Chapter 02

Statement of Cost of Goods Sold

1) Compute the amount of direct materials used during August if P25,000 of raw materials were purchased during the
month and the inventories were as follows:

Inventories Balance August 1 Balance August 31

Raw materials P 5,000 P 3,000
Work in process 13,000 16,000
Finished goods 25,000 27,000

A. 16,000
B. 19,000
C. 23,000
D. 27,000

2) The following information were taken from the accounting records of YANNI MUSIC Co. for 2021:
Increase in raw materials inventory P 45,000
Decrease in finished goods inventory 150,000
Raw materials purchases 1,290,000
Direct labor payroll 600,000
Factory overhead 900,000
Freight out 135,000

The cost of raw materials used during the period amounted to

A. 1,245,000
B. 1,290,000
C. 1,335,000
D. 1,380,000

3) Assume the following information:

Direct materials used P 180,000
Direct labor 260,000
Factory overhead 300,000
Beginning work-in-process inventory 30,000
Beginning finished goods inventory 40,000
Ending work-in-process inventory 84,000
Selling and administrative expenses 75,000
What was the cost of goods manufactured during the year?
A. 794,000
B. 706,000
C. 686,000
D. 690,000

4) Assume the following data for Rourick Company for December:

Beginning finished goods inventory P30,000
Beginning work-in-process inventory 20,000
Ending work-in-process inventory 40,000
Ending finished goods inventory 25,000
Actual factory overhead costs 100,000
Direct materials used 80,000
Direct labor 50,000
What is the cost of goods manufactured for December?
A. 235,000
B. 210,000
C. 250,000
D. 215,000
5) Information from the records of the Heitz Company for July 2021 is as follows:

Sales P205,000
Direct labor 50,000
Selling and administrative expenses 35,000
Direct materials purchases 30,000
Factory overhead 67,500

Inventories
July 1 July 31
Direct materials P6,000 P7,000
Work-in-process 12,500 14,000
Finished goods 11,500 9,500

Heitz Company’s cost of goods manufactured in July is

A. 146,500
B. 148,500
C. 145,000
D. 147,500

6) Flamer Company, a manufacturer, had inventories at the beginning and end of its current year as follows:

Beginning Ending
Raw materials 11,000 15,000
Work in process 20,000 24,000
Finished goods 12,500 9,000
During the year, the following costs and expenses were incurred:

Raw materials purchased 150,000

Direct labor cost 60,000
Indirect factory labor 30,000
Taxes and depreciation on factory building 10,000
Taxes and depreciation on sales room and office 7,500
Sales salaries 20,000
Office salaries 12,000
Utilities (60% applicable to factory, 20% to sales room, and 20% to office) 25,000
Flamer’s cost of goods sold for the year is
A. 257,000
B. 260,500
C. 261,000
D. 269,500

7) Compel Company’s records for the year ended December 31, 2021 included the following information:

Raw materials purchases 860,000

Work in progress inventory decrease 10,000
Finished goods inventory increase 70,000
Raw materials inventory decrease 30,000
Manufacturing overhead 600,000
Freight-out 90,000
Direct labor 400,000
Compel Company’s cost of sales for the year 2021 is
A. 1,910,000
B. 1,830,000
C. 1,770,000
D. 1,750,000
Use the following information for the next two (3) questions:
Following cost data for September, 2021 are from the books of Iloilo Manufacturing Co.

Aug. 31, 2021 Sept. 30, 2021

Opening and closing inventories
Raw materials P20,000 P25,000
Work in process 30,000 36,000
Finished goods 40,000 45,000
Direct labor cost, P60,000
Factory overhead, 60% of direct labor cost.
Cost of goods sold, P125,000
Selling and administrative expenses, P37,000
Sales for September, 2021, P185,000

8) The cost of materials purchased during the month was

A. 65,000
B. 45,000
C. 25,000
D. 55,000

9) The cost of goods manufactured during the month was

A. 136,000
B. 130,000
C. 125,000
D. 55,000

10) The net income of the company for the month was
A. 185,000
B. 60,000
C. 23,000
D. 43,000

End of Chapter 2