CHAPTER 16. JUST-IN-TIME MANUFACTURING SYSTEM

Problem 1. NESTLE Inc. is employing a sophisticated just-in-time manufacturing system. The company uses backflush costing for the recording its production. The following transactions occurred for the year ended December 31,2020:

Purchased P170,000 of raw materials on account

All materials purchased were requisitioned for production

Incurred direct labor costs of P80,000

Actual factory overhead costs amounted to P122,000

Applied conversion costs totaled P202,000 including direct labor cost of P80,000

All telephones were completed and sold

What is the cost of goods sold for the year ended December 31,2020?

372,000

202,000

250,000

292,000

Problem 2. HONDA Inc. is using just-in-time Production System and Backflush Cost Accounting System for the year ended December 31, 2020. The following information was provided for the year 2020:

Raw materials purchased for year 2020 totaled P1,000,000

Direct labor for the year 2020 totaled P500,000

Actual overhead for the year 2020 totaled P300,000 and the standard overhead rat

e is 50% of direct labor cost

The production report for year 2020 showed that the Finished Goods Inventory at December 31 was p200,000 consisting of:

Direct Materials

110,000

Direct Labor

60,000

Factory Overhead

30,000

What is the Cost of Goods Sold for the year ended December 31, 2020?

1,600,000

1,550,000

1,800,000

1,750,000

*with computations all please