Accounting For Manufacturing Assignment 2022

ACCOUNTING FOR MANUFACTURING CONCERN
SYSTEM:
1. Periodic method – WILL BE USED IN INTEGRATED ACCOUTNING
FUNDAMENTALS.
2. Perpetual – WILL BE USED IN HIGHER ACCOUNTING
PERIODIC METHOD:
 Procedures is similar to merchandising business.
 Note of the changes in the account title.
Transactions Entries
Purchase of materials Raw Materials Purchases
xx
AP
xx
Incurrence and payment of wages Direct labor
xx
Indirect labor
xx
Cash/ payable
xx
Adjustment for inventory Raw materials inventory, end
xx
Work in process inventory, end
xx
Manufacturing summary
xx
Finished goods inventory, end
xx
Income summary
xx
Application:
8. The following are selected transactions of Beauty Products for the month
of March, 2012:
1. Raw materials purchased on account, P80,000.
Factory supplies purchased for cash, P3,000.
2. Freight paid in cash for the materials purchased, P1,500.

3. Factory payroll for the month was follows:
Paid to workers net of following deductions:
72,400
Withholding Taxes 3.200
SS Premiums 2,500
Phil Health Premiums 1,300
HDMF Premiums 600
Direct Labor was P50,000, Indirect Labor P10,000, Sales Salaries P10,000,
and Office Salaries P10,000.
4. Employer’s share for the premiums (allocated based on payroll)
Phil Health P1,300
Combined EC and Maternity 750
SSS 3,250
HDMF 600
5. Monthly depreciation charges for the building, P4,000 and for factory
machinery, P3,000.
6. Power, P3,000 and machine maintenance, P1,600.
7. A total of 1,000 goods were finished and out of which 800 units were
sold at a 100% mark up on product cost.
8. Inventories at the end of the month were:
Finished Goods, ?
Work in Process, P15,000
Raw Materials, P14,000
9. Allocation basis of power and depreciation is 50% for the factory and
25% each for distribution and administrative.
Direction: a) Cost of goods manufactured.
b) Number of units manufactured and the cost of manufacturing
one unit.
c) Cost of the finished goods, applying the unit cost computed in
b).