Activity # 2: Cost Accounting

1. Flor Company consumed P450,000 worth of direct materials during May 2011. At the end of the month, the direct
materials inventory of Flor was P25,000 lower than the May 1 inventory level. How much was the direct materials
procured during May 2011
A. P475,000
B. P400,000
C. P425,000
D. P375,000

2. Last month, Pare Company placed P60,000 of materials into production. The Printing Department used 8,000 labor
hours at P5.60 per hour and the Binding Department used 4,600 hours at P6.00 per hour. Factory overhead is applied at
a rate of P6.00 per labor hour in the Printing Department and P8.00 per labor hour in the Binding Department. Pare's
inventory accounts show the following balances:

Beginning Ending
Finished goods P22,000 P17,000
Work in process 15,000 17,600
Materials 20,000 18,000

What is the total cost of goods sold?

A. P108,000
B. P217,200
C. P219,600
D. P214,600

3. The following selected information pertains to Ajax Processing Co.: direct materials, P62,500; indirect materials, P12,500;
factory payroll, P75,000 of direct labor and P11,250 of indirect labor; and other factory overhead incurred. P37,500.
The total conversion cost was:
A. P136,250
B. P137,500
C. P250,000
D. P273,750

4. Burger Co.'s materials purchase during 2011 are P25,590 and materials put into production are direct and indirect
materials, respectively, worth P18,500 and P7,090. The total factory payroll is P74,000 of which P50,000 represents
direct labor. Other factory overhead costs amount to P32,000. The company applies the actual factory overhead cost to
process. Sales, cost of goods sold, and the cost of goods manufactured, respectively, are P130,000, P120,000, and
P128,000.
By what amount did the company's closing goods in process inventory exceed its opening goods in process inventory?
A. P 5,390
B. P1,590
C. P3,590
D. P10,590

5. Department II of Charity Manufacturing Company presents the following production data for the month of May, 2011:
Opening inventory, 3/8 completed. 4,000 units
Started in process. 13,000 units
Transferred 9,000 units
Closing inventory, 1/2 completed. 4,000 units
3/4 completed 4,000 units
What are the equivalent units of production for the month of May, 2011?
FIFO Method Average Method
A. 12,500 units 13,000 units
B. 17,000 units 12,500 units
C. 12,500 units 14,000 units
D. 15,000 units 14,000 units

6. Walden Company has a process cost system. All materials are introduced at the beginning of the process in Department
One. The following information is available for the month of January 2011:

Work-in-process, 1/1/2011 (40% complete as to conversion costs) 500

Started in January 2,000
Transferred to Department Two during January 2,100
Work-in-process, 1/31/2011 (25% complete as to conversion costs) 400

What are the equivalent units of production for the month of January 2012?

FIFO Average
Materials Conversion Materials Conversion
A. 2,500 2,200 2,000 2,000
B. 2,500 1,900 2,500 1,900
C. 2,000 2,200 2,000 2,200
D. 2,000 2,000 2,500 2,200
7. Department A is the first stage of Mann Company's production cycle. The following information is available tor conversion
costs for the month of April 2011:
Units
Work-in-process, beginning (60% complete) 20,000
Started in April 340,000
Completed in April and transferred to department B 320,000
Work-in-process, ending (40% complete) 40,000
The equivalent units for the conversion cost calculation are:

FIFO Average
A. 324,000 324,000
B. 336,000 336,000
C. 336,000 324,000
D. 324,000 336,000

8. Bart Co. adds materials at the end of the process in Department M. The following information pertain to Department M's
work-in-process during April:
Units
Work-in-process. April 1 (60% complete as to conversion cost) 3,000
Started in April 25,000
Completed 20,000
Work-in-process. April 30 (75% complete as to conversion cost) 8,000

What are the equivalent units of production for the month of April?
FIFO Average
Materials Conversion Materials Conversion
A. 28,000 28,000 28,000 28,000
B. 20,000 20,000 26,000 26,000
C. 20,000 24,200 20,000 26,000
D. 24,200 20,000 26,000 20,000