TOPIC: COST OF GOODS SOLD

For the next 6 items

Data about Annabelle Company’s production and inventories for the month of June are as follows:

Purchases – direct materials P 143,440

Freight in 5,000
Purchase returns and allowances 2,440
Direct labor 175,000
Actual factory overhead 120,000
Inventories June 1 June 30
Finished goods P 68,000 P 56,000
Work in process 110,000 135,000
Direct materials 52,000 44,000

Annabelle Company applies factory overhead to production at 80% of direct labor cost. Over or
underapplied overhead is closed to cost of goods sold at year end. The company’s accounting period is on
the calendar year basis.

1. Annabelle Company’s prime cost for June was:

A. P 154,000
B. P 329,000
C. P 198,000

m
er as
D. P 315,000

co
eH w
DM, beginning 52,000.00

o.
Purchases 143,440.00
rs e
Freight in 5,000.00
ou urc

Purchase returns and allowances (2,440.00)

DM, ending (44,000.00)
DM used 154,000.00
o

Direct labor 175,000.00

aC s

Prime cost 329,000.00

vi re

2. Annabelle Company’s conversion cost for June was:

y

A. P 315,000
ed d

B. P 295,000
ar stu

C. P 329,000
D. P 444,000
is

Direct labor 175,000.00

Applied MO 140,000.00
Th

Conversion costs 315,000.00

3. For the month of June, Annabelle Company’s total manufacturing cost was:
sh

A. P 469,000
B. P 444,000
C. P 644,000
D. P 449,000

DM used 154,000.00
Direct labor 175,000.00
Applied MO 140,000.00
Manufacturing costs 469,000.00

4. For June, Annabelle Company’s cost of goods transferred to the finished goods inventory account was:
A. P 579,000
B. P 461,000
This study source was downloaded by 100000819742221 from CourseHero.com on 10-20-2021 08:38:46 GMT -05:00

https://www.coursehero.com/file/26483466/Prelims-Quiz-2docx/
 C. P 469,000
D. P 444,000

Manufacturing costs 469,000.00

WIP, beginning 110,000.00
Cost of goods put into process 579,000.00
WIP, ending (135,000.00)
Cost of goods manufactured 444,000.00

5. Annabelle Company’s cost of goods sold for June was:

A. P 441,000
B. P 481,000
C. P 456,000
D. P 444,000

Cost of goods manufactured 444,000.00

Finished goods, beginning 68,000.00
Cost of goods available for sale 512,000.00
Finished goods, ending (56,000.00)
Cost of goods sold 456,000.00

m
er as
6. The amount of over/underapplied factory overhead for the month of June was:
A. P 140,000 overapplied

co
B. P 120,000 underapplied
eH w
C. P 20,000 overapplied

o.
rs e
D. P 20,000 underapplied
ou urc

Applied MO 140,000.00
Actual MO (120,000.00)
o

Overapplied 20,000.00
aC s
vi re

TOPIC: COST OF GOODS SOLD

For the next 4 items:
Miracle Company provides you with the following information:
y
ed d

Inventories: Beginning Ending

ar stu

Materials ? P 50,000
Work in process P 80,000 95,000
Finished goods 60,000 78,000
is

January transactions:
Th

 Purchases materials, P46,000

 Factory overhead (75% of direct labor cost), P63,000
 Selling and administrative expenses (12.5% of sales), P25,000
 Net profit for January, P25,200
sh

Compute for the following:

7. Sales:
A. P 174,800
B. P 200,000
C. P 225,200
D. P 250,000

Selling & Admin 25,000.00

Divided by: 12.5%
200,000.0
Sales 0
This study source was downloaded by 100000819742221 from CourseHero.com on 10-20-2021 08:38:46 GMT -05:00

https://www.coursehero.com/file/26483466/Prelims-Quiz-2docx/
 8. Cost of goods sold:
A. P 149,800
B. P 174,800
C. P 225,000
D. P 225,200

200,000.0
Sales 0
149,800.0
COGS 0
Gross profit 50,200.00
Selling & Admin 25,000.00
Net profit 25,200.00

9. Cost of goods manufactured:

A. P 116,800
B. P 131,800
C. P 167,800

m
D. P 182,800

er as
co
Cost of goods manufactured
eH w 167,800.00
Finished goods, beginning 60,000.00

o.
Cost of goods available for sale 227,800.00
rs e
Finished goods, ending (78,000.00)
ou urc

Cost of goods sold 149,800.00

o

10. Materials inventory, beginning:

aC s

A. P 26,200
vi re

B. P 39,800
C. P 66,000
y

D. P 76,550
ed d
ar stu

DM, beginning 39,800.00

Purchases 46,000.00
DM, ending (50,000.00)
is

DM used 35,800.00
Direct labor 84,000.00
Th

Applied MO 63,000.00
Manufacturing costs 182,800.00
WIP, beginning 80,000.00
sh

Cost of goods put into process 262,800.00

WIP, ending (95,000.00)
Cost of goods manufactured 167,800.00
Finished goods, beginning 60,000.00
Cost of goods available for sale 227,800.00
Finished goods, ending (78,000.00)
Cost of goods sold 149,800.00

TOPIC: COST OF GOODS SOLD

11. Santol Company had the following inventories:

April 1 April 30
Work in process P 18,000 P 26,000
This study source was downloaded by 100000819742221 from CourseHero.com on 10-20-2021 08:38:46 GMT -05:00

https://www.coursehero.com/file/26483466/Prelims-Quiz-2docx/
 Finished goods 54,000 72,000

The following information was available for April, 2017:

Direct labor P 60,000

Direct labor rate per hour P 7.50
Overhead rate per direct labor hour P10.00
Cost of goods manufactured P 153,650

What is the prime cost during April 2017?

A. P 81,650
B. P 80,000
C. P 90,000
D. P 96,000

DM used 21,650.00
Direct labor 60,000.00
Applied MO 80,000.00
Manufacturing costs 161,650.00
WIP, beginning 18,000.00
Cost of goods put into process 179,650.00

m
WIP, ending (26,000.00)

er as
Cost of goods manufactured 153,650.00

co
eH w
o.
TOPIC: COST OF GOODS SOLD
rs e
12. Abner Corporation has manufactured 100,000 units of compound X in 2017 at the following costs: Labor
P242,500 of which 93% represents direct labor. Materials of P182,500 of which 90% represents direct
ou urc

materials. Opening work in process inventory is P88,125. Closing work in process inventory is P67,500.
Overhead is applied at 125% of direct labor cost.
o

The cost of goods manufactured is

aC s

A. P 671,150
vi re

B. P 692,306
C. P 651,036
y

D. P 629,900
ed d
ar stu

DM (182,500 x 90%) 164,250.00

is

DL (242,500 x 93%) 225,525.00

Th

FO - Applied (225,525 x 125%) 281,906.25

Manufacturing cost 671,681.25
WIP, beg 88,125.00
CGPIP 759,806.25
sh

WIP. End (67,500.00)

CGM 692,306.25

TOPIC: COST OF GOODS SOLD

13. For the year 2017, the gross profit of ABC Co. was P96,000; the cost of goods manufactured was P340,000;
the beginning inventories of work in process and finished goods inventory were P28,000 and P45,000,
respectively; and the ending inventories of work in process and finished goods were P38,000 and P52,000
respectively. The sales of ABC Co. for 2017 must have been:
A. P 419,000
B. P 429,000
C. P 434,000
D. P 436,000

This study source was downloaded by 100000819742221 from CourseHero.com on 10-20-2021 08:38:46 GMT -05:00

https://www.coursehero.com/file/26483466/Prelims-Quiz-2docx/
 Gross profit 96,000.00
Cost of goods manufactured 340,000.00
FG, beginning 45,000.00
(52,000.00
FG, ending )
429,000.00
TOPIC: COST OF GOODS SOLD
14. The books of Chico Manufacturing Co. showed the following data for the month of October 2017:

Oct. 1 Oct. 31
Raw materials P 16,000 P 17,200
Work in process 16,000 24,000
Finished goods 28,000 36,000

Direct labor cost, P32,000

Factory overhead, 75% of direct labor cost
Cost of goods sold, P112,500

What is the cost of materials purchased during the month?

A. P 71,200
B. P 72,000
C. P 73,700
D. P 87,200

m
er as
DM, beginning 16,000

co
eH w
Purchases
DM available for use
73,700
89,700

o.
DM, ending (17,200)
rs e
DM used 72,500
ou urc

DL 32,000
FO (75% of DL 24,000
o

Manufacturing costs 128,500

aC s

WIP, beginning 16,000

vi re

Cost of goods put into process 144,500

WIP, ending (24,000)
Cost of goods manufactured 120,500
y

FG, beginning 28,000

ed d

CGAS 148,500
ar stu

FG, ending (36,000)

COGS 112,500
is

TOPIC: JOB ORDER COSTING

Th

For the next 2 items:

The Diamond Company uses a job order accounting system. Overhead is applied to production at a
predetermined rate of 80% based on direct labor cost.
The following postings appear in the ledger accounts of the company for the month of September 2017:
sh

Debit
Work in process, Sept. 1 P 30,000
Direct materials 60,000
Direct labor 50,000
Factory overhead 40,000
Cost of goods completed (155,000)

Job No. 327 was the only job not completed in September, and it has been charged P4,600 for factory
overhead.

15. Direct materials charged to Job No. 327 was:

A. P 10,350
B. P 14,650
C.was downloaded
This study source P 20,000 by 100000819742221 from CourseHero.com on 10-20-2021 08:38:46 GMT -05:00

https://www.coursehero.com/file/26483466/Prelims-Quiz-2docx/
 D. P 25,000

16. Direct labor charged to Job No. 327 was:

A. P 5,750
B. P 6,784
C. P 8,280
D. P 8,480

Work in process, Sept. 1 30,000.00

Direct materials 60,000.00
Direct labor 50,000.00
Factory overhead 40,000.00
(155,000.00
Cost of goods completed
)
WIP, Sept 30 25,000.00
FO (4,600.00)
DL (5,750.00)
DM 14,650.00

TOPIC: JOB ORDER COSTING

17. Sandy Corporation manufactures a specialty line of dresses using a job order cost system. During January,

m
the following costs were incurred in completing Job H-1:

er as
Direct materials P 27,400

co
eH w
Direct labor
Administrative costs
9,600
2,800

o.
Selling costs 11,200
rs e
ou urc

Factory overhead was applied at the rate of P50 per direct labor hour, and Job H-1 required 400 direct labor
hours. If Job H-1 resulted in 4,000 good dresses, the cost of goods sold per unit is:
A. P 9.25
o

B. P 14.25
aC s

C. P 14.95
vi re

D. P 17.75
y

DM 27,400.00
ed d

DL 9,600.00
ar stu

FO (400 DLH x P50) 20,000.00

Manufacturing cost 57,000.00
Divided by: No. of dresses 4,000.00
is

14.25
TOPIC: JOB ORDER COSTING
Th

18. Overhead applied was P120,000, while actual overhead was P124,000. Which of the following is always true
of the above?
A. Direct labor activity was overestimated.
sh

B. Overhead was underapplied by P4,000.

C. Overhead was overapplied by P4,000.
D. The difference must be reported as a loss.

TOPIC: JOB ORDER COSTING

19. Mangga Inc. employs job order cost system. Its manufacturing activities in July, 2017, its first month of
operation, are summarized as follows:

Job Numbers
201 202 203 204
Direct materials P 7,000 P 5,800 P 11,600 P 5,000
Direct labor cost P 6,600 P 6,000 P 8,400 P 2,400
Direct labor hours 1,100 1,000 1,400 400
Units produced 200 100 1,000
This study source was downloaded by 100000819742221 from CourseHero.com on 10-20-2021 08:38:46 GMT -05:00
300

https://www.coursehero.com/file/26483466/Prelims-Quiz-2docx/
 The manufacturing overhead is applied at a rate of P2 per direct labor hour to variable overhead, P3 per
direct labor hour for fixed overhead.
Jobs 201, 202 and 203 were completed in July.

What is the cost of the completed jobs?

A. P 62,900
B. P 62,500
C. P 72,900
D. P 65,900

201 202 203 Total

24,400.0
DM 7,000.00 5,800.00 11,600.00 0
21,000.0
DL 6,600.00 6,000.00 8,400.00 0
17,500.0
FO 5,500.00 5,000.00 7,000.00 0
62,900.0
Manufacturing costs 19,100.00 16,800.00 27,000.00 0

TOPIC: JOB ORDER COSTING

20. Banana Corporation has a job cost system. The following debits (credits) appeared in the ledger account

m
Work in Process for the month of March 2017:

er as
co
March 1eH w Balance P 12,000
31 Direct materials 40,000

o.
31 Direct labor 30,000
rs e
31 Factory overhead 27,000
ou urc

31 To finished goods (100,000)

Banana applied manufacturing overhead to production at a predetermined rate of 90% based on direct labor
o

cost. Job No. 232, the only job still in process at the end of March, 2017, has been charged with factory
aC s

overhead of P2,250. What was the amount of direct materials charged to Job No. 232?
vi re

A. P 2,250
B. P 2,500
C. P 4,250
y

D. P 9,000
ed d
ar stu

Balance 12,000.00
DM 40,000.00
DL 30,000.00
is

FO 27,000.00
Th

(100,000.00
Cost of goods manufactured )
WIP, ending 9,000.00
FO (2,250.00)
sh

DL (2,250/90%) (2,500.00)
DM 4,250.00

TOPIC: ACTIVITY BASED COSTING

21. Uratex Company manufactures a variety of classroom chairs. Its job-costing system uses an activity-based
approach. There are two direct-cost categories (direct materials and direct labor) and three indirect cost
pools. The cost pools represent three activity areas at the plant.

Cost-
Manufacturing Budgeted Cost Driver used as
allocation
Activity Area Cost for 2017 Allocation Base
Rate
Materials Handling P 200,000 Parts P 0.25
Cutting 2,000,000 Parts 2.50
Assembly 2,000,000 Direct labor hours 25.00
This study source was downloaded by 100000819742221 from CourseHero.com on 10-20-2021 08:38:46 GMT -05:00

https://www.coursehero.com/file/26483466/Prelims-Quiz-2docx/
 Two styles of chairs were produced in March, the high school chair and the college chair. Their quantities,
direct material costs, and other data for March 2017 are as follows:

Direct
Units Direct materials Number of
manufacturing labor
produced cost parts
hours
High school chair 5,000 P 600,000 100,000 7,500
College chair 100 25,000 3,500 500

The direct labor rate is P20 per hour. Assume no beginning or ending inventory.

What are the unit cost of the high school chair and college chair?
A. P 240.50 and P 571.75 respectively
B. P 242.50 and P 570.25 respectively
C. P 252.50 and P 571.25 respectively
D. P 242.50 and P 571.25 respectively

HS Chair College Chair

DM 600,000.00 25,000.00
DL 150,000.00 10,000.00
MO
Materials handling 25,000.00 875.00

m
Cutting 250,000.00 8,750.00

er as
Assembly 187,500.00 12,500.00

co
Manufacturing costs
eH w 1,212,500.00 57,125.00
Divided by: No of units produced 5,000.00 10.00

o.
Unit cost 242.50 5,712.50
rs e
ou urc

TOPIC: ACTIVITY BASED COSTING

For the next 6 items:
o

Special Products recently installed an activity-based relational data base. Using the information contained in the
activity relational table, the following pool rates were computed:
aC s

 P200 per purchase order

vi re

 P12 per machine hour, process A

 P15 per machine hour, process B
y

 P40 per engineering hour

ed d

Two products are produced by Special Products: A and B. Each product has an area in the plant that is
ar stu

dedicated to its production. The plant has two manufacturing processes, process A and process B. Other
processes include engineering, product handling and procurement. The product relational table for Special is as
follows:
is

Activity Driver Activity Usage

Name
No.
Th

Product A Product B
1 Units 200,000 25,000
2 Purchase orders 250 125
3 Machine hours 80,000 10,000
sh

4 Engineering hours 1,250 1,500

22. How much overhead cost will be assigned to product A using the number of purchase orders?
A. P 50,000
B. P 25,000
C. P 40,000,000
D. P 66,750

P200 x 250 PO

23. How much overhead cost will be assigned to product B using engineering hours?

A. P 50,000
This study source was downloaded by 100000819742221 from CourseHero.com on 10-20-2021 08:38:46 GMT -05:00

https://www.coursehero.com/file/26483466/Prelims-Quiz-2docx/
 B. P 60,000
C. P 1,000,000
D. P 400,500
P40 x 1,500 hours

24. How much overhead cost will be assigned to product A using process A?

A. P 1,200,000
B. P 2,400,000
C. P 960,000
D. P 120,000
P12 x 80,000

25. How much overhead cost will be assigned to product B using process B?

A. P 1,200,000
B. P 960,000
C. P 120,000
D. P 150,000
P15 x 10,000

m
er as
26. What is the unit cost of Product A?

co
A. P 4.71
eH w
o.
B. P 3.76
rs e
C. P 252.00
ou urc

D. P 5.30

27. What is the unit cost of Product B?

o
aC s

A. P 9.40
vi re

B. P 6.00
C. P 252.00
y

D. P 6.41
ed d
ar stu

A B
Purchase order 50,000.00 25,000.00
150,000.0
is

Machine hours 960,000.00 0

Engineering hours 50,000.00 60,000.00
Th

1,060,000.0 235,000.0
Total 0 0
Divided by: Units produced 200,000.00 25,000.00
sh

5.30 9.40

This study source was downloaded by 100000819742221 from CourseHero.com on 10-20-2021 08:38:46 GMT -05:00

https://www.coursehero.com/file/26483466/Prelims-Quiz-2docx/

Powered by TCPDF (www.tcpdf.org)