2nd Flr, GF Partners Bldg, 139 H.V. dela Costa, Salcedo Village, Makati City

3rd Flr. EPCIB Bldg. 2070 Claro M. Recto, Manila

Practical Accounting 2 Prof. Jennifer Tolentino

QUIZZER IN COST ACCOUNTING
Job Order Costing
The work in process account of the Malinta Company which uses a job order cost system follows: Work in Process
April 1 Bal 25,000
Direct materials 50,000
Direct Labor 40,000
FO applied 30,000 / Finished Goods 125,450
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 charged with direct labor cost of P3,000 and Job No 789, which has been charged with applied overhead of P2,400.
1. / The cost of direct materials charged to Job No. 456 and 789 amounted:
a. P8,700 / c. P4,500
b. P7,600 / d. P4,200
2. / The prime cost during the month amounted to;
a. P70,000 / c. P120,000
b. P90,000 / d. P145,000
The following cost data pertain to Matatag Company for March 2000
March 1 / March 31
Materials / P40,000 / P50,000
Work in Process / 25,000 / 35,000
Finished Goods / 60,000 / 70,000
March 1-31
Direct Labor Cost / P120,000
Factory Overhead applied / 108,000
Cost of good sold / 378,000
3. / The cost of goods manufactured during March was;
a. P378,000 / c. P398,000
b. P388,000 / d. P425,000
4. / The amount of materials purchased for the month was:
a. P50,000 / c. P180,000
b. P170,000 / d. P220,000
Hamilton Company uses a job order costing. Factory overhead is applied to production at a budgeted rate of 150% of direct labor costs. Any overapplied or underapplied factory overhead is closed to the cost of good sold account at the end of the month. Additional information is available as follows:
Direct Materials / P4,000
Direct Labor / 2,000
Factory overhead applied / 3,000
P9,000
Jobs 102,103 and 104 were started during February. Direct materials requisitions for February totaled P26,000. Direct labor costs of P20,000 were incurred for February. Actual factory overhead was P32,000 for February. The only job still in process at he end of February was Job No 104, with costs of P2,800 for direct materials and P1,800 for direct labor
5. / The cost of goods manufactured for February was :
a. P77,700 / c. P79,700
b. P78,000 / d. P85,000
During March , Marc Company incurred the following costs on Job 209 for the manufacture of 200 motors:
Original cost accumulation:
Direct materials / P660
Direct Labor / 800
Factory overhead (150% of DLC) / 1,200
P2,660
Direct costs of reworking 10 units:
Direct materials / P100
Direct Labor / 160
P260
Method A – The rework cost were attributable to the exacting specifications of Job 209, and the full rework costs were charged to this specific job.
Method B – The defective units fall within the normal range and the rework is not related to a specific job, or the rework is common to all the jobs.
6. / The cost per finished unit of Job 209 using method A is:
a. P15.60 / c. P15.80
b. P13.30 / d. P13.50
7. / The cost per finished unit of Job 209 using method B is:
a. P13.30 / c. P15.80
b. P15.80 / d. P13.60
Rumors Company applies factory overhead as follows:
Factory Overhead Rate
Fabricating Department / P7.75 per machine hour
Spreading Department / 15.10 per machine hour
Gossiping Department / 2.125 per machine hour
Actual machine hours are: 19,000 hours for fabricating; 27,500 hours for spreading and 5,500 hours for gossiping
8. / If the actual factory overhead cost for the period is P574,375, how much is over(under) applied factory overhead?
a. (P11,875.00) / c. (P187.50)
b. (P23,562.50) / d. (P76,125.00)
DMF Manufacturing Company uses a job order costing system and a predetermined overhead rate based on machine hours. At the beginning of the year, the company estimated manufacturing overhead for the year would be P120,000 and the machine hours used would be 8,000.
The following information pertain to June of the current year:
Job A / Job B / Job C
Work in process, June 1 / P8,000 / P13,000 / P19,000
Materials requisitioned / 2,000 / 2,400 / 3,600
Direct labor costs / 1,200 / 1,800 / 2,000
Machine hours / 400 / 700 / 900
Actual manufacturing costs incurred were P29,000. At the end of June, Job B was sold at 60% above cost.
9. / The total costs associated to Job A is
a. P35,200 / c. P11,200
b. P17,200 / d. P40,200
10. / The billing price for Job B is
a. P44,320 / c. P31,580
b. P94,720 / d. P46,200
The following information was taken from the records of the Uganda Corporation for the month of June 2002. (There were no inventories of work in process or finished goods on June 1)
Units / Costs
Sales during the month / 8,000 / P?
Manufacturing costs for month:
Direct Materials / P32,000
Direct Labor / 20,000
Overhead costs applied / 15,000
Overhead costs underapplied / 800
Inventories, June 30:
Work in process / 1,000 / P?
Finished goods / 2,000 / ?
Indirect manufacturing costs are applied on a direct labor costs basis. The underapplied balance is due to seasonal variations and will be carried forward. The following cost estimates have been submitted for the work in process inventory of June 30; materials P3,000; direct labor P2,000; overhead P1,500.
11. / The no of units that were completed and transferred to finished goods during the month was
a. P8,000 / c. P10,000
b. P6,000 / d. P11,000
12. / The actual overhead for the month is
a. P15,000 / c. P14,200
b. P15,800 / d. answer not given
13. / The manufacturing cost per unit is
a. P6.05 / c. P11.09
b. P8.375 / d. P4.84
Hull Machine Shop is a manufacturer of aircraft parts. Five aircraft parts out of job lot of 50 aircraft parts are spoiled. Costs assigned prior to the inspection point are P2,000 per part. The current disposal price of the spoiled parts is estimated to be P600 per part
14. / If the spoilage is normal and attributable to a specific job, the unit cost of the good units is
a. P2,000 / c. P600
b. P2,155 / d. P1,400
15. / If the spoilage is normal common to all jobs, the unit cost of the good units is
a. P2,000 / c. P600
b. P2,155 / d. P1,400
16. / If the spoilage is abnormal, the amount chargeable to Loss from spoilage account is
a. P3,000 / c. P7,000
b. P10,000 / d. P0
17 / Consider Hull Machine Shop above, if the 5 aircraft pars are defective, normal and attributable to specific job and it requires the following cost to rework the units: Materials of P800, Labor of P2,000 and Overhead of P1,000. The entry to record the cost of rework is:
a. / Manufacturing Overhead Control / 3,800
Materials / 800
Wages Payable / 2,000
Manufacturing Overhead Applied / 1,000
b. / Loss from rework / 3,800
Materials / 800
Wages Payable / 2,000
Manufacturing Overhead Applied / 1,000
c. / Work in Process / 3,800
Materials / 800
Wages payable / 2,000
Manufacturing Overhead applied / 1,000
d. / Work in Process / 3,800
Materials / 800
Wages payable / 2,000
Manufacturing Overhead Control / 1,000
18. / Consider data in No 14, except that the rework is normal and common to all jobs, the entry to record the cost of reworked is:
a. / Manufacturing Overhead Control / 3,800
Materials / 800
Wages Payable / 2,000
Manufacturing Overhead Applied / 1,000
b. / Loss from rework / 3,800
Materials / 800
Wages Payable / 2,000
Manufacturing Overhead Applied / 1,000
c. / Work in Process / 3,800
Materials / 800
Wages payable / 2,000
Manufacturing Overhead applied / 1,000
d. / Work in Process / 3,800
Materials / 800
Wages payable / 2,000
Manufacturing Overhead Control / 1,000
Fred Company employs a job order costing system. Only three jobs, #105, #106, and #107 were worked during November and December 2001. Job#105 was completed December 10; the other two jobs were still in production on December 31, the end of the company’s operating year. Job cost sheets on the three job follows:
#105 / #106 / #107
November costs:
Direct Materials / P16,500 / P9,300 / -
Direct Labor / 13,000 / 7,000 / -
Factory Overhead / 20,800 / 11,200 / -
December costs;
Direct Materials / P - / P8,200 / P21,300
Direct Labor / 4,000 / 6,000 / 10,000
Factory Overhead / ? / ? / ?
The following additional information is available:
Manufacturing overhead is assigned to jobs on the basis of direct labor cost
Indirect materials used during December totaled P4,000
Indirect labor cost for December totaled P8,000
Various manufacturing overhead incurred during December was P19,000
Balances in the inventory accounts at November 30 were as follows:
Raw Materials / P40,000
Work in Process / ?
Finished Goods / 85,000
19. / The predetermined overhead rate used to assigned overhead costs to jobs is
a. 60% of DL cost / c. 160% of DL cost
b. 62.50% of DL cost / d. 60% of DM cost
20. / The total overhead costs applied during December is
a. P12,500 / c. P32,000
b. P12,000 / d. P31,000
21. / The entry to record overhead charged to production is
a. / Work in process / 31,000
Manufacturing Overhead Control / 31,000
b. / Work in process / 31,000
Materials / 4,000
Wages Payable / 8,000
Various Account / 19,000
c. / Work in Process / 32,000
Manufacturing Overhead Control / 32,000
d. / Work in Process / 32,000
Manufacturing Overhead Control / 32,000
22. / The cost of goods manufactured for the period is
a. P56,700 / c. P58,300
b. P54,300 / d. P55,000
23. / The balance of the work in process on December 31 is
a. P27,500 / c. P32,000
b. P23,800 / d. P73,000
24. / The total amount debited to work in process account for December is
a. P81,500 / c. P61,500
b. P49,500 / d. P80,500
25. / The overhead resulted to a variance of
a. P3,000 underapplied / c. P19,000 underapplied
b. P3,000 overapplied / d. P19,000 overapplied
PROCESS COSTING
Weighted Average Costing
The following data for te month of September were taken from the cost records of Department A of NLP which uses average costing:
Opening inventory of work in process
Units –(all materials and 50% converted) / 500
Costs – Materials / P2,400
Labor / 1,,500
Factory Overhead / 760
Put into Production:
Units / 5,000
Costs – Materials / P25,100
Labor / 19,380
Factory Overhead / 14,900
Completed and transferred / 4,800 units
Ending inventory of work in process
Units –(all materials and 60% converted) / 700
1. / The equivalent unit of production for labor is
a. 7,200 / c. 4,970
b. 5,220 / d. none of the given
2. / The unit cost of material for the month is
a. P5.00 / c. P4.00
b. P5.50 / d. none of the given
Cost and statistics for Dept B of a company manufacturing a single product in three department follow:
Work in Process, October 1
Cost in Dept A / P11,380
Cost in Dept B
Costs – Materials / None
Labor / P 500
Factory Overhead / 50
Cost added in Dept B in October
Costs – Materials / None
Labor / P13, 000
Factory Overhead / 450
Units in Process, October 1(60% converted) / 500
Units received from Dept A at P2.60/unit / 6,700
Units completed and transferred / 6,800
Units in Process, October 31 (50% converted) / 400
The company uses average costing method
3. / The equivalent production for labor was
a. 7,200 / c. 6,800
b. 7,000 / d. none of the given
4. / The conversion costs per unit in Dept B was
a. P2.00 / c. P5.00
b. P6.00 / d. none of the given
Materials are added at the start of the process in Cedar Company’s department, the first stage of the production cycle. The following information is available for the month of July:
Work in Process, July 1 (60% converted) / 60,000 units
Started in July / 150,000
Transferred to next department / 110,000
Lost in Production / 30,000
Work in Process, July 31 (50% converted) / 70,000
Under Cedar Company’s cost accounting system, the costs incurred on the lost units are absorbed by the remaining good units
5. / Using the weighted average method, what are the equivalent units for the materials?
a. 120,000 / c. 180,000
b. 145,000 / d. 210,000
SSS Corporation’s production cycle starts in the Mixing Department. The following information is available for the month of April:
Work in Process, April 1 (50% converted) / 40,000 units
Started in April / 240,000
Work in Process, April 30 (60% converted) / 25,000
Materials are added in the beginning of the process.
6. / Using the weighted average method , what are the equivalent units of production for the month of April?
Materials / Conversion
a. 240,000 / 250,000
b. 255,000 / 255,000
c. 270,000 / 270,000
d. 280,000 / 270,000
Roy Company manufactures product X in two stage production cycle in Dept A and B. Materials are added at the beginning of the process in Dept B. Roy uses the weighted average method. Conversion costs for Dept B were 50% complete as to the 6,000 units in the beginning WIP and 75% complete as to the 8,000 units in the ending WIP. 12,000 units were completed and transferred out . An analysis of the costs relating to work in process and production activity in Dept B for February is as follows:
Trans in / Materials / Conversion
WIP, February 1 / P12,000 / P2,500 / P1,000
February cost added / 29,000 / 5,500 / 5,000
7. / The total cost per equivalent unit transferred out for February of Product X (rounded to the nearest centavo)
a. P2.75 / c. P2.82
b. P2.78 / d. P2.85
The Wiring Dept is the second stage of Fern Company’s production cycle. On May 1, the beginning work in process contained 25,000 units which were 60% complete as to conversion costs. During May, 100,000 units were transferred in from stage one of Fern’s production cycle. On May 31, the ending work in process contained 20,000 units which were 80% complete as to conversion costs. Material costs are added at the end of the process.
8. / Using the weighted average method, equivalent units were:
Trans in / Materials / Conversion
a. / 100,000 / 125,000 / 100,000
b. / 125,000 / 105,000 / 105,000
c. / 125,000 / 105,000 / 121,000
d. / 125,000 / 125,000 / 121,000
Lucas Co adds materials in the beginning of the process in the Forming Dept., which is the first of two stages of its production cycle. Information concerning the materials used in the Forming Dept in October are as follows:
Units / Costs
Work in Process, October 1 / 6,000 / P3,000
Units started in October / 50,000 / 25,560
Units completed and transferred out / 44,000 / ?
9. / Using the weighted average method, what was the material cost of work in process at October 31?
a. P3,000 / c. P6,000
b. P5,520 / d. P6,120
Information concerning Dept B of the Dovinlen Co is as follows:
Units / Costs
Beginning work in process / 5,000 / P6,300
Units transferred in / 35,000 / 58,000
Units completed / 37,000
Costs
Trans in / Materials / Conversion
Beginning WIP / P2,900 / P-0- / P3,400
Units transferred in / 17,500 / 25,500 / 15,000
Conversion costs were 20% complete as to beginning work in process and 40% complete as to the ending work in process. All materials are added at the end of the process. Toby uses average method.
10. / The cost per equivalent unit for conversion costs is
a. P0.44 / c. P0.48
b. P0.46 / d. P0.50
11. / The portion of the total cost of ending WIP attributable to the transferred in costs
a. P-0- / c. P1,530
b. P1,500 / d. P1,650

FIFO Costing