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  goods 60,000 Finished Raw mat goods erials used Total manufacturing costs charged to production d MULTIPLE CHOICE QUESTIONS

180,000

220,000 652,000

1. Benhur company consumed P450,000 worth of direct materials during May 2011. At the end of the month the direct materials inventory of Benhur Ben hur was P25,000 lower than the May 1 inventory level. How much were the direct materials procured during May 2011?   A. P475,000 C. P400,000 B. P375,000 D. P425,000 2. Pin company incurred the following costs during the month: direct labor, P122,0 P122,000; 00; factory overhead, 108,000 and direct materials purchases, P160,000. Inventories show the following costs: Beginning Ending Finished goods P27,000 P30,000 Work in process 61,500 57,500 Direct materials 37,500 43,500 How much is the cost of goods manufactured? A. P443,500 C. P386,000 B. P382,000 D. P388,000 3. Last month, Pare company placed P55,000 of materials into production. The Printing Department used 8,000 labor hours at 5.60 per hour and the Binding Department used 4,600 hours at P6.00 per hour. Factory overhead is applied at a rate of P6.00 per labor hour in the Printing Department and P8.00 per labor hour in the Binding Department. Pares inventory accounts show the following balances:

Finished goods

Beginning P22,000

Ending P17,000

Work in process Materials

15,000 20,000

17,600 18,000

What is the total cost of goods sold? A. P219,600 C. P108,000 B. P214,600 D. P217,200 4. The factory ledger of Diamond Corporation contains the following cost data for the year ended December31, 2011:

Raw materials Work in process

Inventories Opening Closing P150,000 170,000

160,000

60,000

 

Finished goods Raw materials used Total manufacturing costs charged to production during the year (including raw materials, direct labor and factory overhead applied at the rate of 50% of direct labor cost)

180,000

220,000 652,000

1,372,000

Compute the: (1) cost of raw materials purchased and (2) direct labor charged to production during the year: A. (1) P632,000; (2) P240,000 C. (1) P.72,000; (2) P720,000 B. (1) P672,000; (2) 480,000 uring the year (including raw materials, direct labor and factory overhead applied at the rate of 50% of direct labor cost) 1,372,000 Compute the: (1) cost of raw materials purchased and (2) direct labor charged to production during the year: A. (1) P632,000; (2) P240,000 C. (1) P.72,000; (2) P720,000 B. (1) P672,000; (2) 480,000 D. (1) 360,000; (2) P480,000 5. National Marketing Corp. uses a job-order job -order costing system. It has three production departments, X, Y and Z. The manufacturing cost budget for 2011 is as follows: Dept. X P600,000 200,000 600,000

Direct Materials Direct Labor Manufacturing overhead

Dept. Y P400,000 500,000 100,000

Dept. Z P200,000 400,000 200,000

For Job no. 01-90 which was completed in 2011, direct materials cost was P75,000 and direct labor was as follows: Dept. Dept. X Y Dept. Z

P100,000 40,000 20,000

The corporation applies manufacturing overhead to each job order on the basis of direct labor cost, using departmental rates predetermined at the beginning of o f the year based on the manufacturing cost budget. The total manufacturing cost of Job No. 01-90 which was completed is 201 2011 1 is: A. P235,000 Company had the following inventories on August 1 of the current year. Finished goods Work in process

P25,000 18,500

 

Materials direct materials

22,000A company had the following total usage of direct labor and

Direct Labor (P8 per hour) Direct Materials (Pl0 per pound)

Hours 400

Pounds 300

Incomplete job # 101 has used 20 hours of direct labor and 8 pounds of direct materials. Factory overhead is applied at the rate of 200% per direct labor peso. Wh What at is the balance in work in  process relating to job # 101 A. P560 debit C. P12,600 debit stimated Overhead  Company applies factory overhead on the basis of direct labor hours. Budget and actual data for direct labor and overhead for the year are as follows:

Direct labor hours Factory overhead costs

Budget P600,000 720,000

 Required: 1. Compute for Predetermined Factory Overhead Rate 2. How much is the applied overhead? 3. How much is the over or under applied?

Problem 2: Computation of Estimated Overhead

MULTIPLE CHOICE QUESTIONS

Actual P550,000 680,000

 

1. Benhur company consumed P450,000 worth of direct materials during May 2011. At the end of the month the direct materials inventory of Benhur was P25,000 lower than the May 1 inventory level. How much were the direct materials procured during May 2011?   A. P475,000 C. P400,000 B. P375,000 D. P425,000 2. Pin company incurred the following costs during the month: direct labor, P122,000; factory overhead, 108,000 and direct materials purchases, P160,000. Inventories show the following costs: Beginning Ending Finished goods P27,000 P30,000 Work in process 61,500 57,500 Direct materials 37,500 43,500 How much is the cost of goods manufactured? A. P443,500 C. P386,000 B. P382,000 D. P388,000 3. Last month, Pare company placed P55,000 of materials into production. The Printing Department used 8,000 labor hours at 5.60 per hour and the Binding Department used 4,600 hours at P6.00 per hour. Factory overhead is applied at a rate of P6.00 per labor hour in the Printing Department and P8.00 per labor hour in the Binding Department. Pares inventory accounts show the following balances:

Finished goods Work in process Materials

Beginning P22,000 15,000 20,000

Ending P17,000 17,600 18,000

What is the total cost of goods sold? A. P219,600 C. P108,000 B. P214,600 D. P217,200 4. The factory ledger of Diamond Corporation contains the following cost data for the year ended December31, 2011:

Raw materials Work in process Finished goods Raw materials used Total manufacturing costs charged to production during the year (including raw materials, direct labor and factory overhead applied

Inventories Opening Closing P150,000 170,000 160,000 60,000 180,000 220,000 652,000

 

at the rate of 50% of direct labor cost)

1,372,000

Compute the: (1) cost of raw materials purchased and (2) direct labor charged to production during the year: A. (1) P632,000; (2) P240,000 C. (1) P.72,000; (2) P720,000 B. (1) P672,000; (2) 480,000 D. (1) 360,000; (2) P480,000 5. National Marketing Corp. uses a job-order job -order costing system. It has three production departments, X, Y and Z. The manufacturing cost budget for 2011 is as follows: Dept. X P600,000 200,000 600,000

Direct Materials Direct Labor Manufacturing overhead

Dept. Y P400,000 500,000 100,000

Dept. Z P200,000 400,000 200,000

For Job no. 01-90 which was completed in 2011, direct materials cost was P75,000 and direct labor was as follows: Dept. X Dept. Y Dept. Z

P 40,000 100,000 20,000

The corporation applies manufacturing overhead to each job order on the basis of direct labor cost, using departmental rates predetermined at the beginning of o f the year based on the manufacturing cost budget. The total manufacturing cost of Job No. 01-90 which was completed is 201 2011 1 is: A. P235,000 C. P385,000 . B. P310,000 D. P150,000 6. Avery uses aAvery’s predetermined factory overhead rate basedbased on direct hours. For the month of Co. October, budgeted overhead was P300,000 on a labor budgeted volume of 100,000 direct labor hours. Actual overhead amounted to P325,000 with actual direct labor hours totaling 110,000. How much was the overapplied or underapplied overhead? A. P30,000 overapplied C. P5,000 overapplied B. P30,000 underapplied D. P5,000 underapplied 7. Yolanda Company provided the iñventory balances and manufacturing cost data for the month of January. Under Yolanda’s cost system, any over --or or underapplied overhead is closed to the cost of goods sold account at the end of the calendar year. Inventories

January 1

January31

 

Direct materials Work in process Finished goods

P30,000 15,000 65,000

P40,000 20,000 50,000  Month of January

Factory overhead applied Cost of goods manufactured Direct materials used Actual factory overhead

P150,000 515,000 190,000 144,000

What would cost of goods sold be if under-or overapplied overhead were closed to cost of goods sold? A. P509,000 C. P530,000 B. P524,000 D. P536,000 8. Using the same information in No. 7, what would cost of goods sold b bee if under-or overapplied were allocated to inventories and cost of goods sold? A. P509,700 C. P526,300 B. P524,700 D. P530,300 9. The following date were taken the records of Best Company: 9/30/2011 Inventories: Raw materials P ? Work in process 80,000 Finished goods 60,000

8/31/2011 P50,000 95,000 78,000

Raw materials purchases, P46,000 Factory overhead, 75% of direct labor cost, P63,000. Selling and administrative expenSe5 12.5% of sales, P25,000  Net income for September, 2011, P25,000 What is the cost of raw materials inventory on August Au gust 31, 2011? A. P30,000 C. P46,000 B. P40,000 D. P50,000 10. Wat Corporation manufactures rattan furniture sets for export and uses the t he lob order cost system in accounting for its costs. You obtained from the corporation’s books and records the following information for the year ended December 31, 2011:   The work in process inventory on January Januar y 1 was 20% less than the work in process inventory on December 31.   The total manufacturing costs added during 2011 was P900,000 based on actual direct materials and direct labor but with 3nufacturing overhead applied on actual direct labor  pesos. 



 

  The manufacturing overhead applied to process was 72% of the direct labor pesos, and it

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was equal to 25% of the total manufacturing manu facturing costs.   The costs of goods manufactured, also based on actual direct materials, actual direct labor and applied manufacturing overhead was P850,000

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The cost of direct materials used and the work-in process inventory on December 31, 2011: Direct materials used Work in process inventory A. P1,075,000 P200,000 B. 362,500 250,000 C. 312,500 250,000 D. 312,500 275,000 11. Chiz Crafts manufactures to customers’ specifications. The company uses a job order cost system and, for the month of May Ma y 2O09,ummarized the following information: Beginning work in process inventory (five partially completed jobs) P300,000 Orders completed (eighteen) 2,400,000 Orders shipped out (fourteen) 2,000,000 Materials requisitioned 1,700,000 Direct labor cost 800,000 Overhead = 150% of direct labor cost The month-end work in process inventory was A. P700,000 C. P1,400,000 B. P800,000 D. P1,600,000 12. The BAM Manufacturing Co. uses a job-order costing system, and it ap applies plies factory overhead to production at a pre-determined rate based on direct labor cost. The following account appears in the general ledger:

Beg. Bal Direct Materials

P50,000 100,000

WORK IN PROCESS Finished goods

P250,900

Direct Labor 80,000 Applied overhead 60,000

The ending work in process represents the cost of Job# 26 which has been charged with P6,000 of direct labor and the cost of Job # 27 which has been charged with applied factory overhead of P4,800. Total cost of direct materials in the ending work in process was A. P8,400 C. P15,200 B. P9,000 D. P17,400

 

13. ANGGARA Co. manufactures leather products and uses a job order costing system. Its work in process show the following: Direct materials used Direct labor incurred Factory overhead Transferred to finished goods

P341,000 324,500 259,600 825,000

Two jobs are still in process on which materials of P70,400 are expended Factory overhead is applied at a predetermined percentage based on direct labor cost. What are the direct labor and overhead components of the jobs transferred to finished goods?

Direct labor Overhead

A. P308,000 P246,400

B. P310,500 P248,400

C. P324,500 P259,600

D. P341,000 P272,000

Questions 14 through 16 are based on the following information The following information is taken fr the records of JOHN REY Manufacturing Company for the first calendar quarter of 2011:

Inventory, Raw materials Inventory, Goods in Process Inventory, Finished Goods Direct labor Factory overhead cost Cost of goods sold

Jan. 1 P32,300 38,500 44,600

March31 P34,100 35,050 48,800 254,000 236,900 676,300

14. How much is the total “cost of goods manufactured» during the first quarter of 2011?  2011?   A. P676,100 C. P680,500 B. P243,000 D. P713,350 15. How much is the total cost of goods placed in process during the first quarter of 2011? A. P680,500 C. P715,550 B. P677,050 D. P719,050 16. How much is the total cost of raw materials used during the first quarter of 2011? A. P263,150 C. P224,650 B. P186, 150 D. P286, 150

 

17. NANCY Products has no work-in-process or finished goods inventories at the close of  business on December 31, 2011. The balances of NANCY accounts as of December 31, 2011 are as follows: Cost of goods sold General selling and administrative expenses Sales Factory overhead control Factory overhead applied

P2,040,000 900,000 3,600,000 700,000 648,000

 NANCY income before income taxes 2011 is A. P660,000 . C. P712,000 B. P608,000 D. P1,508,000 18. A company had the following total usage of direct labor and direct materials

Direct Labor (P8 per hour) Direct Materials (Pl0 per pound)

Hours 400

Pounds 300

Incomplete job # 101 has used 20 hours of direct labor and 8 pounds of direct materials. Factory overhead is applied at the rate of 200% per direct labor peso. Wh What at is the balance in work in  process relating to job # 101 A. P560 debit C. P12,600 debit B. P560 credit D. P12,600 credit 19. The Childers Company manufactures widgets. During the th e fiscal year just ended, the company compan y incurred prime costs of P1,500,000 and conversion costs of P1,800,000. Overhead is applied at the rate of 200% of direct labor labo r cost. How much of the above costs represent material cost? A. P1,500,000 C. P900,000 B. P300,000 D. P600,000 20. Ajax Corporation transferred P72,000 of raw materials to its production depament in February and incurred P37,000 of conversion costs (P22,000 of direct labor and P15,000 of overhead). At the beginning of the period, P14,000 of inventor inventory y (material and conversion costs) was in process. At the end of the period, P18,000 of inventory was in process. What was the cost of goods manufactured? A. P105,000 C. P123,000 B. P109,000 D. P141,000

 

21. Luna Co.’s year -end -end manufacturing costs were as follows: Direct materials and direct labor Depreciation of manufacturing equipment Depreciation of factory building Janitor’s wages for cleaning factory premises p remises

P500,000 70,000 40,000 15,000

How much of these costs should be inventoried for external purposes? A. P625,000 C. P585,000 B. P610,000 D. P500,000 22. Blum Corp. which manufactures plastic coated co ated metal clips. The information was among Blum’s year -end -end manufacturing costs. Wages Machine operators Maintenance workers Factory foremen Materials Used Metal wire Lubricant for oiling machinery Plastic coating Blum’s year -end: -end: Direct labor A. 230,000 B. 200,000 C. 290,000 D. 320,000

P200,000 30,000 90,000 500,000 10,000 380,000

Direct Materials 890,000 880,000 510,000 500,000

23. Hamilton Company uses job order costing’ Factory overhead is applied to production at a determined rate of 150% of direct-labOr cost. Any over or underapplied factory overhead is closed to the cost of goods sold account at the end of each month. Additional information is available as follows:

  Job 101 was the only job inproceSs at January 31, 2011,With 2011 ,With accumulated costs as



follows: Direct materials Direct labor Applied factory overhead

       

 

 

P4,000 2,000 3,000 9,000

Jobs 102, 103 and 104 were started during February Direct materials requisitions for February totaled P26,000 Direct-labor cost of P20,000 was incurred for February Actual factory overhead was P32,000 for February

 

  The only job still in process at February 28, 2 8, 2011 was Job 104 104,, with costs of P2,800 for

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direct materials and P1,800 for direct labor The cost of goods manufactured for February 2011 was A. P77,700 C. P79,700 B. P78,000 D. P85,000 24. Using the same information in No. 23, any over or under-applied factory overhead should be closed to the cost of goods sold account at February 28, 2011, in the amount of A. P700 overapplied C. P1,700 underapplied B. P1,000 overapplied D. P2,000 underapplied 25. Under Pick Company’s Compan y’s job order costing system, manufactUring overhead is applied to work in process using a predetermined predete rmined annual overhead rate. During January 2011, Pick’s transactions included the following: Direct materials issued to production P90,000 Indirect materials issued to production 8,000 Manufacturing overhead incurred 125,000 Manufacturing overhead applied 113,000 Direct labor costs

107,000

Pick had neither beginning nor ending work in process inventory. What was the cost of jobs completed in January 2011? A. P302,000 C. P322,000 B. P310,000 D. P330,000 26. A company manufactures pipes and uses a job order costing system. During May, the following jobs were started (no other jobs were in process) and the following costs were incurred:

Materials requisitioned Direct labor

Job X 10,000

Job Y 20,000

Job Z 15,000

Total 45,000

5,000 15,000

4,000 24,000

2,500 17,500

11,500 56,500

In addition, estimated overhead of P300,000 and direct labor costs of P150,000 were estimated to  be incurred during the year. Actual overhead of P24,000 was inçurred in May; overhead is applied on the basis of direct labor pesos. p esos. If only Job X and JJob ob Z were completed during the month, the appropriate entry to record the initiation of all jobs would be A. Work in process P79,500 Direct materials P45,000 Direct labor 11,500 Applied factory 23,000 overhead

 

B. Work in process Direct materials Direct labor Factory overhead

P80,500

C. Work in process Direct materials Direct labor Applied factory overhead

P80,500

D. Direct labor Direct material

P11,500 45,000

P45,000 11,500 24,000

P45,000 11,500 24,000

Work in process

P56,500

27. The Papaya Company Compan y uses a job order cost system. The following data were obtained from the company’s cost records as of June 30. No jobs No  jobs were in process at the beginning of June, all costs listed being incurred during the month. Job Order No. 1001 1002 1003 1004 1005 1006

Direct Materials P4,320 9,150 11,275 3,225 6,500 2,750

Direct Labor Hours 1,300 3,700 8,200 1,500 3,200 980

Direct Labor Cost P1,600 7,250 14,325 2,800 6,100 1,650

Manufacturing overhead costs are charged to jobs on the basis of p1.50 per direct labor hour. The actual rnanufacturing overhead cost for the month totaled P30,350. During June, Job Order Nos. 1001, 1002, 1004 and 105 were completed. Jobs 1001l and 1002 were shipped out and the customers were billed P9,000 for Job 1001 and P20,000 for Job 1002. The cost of goods manufactured would be: A. P55,500 C. P56,495 B. P55,495 D. P57,500 28. Job No. 210 has, at the end of the second week in February, an accumulated total cost of P4,200. In the third week, p1,000 of direct materials were used on the th e Job, together with P10 of indirect materials. Twenty (20) hours of direct labor services were applied ap plied to the job at a cost of P5 per hour. Manufacturing overhead was applied at the basis of P2.50 per direct labor hour for fixed overhead and P2 per hour for variable overhead. Job No. 210 was the only job completed during the third week.

 

The total cost of Job Order No. 210 is: A. P5,390 C. P5,350 B. P5,360 D. P5,400 29. The workinPr0ss account of the MatamiS Company which uses a job order cost system follows: Work in Process April 1 Balance Direct Materials Direct labor Factory Overhead Applied

P25,000 50,000 40,000 30,000

Finished goods P125,450

Overhead is applied to production at a predetermined rate, based on direct labor cost. The work in process at April 30 represents the cost of Job No. 456, which has been be en charged with direct labor cost of p3,000 and Job No 789, which has been charged with applied overhead of P2,400. The cost of direct materials charged to Job No. 456 and Job No. 789 amounted to: A. P8,700 C. P4,500 B. P7,600 D. P4,200 30. The Narra Company uses a job order cost accounting system. Overhead is applied to  production at a predetermined rate based on direct labor cost. The following postings appear in the ledger accounts of the company for the month of September, 2011:

Work in process, Sept. 1 Direct materials Factory overhead Direct labor

Debit P30,000 60,000 40,000 50,000

On September 30, 2011, finished goods completed, from work in process cost P160,000. Job No. 327 was the only job not completed in September, and it has been charged P4,600 for factory overhead. Direct materials charged to Job No. 327 3 27 was: A. P10,350 C. P9,650 B. P 14,650 D. P25,000

 

Questions 31 and 32 are based on the following:

 Newport Company, a manufacturer of fiber optic communications equipment, uses a job-order costing system. Since the production process is heavily automated, manufacturing overhead is applied on the basis of machine hours using a predetermined overhead rate. The current annual rate of P15 per machine hour is based on budgeted manufacturing overhead costs of P1,200,000 and a budgeted activity level of 80,000 machine hours. Operations for year 2013 have been completed, and all of the accounting entries have been made for the year except the application of manufacturing overhead to the jobs worked on during December, the transfer of costs from Work in Process to Finished Goods for the jobs completed c ompleted in December, and the transfer of costs from Finished Goods to Cost of Goods Sold for the jobs that have been sold during December. Summarized data as of November 30, 2013 and for December 2013 are presented in the following table. Jobs Tu-007, Nu-013, and Nu-015 Nu-01 5 were completed during December. All completed jobs except Job Nu-013 have been turned over to customers by the close of business on December 31, 2013.

Job No. Tu-007  Nil 013  N 11-015 D12-002 D12-003 Total

Work in Process Balance Direct

December 2013 Activity Direct Machine

11/30/2013 P 87,000 55,000 -0-0-0P142,000

Labor P 4,500 12,000 26,700 20,000 16,800 P80,000

Operating Activity Actual manufacturing overhead: Indirect material Indirect labor

Utilities Depreciation Total Overhead Other Items: Raw material purchases * Direct-labor costs Machine hours

Material P 1,500 4,000 25,600 37,900 26,000 P95,000

Activity through 11/30/2013

Hours 300 1,000 1,400 2,500 800 P6,000  December 2013 Activity

P125,000 345,000

P9,000 30,000

245,000 385,000 P1,100,000

22,000 35,000 P96,000

P965,000 P845,000 73,000

P98,000 P80,000 6,000

Account Balances at Beginning of Year: 1/1/2013 Raw material inventory* P105,000 Work in process inventory 60,000 Finished goods inventory 125,000

 

* Raw material purchases and raw material inventory inven tory consist of both direct and indirect materials. The balance of the Raw Materials Inventory account as of December 31, 2013 is P85,000. 31. Determine the amount by which the overhead is overapplied or underapplied as of Dec. 31, 2013. A. P11,000 underapplied C. P6,000 underapplied B. P11,000 overapplied D. P6,000 overapplied 32. Determine Determine the balance in Newport Company’s Compan y’s Finished Goods Inventory account on Dec. 31, 2013. A. P86,000 C. P39,000 B. P31,000 D. P211,000 33. You find that the cost records at Sabath Tool and Die Company have been poorly maintained. Some information has been entered, but other information is missing. Fortunately, the information given is correct. The costs for Jobs 686, 687, and 688 are to be determined. The direct materials cost is P5,280 for Job 686 and P7,150 P 7,150 for Job 687. The cost of direct materials requisitioned during the month for all other jobs, except Job 688, is P48,200. No jobs were in process at the beginning of the month. The total cost of direct materials requisitioned during the month was P69,130. P 69,130. Labor is paid at a uniform rate of P100 an hour. Job 686 required 82 direct labor hours, and Job 688 required 43 direct labor hours. hou rs. A total of 760 direct labor hours were worked during the month. The direct labor cost of all other jobs, with the exception of the three jobs being considered, was P58,500.  Two machine hours are used for each e ach direct labor hour. Overhead is app applied lied at a rate of P40 per machine hour. The actual overhead cost for the month was P63,200. Jobs 686, 687, and 688 were completed during the month. How much is the cost of goods manufactured? A. P44,820 C. P63, 190 B. P48,710

D. P64,860

34. Kyoto Corporation, a Japanese manufacturer of television sets, provides the following data for 2013: Budgeted overhead cost Budgeted activity Actual overhead cost Overapplied overhead

Y20,000,000 20,000 machine hours Y21,500,000 Y500,000

 

Determine the amount of machine hours worked at Kyoto Corporation during 2013. A. 22,000 D. 20,500 B. 20,000 E. none of these C. 21,000 35. The Childers Company manufactures widgets. During the fiscal year just ended, the compa company ny incurred prime costs of P1,500,000 and conversion costs of P1,800,000. Overhead is applied at the rate of 200% of direct labor labo r cost. How much of the above costs represent material cost? A. P1,500,000 C. P900,000 B. P300,000 D. P600,000