example of hpp questions and answers
In the world of accounting, especially for students who are learning about finance and income statements, the term HPP (cost of goods sold) is one of the basic concepts that must be understood. This article will thoroughly explore what HPP is, how to calculate it with the correct formula, and is accompanied by example of hpp questions and answers So that it is easier for you to understand.
What is HPP (Cost of Sales)?
Cost of Goods Sold (HPP) is the total cost incurred by the company to produce or buy merchandise which is then resold to consumers. HPP is very important to calculate the profit or loss of a business, because gross profit is calculated from sales revenue minus HPP.
HPP components
To understand the HPP, it is important to know some of the main components involved:
merchandise beginning inventory: Items available for sale at the beginning of the period.
net purchase: Total purchases during the period after deducting purchase returns and discounts on purchases.
merchandise ending inventory: the value of the goods still available at the end of the period.
HPP formula
The basic formula for calculating the cost of goods sold is as follows:
HPP = Beginning inventory + Net purchase – Ending inventory
Net Purchase Formula:
Net purchase = Purchase + Purchase freight cost – Purchase return – Purchase discount
the function and importance of HPP in accounting
Why is HPP so important in accounting? Here are some reasons:
Determine gross profit: Gross profit is obtained from sales minus HPP. HPP calculation errors will directly affect profit.
help decision making: HPP information is used by management to determine the selling price and production strategy.
Preparation of Financial Reports: HPP must be included in the income statement, one of the company’s main financial statements.
example of hpp questions and answers
Here are some example of hpp questions and answers complete with discussion. Suitable for high school / vocational students or students who are just learning accounting.
📘 Sample Question 1: Simple HPP
Questions:
CV Jaya Makmur has the following data:
Beginning inventory: IDR 10,000,000
Purchase: IDR 20,000,000
Purchase freight: IDR 500,000
Purchase return: IDR 1,000,000
Purchase discount: IDR 500,000
Ending inventory: IDR 8,000,000
Calculate the cost of goods sold (HPP)!
Discussion:
Step 1: Calculate Net Purchase
Net Purchase = Purchase + Transportation Cost – Return – Discount
= IDR 20,000,000 + IDR 500,000 – IDR 1,000,000 – IDR 500,000
= IDR 19,000,000
Step 2: Calculate HPP
HPP = Beginning inventory + Net purchase – Ending inventory
= IDR 10,000,000 + IDR 19,000,000 – IDR 8,000,000
= IDR 21,000,000
Answer: Cost of goods sold is IDR 21,000,000
📘 Sample question 2: trading company
Questions:
The Smart Bookstore records the following data during the month of January:
Beginning inventory: IDR 5,000,000
Purchase: IDR 12,000,000
Purchase freight: IDR 200,000
Purchase return: IDR 500,000
Purchase discount: IDR 300,000
Ending inventory: IDR 3,000,000
How much is the Smart Bookstore HPP?
Discussion:
Step 1: Calculate Net Purchase
Net Purchase = IDR 12,000,000 + IDR 200,000 – IDR 500,000 – IDR 300,000
= IDR 11,400,000
Step 2: Calculate HPP
HPP = IDR 5,000,000 + IDR 11,400,000 – IDR 3,000,000
= IDR 13,400,000
Answer: Cost of goods sold is IDR 13,400,000
📘 Sample Question 3: Retail Company Case Study
Questions:
PT Sukses Bersama reports the following information for 2024:
Beginning inventory: IDR 50,000,000
Total Purchase: IDR 120,000,000
Purchase freight: IDR 5,000,000
Purchase return: IDR 10,000,000
Purchase discount: IDR 5,000,000
Ending inventory: IDR 40,000,000
Calculate the HPP PT Sukses Bersama!
Discussion:
Step 1: Calculate Net Purchase
Net Purchase = IDR 120,000,000 + IDR 5,000,000 – IDR 10,000,000 – IDR 5,000,000
= IDR 110,000,000
Step 2: Calculate HPP
HPP = IDR 50,000,000 + IDR 110,000,000 – IDR 40,000,000
= IDR 120,000,000
Answer: Cost of goods sold is IDR 120,000,000
Summary table of calculation process
| Component | formula or value |
|---|---|
| Initial inventory | according to data |
| net purchase | Purchase + transportation costs – returns – discounts |
| Last stock | according to data |
| HPP | Beginning inventory + net purchase – Ending inventory |
Conclusion
Understand example of hpp questions and answers It is very important for anyone who wants to study accounting, especially in analyzing the company’s income statement. By understanding the basic components such as early inventory, net purchases, and ending inventory, students can calculate HPP accurately.
In practice, the calculation of HPP is also the basis for making business decisions, such as determining the selling price and managing the stock of goods. Therefore, mastery of the HPP concept is not only useful academically, but also in the real business world.
Reference
Sofyan Harahap. (2008). Accounting Basics. Jakarta: Salemba Empat.
Kieso, Weygandt, & Warfield. (2019). Intermediate Accounting. Wiley.
