| CPA REVIEW SCHOOL OF THE PHILIPPINES i Manila Advanced Financial Accounting Guerrero/German/Desesus/Lim/Ferrer/Laco/Valix. Job Order Costing \ Bart}: Theory of Accounts | 1 Wich ofthe flowing statements conceming the comparison among sna! con, normal cpping dtr easing score ! a) Actual costing system values manufactured products with the actual material costs, actual direct labor costs, and actual manufacturing overhesd cost wb! Normal costing system values manufactured products with the actual material costs, setual direct Iebor costs and manufacturing overhead based on a predetermined manufacturing ‘overhead sate withthe possible over/under application of factory overhead tobe tlosed to costs of goods sold only if insignificant or to be closed prorated to cost of goods'sold, work in ross and fihed goo vento sigan : Cee ae em tafrd goods wi poteemine atl cs predetermined direct labor cost, and a predetermined manufacturing overhead frosts with the possible ovec/under application of factory overhend to be closed to costs of goods sold only if insignificant or to be closed prorated to cost of goods sold, work in process and finished goods inventory if significant. 4. Allof the above. 2. Which of the following instances will decrease the cost of goods manufactured for the period ended? ‘2. Increase in the finished goods during the period. Decrease in the direct labor cost from prior year. ‘e. Increase in the work in process inventory during the period. 4. Decrease in the raw materials inventory during the period. 3. When shall the job order costing be used instead of process costing? ‘When the production process performs standardized or uniform procedures. | 'b. When the company performs a very long production runs. ¢. When the company intends to use it for billing customers. 44. When the company produces low-value and homogeneous products. 4, Which ofthe following costs shall be considered prime cost, conversion east and product estat the same time? Acquisition price ofthe main material ofthe product. b. Depreciation of the machinery used to manufacture the product Salary ofthe factory supervision, factory janitor and factory security guard. 4. Employee benefis ofthe factory machine operator. 5. Which of the following costs shall be considered prime cost but not conversion cost? ‘Acquisition price ofthe main material ofthe product. Depreciation of the machinery used to manufacture the product. Salary of the factory supervision, factory janitor and factory security guard. Employee benefits ofthe factory machine operator. 6 Which ofthe fllowing cose shal be considered comerson cot bu no pine cost 4. Acquistion price ofthe main material ofthe product. 3. Depreciation oft aministatve buling €. Salry of te fictorysupervst, factory jntr and factory sees guard d, Employee benefits of the factory machine operator. ” ” 8610Page 2° 7. Which of the following costs shall be considered as product cost instead of period cast? 44 Salary of the inventory uecountant. '. Freight out, warranty cost and sales commission, ©. ‘Storage cost of work-in-process inventory 4. Costs of abnormal waste ‘8. Which ofthe following costs shall be considered as period cost instead of product cost? ‘Finance cost on inventory loan and foreign exchange differences arising from purchases ', Freightin and insurance wile in transit ofthe raw materials ©. Non-creditable import dutios and imecoverable value added tax 4. Cost of indirect material used and indirect labor incurred 9. Which ofthe following statements conceming spollage ina job-order costing is correct? ; ‘a. The cost of abnormal spoilage is recorded as period cost or expense. t b, When normal spoilage occurs because of the specification of a particular job, cost of normal Joss shall be capitelized to that specific job reduced by the curent disposal value/ net realizable value ofthe spoiled units. at ‘c. When normal spoilage isa characteristic ofa given production cycle, the cost of normal loss is ‘not charged to specific ob but willbe closed to manufacturing overhead control account. 4, Allof the above. 10, Which of the following statements concerning rework costs ina job-order costing is comect? 9 IF the normal rework cost is atvibutable to a specie job, it shall be capitalized to that particular jb: : b. It the normal rework cost is common to all jobs, it shall be debited to manufacturing ovethead contre ascount. {Ifthe rework cost is abnoroa, it shall be recorded as period cost or expense, . Allofthe above, 11. Which of the following stotements concerning serap in 2 job-order costing is correct? lf the sep is insipnficat, he reliable vaiue of scrap is recognized as revenue at the time it issold 'b, If the serap is insignificant but traceable to the job that yield the scrap, the net realizable ‘value of sap shall be recorded as deduction from cost ofthat specific product. «. Ifthe serap is insigniticant but eomimon to all obs, the net realizable vale of scrap shal! be credited to manufacturing overhead contrl 4. If the scrap: is significa, the net realizable valus shall be capitalized as inventory of scrap with the credit going wo specific job if taceabe to a pariulae job or manufacturing overhead conte if comaron tal jobs H €. Allofthe above.be Pagel 3) roblem 1. MLB tne. js employing normal costing forts job orders. The overhead is applied using a predetermined oveshed rate, The following information eats to the MLB Inc. forte ear ended December 31,2020 ob No. 101 Job No, 102. Job No, 103 Jo in Process, January 1, 2020: : Direct Materials 40,000 30,000 e Ely Labor 60,000 40.000 yaa Factory Overhead 30,000 200000 fs Costs added during 2020; pid Materials 20,000 10,000 100,000 Labor 100.000 200,000 400,000 Factory Overhead ? 2 2 i ‘Adational information: ‘Actual ovechead for the year 2020 amounted to P350,000. 1 2. Jobs No. 101 and 102 were completed and transferred to finished goods during year 2020. 3. JobNo. 101 was sold duzing year 2020, 4. The gross profit rate is 20% based on cost. 1. Whats the total manufacturing cost for 2020? 1,400,000 ». 1,180,000 ©. "480,000, 4. 1,200,000 2. What isthe cost of goods manufactured for 2020? 680,000 . 700,000 ©. $80,000 . 4 780,000 3. What is the cost of goods sold for 20207 1,180,000 b. "300,000 i & 700,000 1,200,000 4. What is the gross profit for 20207 & 236,000 b. 60,000 140,000 & 240,000 5. What are the cost of work in process op December 31, 2020 and the cost of finished goods." ‘on December 31, 2020, respectively? 800,000 and $00,000 , 700,000 and 400,000 ‘©. 600,000 and 300,000 4. 900,000 and 200,000Page 4, 2, NFL ne. produces sport's equipment made to customer's specifications. The following data pertain to Job 101. 6-month ending June 30,2620 6-month ending 1231/2020 ieee Materials ~ Dept. 1 Pion,on 200,000 id Direct labor rate ~ Dept. 1 PlOmhour Pisfour ‘ Labor hours used ~ Dept. 1 4,000 hours 2,000 hows yes Direct labor rte ~ Dept. 2 P20/hour P30 ‘ Labor hours used — Dept. 2 1,000 hours 3,000 hours ‘ Machine hours used—Dept.2 2,000 hours 1,900 hours Addltional data: , ‘NFL Inc. determined tht the amount of operating expenses is 10% of full production cost of Job. ', The company has provided a net profit mark up of 20% besed on sales. ‘Applied factory overhead: s Department 1 PS.00 per direct labor hour Departmeat 2. P2.00 per machine hour ‘What isthe net profit i Job 101 was completed and sold in year 20207 a 141,900 rt 193,500 i e. 129,000 el 4. 113,520 3. UFC Ine. applies factory overhead as follows: at Depertment Per Machine Hour Fabricating Plo Spreading P20 : Packaging P30 ‘Actual machine hours re: Fabricating - 2,000 hours Spreading 1,500 hours * ‘Packaging ~ 3,000 hours The following additional data are provided: i 8 The actual factory overhead expense for the peiod is P100,000. b. The ending balances ofthe inventories and cost of goods sold after the application of overhead, areas follows Rew Materials 200,000 Work in Process 100,000 1 Finished Goods 400,000 i Cost of goods sold 500,000 i ‘& The over{under) applied overhead during the ptiod is considered material if at least 30% a actual factory overhead, may ‘What is the adjusted cost of goods sold after closing the under/over application of factory overbead? sash a. 460,000 480,000 ha 540,000 . 483,333,the cure year: Net purchases of aw materials during the year Tota labor costs during the year Depreciation of factory assets during the year ‘lites onthe factory during the year Raw materia invemory rk in process inventory Fihished goods inventory ‘The entity uses a single account for its direct material and indirect materials. used is one-fourth ofthe total material used. Beginning 200,000 500,000 600,000 ‘The indirect labor cost is 1/8 of the total labor costs. ‘The overhead application rate is 80% of direct labor costs ‘Any ever or under application of overhead is considered material 1. What is the total manufacturing cost during the current year? a 1,560,000 b. 1,500,000 a 1640,000 1,740,000, 2, What is the cost of goods manufactured dur 2,040,000 b 4 1,860,000 1,940,000 1,800,000 the current year? 3. What isthe over or under application of overhead’ 60,000 over application b 4 140,000 under application 440,000 under application 160,000 over application 500,000 300,000 100,000 300,000 Ending 4. Marawi Company employs nomal costing fr its production, The following da are provided during 300,000] 200,000 300,000 Page 5 rect material 5. NIKE Inc. has completed the Jab 101, containing 1,100 shoes, during 2020 atthe following unit costs: Direct materials Direct labor Factory ovecead including an allowance of P300 for spoiled work) Fal nscton of Job 101 cited 10 sole shoes wish were sold toa dpureent P2000 1 Whatis the unit os ofthe good shoe produced on Job 101i spoilage loss is charged to ail 2,000 1,000 1,300 2. What js the unit cost of the good shoes produced on Job 101 if spoilage loss is charged to specific Job 1017 6 4 4300 4.000 4,500 4,200 8610 IPage 6 6. Forthe scar ended December 33,2120, UA Ine, cured the following costs on Job Onder 201 for manufacturing of S00 units: Original cost accumulation: Direct materials 00,000 Direct labor 400,000 Factory overhead 100,000 Direct costs of reworking 100 units: Direct matenals 100,000 Direct labor 200,000 1, What is the cost per unit of Job Order 201 if the rework costs were attributable to the exacting specification of Job Order 201? a 2,600 b. 2500 ©. 2700 @. 2200 2 What is the cost per unit of Job Order 201 ifthe rework costs were attributable fo internal failure? 2,500 2.400 e. 2,000 4. 2,300 Hl ‘Adidas Ine. s exploring ways to allocate the eos of service departments such as Quality Cont aid Maimenance to the production departments such as Machining and Assembly. The controller of the ‘company fas provided the following information: Quality Control Maimenance | Machining | Assembly) Total’? 200,000 | P400,000 | P300,000 | P1,250,000 =| sapot is [50,0007 25,000 brs | 25,000 hs 7,000 hrs | 35,000 brs Budgeted hows of service of quality como! ‘Budgeted hours cfsenvice of ‘maintenance [ren "20s | 00 | 1 Under rect med of atoating sevice departoeat costs, what ae the tral service ents allocated to the machining and assembly departments, respectively? 00 and 167,509 ive ‘300,000 and 130,060 1 ©, 412,500 and 137,500 4. 330,000 and 220/000 245 2 Under the step-down method of allocating service departinent cnets from quality control to maintenance, what sre the total service costs allocated to the machining and assembly: departments, respectively? 372,000 and 178.005, . 412,500 and 137.500 330,000 and 220-000 d._ 405,000 and 15,040 3. Under the reciprocal method of allecating service deparinent costs, what are the total amount of quality ccatrol casts and toral smount of maintenance costs, respectively, ta be allocated to the ather departments? nee a. 421,053 and 284211 , 453.201 and 290,640 €. 410,250 and 282,056 4,435,800 and 287,169 END 8610