Marawi Company employs normal costing for its production, meaning factory overhead is applied to production instead of actual costs. The following data are provided during the current year: Net purchases of raw materials during the year P500.000 Total labor costs during the year Depreciation of factory assets during the year Utilities on the factory during the year 800.000 100,000 300,000 Beginning Ending P200,000 300,000 Raw materials inventory Work in process inventory Finished goods inventory 500,000 200,000 600,000 300,000 • The entity uses a single account for its direct materials and indirect materials. Indirect materials used is one fourth of the total material used. • The indirect labor cost is 1/8 of the total labor costs. • The overhead application rate is 80% of direct labor costs. • Any over or under application of overhead is considered material. A) What is the total manufacturing cost during the current year? B) What is the cost of goods manufactured during the current year?
Marawi Company employs normal costing for its production, meaning factory overhead is applied to production instead of actual costs. The following data are provided during the current year: Net purchases of raw materials during the year P500.000 Total labor costs during the year Depreciation of factory assets during the year Utilities on the factory during the year 800.000 100,000 300,000 Beginning Ending P200,000 300,000 Raw materials inventory Work in process inventory Finished goods inventory 500,000 200,000 600,000 300,000 • The entity uses a single account for its direct materials and indirect materials. Indirect materials used is one fourth of the total material used. • The indirect labor cost is 1/8 of the total labor costs. • The overhead application rate is 80% of direct labor costs. • Any over or under application of overhead is considered material. A) What is the total manufacturing cost during the current year? B) What is the cost of goods manufactured during the current year?
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter2: Basic Cost Management Concepts
Section: Chapter Questions
Problem 21E: Ellerson Company provided the following information for the last calendar year: During the year,...
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