MULTIPLE CHOICE-PROBLEMS

1. A

Direct materials and direct labor P 500,000

Depreciation of manufacturing equipment 70,000
Depreciation of factory building 40,000
Janitor’s wages for cleaning factory premises 15,000
TOTAL ₱ 625,000

2. A ( 85K+50K)
Department
A B
Direct materials P 25,000 P 5,000
Direct labor 20,000 (40,000/200%) 30,000
Factory overhead 40,000 15,000 (30,000*50%)
TOTAL 85,000 50,000

3. C.

DIRECT MATERIAL: 2,600

DIRECTLABOR: FACTORY OVERHEAD: 1,000
800

WORK IN PROCESS-END: 4,400

Blue Beach Industries has two production departments. ABC and XYZ, and uses a job order cost
system. To determine manufacturing cost. The company applies manufacturing overhead to
production orders based on direct labor cost using the departmental rates predetermined at the
beginning of the year based on the annual budget. The 2019 budget for the two departments was
as follows:

4. D

ABC XYZ RATE

Direct materials P 630,000 P 90,000 ABC 540,000/180,000= 300%

Direct labor 180,000 720,000

XYZ 360,000/720,000= 50%

Factory Overhead 540,000 360,000

FACTORY OVERHEAD- ABC (7,200*3) 21,600
FACTORY OVERHEAD- XYZ (10,800*.5) 5,400
TOTAL ₱ 67,500

The Work-In-Process account of the Malinta Company follows:

Work-In-Process

April 1 bal. P 25,000

Direct materials 50,000
Direct labor 40,000
Factory overhead-applied 30,000
Finished Goods (125,450)
Work in Process-ending ₱ 19, 550

Overhead is applied to production at a predetermined rate, based on direct labor cost. The work
in process at April 30 represent the cost of Job No. 456, which has been charged with direct
labor cost of P 3,000, and Job No. 789 which has been charged with applied overhead of P2,400.

5. A.
Rate: 456 789 WIP-end 19,550

30,000/40,000 DM 8, 7 0 0 Conversion Cost (10,850)

= 0.75 DL 3,000 3,200 DIRECT MATERIALS 8,700

3,000x.75= 2,250 FOH 2,250 2,400
2,400/.75= 3,200
6. B

DM 50,000
DL 40,000
PM 90,000
 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 posting appear in the
ledger accounts of the company for the month of September.

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)
WORK IN POCESS, SEPT. 30 ₱ 25,000

Job No. 327 was the only job not completed in September, and it has been charged P 4,600 for
factory overhead.

7. B.

DL 4,600/.80 = 5,750

COMPUTATION: (SQUEEZE)

DIRECT MATERIAL: 14,650

DIRECTLABOR: 5,750

FACTORY OVERHEAD: 4,600

WORK IN PROCESS-END: 25,000

8. A (4,600/.8)
 9. A.
Total Manufacturing Cost *76,000
Total Manufacturing Cost
DM 26,000 WIP, Feb 1 9,000
DL 20,000
FO 30,000 (20,000x1.5) Goods put into Process 85,000
*76,000
WIP, Feb. 28 WIP, Feb 28 *(7,300)
DM 2,800
COG Manufactured 77,700
DL 1,800
FO 2,700
*7,300

10.B.
8,200 + 4,800 x 1.20= 15,600
15,600/.75 = 20,800

11. B

Direct materials (182,500*90%)164,250 Total Man. Cost 671,681

Direct Labor (242,500*93%) 225,525 Factory OH (225,525*1.25)281,906
Decrease in WIP 20,625

COGM P692,306

Total Manufacturing Cost 671,681

12. A.

(Rate: 120,000/160,000= 0.75)

SOLUTION 106 107
DIRECT MATERIALS 34,800 34,800
DIRECT LABOR 12,000 12,800 24,800
FACTORY OH 9,000 9,600 18,600
WIP, ENDING 78,200
13. C

FO 800,000x 150% = 1,200,000 WIP, beginning 300,000

DM 1,700,000 Total Manufacturing Cost 3,700,000

DL 800,000 Cost of goods Manufactured (2,400,000)

FO 1,200,000 WIP, ending 1,600,000

TMC 3,700,000
 14. D
15. A
16. D

Estimated Manufacturing Overhead 180,000

Estimated Direct Labor Hours 60,000
Predetermined overhead rate

15. WIP, June 30

Materials 2,600
Direct labor hours 1,800 300hrs x 6/hr
Applied manufacturing overhead 300hrsx 3P
5,300

COGS 84,000
FG,ending 16,000
FG,Beginning (11,000)
COGM 89,000
WIP, ending 5,300
WIP, beg. (4,500)
Manufacturing Cost 89,800
Applied Overhead (15,600) 5,200 hrs x 3/rate
Direct labor (31,200) 5,200 x 6/rate
Direct material used 43,000
 17. C.

INDIRECT MATERIALS = 120,000 x 20%

= 24,000

INDIRECT LABOR = 33,000

OTHER OVERHEAD = 36,000

FACTORY OVERHEAD = 93,000

18. C.
501 502 503
DIRECT MATERIALS (120,000* 30%:25%:25%) 36,000 30,000 30,000
DIRECT LABOR (2,500:3,100:4,200*8.5) 21,250 26,350 35,700
FACTORY OH (DL*120%) 25,500 31,620 42,840
COST 82,750 87,970 108,540

19. D
Work in Process of Alonzo Corporation on July 1 (per general ledger) is P22,800.

Per cost sheets Job 101 Job 102 TOTAL

Direct Materials P6,000 P8,000 14,000
Direct labor 3,000 2,500 5,500
Factory Overhead 1,800 1,500 3,300
TOTAL WORK IN PROCESS 10,800 12,000 22,800
Amount charged to Work in process for July

Job 101 Job 102 Job 103 Job 104

Direct materials3,000 2,000 6,000 4,500
Direct labor 1,000 1,500 2,600 2,000
Factory OH (60%) 1560 1200
TOTAL 4,600 4,400 10,160 7,700
26,860

WIP, beginning 22,800

WIP changes 26,860

GOODS PUT INTO PROCESS49,660

 20.C (15,400 + 10,160)

101 102 103 104

WIP, beg 10,800 12,000
WIP, current 4,600 4,400 10,160 7,700
TOTAL 15,400 16,400 10,160 7,700

21. C

Direct Labor 2,500

Factory OH 2,250
WORK IN PROCESS, ending 9,000
22. C.
Incomplete accounts of the Janice Company appear as follows on January 31.

Materials Inventory
Bal. 15,000 Issued 20,000
Purch. 35,000
30,000 (19)

Work in Process
Bal. 0 CofGM 40,000
Materials 20,000
Labor 44,000
OH 22,000 (20)
46,000 (21)

Finished Goods
Bal. 10,000 CofGS 20,000
CofGM 40,000

Additional information:

a. There were 5,500 direct labor hours at the rate of P8.00 per direct labor hour.
= (5,500 * 8 = 44,000)

b. Overhead is applied at the rate of P4.00 per direct labor hour.

= (5,500 * 4 = 22,000)

23. The January 31 od materials inventory should be

a. P20,000
 b. P25,000

c. P30,000

d. P50,000

24. The total overhead that have been charged to work in process during

January a. P17,000

b. P22,000

c. P33,000

d. P40,000

25. The January 31 balance of the Work in process account

a. P46,000 b. P75,000 c. P76,000 d. P82,000

The following information is taken from the records of SBU Manufacturing Company for the
first quarter of 2019

January 1, 2018 March 31, 2018

Raw materials inventory P 32,000 P 34,100
A Work in process inventory 38,500 33,050
Finished goods inventory 44,600 48,800
Direct labor 254,000
Factory overhead cost 236,900
Cost of goods sold 678, 300

26. The cost of good manufactured during the first quarter was

a. P 676,000 b. P 243,000 c. P 682, 500 d. P 713,350

27. The total cost of goods placed in process was

a. P 680,500 b. P 645,450 c. P 715,550 d. P 719,150

28. The cost of raw materials used was

a. P 263,150 b. P 186,150 c. P 224,650 d. P 286, 150

Direct Materials 263,150 (24)
Direct Labor 254,000
Factory Oh 236,900
Total Manufacturing Cost 754,050
WIP, Beginning 38,500
Goods Put into Process 715,550 (23)
WIP, Ending 33,050
Cost of Goods Manufactured 682,500 (22)
Finished Goods, beginning 44,600
Goods Available for Sale 727,100
Finished Goods, ending 48,800
Cost of Goods Sold 678,300

Job 123 required direct materials costing P20,000 and direct labor costing P 5,000 (300 hrs.)

Additionally factory overhead of P 0.80 per direct labor hour cost is charged to the job. It was

discovered that the labor shown was 125% of the correct amount due to erroneous overtime

premiums.

29. The correct cost of Job 213

a. P 24, 240 b. P 27,200 c. P 28,000 d. P 28,000

COMPUTATION Recorded Correct Amount
Direct Materials 20,000 20,000
Direct Labor 5,000 4,000
Factory OF 240 240
TOTAL COST 25,240 24,240