MULTIPLE CHOICE

Arko Manufacturing Co. purchased 10,500 lbs. of materials XY at P2 per lb. and
incurred freight cost of P1,050. A cash discount of 2% is granted on payments within
ten days. Freight in is treated as additional cost of materials purchased. What unit cost
must be entered on the stock card for material XY assuming that the allowance
method is used in accounting for discounts?
P2.06
P1.96
P2.00
P2.058

Each of the five (5) workers in a factory is being paid P250 per day. For every unit
produced in excess of 25 units in one day, a worker is paid P12. Fixed factory
overhead per annum is P198,000 and there are approximately 330 working days in
one year. Production data for Januar 6 and 7, 20C show the following number of units
produced by each worker: January 6 = Abdon - 25, Belleza - 27, Cortes - 24, Drillon -
24, Emilio - 28; January 7 = Abdon - 26, Belleza - 26, Cortes - 28, Drillon - 27, Emilio -
26. What is the average direct labor cost per unit for the two-day period?
P10.00
P10.18
P10.10
Not given.

If the average costing method was used in the question above, how much must be the
debit (credit) to inventory adjustment based on the returns to suppliers on April 19?
P(13)
P13
P11
None of these.

x`
P7,338 and P6,829
P1,834 and P1,707
P9,172 and P8,536
Not given.
Both of the purchase requisition and purchase order are orders to suppliers to deliver
items enumerated therein while a stores requisition is an order to issue items from the
storeroom at the specified date.
True
False

As of September 1, 20C, there are two jobs in process with accumulated prime costs
as follows: Job 71: No. of units - 6,000, Direct materials - P5,000, Direct labor -
P2,000. Job 72: No. of units - 5,000, Direct materials - P4,000, Direct labor - P1,800.
Job 72 is special in nature because of its strict specifications. Factory overhead is
charged at P.40 per unit and includes a P.03 provision for defective work. The prime
costs incurred in September are as follows: Job 71: Direct materials - P3,000, Direct
labor - 2,000; Job 72: Direct materials - P5,000, Direct labor 3,000; Job 75: No. of
units - 3,000, Direct materials - P4,500, Direct labor - 2,000; Job 76: No of units -
2,000, Direct materials - P2,500, Direct labor - 1,500. Some units are found to have
imperfections and the corresponding prime costs incurred in reprocessing are as
follows: No. of units found with imperfections: Job 71 - 50, Job 72 - 80, Job 75 - 40.
Prime costs in reprocessing: Direct materials = Job 71 - P500, Job 72 - P1,500, Job
75 - P300; Direct labor= Job 71 - 200, Job 72 - 800, Job 75 - 100. Jobs 71, 72 and 75
were completed. The units cost in each completed job must be:
Job 71- P2.49, Job 72 - P3.60, Job 75 - P2.57
Job 71- P2.37, Job 72 - P3.13, Job 75 - P2.54
Job 71- P2.40, Job 72 - P3.60, Job 75 - P2.57
Answer not given.

It is concerned with the determination of how much to pay employee and the keeping
of the earnings records.
TIME AND MOTION STUDY
FINANCIAL ACCOUNTING PHASE IN LABOR COST CONTROL
TIMEKEEPING
COST CONTROL PHASE IN LABOR COST CONTROL
CLOCK CARD
TIME TICKET
DAILY TIME REPORT
PAYROLL SHEET
EARNINGS RECORD
PAYROLL CHECK
INCENTIVE SYSTEM

The inventory account of Vanda Manufacturing Co. includes raw materials and work in
process and is on a perpetual inventory basis using the FIFO costing method. There is
no finished goods inventory. The opening inventory of P30,500 includes obsolete
materials recorded at P250. The following are debits to certain accounts in March,
20C: Purchases - P49,400, Direct labor - P24,100, Factory overhead control -
P50,400, Cost of goods sold - P137,200. Factory overhead rate is 200% of direct labor
cost. The given cost of goods sold includes direct labor cost of P13,800. The obsolete
materials (in the beginning inventory) of P250 was charged to cost of goods sold upon
removal thereof from the inventory account. Factory overhead has been charged for
an excessive scrap loss of P1,600 identified with a special order (that was started on
and completed during the month). Normal scrap loss on regular product lines is
considered negligible. Based on the information given, how much must be the
overabsorbed (underabsorbed) factory overhead as of March 31?
P600
P (600)
P(2,200)
Answer not given.

Different tasks are observed and analyzed to eliminate unnecessary motions and set
the standard time for the performance of each task.
TIME AND MOTION STUDY
FINANCIAL ACCOUNTING PHASE IN LABOR COST CONTROL
TIMEKEEPING
COST CONTROL PHASE IN LABOR COST CONTROL
CLOCK CARD
TIME TICKET
DAILY TIME REPORT
PAYROLL SHEET
EARNINGS RECORD
PAYROLL CHECK
INCENTIVE SYSTEM

GondolaB Company's Job No. 205 (for the manufacture of 6,600 coats) was
completed August, 20M at the following unit costs: Direct materials - P1,500, Direct
labor - 1,000, Factory overhead (including allowance of P50 for spoiled work) - 500.
Total = P3,000. Final inspection of Job No. 205 disclosed 600 spoiled costs. These
were subsequently sold to a jobber for P600,000. Assuming that spoilage loss is
chargeable to the particular job, the unit cost of the good coats produced per Job No.
205 must be:
P3,145
P2,950
P3,000
P3,150
The following data are given for the period August 12 to 18, 20C: Total Hours: Pete
Tuazon - 48, Jose Carlos - 46, Mario Farela - 50, Ben Gomez - 53, Lucio Lim - 53,
Gem Tinio - 51; Regular: Tuazon - 48, Carlos - 43, Farela - 48, Gomez - 46, Lim - 45,
Tinio - 45; OT: Carlos - 3, Farela - 2, Gomez - 7, Lim - 8, Tinio - 6. Jobs Worked On:
21: Carlos - 12, Farela -15, Gomez - 16, Lim - 17, Tinio - 10; 22: Carlos - 20, Farela
-25, Gomez - 30, Lim - 15, Tinio - 18; 23: Carlos - 9, Farela - 9, Gomez - 5, Lim - 20,
Tinio - 17. Others: Gomez - Delivery=4, Tinio - Repairs=5. Pete Tuazon is the foreman
with hourly rate of P30. All the workers under him receive P25 per hour. Overtime
work was rendered on working days on Job 23, based on a rush order. Accordingly,
overtime premium is 25%. How much must the total charge to direct labor for the
week?
P6,112.50
P5,300
P5,950
Not given.

It shows the number of hours worker has devoted to a job during a day.
TIME AND MOTION STUDY
FINANCIAL ACCOUNTING PHASE IN LABOR COST CONTROL
TIMEKEEPING
COST CONTRIL PHASE IN LABOR COST CONTROL
CLOCK CARD
TIME TICKET
DAILY TIME REPORT
PAYROLL SHEET
EARNINGS RECORD
PAYROLL CHECK
INCENTIVE SYSTEM

You are given the following statements for evaluation: * Labor cost is both a prime
cost and a conversion cost. * The effective cost of labor may be much higher than the
basic hourly rate because of additional indirect compensation to workers. * Payroll
payments may be delayed only for one day.
All the statements are true.
All the statements are false.
The third statement is false.
Only the first statement is true.

Returns to suppliers and returns to storeroom are entered as negative in the stock
cards under "received" and "issued" sections, respectively.
True
False
When imperfections are inherent or are expected to occur in standard jobs being
processed because of the nature of the product itself or of the manufacturing process
involved, reprocessing cost (in the case of defective work) or loss from spoilage (in the
case of spoilage goods) is charged to factory overhead.
True
False

When an item of cost is to be charged to all jobs being processed, it is treated as part
of factory overhead.
True
False

When balances per materials ledger cards do not tally with the balance per general
ledger, the difference is charged to a loss account.
True
False

Imperfections are considered normal when they irregularly occur at all stages of
manufacturing operations.
True
False

The following data are given for 20C: Budgeted production volume - 70,000 units,
Allowed number of hours per unit - 1/5 hr., Labor rate per hour - P25>, No. of regular
hours in August per worker - 192 hours.
P350,000
P1,825
P250,000
Not given

It shows how much employee's net pay is arrived at by providing columns for gross
pay and deductions aside from net pay.
TIME AND MOTION STUDY
FINANCIAL ACCOUNTING PHASE IN LABOR COST CONTROL
TIMEKEEPING
COST CONTRIL PHASE IN LABOR COST CONTROL
CLOCK CARD
TIME TICKET
DAILY TIME REPORT
PAYROLL SHEET
EARNINGS RECORD
PAYROLL CHECK
INCENTIVE SYSTEM
A worker earns P10,000 per month on the average and produces 50 units per day.
Accordingly, the employer's monthly contribution for SSS, Medicare, Pag-IBIG and EC
premiums are P456, P37.50, P10 and P100, respectively. Fringe benefits such as
meal and uniform subsidiaries amount to P9,900 per annum. Assuming that there are
330 working days in one year, what is the effective labor cost per unit?
P14.91
P13.48
P13.75
Not given.

The use of forms and records is indispensable in the effective control of production
costs.
True
False

It is used by a worker in accounting for the total number of hours timed in for a day.
TIME AND MOTION STUDY
FINANCIAL ACCOUNTING PHASE IN LABOR COST CONTROL
TIMEKEEPING
COST CONTRIL PHASE IN LABOR COST CONTROL
CLOCK CARD
TIME TICKET
DAILY TIME REPORT
PAYROLL SHEET
EARNINGS RECORD
PAYROLL CHECK
INCENTIVE SYSTEM

Lucena Manufacturing Co. charges factory overhead to production at 80% of direct

labor cost. Jobs 842 and 843 were completed and sold in July, 20B. Total direct
materials cost and prime cost for Job 842 were P9,000 and P14,000, respectively.
Production cost of Job 843 amounted to P31,200 with factory overhead equal to 48%
of direct materials cost. How much were the direct labor costs of Jobs 842 and 843?
P5,000 and P7,200, respectively
P5,000 and P9,000, respectively
P4,000 and P7,200, respectively
None of the above.

The following data are given for the period August 12 to 18, 20C: Total Hours: Pete
Tuazon - 48, Jose Carlos - 46, Mario Farela - 50, Ben Gomez - 53, Lucio Lim - 53,
Gem Tinio - 51; Regular: Tuazon - 48, Carlos - 43, Farela - 48, Gomez - 46, Lim - 45,
Tinio - 45; OT: Carlos - 3, Farela - 2, Gomez - 7, Lim - 8, Tinio - 6. Jobs Worked On:
21: Carlos - 12, Farela -15, Gomez - 16, Lim - 17, Tinio - 10; 22: Carlos - 20, Farela
-25, Gomez - 30, Lim - 15, Tinio - 18; 23: Carlos - 9, Farela - 9, Gomez - 5, Lim - 20,
Tinio - 17. Others: Gomez - Delivery=4, Tinio - Repairs=5. Pete Tuazon is the foreman
with hourly rate of P30. All the workers under him receive P25 per hour. Overtime
work was rendered on working days on Job 23, based on a rush order. Accordingly,
overtime premium is 25%. How much must be the total payroll for the week?
P7,765
P7,927.50
P7,800
Not given.

The following data are given for 20C: Budgeted production volume - 70,000 units,
Allowed number of hours per unit - 1/5 hr., Labor rate per hour - P25, No. of regular
hours in August per worker - 192 hours. How many workers are required for the
August production?
1,823
73
14,000
Not given

When imperfections occur irregularly, reprocessing cost or loss from spoilage is

treated as part of factory overhead.
True
False

The following information appears on the stock card for material DEF for April, 20C:
Beginning balance: 700 units @ P5; Purchases: April 10 - 2,500 units @ P6.00; April
18 - 2,000 units @ P5.50; April 27 - 3,000 units @ P5.80. Issuances: April 11 - 2,000
units for Job No. 76; April 15 - 700 units for Job No. 79; April 20 - 1,500 units for Job
No. 75; April 25 - 600 units for Job No. 79; April 30 - 1,500 units for Job No. 76. On
April 19, 200 units of the April 18 delivery were returned to the supplier for being
defective. Accordingly, a credit memorandum was received from the latter. On April
29, 100 units were returned to the storeroom by the department that made the
requisition on April 20. Using the FIFO costing method, how much materials cost must
be charged to the jobs for April?
Job 75 = P8,500; Job 76 = P19,910; Job 79 = P7,500
Job 75 = P9,000; Job 76 = P18,250; Job 79 = P7,500
Job 75 = P7,950; Job 76 = P19,910; Job 79 = P7,500
None of the above.
Freight in should be considered an addition to cost of items purchased. However,
freight charges for materials purchased may be charged to factory overhead for
convenience.
True
False

Each of the five (5) workers in a factory is being paid P250 per day. For every unit
produced in excess of 25 units in one day, a worker is paid P12. Fixed factory
overhead per annum is P198,000 and there are approximately 330 working days in
one year. Production data for Januar 6 and 7, 20C show the following number of units
produced by each worker: January 6 = Abdon - 25, Belleza - 27, Cortes - 24, Drillon -
24, Emilio - 28; January 7 = Abdon - 26, Belleza - 26, Cortes - 28, Drillon - 27, Emilio -
26. How much savings in fixed factory overhead per unit was effected assuming that
additional output is due to the incentive given?
P.13
P.22
P.24
Not given.

It is concerned with the total number of hours worked by each employee and what
worker does each hour he is being paid.
TIME AND MOTION STUDY
FINANCIAL ACCOUNTING PHASE IN LABOR COST CONTROL
TIMEKEEPING
COST CONTRIL PHASE IN LABOR COST CONTROL
CLOCK CARD
TIME TICKET
DAILY TIME REPORT
PAYROLL SHEET
EARNINGS RECORD
PAYROLL CHECK
INCENTIVE SYSTEM

It is concerned with the determination of the breakdown of the payroll and the making
of labor cost entries on cost sheets or production reports.
TIME AND MOTION STUDY
FINANCIAL ACCOUNTING PHASE IN LABOR COST CONTROL
TIMEKEEPING
COST CONTROL PHASE IN LABOR COST CONTROL
CLOCK CARD
TIME TICKET
DAILY TIME REPORT
PAYROLL SHEET
EARNINGS RECORD
PAYROLL CHECK
INCENTIVE SYSTEM

It shows the different amounts earned by an employee for a period and he deductions
made therefrom.
TIME AND MOTION STUDY
FINANCIAL ACCOUNTING PHASE IN LABOR COST CONTROL
TIMEKEEPING
COST CONTRIL PHASE IN LABOR COST CONTROL
CLOCK CARD
TIME TICKET
DAILY TIME REPORT
PAYROLL SHEET
EARNINGS RECORD
PAYROLL CHECK
INCENTIVE SYSTEM

Gondola Company's Job No. 205 (for the manufacture of 6,600 coats) was completed
August, 20M at the following unit costs: Direct materials - P1,500, Direct labor - 1,000,
Factory overhead (including allowance of P50 for spoiled work) - 500. Total = P3,000.
Final inspection of Job No. 205 disclosed 600 spoiled costs. These were subsequently
sold to a jobber for P600,000. Assuming that spoilage loss is charged to all
production, what would be the unit cost of the good coats produced per Job No. 205?
P2,900
P2,950
P3,000
P3,150

It shows when the worker reports for work and when he goes out and is used as basis
in the computation of his gross pay.
TIME AND MOTION STUDY
FINANCIAL ACCOUNTING PHASE IN LABOR COST CONTROL
TIMEKEEPING
COST CONTROL PHASE IN LABOR COST CONTROL
CLOCK CARD
TIME TICKET
DAILY TIME REPORT
PAYROLL SHEET
EARNINGS RECORD
PAYROLL CHECK
INCENTIVE SYSTEM

The inventory account of Vanda Manufacturing Co. includes raw materials and work in
process and is on a perpetual inventory basis using the FIFO costing method. There is
no finished goods inventory. The opening inventory of P30,500 includes obsolete
materials recorded at P250. The following are debits to certain accounts in March,
20C: Purchases - P49,400, Direct labor - P24,100, Factory overhead control -
P50,400, Cost of goods sold - P137,200. Factory overhead rate is 200% of direct labor
cost. The given cost of goods sold includes direct labor cost of P13,800. The obsolete
materials (in the beginning inventory) of P250 was charged to cost of goods sold upon
removal thereof from the inventory account. Factory overhead has been charged for
an excessive scrap loss of P1,600 identified with a special order (that was started on
and completed during the month). Normal scrap loss on regular product lines is
considered negligible. The inventory balance as of March 31 must be:
P15,250
P13,650
P1,450
Answer not given.

It provides for additional financial compensation to workers and at the same time
reduces the fixed overhead cost per unit.
TIME AND MOTION STUDY
FINANCIAL ACCOUNTING PHASE IN LABOR COST CONTROL
TIMEKEEPING
COST CONTROL PHASE IN LABOR COST CONTROL
CLOCK CARD
TIME TICKET
DAILY TIME REPORT
PAYROLL SHEET
EARNINGS RECORD
PAYROLL CHECK
INCENTIVE SYSTEM

Scrap is treated as a reduction in factory overhead if it is traceable to a particular job.

True
False

A copy of your responses will be emailed to 2206072@slu.edu.ph.

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