Answers in Assignment no 1:
AQ1. 1. Purchased raw materials from supplier amounting to
Q1: No 1. Cost accounting is a management accounting plus a
small part of financial accounting to the extent that its
product costing functions satisfies the needs of external
reporting.
NO 2. Cost accounting is a system that records, summarizes,
analyzes and interprets the details of the cost of materials,
labor and overhead necessary to produce and sell an article.
• Both are true
Q2. No 1. Manufacturing cost includes direct materials, direct
labor and overhead. Direct materials also called raw
materials, are those materials used in manufacturing process
that become a significant part of the finished product.
No 2. Manufacturing overhead are cost that cannot be traced
directly to the product or cannot be considered as direct
material or direct labor. Manufacturing overhead is also
called manufacturing expense or factory burden.
• Both are true
Q3. No 1. When raw materials are issued to production, these
will become part of work in process inventory. Raw materials
Inventory account reflects the cost of materials and factory
supplies that will be used in the manufacturing process.
No 2. Conversion cost is composed of direct labor and
overhead cost
• Both are true
Q4. No 1. When goods are sold, their cost is debited to Cost
of goods sold.
No 2. Work in process account pertains to inventory not yet
completed or needs further processing. When completed,
Work in process account is debited.
• Only No. 1 is true
Q5. Flor company consumed P 450,000 worth of direct
materials during May, 2011. At the end of the month, the
direct materials inventory of Flor was P 25,000 lower than the
May 1 inventory level. How much was the direct materials
procured during May 2011?
• 425,000
Q6. ASTA company incurred the following cost during the
month; direct labor, P120,000; factory overhead, P108,000
and direct material purchases, P160,000. Inventories show
the following costs:
Finished Goods inventory has beginning and ending balances
of P 27,000 and P 30,000, respectively. Work in process has
beginning and ending inventory balances of 61,500 and
57,500, respectively. Direct materials inventory has beginning
and ending balances of 37,500 and 43,500, respectively.
How much is the cost of goods manufactured?
• 386,000
Answers for Assignment No 2:
P 40,000 on account.
2. During the month, raw materials costing P 30,000 were
issued to production. (includes indirect materials of 2,000)
3. Payroll of production personnel totaled P 50,000.
4. Payroll of selling and admin personnel is P 10,000
5. Applied all the labor cost to production.
6. Incurred other overhead-utility cost of P 35,000; Rental
cost of 20,000 (50% is allocated to production plant)
7. Applied overhead cost to production Is 67,500. Overhead
rate is 150% of direct labor cost. Any under or over applied
overhead is immaterial.
8. Beginning WIP is 4,000 and Ending Work in Process is P
1,000
9. Beginning Finished Goods is 12,000 and Ending FG
inventories; costing P 45,000.
10. Gross Sales totaled 200,000. Sales return is 6,000.
Q1. What is the cost of sales at normal cost?
• 110,500
Q2. What is the gross profit?
• 99,000
Q3. GENOCIDE Inc. is a manufacturing company using the
perpectual system. The beginning
inventory of materials totaled P 150,000 & all debits to
"materials account" amounted to P 400,000. The excess of
beginning inventory over its ending inventory is P 60, 000.00.
how much is the total materials issued to production?
• 460,000
Q4. Sales salaries commissions are 10,000 when 80,000 units
are sold, and 14,000 when 120,000 units are sold. Using the
high low method. What is the fixed portion of sales salaries
and commissions?
• None of the above
1. Prime cost and conversion cost share what common
element
• Direct labor
2. What are prime cost
• The first cost incurred in job
• Direct materials and overhead
• Indispensable as distinguished from avoidable cost
• Cost incurred on joint products before split off
• None of the above
3. Direct materials are
I. Prime Cost
II. Conversion cost
III Manufacturing cost
• I and II only
4. Factory supplies for manufacturing plant are generally
• Variable cost
5. Indirect labor is a
-Conversion cost
6. Wages paid to timekeeper in a factory is a Q1. No 1. Perpetual inventory system is used when there are
-Overhead and conversion cost large numbers of inventory which is usually interchangeable.

7. Factory overhead includes No.2. PAS 2 prescribes the use of the FIFO and Moving
-All manufacturing cost except DM and DL average methods to compute the cost of inventories.

8. Property taxes on a manufacturing plant is an element of: • True True

-Conversion cost
Q2. No.1 A new average unit cost shall be calculated under
9. The cost of insurance for manufacturing plant is a moving average cost method after each issue of inventory.
-Product cost/Conversion Cost
NO.2 LIFO is no longer permitted under PAS 27.
10. The flow of cost parallels the flow of resources and all • False False
manufacturing cost flow through the _________

-Work in process account Q3. No 1. Materials returned to store rooms are reported in
the returned Material Report. Different person must be
involved in the storing and issuing operations. All material
issuance must be processed only upon proper written
authorization

No 2. The bin tag is an informal but carefully maintained

record showing the quantities of materials received, issued
and on hand.

• True True

Q4. No 1. Work In process account is debited for direct

materials purchased, direct labor cost incurred and overhead
cost applied to production.
NO 2. Work in Process account is classified as inventory of
the company until sold to customers.

• False False

Q5. No 1. Indirect materials and indirect labor cost are

credited to manufacturing overhead control account when
incurred.
No 2. Normal costing uses applied overhead thru overhead
rates established by the company.

• False True

Q6. No 1. Indirect materials or factory supplies consist of

items that are used in manufacturing process but do not
become part of the finished product.
No 2. When raw materials are issued to production, these
will become part of work in process inventory.

• True True

Q7. The following data are available for JURIS DOCTOR CORP:
Assignment NO 3.-RM, Labor Purchased raw materials from supplier amounting to P
40,000 on account.; During the month, raw materials costing
P 30,000 were issued to production. (P 10,000 pertains to
indirect materials and the remaining balance are direct
materials); Total Payroll of the company is P 60,000; Payroll
of selling and admin personnel is P 10,000; Applied all the
labor cost to production; Incurred other overhead cost (rent
and utility cost) of P 15,000; Applied all overhead cost to
production at the end of the month; Ending Work in Process
is P 1,000; Ending FG inventories; costing P 45,000; Sales on
account is P 70,000; Cash sales is P 20,000 and there is no
beginning inventory. What is the cost of goods sold?
• 49,000
Q8. The following data are available for SAN JOSE CORP:
Depreciation of Factory Equipment P 1,000; Depreciation of
Sales Office P 500; Advertising P 4,000; Freight
out P 2,000; Wages of production workers P Purchases of Material A are: On Jan, 5,000 units at 40 per
28,000; Raw materials used 47,000; Factory rent
P 2,000; Sales salaries and commission P 50 per unit and on July, of 10,000 units at 60 per unit. In
10,000; Indirect materials used P 3,000; Administrative
salaries P 2,000; Utility cost of factory site P 2,000; Supplies
used in the Office P 1,000; Factory supplies P 1,000. What is
the manufacturing cost incurred by the company?
• 81,000
Q9. The following are LORE INC's production costs for Oct
2011: Direct materials 200,000.00; Direct labor
100,000.00 and Factory Overhead 50,000.00. What amount
of cost should be traced to specific products in the
production process?
• 300,000
Q10. The following information relates to production of
MARCELO CORP for the month of Oct 2011:
Direct Materials used 10,000; Direct labor rate
per hour 5.00 ; Overhead cost
2,300.00 ; Direct labor hours employed 500.00 ;
Gross Profit rate 25% based on selling price; Increase in WIP
1,100.00 ; Ending inventory of Finished
goods is 30% of its beginning balance; Total sales
50,000.00. What is the ending inventory of Finished
goods of the company?
• 10,200
Assignment 4:
Q1. The following data are available for ABC Corp: In 2019,
Purchases of Material A are: On Jan, 5,000 units at 40 per
unit; Feb, 12,000 units at 45 per unit; April, of 17,000 units at
50 per unit and on July, of 10,000 units at 60 per unit. In
2020, purchases of material A on Jan 2020 is 10,000 units at
30 per unit and another 10,000 units on May at 40 per unit.
Raw materials used in 2019 and 2020 are 39,000 units and
18, units, respectively. What is the cost of raw materials used
in 2020 using FIFO?
• 720,000
CONSIDER “ NONE OF THE ABOVE EXCEPT BSA 2-17.
Q2. The following data are available for ABC Corp: In 2019,
unit; Feb, 12,000 units at 45 per unit; April, of17,000 units at
2020, purchases of material A on Jan 2020 is 10,000 units at
30 per unit and another 10,000 units on May at 40 per unit.
Raw materials used in 2019 and 2020 are 39,000 units and
18,000 units, respectively. What is the cost of raw materials
used in 2020 using Simple Average?
• 683,100
Q3. The cost data of LOREGE INC. for the month of April
2011 shows the following:
Payroll of Factory employees, net of taxes amounting to
5,600, is 33,450.00; Property taxes of Factory plant 6,000 ;
Salary of security guard of factory plant 5,000; Depreciation
of Office building 3,500; Depreciation of store building 4,500;
Depreciation of factory plant 2,800; Total Materials
purchased, (includes indirect materials of 4,000) is 40,000;
Increase in Direct materials inventory 15,000.00 ; Increase in
Indirect Direct materials inventory 0; Decrease in WIP 8,900;
Increase in Finished goods 12,500.
What is the Cost of goods sold (COGS)?
• 74,250
Q4. Data are as follows: Beginning inventory balances for WIP
and Finished Goods inventory are P 67,000 and P 54,000,
respectively. Ending balances of raw materials, WIP and
Finished goods inventory are as follows: P 39,000, P 59,000
and P 48,000, respectively. Raw materials purchases is P
45,000. Factory overhead totaled P 7,500 (this is 75% of total
Direct labor cost). Total expenses of the company totaled P
11,500 which is 11.5% of total sales. Net income is 31,000.
Compute the total Cost of Goods Sold
• P 57,500
Q5. Data are as follows: Beginning inventory balances for WIP
and Finished Goods inventory are P 67,000 and P 54,000,
respectively. Ending balances of raw materials, WIP and
Finished goods inventory are as follows: P 39,000, P 59,000
and P 48,000, respectively. Raw materials purchases is P follows: 10% to maintenance dept; 30% to Dept 1 and 60% to
45,000. Factory overhead totaled P 7,500 (this is 75% of total Dept 2. What is the total cost allocated to Department 1?
Direct labor cost). Total expenses of the company totaled P
11,500 which is 11.5% of total sales. Net income is 31,000 • 13,333

Compute the total Prime cost.

• P 36,000

Q6. A, worked a total of 186 hours for the month of June

2020. His rate per hour is 450 per hour. Overtime premium is
30%. The regular working hours of the company is 8 hours a
day. The company’s regular working days is from Monday to
Friday or 5 days a week. Overtime was due to company’s
production inefficiency. What is the amount of labor cost
charged to Overhead?

• 3,510

Q7. A, worked a total of 186 hours for the month of June

2020. His rate per hour is 450 per hour. Overtime premium is
30%. The regular working hours of the company is 8 hours a
day. The company’s regular working days is from Monday to
Friday or 5 days a week. Overtime was due to customer’s
specifications / order. What is the amount of labor cost
charged to WIP?

• 87,210

Q8. ABC Corp has just started its operations in 2020. After 6
months, the company has the following data: Cost of goods
sold is 540,000; 30% of Manufacturing cost were distributed
to Direct labor cost. Applied overhead is 375,000. WIP,
ending was 10% of total manufacturing cost. Finished goods
remaining in stock were 20% of total cost of goods
manufactured. Over applied overhead is 10,000 (OH rate is
based on DL). What is the overhead rate used for the period?

• 167%

Q9. One morning, a customer brings a rush order of 2,600

units of product X at a unit sales price of 50 per unit. The
company agrees to produce the goods at weekend. The
regular working days of the company is from Monday to
Friday. Sixty of the direct labor employees who earns 50 per
hour worked eight hours each day on Saturday and Sunday to
complete the job. The company’s policy on overtime during
weekend is time and a half. Materials costing 3 per unit was
used on the order. Overhead rate is 12 per hour. What is the
total product cost per unit of product X?

• 35.12 per unit

Q10. DRAGON allocates service department cost directly to

producing departments without allocation to other service
department. The two service departments are maintenance
dept and utilities dept. The producing departments are dept
1 and Dept 2. Overhead cost of Maintenance dept is 20,000
while utilities have OH cost of 10,000. The percentage of
service provided by Maintenance dept are as follows: 20% to
utilities dept; 40% to Dept 1 and 40% to Dept 2. The
percentage of service provided by Utilities dept are as
QUIZ 1:
Design Arts Associates is an interior decorating firm in San
Mateo. The following data are available in the firm’s contract
to redecorate the mayor’s office for 2020: Purchases of raw
materials of 60,000; Raw materials beginning is 10,000; Raw
materials inventory decreased to 2,000. Labor hours are as
follows: Total worked hours (direct labor hours) is 900 hours.
The regular working hours for the period is 820 hours with
regular rate of 30 per hour. Overtime rate premium is 20%.
Overtime hours are the result of client’s specifications. The
SSS, Pag ibig and Withholding tax totaled 5,000. The company
uses normal costing and the firm’s budget for the year
included the following estimates: 4,000,000 budgeted OH
and Budgeted direct labor cost of 2,500,000. Other actual
cost incurred by the company are as follows: indirect
materials of 6,000; rent and utility of the service department
of 20,000 and indirect labor cost of 1,000. Calculate the total
cost of the firm in redecoration of mayor’s office at normal
cost?
Answer: 133,448
SAN JOSE purchased 1,000 units of materials X at 5 per unit
on January 2020 and another 1,000 units at 8 per unit on
November 2020. Ending raw materials is 300 units. The
company uses FIFO. Payroll data shows; 125 working hours at
a rate of 40 per hour. Regular working hours is only 100
hours. OT rate premium is 30%.OT hours, if any is due to
company’s fault. OH rate is 80% of total Direct Labor cost.
What is the manufacturing cost?
Answer: 19,600
SAN JOSE Corp ahs the following data for 2020: RM,
beginning of 5,000; Purchases of raw materials is 50,000;
return of defective raw materials to suppliers of 4,000; return
of direct materials from the production to warehouse (over
issuance of direct materials) of 2,000; ending raw materials
inventory of 1,000. Total Payroll of the company is 80,000,
net of SSS, Pag ibig, Philhealth and Taxes withheld of 8,000.
Per cost acctg, total payroll was allocated to 80% production
and 20% OPEX. Then, the production payroll was allocated to
90% direct labor and 10% indirect labor. Budgeted overhead
cost is 50,000 while the budgeted direct labor cost is 100,000.
Indirect materials used is 3,000, Other overhead cost is
12,000. Beginning balances of WIP and FG are 10,000 AND
14,000, respectively. WIP decreased to 6,000 and FG
increased by 4,000. What is the cost of gods sold at normal
cost?
Answer: 142,040
ABC Corp incurred the following actual cost during 2020:
Direct materials used is 275,000; Direct labor cost of 120,000;
Manufacturing overhead of 252,000. The firms’
predetermined overhead rate is 210% of direct labor cost.
The January 1, 2020 inventory balances were as follows: RM
of 30,000; WIP of 39,000 and FG of 42,000. Each of these
inventory balances was 10% higher at the end of the year.
What was the cost of goods sold at normal cost for the year?
Answer: 638,900
SAN JOSE CORP incurred the following cost to produce
product X which consisted of 1,000 units in January 2020:
Direct materials: Requisition number 101: 400 yards of fabric
at P 8 per yard and requisition number 102: 500 cubic feet of
stuffing at 3 per cubic foot. Direct labor incurred are as
follows: 500 hours was incurred (regular working hours for
January is 110 hours per week with regular rate of 24 per
hour. Overtime rate premium is 20%. Overtime hours are the
result of inefficiency of the company’s machineries).
Manufacturing overhead is applied based on direct labor
hours at 20 per hour. At the end of January, 300 units of
product X were still unsold. What is the cost of goods sold?
Answer: 18,690
SAN JOSE Corp ahs the following data for 2020: RM,
beginning of 5,000; Purchases of raw materials is 50,000;
return of defective raw materials to suppliers of 4,000; return
of direct materials from the production to warehouse (over
issuance of direct materials) of 2,000; ending raw materials
inventory of 1,000. Total Payroll of the company is 80,000,
net of SSS, Pag ibig, Philhealth and Taxes withheld of 8,000.
Per cost acctg, total payroll was allocated to 80% production
and 20% OPEX. Then, the production payroll was allocated to
90% direct labor and 10% indirect labor. Budgeted overhead
cost is 50,000 while the budgeted direct labor cost is 100,000.
Indirect materials used is 3,000, Other overhead cost is
12,000. Beginning balances of WIP and FG are 10,000 AND
14,000, respectively. WIP decreased to 6,000 and FG
increased by 4,000. What is the amount debited to Finished
Goods account?
Answer: 146,040
SAN JOSE Company provides the following data for 2014:
Beginning RM is 12,000; Ending RM is 13,500; Beginning WIP
is 15,100; Ending WIP is 17,600; Beginning FG is 19,500;
ending FG is 21,200; Cost of sales is 149,200; Direct labor cost
is 50,000; utility cost (OH) is 62,500; Indirect materials used is
5,000 and indirect labor cost is 2,000. What is the cost of
materials purchased during 2014?
Answer: 40,400
You are given the following data for ABC Corp for January
2020: Purchases of raw materials on account of 70,000; RM
inventory, beginning is 13,000; RM, ending inventory balance
is 10,000; Indirect materials used is 4,000; Factory Labor is
30,000 (includes 2,000 indirect labor); Other overhead cost
incurred (rent -utility) of 22,000; WIP, beginning is 16,000;
WIP, ending is 20,000; Finished Goods inventory, beginning is
40,000; Finished Goods, ending is 25,000 and cost of goods
sold at normal cost is 150,000. The rate of applied overhead
based on direct labor would be?
Answer: 150%
SAN JOSE has two service departments and two production
departments ( A and B). Data provided are as follows: Direct
cost of Department A and Department B are 6,000 and 7,500,
respectively. Cost of service dept 1 and 2 are 400 and 700,
respectively. Services performed by Service Dept 1 to Service
Dept 2, Department A and Department B are 40%, 40% and
20%, respectively. Services performed by Service Dept 2 to
Service Dept 1, Department A and Department B are 20%,
70% and 10%, respectively. Assuming step down method is
used to allocate service department cost, what is the total
cost of department A?
Answer: 6,850
SAN JOSE has two service departments and two production
departments ( A and B). Data provided are as follows: Direct
cost of Department A and Department B are 5,000 and 6,000,
respectively. Cost of service dept 1 and 2 are 150 and 300,
respectively. Services performed by Service Dept 1 to Service
Dept 2, Department A and Department B are 40%, 40% and
20%, respectively. Services performed by Service Dept 2 to
Service Dept 1, Department A and Department B are 20%,
70% and 10%, respectively. Assuming reciprocal method is
used to allocate service department cost, what is the total
cost of department A?
Answer: 5,365.22
The following refer to SAN JOSE Company for the year 2014:
Sales of 950,000; WIP as of 12/31/2014 is 30,000; WIP as of
12/31/2013 is 40,000; selling expenses of 150,000; income
tax expense of 90,000; Purchase of raw materials of 180,000;
raw materials as of 12/31/2014 is 25,000; raw materials as of
1/1/2014 is 40,000; Direct labor cost of 200,000; utilities of
production plant is 40,000; Depreciation of production
equipment is 60,000; Finished goods at 12/31/2014 is 50,000;
Finished Goods at 13/31/2013 is 20,000; Indirect materials
used is 10,000; indirect labor cost is 15,000 and other
manufacturing overhead is 80,000. What is the net income?
Answer: 140,000
The SAN JOSE, Inc., keeps accounting and cost records on a
personal computer. During the month of January, data were
loss as a result of errors made by a new operator.
Fortunately, some data were retrieved and are set forth as
follows:a). The total ending credit balance of the Accrued
Payroll account was P140, 000. This include the beginning
balance of accrued payroll account of P 10,000. Total accrued
payroll for the month includes P20, 000 in indirect labor that
was charged to the Factory Overhead account.b). The debit
balance in the Factory Overhead account totaled P166, 000.
This balance included the indirect labor amount in (a).c).
Factory overhead is applied to the products at 150% of direct
labor cost.d). The work in process account showed a January
1 balance of P 91, 000. Materials requisitioned and charged
to Work in process during the period amounted to P98, 000.
The balance in work in process on January 31, was P
82,000.e). The finished goods balance at January 1 was P48,
000.f). Cost of goods sold had a debit balance of P389, 000.
This amount did not include under applied or over applied
factory overhead. What is the cost of sale after closing the
under / over applied overhead (immaterial)?
Answer: 390,000
The SAN JOSE, Inc., keeps accounting and cost records on a
personal computer. During the month of January, data were
loss as a result of errors made by a new operator.
Fortunately, some data were retrieved and are set forth as
follows:a). The total ending credit balance of the Accrued
Payroll account was P140, 000. This include the beginning
balance of accrued payroll account of P 10,000. Total accrued
payroll for the month includes P20, 000 in indirect labor that
was charged to the Factory Overhead account.b). The debit
balance in the Factory Overhead account totaled P166, 000.
This balance included the indirect labor amount in (a).c).
Factory overhead is applied to the products at 150% of direct
labor cost.d). The work in process account showed a January
1 balance of P91, 000. Materials requisitioned and charged to
Work in process during the period amounted to P98, 000. The
balance in work in process on January 31, was P82,000.e).
The finished goods balance at January 1 was P48, 000.f). Cost
of goods sold had a debit balance of P389, 000. This amount
did not include under applied or over applied factory
overhead. Determine the cost of work completed and
transferred to the finished goods inventory for the month.
Answer: 382,000
SAN JOSE Company provides the following data for 2014: RM
inventory, beginning is 12,000; RM inventory, ending is
13,500; WIP, beginning is 15,100; WIP , ending is 17,600;
Finished Goods, beginning is 19,500; Finished Goods, ending
is 21,200; Cost of goods sold at normal cost is 149,200; Direct
labor cost is 50,000; utility cost -OH is 62,500; indirect
material cost used is 5,000 and indirect labor cost is 2,000. GP
rate is 20% based on actual cost. The company uses normal
costing at 150% of total production labor cost. What is the
Gross profit based on actual COGS assuming under or over
applied OH is immaterial?
Answer: 28,140
Assignment 5:
The following data are available for product X and Y: Units
produced is 2,000 units of X and 160,000 units of Y; Direct
materials cost per unit is 300 and 10 for X and Y, respectively;
Direct labor cost is 280,000 for X and 560,000 for Y; Direct
labor hours is 2,800 for X and 5,600 for Y; Number of set ups
for X and Y is 45 each; Design hours is 3,000 and 5,000 for X
and Y, respectively. Overhead cost totaled 3,528,000
consisting of Set up cost related amounting to 1,350,000;
Design cost related of 1,400,000 and other overhead cost for
the remaining amount. At present, the company is using
traditional costing which uses direct labor hours to allocate
overhead. The management consider using ABC system for
more accurate allocation of overhead. The number of set ups
and number of designs hrs will be used to allocate the new
cost pools while the direct labor hours for the remaining
overhead cost. What is the unit cost of X under ABC costing?
• 1,169.67
Marikina Shoes Corp had 10,000 pairs of quality shoes during
the year. The following cost per par areas follows; Materials
is 200; Direct labor cost is 450 and overhead rate s 125% of
DL. Final inspection revealed that 450 pairs were spoiled
which was sold at secondhand value of 20,000. The goods
were shipped to customer at cost plus 50% mark up upon
cost. Assuming that the spoilage is due to change sin
customer’s specifications, what is the mfg. cost per unit/pair?
• 1,276.54
The following data are available for product X and Y: Units
produced is 2,000 units of X and 160,000 units of Y; Direct
materials cost per unit is 300 and 10 for X and Y, respectively;
Direct labor cost is 280,000 for X and 560,000 for Y; Direct
labor hours is 2,800 for X and 5,600 for Y; Number of set ups
for X and Y is 45 each; Design hours is 3,000 and 5,000 for X
and Y, respectively. Overhead cost totaled 3,528,000
consisting of Set up cost related amounting to 1,350,000;
Design cost related of 1,400,000 and other overhead cost for
the remaining amount. At present, the company is using
traditional costing which uses direct labor hours to allocate
overhead. The management consider using ABC system for
more accurate allocation of overhead. The number of set ups
and number of designs hrs will be used to allocate the new
cost pools while the direct labor hours for the remaining
overhead cost. What is the unit cost of Y under Traditional
costing?
• 28.20
The following data are available for product X and Y: Units
produced is 2,000 units of X and 160,000 units of Y; Direct
materials cost per unit is 300 and 10 for X and Y, respectively;
Direct labor cost is 280,000 for X and 560,000 for Y; Direct
labor hours is 2,800 for X and 5,600 for Y; Number of set ups
for X and Y is 45 each; Design hours is 3,000 and 5,000 for X
and Y, respectively. Overhead cost totaled 3,528,000
consisting of Set up cost related amounting to 1,350,000;
Design cost related of 1,400,000 and other overhead cost for
the remaining amount. At present, the company is using
traditional costing which uses direct labor hours to allocate
overhead. The management consider using ABC system for
more accurate allocation of overhead. The number of set ups
and number of designs hrs will be used to allocate the new
cost pools while the direct labor hours for the remaining
overhead cost. What is the total product cost of X under ABC
costing?
• 2,339,333
The following data are available for product X and Y: Units
produced is 2,000 units of X and 160,000 units of Y; Direct
materials cost per unit is 300 and 10 for X and Y, respectively;
Direct labor cost is 280,000 for X and 560,000 for Y; Direct
labor hours is 2,800 for X and 5,600 for Y; Number of set ups
for X and Y is 45 each; Design hours is 3,000 and 5,000 for X
and Y, respectively. Overhead cost totaled 3,528,000
consisting of Set up cost related amounting to 1,350,000;
Design cost related of 1,400,000 and other overhead cost for
the remaining amount. At present, the company is using
traditional costing which uses direct labor hours to allocate
overhead. The management consider using ABC system for
more accurate allocation of overhead. The number of set ups
and number of designs hrs will be used to allocate the new
cost pools while the direct labor hours for the remaining
overhead cost. What is the total product cost per unit of X
under Traditional costing?
• 1,028.15
Quiz No. 2
SANJOSE Company produces jobs to customer specifications.
Data for Job # 143 is as follows: Direct materials used was
120,000.00 ; Direct labor hours worked 25,000.00 ; Budgeted
Overhead cost 300,000.00 ; Budgeted Direct labor hours
10,000 ; Budgeted Direct machine hours 6,000 ; Machine
hours used ??? ; Direct labor rate per hour PHP 5/hr ; Cost of
goods available for sale of 550,000.00; Beginning balance of
FG Inventory of 120,000.00 ; Cost of goods sold of
500,000.00; Factory Overhead control account of 180,000.00
. Job # 143 was completed at the end of the year. Overhead is
applied based on machine hours Compute the total machine
hours used in the production.
• 3,700 MHrs
A company uses job order costing system and the following
information is available from its records. The company has
three jobs in process: #6, #9, and #13. Data are as follows:
Raw materials used P120,000; Direct labor per hour P8.50;
Overhead applied based on direct labor cost 120%.Direct
materials was requisitioned as follows for each job
respectively: 30%, 25%, and 25%; the balance of the
requisitions was considered indirect. Direct labor hours per
job are 2,500; 3,100; and 4,200 respectively. Indirect labor is
P33,000. Other actual overhead costs totalled P36,000.
Assume the balance in work in process was P18,500 on June
1 and P25,297 on june 30. The balance on June 30 represents
one job that contains direct material of P11,250. How much is
the cost of goods manufactured?
• 272,463
A, Inc., uses the high-low method to analyze cost behavior.
The company observed that at 12,000 machine hours of
activity, total maintenance costs averaged $7.00 per hour.
When activity jumped to 15,000 machine hours, which was
still within the relevant range, the average cost per machine
hour totaled $6.40. On the basis of this information, what will
be the average cost per hour if 8,000 machine hours of
activity will be incurred?
• 8.50
The following transactions and account balances of MARCELO
company are as follows: Manufacturing cost of 1,000,000.00 ;
Conversion cost of 600,000.00 ; Sales of 2,500,000.00; Selling
and admin expenses of 550,000.00 ; Factory overhead control
account of 235,000.00 ; Overhead application rate per labor
hour of PHP 6 per hour ; Increase in Work in process account
of 120,000.00 ; Decrease in Finished Goods Inventory of
250,000.00 ; Direct labor rate per hour of PHP 10 per hour.
Applied Overhead is equivalent to 60% of Direct labor cost.
What is the COGS after adjustment of under/over applied
overhead (O/U OH is immaterial)?
• PHP 1,140,000
A company uses job order costing system and the following
information is available from its records. The company has
three jobs in process: #6, #9, and #13. Data are as follows:
Raw materials used P120,000; Direct labor per hour P8.50;
Overhead applied based on direct labor cost 120%.Direct
materials was requisitioned as follows for each job
respectively: 30%, 25%, and 25%; the balance of the
requisitions was considered indirect. Direct labor hours per
job are 2,500; 3,100; and 4,200 respectively. Indirect labor is
P33,000. Other actual overhead costs totalled P36,000.
Assume the balance in work in process was P18,500 on June
1 and P25,297 on june 30. The balance on June 30 represents
one job that contains direct material of P11,250. How many
direct labor hours have been worked on this job?
• 751
The following transactions and account balances of MARCELO
company are as follows: Manufacturing cost of 1,000,000.00 ;
Conversion cost of 600,000.00 ; Sales of 2,500,000.00; Selling
and admin expenses of 550,000.00 ; Factory overhead control
account of 235,000.00 ; Overhead application rate per labor
hour of PHP 6 per hour ; Increase in Work in process account
of 120,000.00 ; Decrease in Finished Goods Inventory of
250,000.00 ; Direct labor rate per hour of PHP 10 per hour.
Applied Overhead is equivalent to 60% of Direct labor cost.
What is net income before tax?
• PHP 810,000
A job order cost system uses a predetermined factory
overhead rate based on expected volume and expected fixed
cost. At the end of th year, underapplied overhead might be
explained by which of the following situations??
• Actual volume is less than expected and actual fixed cost is
greater than expected.
I.Job order costing is most appropriate to use when the
company incurs significant Overhead cost. II Normal cost
system is the combination of actual cost system and standard
cost system. III. In Job Order Cost system, when the
production of job is completed, the job is assigned by a
number and a form called a job cost sheet. IV. Cost
accounting is also used in preparing company's budget
• F,T, F, T
In manufacturing the Job 250914 for the month of March, A
Co. incurred spoilage due to customer specifications . The
number of units affected and undeliverable is 100 units with
sale value of 20 per unit. Job order 250914 was delivered to
the customer at the end of the month for a total of 900 units,
based on the delivery receipt of the trucker. The job was
originally with cost per unit of : Direct materials is 30 per unit;
Direct labor of 50 per unit and overhead of 50% of DL per
unit. GP rate is 40% above cost. How much will be the sales
price of the Job?
• $144,200
Gyro Products transferred 10,000 units to one department.
An additional 3,000 units of materials were added in the
department. At the end of the month, 7,000 units were
transferred to finished goods; while 4,000 units remained in
work in process inventory. There was no beginning inventory,
and lost units were a result of normal production shrinkage.
The production costs for the period in this department would
be effectively allocated over:
• 11,000 units
Howell Corporation has a job order cost system. The
following debits (credits) appeared in Work in Process for the
month of July: July 1, balance is 12,000 ; July 31, direct
materials is 40,000 ; July 31, direct labor is 30,000 ; July 31,
factory overhead 27,000 and July 31, amount transferred to
finished good is (100,000). Cost of goods sold is 90,000 at
normal cost with gross profit rate of 20% based on cost.
Howell applies overhead to production at a predetermined
rate based on the direct labor cost. Job 1040, the only job still
in process at the end of July, has been charged with factory
overhead of $2,250. What was the amount of direct materials
charged to Job 1040?
• 4,250
Shown below are a number of costs incurred last year at
Mecca Publishing Co., a manufacturer of elementary school
textbooks: Solvents and cleaners used by the custodians to
clean the textbook printing presses of $500; Depreciation on
the automobiles used by sales representatives of $4,200; Fire
insurance on factory building of $2,000; Shipping costs on
textbooks sold of $3,700; cost of papers and ink used in
printing books of $ 4,000; salary of employees operating the
printing machines of 3,000; packaging materials used for
delivery of text books to customers of $2,000 and gasoline
cost of trucks used for delivery of textbooks to customers of
$2,000. What is the total of the manufacturing overhead
costs above?
• $4,500
Plants Company has two support departments (S1 and S2)
and two producing departments (P1 and P2). Department S1
costs are allocated on the basis of number of employees, and
Department S2 costs are allocated on the basis of space
occupied expressed in square feet. Data on direct
department costs, number of employees, and space occupied
are as follows: Direct cost are: S1 has 7,500; S2 has 11,000;P1
has 27,500; and P2 has 30,000. Number of employees are: S1
has 10 employees; S2 has 5 employees;P1 has 20; and P2 has
25 employees. Space occupied are as follows: S1 occupied
1,000 sq ft; S2 has 500 sq ft; P1 occupies 1,500 sq ft and P2
occupies 2,500 sq ft. What is the total cost of P1 using
reciprocal method?

• 35,056.12

In manufacturing the Job 250914 for the month of March, A

Co. incurred abnormal production shrinkage of $ 500 and
spoilage due to internal failure of $10,000. The number of
units affected and undeliverable is 100 units. If job order
250914 originally consist of 900 units with cost per unit of :
Direct materials is 30 per unit; Direct labor of 50 per unit and
overhead of 50% of DL per unit. How much
spoilage/shrinkage cost should A Corp charge to Factory
Overhead Control for the month of March?

• $10,000

ABCs Corp. has three producing departments, A, B, and C,

with 50, 30, and 20 employees, respectively, in each
department. Factory payroll costs other than direct labor are
accumulated in a “Payroll Department account” and are
assigned to producing departments on the basis of number of
employees. The total payroll in each department was: A,
$300,000; B, $275,000; C, $325,000; and Payroll Department,
, $50,000. “Other costs” accumulated in the Payroll
Department amounted to $200,000. The amount of Payroll
Department costs chargeable to Department C is:

• $50,000