Reference no: EM133124723
Problem 1 - Honesty Company has only one job in process on January 1, 2021, Job No. 97 for 75 units, carried at a cost of P78,400. During the 6 months period January to June 2021, Honesty accepted two more jobs, Job No. 98 for 200 units and Job No. 99 for 100 units. Actual data for the period is as follows:
Direct Materials used, P2,800,000 distributed as: Job No. 97, 20%; Job No. 98, 45%; Job No. 99, 35%.
Direct Labor cost, P2,175,000 distributed as: Job No. 97, 25%; Job No. 98, 50%; Job No. 99, 25%.
Various overhead incurred, P2,777,000
Purchases of Raw Materials, P3,200,000
The company's annual budgeted overhead is P5,460,000 while the annual budgeted direct labor costs is P4,200,000. Overhead is applied to production on the basis of direct labor costs. Jobs 97 and 98 were completed and sold while Job 99 is still in process at the end of June. Any variance is considered immaterial.
What the adjusted or actual cost of goods sold for the period ended?
a. P5,599,775
b. P5,650,275
c. P5,700,775
d. P3,761,250
Problem 2 - Honesty Confections manufactures Peach-O-Yum; a chocolate covered, peach-filled candy bar. Honesty uses a costing system to collect costs related to production. Two production departments, Processing and Packaging, are used to produce Peach-O-Yum. The first step in the Processing Department is to add the peaches. The peach is then cooked and seasoned. Conversion costs are assumed to be incurred evenly throughout the production process. The last step in the processing Department before going to Packaging is the covering of the peach with chocolate. In the Processing Department last month, Honesty had work in process of 18,500 cases which were 25% processed. Honesty ended the current month with 12,800 cases which were 20% processed. Honesty started work on 84,400 cases during the current month.
Under the FIFO method, what are the Processing Department's equivalent units of production for chocolate for the current month?
a. 71,600
b. 90,100
c. 88,035
d. 88,400
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