PROBLEMS

1. Maganda 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:

Job X Job Y Job Z Total

Materials P10,000 P20,000 P15,000 P45,000
Direct Labor 5,000 4,000 2,500 11,500
P15,500 P24,000 P17,500 P56,500

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 incurred in May; overhead is applied on the
basis of direct labor costs. If only Job X and Job Z were completed during the month, the journal entry to
record the initiation of all jobs would be:

a. Work-in-process P79,500
Material P45,000
Wages payable 11,500
Applied factory overhead 23,000

b. Work-in-process P80,500
Direct materials P45,000
Direct labor 11,500
Factory overhead 24,000

c. Work-in-process P80,500
Direct materials P45,000
Direct labor 11,500
Applied factory overhead 24,000

d. Direct labor P11,500

Direct materials 45,000
Work-in-process P56,500
2. Malakas Company is a manufacturing concern using the perpetual inventory system. The following
materials inventory account data is provided:

Beginning Balance
P275,000
Other debits to the account
825,000
Excess of ending inventory over
beginning inventory
55,000

How much is the cost of materials issued to production?

a. P770,000
b. P1,045,000
c. P1,100,000
d. P1,155,000

3. The books of Chico Manufacturing Co. showed the following data for the month of October 2016:

Opening and closing inventories

Oct. 1 Oct.
31
Raw materials P16,000
P17,200
Work-in-Process 16,000
24,000
Finished Goods 28,000
36,000

Direct labor cost, P32,000

Factory overhead, 75% of direct labor cost.
Cost of goods sold, P112,500

What is the cost of materials purchased during the month?

a. P87,200
b. P73,200
c. P72,000
d. P71,200
4. Durian Company has the following data on April 30, 2016:

April manufacturing overhead P30,101.80

Decrease in ending inventories:
Materials 2,430.00
Goods in Process 590.00

Increase in ending inventory:

Finished Goods 1,320.40

The manufacturing overhead amounts to 50% of the direct labor, and the district labor and
manufacturing combined equal 50% of the total cost of manufacturing. All materials are purchased
F.O.B. shipping point.

What is the cost of goods manufactured?

a. P180,610.80
b. P181,200.80
c. P182,300.00
d. P183,200.80

5. Mangga, Inc. employs a job order cost system. Its manufacturing activities in July, 2016, its first moth
of operation, are summarized as follows:

JOB NUMBERS
201 202 203 204
Direct materials P7,000 P5,800 P11,600 P5,000
Direct labor cost P6,600 P6,000 P 8,400 P2,400
Direct labor hours 1,100 1,000 1,400 400
Units produced 200 100 1,000 300

Manufacturing overhead is applied at a rate of P2 per direct labor hour to variable overhead,P3 per hour
for fixed overhead.

Jobs 201,202 and 203 were completed in July.

What is the cost of the completed jobs?

a. P62,900
b. P62,500
c. P72,900
d. P65,900
6. The Atis Corporation manufactures one product and accounts for cost by a job order cost system. You
have obtained the following information for the year ended December 31, 2016 from the corporation’s
books and records:

Total manufacturing cost added during 2016

based on actual direct materials, actual
direct labor and applied factory overhead
on actual direct labor cost
P1,000,000

Cost of goods manufactured based on actual

direct materials and direct labor and
applied factory overhead
970,000

Applied factory overhead to work in process

based on direct labor cost
75%

Applied factory overhead for the year, based

On total manufacturing cost
27%

Beginning work in process inventory was 80% of ending work in process inventory.

What is the cost of direct materials used for year ended December 31, 2016?

a. P370,000
b. P970,000
c. P990,000
d. P970,500

7. The Papaya Company uses a job order cost system. The following data were obtained from the
company’s cost records as of June 30. No jobs were in process at the beginning of June, all costs listed
being incurred during the month.

Job Order No. Direct Materials Direct Labor Hours Direct Labor Cost
1001 P4,320 1, 300 P1,600
1002 9,150 3,700 7,250
1003 11,275 8,200 14,325
1004 3,225 1,500 2,800
1005 6,500 3,200 6,100
 1006 2,750 980 1,650

Manufacturing overhead costs are charged to jobs on the basis of P1.50 per district labor hour. The
actual manufacturing overhead cost for the month totaled P30,350. During June, Job Order Nos. 1001,
1002, 1004 and 1005 were completed. Jobs 1001 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
b. P55,495
c. P56,495
d. P57,500

8. The Apple Manufacturing Company manufactures a product exclusively to customer order, employing
a job cost system.

On August 1, 2016, its work in process inventory(5 partially completed jobs) had a cost of P3,000.

During August, no additional orders were put into production and 18 orders were completed(total cost,
P24,000) of which 14(cost P20,000) were shipped.

Material requisition in August totaled P17,000 and direct labor cost were P8,000. At the beginning of the
year 2016, a predetermined overhead rate of 150% of expected direct labor cost was established.

The Agusut 31, 2016 work in process inventory is

a. P4,00
b. P14,000
c. P16,000
d. P20,000

9. Job No. 210 has, at the end of the 2 nd week of February, an accumulated total cost of P4,200. In the
third week, P1,000 of direct materials were used on the Job, together with P10 of indirect materials.

Twenty (20) hours of direct labor services were shipped 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
b. P5,360
c. P5,350
d. P5,400

10.Peanuts Corporation uses a job order cost system and has two production departments, M and A.
budgeted ,manufacturing costs for 2016 are as follows:

Department M Department
A
Direct materials P700,000
P100,000
Direct labor 200,000
800,000
Manufacturing Overhead 600,000
400,000

The actual material and labor costs charged to Job No. 432 during 2016 were as follows:

Direct material
P25,000
Direct labor:
Department M P 8,000
Department A 12,000
20,000

Peanuts Corporation Applies manufacturing overhead to production orders on the basis of direct-labor
cost using departmental rates predetermined at the beginning of the year based on the annual budget.
The total manufacturing cost associated with Job No. 432 for 2016 should be:

a. P50,000
b. P55,000
c. P65,000
d. P75,000

11. Banana Corporation has a job order cost system. The following debits(credits) appeared in the ledger
account work in process for the month of March, 2016:

March 1, balance
P12,000
31, direct materials
40,000
31, direct labor
 30,000
31, factory overhead
27,000
31, to finished goods
(100,000)

Banana applied overhead to production at a predetermined rate at 90% based on the direct labor cost.
Job No. 232,the only job still in process at the end of March, 2016 has been charged with factory
overhead of P2,250. What was the amount of direct materials charged to Job No. 232?

a. P2,2250
b. P2,500
c. P4,250
d. P9,000

12. The work in process account of the Matamis Company which uses a job order cost system follows:

Work In Process
April 1 Balance Finished Goods
P25,000 P125,450
Direct Materials
50,000
Direct Labor
40,000
Fac.Overhead Applied
30,000

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.

The cost of direct materials charged to Job No. 456 and Job No. 789 amounted to:

a. P8,700
b. P7,600
c. P4,500
d. P4,200

13. The following data were taken from the records of Sampaloc Company:

08/31/2016
09/30/2016
Inventories:
Raw Materials P ?
P50,000
 Work in Process 80,000
95,000
Finished goods 60,000
78,000

Raw materials purchases, P46,000

Factory overhead,75% of direct labor cost, P63,000
Selling and administrative expenses, 12.5% of sales, P25,000
Net income for September, 2013, P25,000.

What is the cost of raw materials inventory on August 31, 2016?

a. P30,000
b. P40,000
c. P46,000
d. P50,000

14. Macopa Corporation manufactures rattan furniture sets for export and uses the job 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, 2016.

-The work in process inventory on January 1 was 20% less than the work in process inventory on
December 31.

-The total manufacturing costs added during 2016 was P900,000 based on actual direct materials and
direct labor but with manufacturing overhead applied on actual direct labor pesos.

-The manufacturing overhead applied to process was 72% of the direct laborpesos,and it was equal 25
of the total manufacturing costs.

-The cost of goods manufactured,also based on actual direct materials, actual direct labor and applied
manufacturing overhead, was P850,000.

The cost of direct materials used and the work in process inventory on December 31, 2016 are:

Direct materials used WIP Inventory, 12/31/2016

a. P1,075,000 P200,000
b. P362,500 P250,000
c. P312,500 P250,000
d. P1,100,000 P275,000

15. 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, 2016:
 Debit
Work in process, Sept. 1
P30,000
Direct materials
60,000
Factory overhead
40,000
Direct labor
50,000

On September 30, 2016, 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 was:

a. P10,350
b. P14,650
c. P 9,650
d. P25,000
16. Pears Factory uses a job oreder cost system. Per company records,the total charges to work in
process in March 2016 were as follows:

Direct materials
P125,000
Direct labor
122,000
Overhead- 75% of direct labor cost.

No jobs were in process at the beginning of the month. During the month, work in process in the
amount of P310,500 was charged to finished goods. On March 31, 2016, the only job order remaining
was Job No. 100 with a direct labor cost of P10,000.

The cost of direct materials charged to Job No. 100 was:

a. P20,500
b. P14,875
c. P10,500
d. P15,000

17. The factory ledger of the Molave Manufacturing Co. contains the following account:

Goals in Process
Materials Finished Goods
P40,000 120,000
Labor
100,000
Overhead
80,000

The amount of materials charged to the uncompleted job was P28,000

The amounts of labor and overhead charges for the uncompleted job are:

Labor Overhead
a. P40,000 P32,000
b. P32,000 P40,000
c. P72,000 P40,000
d. P40,000 P72,000

18. Santol Company has the following inventories:

April 1 April
 30
Direct Materials P36,000
P45,000
Work in process 18,000
26,000
Finished goods 54,000
72,000

The following information were available for April, 2016.

Direct labor
P60,000
Direct labor rate per hour
P7.50
Overhead rate per direct labor hour
10.00
Cost of goods manufactured
153,650

What is the prime cost during April, 2016?

a. P81,650
b. P80,000
c. P90,000
d. P96,000

19. Kasoy Company has underapplied overhead of P45,000 for the year ended December 31, 2016.
Before disposition of the underapplied overhead, selected December 31, 2016 balances from Worley’s
accounting records are as follows:
Sales
P1,200,000
Cost of goods sold
720,000
Inventories:
Direct materials
36,000
Work in process
54,000
Finished goods
90,000

Under Worley’s cost accounting system, over or underapplied overhead is allocated to approporiate
inventories and cost of goods sold based on year end balances. In his 2016 statement of comprehensive
income, Kasoy should report cost of goods sold of:

a. P682,000
b. P684,000
c. P756,000
d. P757,500

20. Orange Company uses a job order cost system and applies factory overhead to production orders on
the basis of direct labor cost. The overhead rates for 2016 are 200% for Department A and 50% for
Department B. Job 123, started and completed during 2016, was charged with the following costs:

Department A
Department B
Direct materials P25,000 P5,000
Direct labor ?
30,000
Factory overhead
40,000 ?

The total manufacturing cost associated with Job 123 should be:
a. P135,000
b. P180,000
c. P195,000
d. P240,000
21. Sampaguita Company uses a job order cost system. The following debits(credit) appeared in
Sampaguita’s wor in process account for the month of April,2016:

April Description
Amount
1 Balance P
4,000
30 Direct Materials P
24,000
30 Direct labor
16,000
30 Factory overhead
12,800
30 To finished goods
(48,000)

Sampaguita applies overhead to production at a predetermined rate of 80% of direct labor cost. Job No.
5, the only job still in process on April 30, 2016. Has been charged with direct labor of P2,000. What was
the amount of direct materials charged to Job No. 5?

a. P3,000
b. P5,200
c. P8,800
d. P24,000
22. Narra Marketing Corp. uses job order cost system. It has three production deparments X, Y and Z.
The manufacturing budget cost for 2016 is as follows:

Dept. X Dept. Y Dept. Z

Direct Materials P 600,000.00 P 400,000.00 P 200,000.00
Direct Labor 200,000.00 1,500,000.00 1,500,000.00
Mfg. Overhead 600,000.00 100,000.00 200,000.00

For Job No. 01-90 completed in 2016, direct material cost was P 75,000.00; direct labor, Dept X, P
40,000.00, Dept. Y, P 100,000.00, Dept. Z, P 20,000.00. The corporation applies manufacturing overhead
overhead to each job on the basis of direct labor cost using department rates predetermined at the
beginning of the year based on the manufacturing budget cost.

The total manufacturing cost of Job No. 01-90 is:

a. P235,000
b. P310,000
c. P280,000
d. P150,000
23. Acacia Crafts manufactures to customer order during the job order cost system. For the month just
ended, it registered the following data:

Beginning work in process(5 partially

completed jobs)
P300,000
Orders completed (18)
2,400,000
Orders shipped (14)
2,000,000
Materials requisitioned for the month
1,700,000
Direct labor cost
800,000
Overhead rate 150 of direct labor
cost

The ending work in process inventory was:

a. P1,600,000
b. P1,400,000
c. P 300,000
d.P 700,000

24. The accounting records for 2016 of Yamaha Music Co. showed the following:

Increase in raw materials inventory P

45,000
Decrease in finished goods inventory
150,000
Raw materials purchased
1,290,000
Direct labor payroll
600,000
Factory overhead
900,000
Freight-out
135,000

The cost of raw materials used for the period amounted to:

a. P 1,245,000
b. P 1,290,000
c. P1,335.000
d. P1,380,000

25. The following information relates to Job No. 2468, which is being carried out by Matibay Company
tome customer’s order.

Department A
Department B
Direct materials consumed P5,000 P3,000
Direct labor hours employed 400 200
Direct labor per hour P4.00 P5.00
Production overhead per direct labor hours P4.00 P4.00
Administrative and other overhead 20% of full production cost
Profit mark up 25% of selling price

What is the selling price to the customer for Job 2468?

a. P 16,250 c. P17,333
b. P 20,800 d. P 19,810
26. The Handycam Corp. manufactures specialized precision tools for the electronics industry. It receives
various job orders. For the month of April, it started work on two orders, East and West. The total
materials cost for both orders were estimated at P 80,000 of which 60% applies to East and 40%, to
West. Direct labor hours were estimated at 700 for East and 400 for West. The labor rate amountedto
P18 per hour. Variable overhead varies at the rate of P10 per hour.

By the end of April, 75% of the required materials were issued to production amounting to P90,000.
Also, the two orders were all 50% completed with respect to labor and overhead. Labor hours for the
month were charged at 360 to East and 180 to West. Variable overhead equated to the hourly rate
given.

The total actual cost for East order for the month of April is:
a. P 64,080
b. P 45,800
c. P 52,350
d. P 67,600