AFAR.

07

Question 1
The following were taken from the books of Marvin Company.

January 1 March 31

Raw materials P268,000 P 167,000

Work in process 0 0

Finished goods P 43,000 ?

(100 units)  (200 units)

Materials purchased P1,946,700

Direct labor 2,125,800

Factory overhead    764,000

Sales (12,400 units at P535)

 
The company uses the FIFO method for costing inventories.
 
The number of units manufactured is:
Response: 11,900
Correct answer: 12,500
Score: 0 out of 1 No

Question 2
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 goods sold account at the end of the month.
Additional information is available as follows: Job 101 was the only job in process at
January 31, 2013 with accumulated costs 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 the
end of February was Job 104, with costs of P2,800 for direct materials and P1,800 for
direct labor.
 
The cost of goods manufactured for February was:
Response: P79,700
Correct answer: P77,700
Score: 0 out of 1 No

Question 3
The following were taken from the books of Marvin Company.

January 1 March 31

Raw materials P268,000 P 167,000

Work in process 0 0

Finished goods P 43,000 ?

(100 units)  (200 units)

 Materials purchased P1,946,700

Direct labor 2,125,800

Factory overhead    764,000

Sales (12,400 units at P535)

 
The company uses the FIFO method for costing inventories.
 
The cost of goods sold is:
Response: P4,091,500
Correct answer: P4,901,500
Score: 0 out of 1 No

Question 4
The following were taken from the books of Marvin Company.

January 1 March 31

Raw materials P268,000 P 167,000

Work in process 0 0

Finished goods P 43,000 ?

(100 units)  (200 units)

Materials purchased P1,946,700

Direct labor 2,125,800

 Factory overhead    764,000

Sales (12,400 units at P535)

 
The company uses the FIFO method for costing inventories.
 
The cost of goods manufactured per unit is:
Response: P395
Correct answer: P395
Score: 1 out of 1 Yes

Question 5
Rumors Company applied factory overhead as follows:

Department Factory Overhead Rate

Fabricating P7.75 per Machine hour

Spreading 15.10 per Machine hour

  2.125 per Machine

Gossiping
hour

 
Actual machine hours are: 19,000 hours for fabricating; 27,500 hours for spreading and
5,500 hours for gossiping.
 
If the actual factory overhead cost for the period is P574,375, how much is over (under)
applied factory overhead?
Response: (P     187.50)
Correct answer: (P     187.50)
Score: 1 out of 1 Yes
Question 6
Tudors, Inc. purchases and resells a single item of product. Inventory at the beginning
of September, 2020 was 400 units, values at P1.80 each. Further receipts and sales
during the month were as follows:

Units Pesos Per Unit

Sept. 8 Receipts    600 P2.10

Sept. 14 Receipts    500 ?

Sept. 25 Sales 1,250   4.00

 
The company uses the FIFO. Gross margin for September was P2,500.
 
What was the cost per unit of the 500 units received on Sept. 14?
Response: P1.94
Correct answer: P2.08
Score: 0 out of 1 No

Question 7
Worley Co. has overapplied overhead of P45,000 for the year ended December 31,
2021. Before disposition of the underapplied overhead, selected December 31, 2021,
balances from Worley’s records are as follows:

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
appropriate inventories and cost of goods sold based on year-end balances.
 
In its 2021 income statement, Worley should report cost of goods sold at
Response: P682,500
Correct answer: P757,500
Score: 0 out of 1 No

Question 8
Ronald Factory provides for an incentive scheme for its factory workers which features
a combined minimum guaranteed wage and a piece rate. Each worker is paid P11.25
per piece with a minimum guaranteed wage of P875 per week. Production report for the
week show:

Employee Units produced

R 67

O 78

L 80

A 82

N 72

D 75

 
The portion of the weekly payroll that should be charged to factory overhead is
Response: P   217.50
Correct answer: P   217.50
Score: 1 out of 1 Yes
Question 9
The accounting records for 2020 of Wagner Music Co. showed the following:

Decrease 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
Response: P1,335,000
Correct answer: P1,335,000
Score: 1 out of 1