COST ACCOUNTING AND CONTROL

Bachelor of Science in Accountancy 2

LAGUNA STATE POLYTECHNIC UNIVERSITY (LSPU) – SINILOAN CAMPUS
Quiz No. 2

Name: __________________________________________ Year and Section: ___________________________

INSTRUCTIONS: Encircle the correct answer for theory questions. For problem solving questions, write the answer on
the space provided before the number.

1. When job order costing is used, the primary focal point of cost accumulation is the
a. Department
b. Item
c. Cost driver
d. Job

2. Which of the following could not be used in job order costing?

a. Standards
b. An average cost per unit for all jobs
c. Normal costing
d. Overhead allocation based on the job’s direct labor hours

3. In a normal cost system, a debit to Work in Process Inventory would not be made for
a. Actual overhead
b. Applied overhead
c. Actual direct material
d. Actual direct labor

4. After the completion of the production, standard and actual costs are compared to determine the _____ of
the production process.
a. Effectiveness
b. Complexity
c. Homogeneity
d. Efficiency

5. Which of the following journal entries records the accrual of the cost of indirect labor used in production?
a. Debit to WIP Inventory, credit Wages Payable
b. Debit to WIP Inventory, Manufacturing Overhead
c. Debit to Manufacturing Overhead, credit WIP Inventory
d. Debit to Manufacturing Overhead, credit Wages Payable

6. A material requisition form should show all of the following information except
a. Job number
b. Quantity required
c. Unit cost
d. Purchase order number
e.
7. Underapplied overhead resulting from unanticipated an immaterial price increases for overhead items
should be written off by
a. Decreasing cost of goods sold
b. Increasing cost of goods sold
c. Decreasing cost of goods sold, WIP inventory, and finished goods inventory
d. Increasing cost of goods, WIP inventory, and finished goods inventory
 The following information were taken from the accounting records of Padayon Music Company for 2023

Increase in raw materials inventory 45,000

Decrease in finished goods inventory 150,000
Raw materials purchases 1,290,000
Direct labor 30% of total manufacturing costs
Factory overhead 10% of total manufacturing costs
Freight in 135,000

8. The cost of raw materials used during the period amounted to _________________.
9. Total manufacturing costs amounted to _________________.
10. Total costs of goods sold amounted to _________________.

Parker Company manufactures custom-built conveyor systems for factory and commercial operations. Susan
Jones is the cost accountant for Parker Company and she is in the process of educating a new employee,
Terry Smith about the job order costing system that Parker Company uses. The system is based on normal
costs; overhead is applied based on direct labor cost and rounded to the next whole peso. The following job
order cost records are available for July:

JOB NO. DIRECT MATERIALS DIRECT LABOR APPLIED OH TOTAL COSTS

667 5,901 1,730 1,990 9,621
669 18,312 1,810 2,082 22,204
670 406 500 575 1,481
671 51,405 9,500 10,925 71,830
672 9,615 550 633 10,798

To explain the missing job number, Susan informed Terry that job 668 had been completed in June. She also
told her that job 667 was the only job in process at the beginning of July. At that time, the job had been
assigned 4,300 for direct materials and 900 for direct labor. At the end of July, job 671 had not been
completed, all others had. Terry asked Susan several questions to determine whether she understood the
job order system.

11. What is the predetermined overhead rate used by Parker Company? _________________.
12. What was the total cost of beginning WIP inventory? _________________.
13. What was the cost of goods manufactured for July? ________________.

14. Debit to costs of goods sold typically represent the

a. Transfer of completed items to finished goods inventory
b. Costs of items sold
c. Selling price of items sold
d. The costs of goods manufactured

15. In a production environment that manufactures goods to customer specifications, a job order costing system
a. Can be used only if standard costs are used for material and labor.
b. Will provide reasonable product cost information only when all jobs utilize approximately the same
quantities of material and labor.
c. May be maintained using either actual or predetermined overhead rates.
d. Emphasizes that large customers create the most costs even though they also provide the most
revenues.
 REO Company uses a job order costing system and the following information is available from the
records. The company has 3 jobs in process: 501, 502 and 503.

Raw materials used 120,000

Direct labor per hour 8.50
Overhead applied based on direct labor cost 120%

Direct material was requisitioned as follows for each job, respectively: 30%, 25% and 20%, 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 33,333. Other actual overhead costs totaled 35,000.

16. What is the total amount of actual factory overhead? _________________.

17. What is the total amount of factory overhead applied to production? __________________.
18. If the Job 503 is completed and transferred, how much is the total cost transferred to finished goods
inventory? ________________.

SHEIN Company is a manufacturing company using the perpetual inventory system. The following materials
inventory account data is provided:

Beginning balance 275,000

Other debits to the account 835,000
Excess of ending inventory over beginning inventory 55,000

19. How much is the cost of materials issued to production? ________________.

DONUT Company has the following data in April 30, 2023:

Manufacturing overhead 30,101.80
Decrease in ending inventories:
Materials 2,430
Work in Process 590
Increase in ending inventory:
Finished goods 1,320.40

The manufacturing overhead amounts to 50% of the direct labor, and the direct labor and manufacturing
Overhead combined equal to 50% of the total manufacturing costs. All materials are purchased FOB shipping
Point.

20. Cost of goods manufactured amounted to __________________.

21. Total manufacturing costs amounted to__________________.
22. Costs of goods sold amounted to __________________.

23. The source document that records the amount of raw material that has been requested by production is the
a. Job order cost sheet
b. Bill of lading
c. Interoffice memo
d. Material requisition

24. In a job order costing system, the use of indirect material would usually be reflected in the general ledger as
Increase in
a. Stores control
b. Work in process control
c. Manufacturing overhead applied
d. Manufacturing overhead control
 MACOPA COMPANY 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, 2023:

 The work in process inventory on January 1 was 20% less than the work in process inventory on
December 31.
 The total manufacturing cost added during 2023 was 900,000 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 labor pesos, and it was
equal to 25% of the total manufacturing costs.
 The costs of goods manufactured also based on actual direct labor and applied manufacturing
overhead, was 850,000.

25. The cost of direct materials used amounted to __________________.

26. WIP Inventory on December 31, 2023 amounted to ________________.

27. The source document that records the amount of time an employee worked on a job and his/her pay rate is
the
a. Job order cost sheet
b. Employee time sheet
c. Labor requisition form
d. Interoffice memo

28. Production overhead does not include the costs of

a. Factory depreciation and supplies
b. Factory employees’ cafeteria departments
c. Production line labor
d. The maintenance department for the factory.

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

8/31/2023 9/30/2023
Inventories:
Raw materials ? 50,000
Work in process 80,000 95,000
Finished goods 60,000 78,000

Raw materials purchases, 46,000

Factory overhead, 75% of direct labor cost, 63,000
Selling and administrative expenses, 12% of sales, 25,000
Net income after tax for September, 18,750
Tax rate, 25%

29. What is the cost of raw materials inventory on August 31, 2023? ___________________.
30. Beginning WIP inventory amounted to ___________________.