 10,000
a) Prepare a report that shows the manufacturing cost of the products grouped.
in the three components of manufacturing cost.

4. If it is known that:

FIRST COST

INDIRECT COSTS
MATERIALS LABOR OF MANUFACTURING
DIRECT DIRECT

COST OF
CONVERSION

Prepare a report that shows the prime cost and the conversion cost.

5. Industries 'EL' S.A.C. as of 31-12-20XX, has incurred the following expenditures,

to produce 3,000 units.

Advertising 7,000
Loan interest 3,800
Repair of the machinery 2,600
Consumption of raw materials 90,900
Salary of foremen 9,000
Total direct labor 45,000
Rent (40% Production, 20% Sales, and 40% Administration) 6,000
Fuel consumed in the production plant 3,500
Insurance against theft of the assets of the production plant 2,800
Electric energy (50% production, 30% administration, and 20% sales) 2,900
Depreciation of machinery 2,100
Depreciation of delivery vehicles 1,300
Fuel consumed in distribution 1,500
Distributor driver uniform 300
Gross Margin 40%

IS REQUESTED:
Determine the amounts of the different elements of production costs and
operating cost.
Determine the unit cost.
Prepare the cost of production statement.
Prepare the cost of sales statement (knowing that everything was completed)
process and sell 2,500 units
Prepare the Income Statement.

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6. The following information corresponds to Snowball Manufacturing Company:

Direct Materials S/. 25,000.00

Indirect Materials 5,000.00
Direct Labor 30,000.00
Indirect Labor 4,500.00
Indirect Manufacturing Costs (excludes the
Indirect Materials and Labor 15,000.00
Indirect

Calculate the Prime Costs, the Conversion Costs, and the Costs of
Production.
7. Cost of goods sold statement.

Below is a list of accounts from the Metalmecánica Company.

assembly S.A.C with balances for a year that ended on 31.12.20XX. It is requested
prepare the Income Statement with this information:
Administrative expenses S/ 35,000
Returns and discounts on sales 54,400
Depreciation of plant and equipment 38,800
Depreciation - Sales Area 4,300
Direct labor 164,500
Dividends 14,000
Electric energy (Factory) 91,500
Indirect materials for factory consumption 24,100
Initial inventory of finished products 74,400
Final Inventory of Finished Products 71,500
Initial inventory of work in progress products 20,800
Final inventory of products in process 45,600
Indirect labor 25,750
Taxes and insurance (factory) 8,900
Financial expenses 9,000
Utility in the sale of machinery 11,500
Income tax 27%
Purchases of direct raw material 280,300
Initial inventory of raw materials 158,300
Final inventory of raw materials 169,290
Gross sales 792,500
Other Selling Expenses 41,500

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 8. PRODUCTION COSTS AND INTERNAL FINANCIAL REPORTS
INDUSTRIAS GAMA SAC. It is a company dedicated to the production of Shoes.
for gentlemen of Executive type, located in the city of Huancayo, which has
two production plants.
The management of the company urgently needs to know what the performance of the
company for this study month. The accounting department after
A thorough analysis has managed to extract the following cost data:

Raw material S/. 120,000.00, 75% is direct.

2) Labor costs S/. 130,000.00 with 40% in indirect costs.
3) Depreciation S/. 50,000.00 (25% corresponds to administration and 25% to
sales
4) Administrative expenses S/. 30,000.00
Selling expenses S/. 20,000.00
Units produced in the period 20,100
There are no inventories.

IT IS REQUESTED:

a) Determine the prime cost

b) Determine the conversion cost
c) Determine the production cost
d) Determine the total operating cost
e) Determine the unit cost

9. The industrial company MALTERIA LIMA S.A. presents us with the following
Information as of 31.12.20XX
Initial Inventory of Work in Progress S/. 6,000
Final inventory of work in process 7,000
Raw materials 9,000
Direct labor 11,000
Indirect manufacturing costs 16,000
Initial inventory of finished products 13,000
Final inventory of finished products 23,000
Sales of the fiscal year 50,000
Selling expenses 10,000
Administration expenses 8,000
REQUESTED:
a. Manufacturing costs
b. Production costs
c. Cost of sales
d. Exercise result

10. Woody Lumber Manufacturing Company had no units in process on the 1st of
January. On December 31, there were 300,000.00 finished units available.
During the year, 250,000.00 units were sold. In the process,
materials costing S/. 275,000.00; 80% were direct materials. The

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 Labor costs were S/. 400,000.00; 65% was labor.
direct. The additional costs were as follows:

Heating, light, and energy (Prod.) S/. 160,000.00

Depreciation (Prod.) 45,000.00
Property taxes 85,000.00
Repair and maintenance (Prod.) 20,000.00

Sales expenses were S/. 125,000.00; Other general expenses and

Administrative expenses were S/. 80,000.00, the selling price per unit was S/. 4.40

IT IS REQUESTED:
a) Prepare the Income Statement using the direct method and the absorption method.
b) Determine the Prime Costs.
c) Determine the Conversion Costs.
d) Determine the Product Costs.
e) Determine the Cost of the Period

Exercise guide - Week 2

1. DIRECT COSTING METHOD
Complete the following table:
Concepts S/ CV CF
Direct raw material 27,050
Sales commissions 4,150
Cost accountant salary 1,800
Factory workers (Day laborers) 16,050
Factory surveillance 1,400
Electric energy (80%-factory, 20%-admin.) 8,150
65%-factory, 35%-admin 2,400
Straight-line depreciation (70% factory, 30% administration) 4,310
Administrative salaries 3,500
Cleaning staff (factory) 2,755
Insurances (factory) 1,980
Spare parts (factory) 1,800
Interest paid 900
Indirect raw material 1,150
Supplies (80%-sales, 20%-admin.) 2,450
Interests received 2,400
Marketing and Advertising TV 5,320
Sales 97,250
Salaries of salespeople 11,300
Total

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 Considering that no inventory levels were recorded in the process
products in process or finished products, prepare the status of
Results by Direct or Variable Method

2. Mr. Pérez bought a factory that has fixed costs of S/. 180,000 per year. The
the factory has the capacity to produce 70,000 units of the only product that
produce. However, for each unit produced, the variable costs are
increase by S/. 8. If it is assumed that Mr. Pérez can sell all his
production at S/. 3.50 above variable cost. Please respond with the correct option:
a.- It should not produce as it is not profitable, it should sell the factory.
b.- It should produce 35,000 units and rent the rest of the plant or produce
another product, taking advantage of unused capacity.
c.- It should produce 70,000 units because then the fixed unit cost would be reduced to
minimum
d.- You can produce whatever you want, because within the relevant range always
it would have a utility of S/. 3.5 over the variable costs

3. The following information is available:

Sales 72,000
Cost of Sales 40,000
Gross Profit 32,000
Operating expenses 10,000
Administrative 3,000
of Sales 7,000
Operating Utility 22,000

Additional data:
Unit variable production cost S/. 35.00
Variable unit sales expenses S/. 5.00
800 units were sold

What would be the operational utility if sales were to triple?

4. QWE S.A. prepared the following preliminary forecast related to product X

for next year:

Sale price per unit: $10.00

Unit sales 100,000
Variable costs S/. 600,000
Fixed Costs $300,000

A market study estimates that the sale value could be increased.

by unit by 15% and increase the sales volume in units by 10% if
They spend S/. 100,000 on advertising. If these changes are incorporated into the forecast
What would be the operational usefulness of product X?

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 Exercise Guide - Week 3

ABC sold 100,000 units of its product at S/. 20 per unit. The Costs
variables were S/. 11 per unit (S/. 9.00 of production and S/. 2.00 of
commissions). Fixed Costs are incurred uniformly throughout the year and are
S/. 692,000 (of production S/. 400,000 and of operation S/. 292,000). There is no
initial or final inventories.

a) Calculate the break-even point in soles and units

b) How much should be sold to generate an Operating Profit of S/. 60,130.
c) If the Labor Costs are 40% of the total variable costs and 8% of the
Total Fixed Costs. A 10% increase in salaries and wages in terms of
Would it increase the number of units required to reach equilibrium?

2. At a break-even point of 400 units sold, variable costs S/. 400 and
The fixed costs are S/. 200. What will be the profit before taxes with the sale of the
unit number 401?

3. Below are the operational results for the fiscal year that
has just finished. There were sales of 1,800 tons of product during the
year. The plant capacity is 3,000 tons of product.

Sales S/. 900,000

Total variable costs S/. 495,000
Total fixed costs $247,500
Tax rate 40%

Suppose there is an offer from a client who offers to buy 1500 tons at
$450 each. Assume that all costs are at the same levels.
and rates.

a) What net utility after taxes would be obtained if this order is taken and
some orders from other customers are rejected in order not to exceed the
production capacity?
b) Using the above information. Now suppose that it is estimated that the value
tonnage sales down by 10%, variable costs increase by
$40 per ton and fixed costs do not change. What volume of sales in
it would be required to obtain a net profit after taxes of
S/. 94,500?

A company knows that its variable costs per unit are S/. 0.10 and its value of
Sales S/.0.50. The total fixed costs are S/. 50,000.00. If the expected sales
They amount to S/. 200,000.00 What is the margin of safety?

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 5. "Unicorn" companies produce and sell two strategy games: "Wars
"Mystics" and "Dungeons and Dragons". The projected results for the year that
it comes, by product line, as follows:

WARS Dungeons TOTAL

Sales 500,000 800,000 1,300,000

Variable Costs (230,000) (460,000) 690,000

Margen de Contribución 270,000 340,000 610,000

Common Fixed Costs (210,000)

Operating Utility 400,000

The sales values are: Mystic Wars: S/.10 each

Dungeons and Dragons S/.20 each

a) Calculate the number of units of each game that the company must sell to
reach a state of equilibrium.

Exercise guide - Week 4

VALUATION OF INVENTORIES (KARDEX)

The commercial company DELTA SAC is dedicated to the buying and selling of cotton wool.
and during the month of July 2021, carried out the following operations:

01.07.21
03.07.21, With OC 901, 50,000 kilos of wool are purchased at a unit cost of S/. 14.16
including VAT
On 11.07.21, with invoice No. F01-123, 36,000 kilos of wool were sold to a local customer.
On 15.07.21, with OC 902, 20,000 kilos are purchased at S/. 12.60 per kilo and a...
10% discount
20.07.21, With OC 903, 20,000 kilos are purchased at S/. 12.20 but the contracts are hired
Truck services for transportation to the warehouse for which S/. 2,000 is paid (not
including VAT
21.07.21, 2,000 kilos are returned to the supplier for PO 902, because the material arrived.
out of technical specifications.
25.07.21
07/29/21, The customer returns 4,000 kilos of wool from invoice F01-124, due to excess
purchase.
a) You are requested to calculate the cost of the dispatched material taking into account the
AVERAGE valuation method.

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2. ACEROS AREQUIPA S.A. is an industrial company dedicated to the manufacture of
Steel Tubes, which provides us with the following data from the valued Kardex of
The Steel Plates used in Production (March /20XX).
March 1: 200 units are in stock at S/.100 each.
March 5: 1,500 Units were imported according to O/C # 636
12/March A Materials Requisition is received from the Department of
Production for 700 Units - R/M N° 323
March 13: 1,500 units were imported according to O/C # 637
March 14 Production returns 200 units to Warehouse for not being from the
required characteristics belonging to the Month of February/2014
March 15 Warehouse returns to the supplier the units that do not comply with the
required characteristics according to O/C # 637 (200 Units).
March 16 Production requests 1,200 Units according to R/M No. 324
March 18 Warehouse receives a new imported purchase of 1,500 units as per
O/C # 638
March 25 Production requires 1,000 units to complete its production
s/g R/M No. 325

March 31 Production returns 400 units that are not used from R/M No. 325.

05/March March 13 18/March

O/C 636 O/C 637 O/C 638

Value of Raw Material 130,313 149,862 111,569

Freight 14,017 16,120 12,042

Sure 2,601 2,991 2,186
Ad-Valorem (15%) 22,040 25,346 18,870
Customs I.G.V. 28,725 33,034 24,593
Customs I.P.M. 3,379 3,886 2,893
Agency Services 26,029 29,931 22,283
I.G.V / I.P.M- Agency 4,945 5,687 4,234
Overdraft. 5,250 1,313 2,000

The General Management requests the Cost Analyst for a Comparative Analysis regarding
the Valuation Methods (P.E.P.S and AVERAGE), recommended which is the best
appropriate for ACEROS AREQUIPA S.A.

2. The company 'Tecnología S.R.L' is dedicated to the marketing of 'Backpacks'

intended for university students of socioeconomic level 'A' and 'B', during the Month
In Nov/20XX, the following movement was recorded in your warehouse:

On November 2, there are 150 backpacks in stock at the warehouse for S/ 160 each.
On November 5th, 1,200 backpacks are purchased according to Imported O/C No. 450.
On November 7, a discount of 8% of the cost is finalized by the Financial Management.
placed in Warehouse of the O/C No. 450 to the supplier of the good

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 On November 8th, the Warehouse receives a purchase order from the Commercial Area of a distributor.
existing 500 Backpacks in which was delivered
On November 10th, a return of 100 backpacks is made to the foreign supplier due to
Quality issues of O/C No. 450 in which the credit note is received.
respective.
On November 17, 1,600 backpacks are purchased according to Import Order No. 455.
On November 20th, the Warehouse area returns 150 backpacks to the supplier due to being defective.
state due to the quality of the good and the supplier issues the credit note
related to O/C No. 455
On November 25, the Warehouse receives a new order from the Commercial Area of a
new existing distributor for 280 Backpacks which was accepted.
On November 28, the warehouse receives 900 backpacks according to Imported O/C No. 470

The Cost Analyst must determine the Final Inventory and the acquisition cost of the
Merchandise sold (Cost of Sales) for the month of Nov/2018 under the method of
Moving Average valuation and under the P.E.P.S. valuation method.

Import: O/C No. 450

S/ 190,000
FREIGHT: 2% FOB
INSURANCE: 5% (FOB+FREIGHT)
AD VALOREM: 15% (C.I.F)
IGV: 18% (C.I.F + AD VALOREM)
Overdraft: S/ 7,500

Importation: O/C No. 455

S/ 180,000
FREIGHT: 3% FOB
INSURANCE: 7% (FOB + FREIGHT)
AD VALOREM: 15% (C.I.F)
IGV: 18% (C.I.F + ADVALOREM)
Overdraft: S/ 9,100

Import: O/C No. 470

S/ 125,000
4% FOB
INSURANCE: 6% (FOB+FREIGHT)
AD VALOREM: 15% (C.I.F)
IGV: 18% (C.I.F + ADVALOREM)
Overdraft: S/ 8,300
DISCOUNT: 10% Cost Placed in the Warehouse

3. The company USICORP S.A. after signing a contract with a company of

cellular telephony decides to import mobile phones from Singapore brand
"CALLME" and here are all the incurred costs:

FOB value (port of origin) US$ 10.05 per unit

Freight Singapore – Panama 1,100 per 30-foot container

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 1,300 per 40-foot container
Freight Panama - Peru 1,000 per 30-foot container
1,250 per 40-foot container
Singapore - Peru insurance 3.9% of the C&F value (FOB value + Freight)
Callao Unloading 200 per 30-foot container
240 per 40-foot container
Customs expenses 780 plus VAT
Tariff 20% CIF value (FOB + Freight + Insurance)
IGV 18% CIF value + tariff
Flete Callao – Store 300 per 30-foot container
400 per 40-foot container
Callao Insurance - Store 0.7% of the C&F value (FOB value and Freight)

The company wants to import 20,000 cell phones which fit into 5
30-foot containers or in 4 40-foot containers. Additionally, the expenses
operating costs will be US$ 3,000/month plus 3.5% commission.

a) Determine the unit cost of each cell phone if they are imported in 40-foot containers.
feet
b) Determine the unit cost of each cell phone if they are imported in containers of 30.
pies
c) If the company wants a gross profit of 30%, how much should it sell each
cell phone. (with the best transportation option)
If the company desires a pre-tax profit of 15% on its investment,
How much should each cell phone be sold for if everything is sold in 2 months?

Exercise Guide - Week 5

LABOR COST

The Vílchez brothers work in two different companies, Juan is a Salesperson for one.
commercial company that receives a fixed payment of S/ 1,000 and a commission
monthly of S/ 1,500 per month, has two children declared to his employer and the
Company and during the month of July 2019 has worked 4 overtime hours in a single day of the
months.

Carlos works as a supervisor in an industrial company with more than 100 employees.
and receives a monthly payment of S/ 2500, lives with a partner who has two
children of a previous marriage, during the month has worked 4 overtime hours in a single day
of the month.

The following is requested:

a) Calculate the labor cost for each of the Vílchez brothers

b) What is the cost of overtime for each of the cases.

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 Exercise Guide - Week 6
J&J Company budgeted total variable CIF of S/. 280,000 for the period.
current. In addition, factory rental costs were budgeted at S/. 75,000,
depreciation costs of factory equipment amounting to S/. 20,000, rental costs of
administrative office for S/. 58,000 and costs of office equipment depreciation
administrative for S/.18,000. The base was 80,000 estimated machine hours. At the end of the
During the period, the CIF control account had a balance of S/. 307,690 and the machine hours
The actual were 64,000. What were the over-applied or under-applied CIF for the
period?

2. The Company “JUDEX S.A.C It has 3 types of toys, corresponding to

As of May/20XX:
TYPE OF TOY You drink Children Girls
Units Sold 5,000 7,000 7,000
Cost of M.D. per Unit S/ 80 S/ 60 S/ 90
Hr- H x Produced Unit 2 Hr-H 3 Hr-H 4 Hr-H
Labor cost per unit S/ 40 S/ 30 S/ 50
Selling Price per Unit $ 125 S/ 150 S/ 180

It is known that the Default CIF for the month of May/2017 amounts to S/ 200,000,
In relation to the inventories for the month in question, it is presented as follows:

Inv Inicial ProductoTerminado => Bebes: 2,500un.; Niños: 1,000un., Niñas: 2,000un.

Inv. Final Finished Product => Babies: 20% Production of May/20XX

Inventory. Finished Product => Children: 25% Production of May/20XX
Inv. Final Finished Product => Girls: 50% Production of May/20XX

It is also known that the distribution base of the CIF to the products is according to the
"Requested analysis", which must be considered mandatory to obtain the CIF,
General Management requests the following information from the Cost Analyst:

A) Calculate the CIF for each type of Toy using 'DIRECT COST' as a base.
TOTAL
B) Find the CIF for each type of Toy using 'HR-H' as the basis
C) Calculate the Unit Production Cost based on the results obtained in A)
B)
D) Calculate the unit Gross Profit based on the results obtained in C)
E) Recommendations based on the results obtained in D)
F) If the Real CIF at the end of the period amounted to S/. 180,350, determine the adjustment.
regarding the Default CIF.

3. Industrial VIRU S.A. manufactures hammers that it sells to hardware stores in the
department of La Libertad. By year 5, it is expected that indirect costs of
manufacturing are:

Fixed $ 117,250
Variables 125,750

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 By year 5, the company expects a production of 175,000 hammers, hours-
machine 180,000 and direct labor hours 36,400. The estimated cost of the
Direct materials were projected at S/.265,000 and the estimated cost of labor
direct work at S/. 172,460.
The actual data for January was as follows:
12,000 hammers
25,000 machine hours
5,000 hours of direct labor
$ 44,020 direct material costs
$18,000 direct labor costs
Calculate the rates to apply the indirect manufacturing costs and determine the
indirect costs applied during January for each of the following bases:
Production units
Direct material costs
Direct labor hours
Direct labor costs
Machine hours

4. The company "Solicitud SAC" is a manufacturing business dedicated to the

elaboration of 'Protective Straps for Motorized Units' during the month
April/2021 presents the following 'Indirect Factory Costs:
Computer Equipment Repair: S/. 3,000
S/ 15,000
$12,000
S/. 7,000
Telephony: S/ 3,200
Municipal Taxes: S/. 7,200

On the other hand, the following Allocation Bases are established for its 5 departments.
productive:
Concept Assembly Extrusion Grinding Engineering Finished
kW - Hour 45 50 25 43 22
Hour-Machine 14 20 18 12 10
Hour – Man 30 35 28 45 22
PC No. 3 2 2 4 1
Mt 2 90 161 132 113 80
# of Worker 11 9 8 9 3
Mt 3 75 80 60 65 90
# of Calls 16 10 14 12 10
The General Management requests the following information from the Cost Analyst for this purpose
you must appropriately select the 'Base' for each type of Factory Indirect Cost
of the Assignment for the month of April/2021:
A) Determination of the CIF by each production department
B) Determination of the Total CIF respective to each productive department.

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 Exercise Guide - Week 7
COSTING BY SPECIFIC ORDERS

1. The manufacturing company '502 SAC' is dedicated to the production of products.

the Salas line, which as of 01/05/20XX receives 3 customer orders, to which they are
assign the Work Orders (O-80, O-85 and O-90), starting their manufacturing process
immediately. The orders consist of the making of 150 pieces of furniture.
body, 90 pieces of 2-body furniture and 25 pieces of 3-body furniture respectively.

Initial Inventories of Direct Raw Material:

Cedar Wood 5,500 pies at S/.17 per pie, mahogany 4,200 pies at S/. 13 each
Purchases of the Month:

Cedar Wood 3,100 pies at S/. 14 each Mahogany 700 Feet at S/ 15 c/d Foot
The Consumption of Direct Raw Material is:
O-80 3,170 Cedar Feet and 1,825 Mahogany Feet
O- 85 2,875 Cedar Feet and 1,915 Mahogany Feet
- 945 Cedar Feet and 670 Mahogany Feet

It is known that for O-80, 3,050 Man-Hours were used, while for O-85 it...
They used 1,900 Man-Hours, finally the O-90 was 1,200 Man-Hours being the Quota
Hourly Salary of S/.2.75 ("Without Social Charges or Social Benefits").

It is also known that the predetermined Factory Overhead Costs during the Month
as of May 20XX, amount to S/ 97,000 being the base of allocation of the C.I.F are in
function of 'Prime Cost', Likewise the company has a policy for its furniture
how it continues:

A) O/T # 80 130% Cost Unit

B) O/T # 85 V. Vta Unit = 145% Cost Unit. Prod; Final Inventory PT = 10% Production
C) O/T # 90 160% Cost Unit

It is finally known that Administrative, Sales, and Financial Expenses represent the
10%, 12% and 5% of the sales revenue for the month
The Administrative Management requests the following information from the Cost Analyst Department.
under the PEPS valuation method:
Unit Manufacturing Cost and Unit Selling Price per Work Order
Valuation of the Final Investment of Cedar and Mahogany as of 31.05.20XX
Income Statement for the month of May 20XX
Determine the adjustment of the CIF if it is known that the actual exchange rate at the end of the month was S/.
99,600.

2. The company 'RESPETO S.A.C' has the following information during the Month of
March/20XX:

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The Initial Inventory of Wire Rolls (Materials) is:
600 Thin Wire Rolls: S/. 15 each.
950 Standard Wire Rolls: S/.17 each.
980 Rolls of 'Thick' Wire: S/ 20 each

The Initial Inventory of Work in Process for Order 770 for 500 units is as follows
S/. 32,000

Likewise, during the month of March, the Manufacturing Orders are put to work.
(O/T) 790, 795 and 798 for the production of 450, 220 and 300 units respectively
which are completely finished in that period.

On the other hand, it is known that the purchase of materials (Wire) for the period was: 3,200
Thin Wire Rolls at S/.18 each, 2,700 Standard Wire Rolls at S/.
19 each and 1,300 rolls of thick wire at S/ 22 each.

Indirect Materials amounted to s/. 125,600 of which were used

In the production process, 75%, The Payroll for the period is S/.
130,000, likewise the total direct hours were: 3,000, 12,000, 25,000, 8,000
respectively for the O/T # 770, 790, 795 and 798 with the hourly wage of
S/. 2.35 (Without Charges or Social Benefits).

On the other hand, it is known that the Other Indirect Manufacturing Costs of the period
rise to S/.135,000 and the Administrative Expenses, Selling Expenses, and Expenses
Financials rise to 15%, 12%, and 8% of sales respectively.

The consumption of direct material is as follows:

Order 770: 325 rolls of 'Thin' wire, 410 rolls of 'Standard' wire and
380 rolls of thick wire
Order 790: 520 Rolls of "Thin" Wire, 620 Rolls of "Standard" Wire and
270 rolls of thick wire
Order 795: 615 rolls of 'Thin' wire, 505 rolls of 'Standard' wire and
305 Rolls of "Thick" Wire
Order 798: 805 Rolls of "Thin" Wire, 710 Rolls of "Standard" Wire and
415 Rolls of Wire 'Thick'

The General Management requests the following information from the Cost Analyst:

A) Total Production Cost per Work Order as of 31.03.20XX

B) Unit Production Cost per Work Order for the month of March 20XX
C) Valuation of the Final Inventory of Wires: 'Thin', 'Standard' and 'Thick' to
March 31, 20XX
D) Income Statement for the month of March 20XX

NOTE: To solve the following problem, you must consider the following:

1. Basis for Assigning CIF to Finished Products: "Prime Cost of

March 20XX
2. Valuation Method: AVERAGE

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 The company has a policy of setting a Unit Selling Price of 160% Cost
Unit production.
4. Inventory. Final Finished Production as of 31.03.20XX is as follows:

O/T 770: 20% of the Production obtained

O/T 790: 30% of the production obtained
O/T 795 : 10% of the production obtained
O/T 798: 18% of the production obtained

Exercise Guide - Week 8

COSTING BY PROCESSES

1. The company "RENOVACION S.R.L" - a clothing manufacturing company is located

in the district of Ate and occupies a building of 1,500 Mt2, of which it has 800 Mt2
uses 400 Mt2 in Process I, 100 Mt2 in Process II, in the Commercial Area
and the rest in the Administrative Area.

The production is continuous through 2 stages which we will call Cutting (Process I)
and Confection (Process II).

It is estimated to produce 12,000 finished units in process I.

The Raw Material Warehouse Movement during April 2014 has been as follows:

Process I (Cut) Units C. Unit. C. Total - S/.

Direct Material 12,000 1.5 18,000

Supplies Process 1,500

Various Supplies 1,000

Process II (Confection)

Supplies Process 800

Various Supplies 500

The initial inventories of products in process were as follows:

Process I 1,500 units. (100,80); Direct Material = S/.1,000 C.C = S/.3,000

Proceso II : 2,000 un. (100,70) ; Mat. Directo = S/. 800 C.C = S/. 500

During the period, 10,000 units were transferred from Cutting to Sewing; upon completion of the
In the manufacturing stage, 9,500 units available for sale were obtained, remaining
A final inventory of products in process of 3,500 units, with a progress degree of 100% and 70%,
for Cutting and 2,500 with a progress rate of 100% and 50% for Sewing.

The following represent the total compensation of workers:

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 Cut Confection

Operators S/.2,500 Workers $2,000

Auxiliaries 1,100 Helpers 1,000
Supervisor 800 Supervisor 700

In addition to the Remunerations that have been detailed, the company must assume the
social charges according to the current legal provisions, assume SCTR = 1.24% and
Senati = 0.75%.

The value of the assets assigned to each process is as follows:

Active Depreciation Rate Cut Manufacturing Total

Annual S/. S/ S/.

Building 3% 800,000 400,000 1,200,000

Machinery 10% 480,000 360,000 840,000
Others 10% 20,000 18,000 38,000

Other Indirect Factory Costs were:

Court Manufacturing
S/. S/.
Maintenance and Repair 1,000 600
Safe 1,200 500
Active Energy 2,500 Kw-Hr 3,500 Kw-Hr

The cost of Kw-Hr for each process is S/.1.5

It is known that the Company uses the valuation method 'Weighted Average' the
General Management requests the Cost Accountant for the following information:

A) Valuation of the Production of the First Cut.

B) Valuation of II Fabrication Production

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 Exercise Guide - Week 9
STANDARD COST
The Industrial Company 'MEDIFARMA S.A.' has implemented a Cost System.
Standard. The product being manufactured is a medication in the form of CAPSULES.
Similarly, for the purpose of cost calculation, each cost unit is considered as
Capsule.
The Standard Unit Costs for each "Capsule" are as follows:
Direct Material:
Magnesium Concentrate: 130 grams at S/ 7 per gram.
Vitamin Complex 'B': 50 Cm3 at S/ 20 C/Cm3
Labor:
2 Production Workers each with a utilization of 24 and 12 hours
respectively for each Capsule at S/8 per hour,
Indirect Manufacturing Costs:
$38,000 Base: Man-Hour.
The Actual Manufacturing Costs of June/20XX were as follows:
Raw Material:

Magnesium Concentrate:
S/. 7.50
Vitamin Complex 'B':
S/.19.20
Labor:
Regarding the Labor, 24 and 16 Hours were used respectively.
The Labor Cost was S/.7.5 per Hour.

Indirect Manufacturing Costs: S/.40,000 (Predetermined)

Real production volume: 140 Finished Capsules

30 Capsules in Process (100,80)
Additional Data:
120 capsules are sold at a selling price of 50% over the standard cost.
Operating Costs represent 40% of Gross Profit
The Productive Cycle consists of a Process
The Actual Quantity Purchased is equal to the Quantity Consumed.

The General Management requests the following information from the Accounting Department:
1. Determine the Standard Unit Cost
2. Standard Total Cost
3. Actual Total Cost
4. Determination of Variations
5. Analysis of Variations

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 6. Income Statement for the Month of June 20XX.
Note: Assume Normal Capacity for the Period June/20XX: 150 Capsules

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 Exercise Guide - Week 10
1. The Industrial Company 'EL NORTENO SAC' dedicated to manufacturing and
Marketing of Passion Fruit Pulp, a product that is distributed to the
main fast food chains for soda production, this
the company is going to reformulate its monthly budget for the month of November
and December of the year 2016.
The product it manufactures is the result of the concentration (water extraction) of
the passion fruit and sell it in bags of 1 kilo. The General Management
he has requested the Financial Management the new budget and the calculation of the
minimum units to sell, for this the Statement of Situation is presented
Financial statement as of October 31, 20XX, and the following projected budgets:
Sales budget
raw material requirements and the purchase budget that follows
are shown:

INDUSTRIAL COMPANY "AIB SA"

Statement of Financial Position
On October 31 of the Year 20XX
ACTIVE $ PASSIVE S/.
CURRENT ASSET Current Liabilities
Boxes and Banks 42,000 Accounts Payable 40,000
Accounts Receivable 60,000
Tax Credit 12,000 Letters to Pay 20,000
Payment on Account Income Tax 18,000
Inventories: 68,000 Social Benefits - CTS 40,000
8,000 Kg of fruit at S/.1 per kg
10,000 Kg Fruit Pulp at S/. 6 each TOTAL CURRENT LIABILITIES 100,000
TOTAL CURRENT ASSETS 200,000 NON-CURRENT LIABILITIES
FIXED ASSET: Financial Loan L Term 160,000
Machinery and Equipment 500,000
Office Furniture 100,000 TOTAL LIABILITIES 260,000

Deprec. Now Furniture Equipment -200,000 ASSET

Social Capital
Accumulated Results 120,000
TOTAL NON-CURRENT ASSETS 400,000 TOTAL ASSETS 340,000
TOTAL ASSET 600,000 TOTAL LIABILITIES AND EQUITY 600,000

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 The sales budget for the month of November is 80,000 kilos with a
sustained growth of 10% per month. The selling price is S/. 15 + VAT.
Sales Budget.
November December Total
Quantity to Sell (Units)
Unit Sale Value (S/. x Unit)
Total Sale Value in S/.
IGV
Total Sales with VAT in S/.

The safety stock policy indicates that the warehouses of raw materials and products
They must retain 10% of sales and needs at the end of each month.

Production Budget, Raw Material Requirements and Purchases

November December
Sales Budget (Units)
Final Inventory (Units)
Initial Inventory (Units)
Production Program (You)

According to the production recipe, 3 kilos of fruit are needed for every kilo of pulp.
Fruit, the cost per kilo of passion fruit is S/. 1.00 + VAT.

Raw Material Requirements Budget

November December
Need for Passion Fruit
Cost of Fruit S/. x Kg
Total Cost of Fruit (S/.)

Purchasing Budget
November December Total
Need for Raw Material
Final Inventory of Raw Materials
Initial Inventory of Raw Materials
Purchase of Raw Material
Cost of Raw Material (S/.1xKg)
Total Purchase Value S/.
IGV
Total Purchases of Raw Materials S/.

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Direct Labor
Man-Hours x Pulp (Ud) Cost per hour
2 Hours per Unit S/.3.20

Important: This cost includes the CTS as well as the contribution to ESSALUD.
Factory Overhead Costs (FOC)
Indirect materials account for 10% of the cost of direct materials, labor
Indirect work is S/. 40,000 monthly (including social charges) to consider.
ESSALUD to determine the net payment, the depreciation rate is 10% and the others
CIF is equivalent to S/. 30,000 per month.

Important: Indirect materials and other CIF are subject to VAT.

OPERATING EXPENSES (ADMINISTRATIVE AND SALES)

CONCEPT November December
Payroll 60,000 60,000
CTS 10,000 10,000
Office Furniture Depreciation 1,000 1,000
Commission of sellers 5% of the sale value 5% of the sales value
30,000 30,000
Other operating expenses (water, electricity,
etc.)
Important: Only the other operating expenses (water, electricity, etc.) are subject to the VAT.
consider the ESSALUD deduction to determine net salaries.

TRADE POLICY

[Link] sales for the projected period will be collected 80% in cash and 20%
credit for 30 days.
b. Direct material purchases will be made: 50% cash and 50%
credit for 30 days.

CASH FLOW:

1. The accounts receivable outstanding as of 10/31/20XX will be collected as follows

way: 60% in the month of November the balance in the month of December.
In November, S/. 100,000 of the long-term debt will be paid + S/. 20,000 of
corresponding interests.
In December, 100% of the commercial accounts payable will be canceled.
pending as of 31/10/XX.
4. In the tax matter, consider the following: VAT is paid in the following month of
obligation generated; Payment on account of Income Tax = 2% of sales
monthly and ESSALUD is paid the following month. Please note that it must be
use the tax credit from the previous month.
5. For the payment on account of income tax for the month of November, have in
It reports that the monthly sales for the month of October amounted to S/.
1,000,000
6. The CIF and the disbursable MOD are fully canceled in the month in which
which is generated.

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 7. Operating expenses are fully paid in the month in which they
They generate; regarding the CTS, its entirety will be settled in the month of November.
including that generated in the same month of November.
8. Within the operating expenses, the only expenses to be taxed with the VAT
they are the 'other operating expenses'
9. The CIF are fully canceled in the month they are generated.
10. The only indirect manufacturing costs to be subject to the IGV are:
Indirect materials and other CIF
On December 1, a truck is acquired to improve its system of
distribution, at a cost of S/. 20,000 + VAT, its depreciation is 20% per year.
PLEASE RESPOND IN THE FOLLOWING FORMATS.
(For the two months)

Labor budget

Labor Budget November December

Production Program (Units)
Hours/Man per Unit
Total Man Hours Incurred
Direct Labor Rate S/. x Hour
Total Direct Labor S/.
CTS
ESSALUD
Net Labor for Cash Flow S/.

2. Manufacturing Budget (CIF)

INDIRECT MANUFACTURING COSTS (CIF)

Indirect Costs November December

Indirect materials

Indirect labor

Depreciation

Other CIF

TOTAL CIF

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 3. IGV Settlement
Settlement of VAT November December Total

IGV for Commercial Sales

Total VAT x Income

IGV for Commercial Purchases
IGV for Indirect Material and CIF
IGV for Operating Expenses

Total VAT x Expenses

Difference between VAT (Income-Expenses)
Tax Credit in Favor
IGV to Pay S/.

4. Projected unit cost

Production Cost: November December
Direct Raw Material
Direct Labor
CIF
Production Cost
Production Budget
Unit Production Cost

5. Projected cost of goods sold statement

Cost of Sales: November December

Initial Inventory Finished Product

Production cost
Final Prod Finished

Cost of Sales S/.

5. Income Statement

INDUSTRIAL COMPANY "AIB S.A"

Income Statement
As of December 31 of the Year 20XX
November December Total

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 Income from sales
Cost of Sales
Gross Profit
Operating Expenses

Operating Income
Financial Expenses
Other Income
Other Expenses
Profit before Taxes

7. Cash Flow

Cash Flow: November December Total

Initial Cash Balance
INGRESOS
Cash Sales
Client Billing

Total income
EXPENSES:
Fruit Payment
Payment of commercial obligations
Long-term debt payment
Interest Payment
Payment of VAT
Payment to Tax Account Income
Payment of CIF
Labor Payment
Payment of Salaries
Payment of Commissions
Other Operating Expenses
CTS Payment
ESSALUD Payment
Purchase of Truck
Total Expenditures

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Income
Final cash balance

8. Statement of Financial Position

ACTIVE Total S/. PASSIVE Total S/.
Cash register and banks Accounts payable commercial
Payment on Account Income Tax Letters payable
Accounts receivable IGV to be paid
Raw Material CTS to be paid
Finished products ESSALUD to Pay
Total Pasivo Corriente
Long Term Debt
Total Current Assets Total Non-Current Liabilities
Machinery and Equipment HERITAGE
Office Furniture Social Capital
Transport Units Cumulative Result
Accumulated Depreciation Result of the Exercise
Total Non-Current Assets Total Assets
Total Assets Total Liabilities and Equity

a. Projected Statement of Financial Position as of 31.12.20X1

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