Pasig Catholic College

Accounting Quiz – Cost Accounting

Multiple Choice – Problems

1. The following cost relate to Kirstel Company for the quarter of the year.

Conversion cost P 435,000

Direct materials 215,000
Manufacturing overhead 190,000
Selling and administrative expense 185,000

What is Kirstel’s prime cost for the last quarter?

a. P 460,000 c. P405,000
b. P 410,000 d. P375,000

2. For the year 2015 the gross margin of Jumbo Co. was P96,000, the cost of goods
manufactured was P340,000; the beginning inventories of work in process and finished
goods were P28,000 and P45,000, respectively; and the ending inventories of work in
process and finished goods were P38,000 and P52,000, respectively. The sales of Jumbo
Co. for 2015 must have been.

a. P419,000 c. P434,000
b. P429,000 d. P436,000

3. Some selected sales and cost data for Alcid Manufacturing Company are given below:

Direct materials used P 100,000

Direct labor 150,000
Factory overhead (40% variable) 75,000
Selling and administrative expenses
( 50% direct, 60% variable ) 120,000

Conversion cost was:

a. P150,000 c. P250,000
b. P225,000 d. P270,000

4. During the month of March 2014. Nape Co., used P300,000 of direct materials. At March
31, 2014. Nape’s direct materials inventory was P50,000 more than it was at March 1,
2014. Direct material purchases during the month of March 2014 amounted to:

a. P 0 c. P300,000
b. P250,000 d. P350,000
5. Peter Paul 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 2015 are 200%
for Dept. A and 50% for Dept. B. Job 123, started and completed during 2015 was
charged with the following costs.

Department
A B
------------------------ ------------------------
Direct materials P 25,000 P 5,000
Direct labor ? 30,000
Factory overhead 40,000 ?

The total manufacturing costs associated with Job 123 should be

a. P135,000 c. P195,000
b. P180,000 d. P240,000
6. March Company had 150 units of product on hand at January 1, costing P21.00 each.
Purchasing of product A during the month of January were as follows:

Unit Unit Cost

January 10 200 P 22.00
18 250 23.00
28 100 24.00

Physical count on January 31, shows 250 units of product A on hand.

The cost of the inventory at January 31, under the FIFO method is:

a. P 5,850 c. P5,350
b. P 5,550 d. P5,250

7. Assume Boone Manufacturing had worked on two jobs, A-01 and A-02 last year 1,200
hours of direct labor was spent on Job A-01, while 1,000 hours of direct labor was spent
on Job A-02. The actual manufacturing overhead was P37,000.

The predetermined overhead rate for Boone Manufacturing is:

a. P 2.00 per unit c. P20.00 per DLH

b. P 15.00 per DLH d. P30.00 per DLH
8. Pocahontas Production Inc. has provided you with the following pertinent information for
the calendar year 2015.

Raw material purchases P 135,000

Beginning raw material inventory 100,000
Ending raw materials inventory 175,000
Factory overhead ( including P85,000 of indirect
Labor and P20,000 of indirect materials) 277,500
Total manufacturing costs 960,000

Compute direct labor cost

a. P577,500 c. P402,500
b. P382,500 d. P642,500

9. M Company has two producing departments. Department A and Department B.

Department A works on raw material XYZ and then transfers it to Department B. After
Department B. puts on its finishing touches, it transfers the product to finished goods
inventory:

If Department A had put 95,000 units into process during the period and had ending
work in process of 21,000 units, what is the number of units transferred to finished goods
inventory, if Department B’s ending units in process are 12,000?

a. 104,000 c. 74,000
b. 85,000 d. 62,000

10. Department A is the first stage of Lovely Company’s production cycle. The following
information is available for conversion cost for the month of May, 2015

UNITS
Work in process, beginning (25% complete) 8,000
Started in May 40,000
Completed in May and transferred to Dept. B 38,000
Work in process, ending (60% complete) 10,000

Using the FIFO method, the equivalent units for conversion costs for the month are

a. 42,000 units c. 44,000 units

b. 38,000 units d. 36,000 units