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SCM 2ND Output Finals - SCM

Management Accounting (Misamis University)

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EXERCISE 1

Requirement 1

a. Direct Materials P18

Direct Labor 7
Variable Manufacturing Overhead 2
Total Variable Manufacturing Costs 27
Fixed Manufacturing Overhead 8_
Unit Product Cost P35

b.

Max Company
Income Statement- Absorption Costing
For the Year Ended December 31, 20xx

Sales P800, 000

Less Cost of goods sold:
Beginning inventory 0
Add cost of goods manufactured 700,000
Goods available for sale P700, 000
Less: Ending inventory 140,000 560, 000
Gross margin P 240,000
Less Selling and Administrative Expense 190, 000
Net operating income P 50,000

Requirement 2

a. Direct materials P18

Direct labor 7
Variable manufacturing overhead 2__
Unit Product Cost P27

b.
Max Company
Income Statement- Variable Costing
For the Year Ended December 31, 20x1

Sales P800, 000

Less Variable expenses:
Variable cost of goods sold:

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Beginning inventory P0
Add variable manufacturing costs 540,000
Goods available for sale P540, 000
Less: ending inventory 108,000
Variable cost of goods sold P432, 000
Variable selling expense 80,000 512, 000
Contribution margin P288,000
Less: Fixed expenses
Fixed manufacturing overhead 160,000
Fixed selling and administrative 110,000 270,000
Net Operating Income P 18,000

EXERCISE 2

Requirement 1
Direct Materials P 1,200
Direct Labor 1400
Variable Manufacturing Overhead 500
Total Variable Manufacturing Cost P3,100
Fixed Manufacturing Overhead 600
Unit Product Cost P3,700

Requirement 2
Direct materials P1,200
Direct labor 1,400
Variable manufacturing overhead _500
Unit product cost P3,100

EXERCISE 3

Requirement 1
Direct Materials P 600
Direct Labor 300
Variable Manufacturing Overhead 100
Unit Product Cost P 1,000

Requirement 2
PC Desk Incorporated
Income Statement- Variable Costing
For the Year Ended December 31, 20x1

Sales P 18,000,000
Less Variable Expenses:

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Variable Cost of goods sold:

Beginning Inventory P0
Add Variable manufacturing costs 10,000,000
Goods Available for sale P 10,000,000
Less: Ending Inventory 1,000,000
Variable cost of goods sold P 9,000,000
Variable Selling and Administrative 1,800,000 10,080,000
Contribution Margin P 7,200,000
Less Fixed expenses:
Fixed manufacturing overhead 3,000,000
Fixed Selling and administrative 4,500,000 7,500,000
Net Operating Loss (P300,000)

Requirement 3
Selling Price per unit P 2,000
Variable Cost per unit ( 1,200)
Contribution margin per uni P 800

PROBLEM 2

Requirement 1
Honey Company
Income Statement- Direct Costing
For the Year Ended December 31, 20xx

Sales P 280,000
Less Variable Cost of Sales
Finished Goods Inventory, 1/1 P 4,000
Current Production 120,000
Total Available for Sale P124, 000
Finished Goods Inventory, 12/31 12,000
Variable Cost of Sale-Standard P112, 000
Unfavourable Variance 5,000 117,000
Contribution Margin-Manufacturing P 163,000
Less Variable Marketing Expenses 28,000
Contribution Margin-Final P 135,000
Less Fixed Costs and Expenses:
Fixed Factory Overhead P 54,000
Fixed Marketing and Admin. Expenses 20,000 74,000
Net Income P 61,000

Requirement 2
Honey Company
Income Statement- Absorption Costing
For the Year Ended December 31, 20xx

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Sales P 280,000
Less: Cost of Sales
Finished Goods Inventory, Jan 1. 5,500
Current Production Costs P120,000
Fixed (30,000x P1.50) 45,000 165,000
P170, 500
Less: Finished Goods Inventory, Dec.31 16, 500
Cost of Sales at standard P154,000
Add (Deduct) Variance
Unfavourable Variable Manufacturing Costs Variances 5,000
Underapplied fixed factory overhead 9,000 168,000
Gross Profit P112, 000
Less: Selling and Administrative Expenses
Variable 28,000
Fixed P 20,000
Net Income P 64,000

MULTIPLE CHOICE:
1. D 11. B
2. B 12. A
3. B 13. C
4. B 14. D
5. B 15. B
6. C 16. A
7. A 17. C
8. B 18. C
9. A 19. B
10. A 20. C

ACTIVITY:
1. Jacob Company produces a ladies’ wallet and a men’s wallet. Selected data for
the past year follow:
Ladies’ Wallet Men’s Wallet
Production (units) 100,000 200,000
Sales (units) 90,000 210,000
Selling price P5.50 P4.50
Direct labor hours 50,000 80,000
Manufacturing costs:
Direct materials P75,000 P100,000
Direct labor 250,000 400,000
Variable overhead 20,000 24,000
Fixed overhead:

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Direct 50,000 40,000

a
Common 20,000 20,000
Non-manufacturing costs:
Variable selling 30,000 60,000
Direct fixed selling 35,000 40,000
b
Common fixed selling 25,000 25,000
a
Common overhead totals P40,000 and is divided equally between the two
products.
b
Common fixed selling costs total P50,000 and are divided equally between the two
products.

Budgeted fixed overhead for the year, P130,000, equalled the actual fixed overhead.
Fixed overhead is assigned to the products using a plantwide rate based on
expected direct labor hours, which were 130,000. The company had 10,000 men’s
wallets in inventory at the beginning of the year. These wallets had the same unit
cost as the men’s wallets produced during the year.

Required:
a. Compute the unit cost for the ladies’ and men’s wallets using the variable-
costing method. Compute the unit cost using absorption costing

*Absorption Costing:
LADIES MENS
WALLET WALLET
DirectMaterials: P 0.75 P 0.50
L (P75,0000/100,000)
M (P100,000/200,000)
Direct Labor:
L ( P250,000/100,000) 2.50 2
M ( P400,000/ 200,000)
Variable Manufacturing
Overhead:
L (P20,000/100,000) .20 .12
M (P24,000/200,000)
Fixed MOH:
L[(P50,000+P20,000)/100,000 .70 .30
]
M[(P40,000+P20,000/200,000]
Unit Product Cost P 4.15 P 2.92

**Variable Costing
LADIES WALLET MENS WALLET
Direct Materials P .75 P .50
Direct Labor 2.50 2
Variable MOH .20 .12

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Unit Product Cost P 3.45 P 2.62

b. Prepare an income statement using Absorption costing.

JACOB COMPANY
INCOME STATEMENT
For The Year Ended December 31, 20xx

Ladies Wallet Men's Wallet Total

Sales
L(P 5.50x90,000) P 495,000 P 945,000 P 1,440,000
M(P 4.50x210,000)

Less: COGS
Beginning --- P 29,200 ---
Inventory
( P2.92x 10,000)
Add: COGM
L ( 100,000xP4.15) 415,000 584,000 999,000
M (200,000xP2.92)
Goods Available for P 415,000 P 613,200 P 1,028,200
Sale
Less: Ending ---
Inventory:
L ( 10,000xP4.15) 41,500 41,500
Cost of Goods Sold P 373,500 P 613,200 P 986,700
Gross Profit P 121,500 P 331,800 P 453,300
Less: Operating
Selling and
Admin.Expenses:
Variable 30,000 60,000 P 90,000
Fixed
L( P35,000+P25,00 60,000 65,000 125,000
0)
M
(P40,000+P25,000
)
Total P 90,000 P 125,000 P 215,000
Net Income P 31,500 P 206,800 P 238,300

c. Prepare and income statement using variable costing.

JACOB COMPANY
INCOME STATEMENT
For The Year Ended December 31,20xx
Ladies Men's Total

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Wallet Wallet
Sales P 495,000 P 945,000 P
1,440,000
Less: COGS
Beginning __ ---
Inventory P 26,200
M
( 10,000xP2.62
)
Add: COGM: P 869,000
L(P3.45x P 345,000
100,000) 524,000
M
( P2.62x200,00
0)
Total Available P 345,000 P 550,200 P 895,200
for Sale
Less: Ending
Inventory 34,500 ---
L (10,000x 34,500
3.45)
Cost of Sales P 310,500 P 550,200 P 860,700
Manufacturing P 184,500 P 394,800 P 579,300
Margin
Less: Variable 30,000 60,000 90,000
Selling
Contribution P 154, 500 P 334,800 P 489,300
Margin-final
Less Fixed
Cost
Manufacturing P 70,000 60,000 P 130,000
OH
Selling 60,000 65,000 125,000
Expense
Net Income P 24,500 P 209,800 P 234,300

d. Prepare a segmented income statement using the products as segments.

JACOB COMPANY
Segmented INCOME STATEMENT
For The Incoming Year
Ladies Wallet Men's Wallet Total
Sales 495,000 945,000 1,440,000
Variable Cost of 310,500 550,200 860,700
Goods Sold

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Variable Selling 30,000 60,000 90,000

Cost
Contribution 154,500 334,800 489,300
Margin
Less: Direct 35,000 40,000 75,000
Fixed Expense
Direct Fixed
Cost
Direct Factory 50,000 40,000 90,000
Overhead
Segment 69,500 254,800 324,300
Margin
Less: Common
Fixed Expenses
Common Fixed 40,000
Overhead
Common Fixed 50,000
Selling
Operating 234,300
Income

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