II. M&M Company M&M Company had raw materials on hand on January 1 of the current year of P540,000 and on June 30 of P570,000. Work in process inventory was P600,000 on January 1 and P440,000 on June 30. The balance of finished goods inventory was P580,000 on January 1 and P400,000 on June 30. The company purchased materials for the period amounting to P1,620,000. Of the raw materials issued, 20% are indirect materials. The labor charges for the period were: direct labor, P840,000; indirect labor, P180,000; office salaries, P140,000, and sales salaries of P80,000. The total factory utilities expense incurred for the period was P360,000, repair and maintenance of factory equipment, P20,000 and depreciation on factory equipment was reported to be P120,000. The company uses the actual costing method of accumulating costs and it maintains a 35% markup on costs for establishing its selling price. Compute for: 1) The total factory costs for the period. 2) The cost of goods sold for the period. 3) The net income or (loss) for the period.

II. M&M Company M&M Company had raw materials on hand on January 1 of the current year of P540,000 and on June 30 of P570,000. Work in process inventory was P600,000 on January 1 and P440,000 on June 30. The balance of finished goods inventory was P580,000 on January 1 and P400,000 on June 30. The company purchased materials for the period amounting to P1,620,000. Of the raw materials issued, 20% are indirect materials. The labor charges for the period were: direct labor, P840,000; indirect labor, P180,000; office salaries, P140,000, and sales salaries of P80,000. The total factory utilities expense incurred for the period was P360,000, repair and maintenance of factory equipment, P20,000 and depreciation on factory equipment was reported to be P120,000. The company uses the actual costing method of accumulating costs and it maintains a 35% markup on costs for establishing its selling price. Compute for: 1) The total factory costs for the period. 2) The cost of goods sold for the period. 3) The net income or (loss) for the period.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter5: Process Costing

Section: Chapter Questions

Problem 10MC: Direct material costs $3 per unit, direct labor costs $5 per unit, and overhead is applied at the...

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