Reference no: EM132866153
Problem - The administrativie, sales and factory plant share the same building. For allocating common costs, 25% is allocated to administrative, 30% to sales and 45% to factory plant. Of the factory payroll, 25% is indirect labor. The following selected data were gathered from the books of Kyowa Manufacturing Company for the year just ended:
Inventory accounts, Jan. 1
Raw Materials P360,000
Work in Process 960,000
Finished goods 620,000
Purchases of Raw materials 10,950,000
Gross payroll for the period 9,456,000
Depreciation 2,700,000
Utilities 3,750,000
Repairs & Maintenance 500,000
Real Estate Taxes 1,450,000
Security services 600,000
Expired Insurance 60,000
Supplies used 15,000
Inventory changes during the period:
Direct materials increased by P120,000
Work in process decreased by P80,000
Finished goods decreased by P105,000
Required -
1. If actual costing method is used, determine the total costs of goods completed?
2. If normal costing method is used (assume an overhead rate equal to 80% of direct labor costs), what would be the total factory costs for the period?