MULTIPLE CHOICE-PROBLEMS

Dexter Company’s 2019 manufacturing costs were as follows:

Direct materials and direct labor P 100,000

Depreciation of manufacturing equipment 70,000
Depreciation of factory building 40,000
Janitor’s wages for cleaning factory premises 15,000
TOTAL ₱ 225,000

1. How much of these costs should be inventoried for external reporting purposes?

a. P 225,000

b. P 210,000

c. P 385,000

d. P 200,000

Peter Paul Company uses a job order cost system and applies factory overhead to production
orders on the basis of direct labor cost. The overhead rates for 2019 are 200% for Dept. A and
50% for Dept B. Job 123, started and completed during 2019, was charged with the following
costs:

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

2. The total manufacturing cost associated with Job 123 should be: (85,000+50,000)

a. P 135,000

b. P 180,000

c. P 195,000

d. P 240,000
Jorelle Corporation has a job order cost system. The following debits (credits) appeared in the
work-in-process account for the month of March of the current year

March Description Amount

1 Balance P 2,000
31 Direct materials 12,000
31 Direct labor 8,000
31 Factory overhead 6,400
31 To finished goods (24,000)
31 Work in Process, ending 4,400

Jorelle applies overhead to production at a predetermined rate of 80% based on direct labor cost.
Job no. 30, the only job still in process at the end of March 2 has been charged with direct labor
of P 1,000.

3. The amount of direct materials charged to Job was

COMPUTATION: (SQUEEZE)
a. P 12,000 DIRECT MATERIAL: 2,600
b. P 4,400 DIRECTLABOR: 1,000
c. P 2,600 FACTOY OVERHEAD: 800__

d, P 1,500 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:

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

Actual materials and labor costs of Job No. 676 during 2019 were as follows:

Direct materials P 22,500

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

4. What was the total manufacturing cost associated with Job No. 678 for 2019?

a. P 45,000

b. P 49,500

c. P 58,500

d. P 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. The cost of direct materials charged to Job No. 456 and Job No. 789 amounted to:

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

FOH 2,250 2,400

 a. P 8,700

b. P 7,600

c. P 4,500

d. P 4,200

6. The prime cost during the month amounted to:

a. P 70,000 DIRECT MATERIALS 50,000

b. P 90,000 DIRECT LABOR 40,000

c. P 120,000 PRIME COST 90,000

d. P 145,000

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. Direct materials charged to Job No. 327 was:

a. P 10,350 COMPUTATION: (SQUEEZE)

b. P 14,650 DIRECT MATERIAL: 14,650

DIRECTLABOR: 5,750
c. P 20,000
FACTOY OVERHEAD: 4,600
d. P 25,000
WORK IN PROCESS-END: 25,000
8. Direct labor charged to Job No. 327 was: (4,600/80%)

a. P 5,750

b. P 6,784

c. P 8,280

d. P 8,480

Hamilton Company uses job-order costing. Factory overhead is applied to production at a

budgeted cost of 150% of direct labor costs. Any overapplied or underapplied factory overhead is
closed to the cost of goods sold account at the end of each month. Job 101 was the only job in
process at January 31 with accumulated costs as follows:

Direct materials P4,000

Direct Labor 2,000
Factory Overhead applied 3,000
Total 9,000
Jobs 102, 103, and 104 were started during February. Direct materials requisitions for February
totaled P26,000. Direct labor costs of P20,000 were incurred for February. Actual factory
overhead was P32,000 for February. The only job still in process at February 28 was Job 104,
with costs of P2,800 for direct materials and P1,800 for direct labor.

9. The cost of goods manufactured for February was: Total Manufacturing Cost 76,000

a. P77,700 WIP, Feb 1 9,000

b. P78,000 Goods put into Process 85,000

c. P79,700 WIP, Feb 28 (7,300)

d. P85,000 COG Manufactured 77,700

The following information relates to Job No. 2468, which is being manufactured by Daisy Co. to
meet customer’s order

Department A Department B
Direct materials used P5,000 P3,000
Direct labor hours used 400 Direct Labor 200 Direct Labor
Direct labor rate per hour P4.00 (400*4) = 1,600 P5.00 (200*5) = 1,000
Overhead rate per DL hour P4.00 (400*4) = 1,600 P4.00 (200*4) = 800
TOTAL MFTG. COST ₱8,200 ₱4,800
Admin. and selling expenses 20% of full production cost
Profit markup 25% of selling price
10. The amount billed to the customer for Job 2468 is: (TOTAL COST: 15,600/75%)

a. P16,250

b. P20,800

c. P17,333

d. P10,800

Abner Corporation has manufactured 100,000 units of compound X in 2019 at the following
costs. Labor of P242,500 of which 93% represents direct labor, Materials of P182,500 of which
90% represents direct materials. Opening work in process is P88,125. Closing work in process
inventory is P67,500. Overhead is applied at 125% of direct labor cost.

11. The cost of goods manufactured is

a. P671,150 Direct materials (182,500*90%)164,250 Total Man. Cost 671,681

b. P692,306 Direct Labor (242,500*93%) 225,525 Decrease in WIP 20,625

c. P651,036 Factory OH (225,525*1.25) 281,906 COGM P692,306

d. P629,900 Total Manufacturing Cost 671,681

Jolly Co. employs the job order cost system. Relevant data for the month just ended are
summarized below.

a. Work in Process beginning P100,000

b. Direct materials used for the month 200,000
c. Direct labor costs for the month 160,000
d. Overhead applied based on direct labor 120,000
e. Cost of goods completed (501,800)
WORK IN PROCESS, ENDING 78,200
f. Ending work in process referred to Job 106 which was charged with direct labor of P12,000
and Job 107 charged with overhead of P9,600.

12. The cost of direct materials charged to Jobs 106 and 107 was: (Rate: 120,000/160,000= 0.75)

a. P34,800

b. P16,800
 c. P30,000

d. P36,000

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

MV Crafts manufactures to customer order using job order cost system. For the month just
ended, it registered the following data:

Beginning work in process (5 partially P300,000

completed jobs)
Orders completed (18) 2,400,000
Orders shipped 2,000,000
Materials requisitioned for the month 1,700,000
Direct labor cost 800,000
Factory overhead rate 150% of direct labor cost
13. The ending work in process inventory was
WIP, beginning 300,000
a. P1,400,000
Total Manufacturing Cost 3,700,000
b. P500,000
Cost of goods Manufactured (2,400,000)
c. P1,600,000
WIP, ending 1,600,000
d. P700,000

Adams Company uses a job order costing system and the following information is available from
the records. The company has 3 jobs in process: 501, 502, and 503.

Raw materials used P120,000

Direct labor per hour P8.50
Overhead applied based on direct labor cost 120%
Direct material was requisitioned as follows for each job, respectively: 30%, 25%, and 25%, the
balance of the requisitions was considered indirect. Direct labor hours per job are 2,500, 3,100,
and 4,200, respectively. Indirect labor is P33,000. Other actual overhead costs totaled P36,000.

14. What is the total amount of actual factory overhead?

Indirect Material (120,000*20%) 24,000
a. P36,000
Indirect Labor
b. P69,000
33,000

Other Overheads 36,000

Factory Overhead- Actual 93,000

 c. P93,000

d. P99,960

15. If Job 503 is completed and transferred, how much is the total cost transferred to Finished
Goods Inventory?

a. P96,700 b. P99,020 c. P108,540 d. P139,540

Computation:

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

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 of the current year:

Job 101 Job 102 Job 103 Job 104

Direct materials 3,000 2,000 6,000 4,500
Direct labor 1,000 1,500 2,600 2,000
Factory OH (60%) 600 900 1560 1200
TOTAL 4,600 4,400 10,160 7,700
26,860
Factory overhead is applied to production based on direct labor cost. Jobs 101 and 103 are
completed during the month.

16. Cost of goods put into process must be:

a. P42,100
WIP, beginning 22,800
b. P26,860
WIP changes 26,860

GOODS PUT INTO PROCESS 49,660

 c. P45,400

d. P49,660

17. The cost of goods manufactured for the month of July is: (15,400 + 10,160)

a. P21,600 b. P15,400 c. P25,560 d. P31,800

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

Marco Corporation has a job order cost system. The following debits (credits) appeared in the
general ledger account work-in-process for the month of September,

September 1, Balance P12,000

September 30, direct materials 40,000
September 30, direct labor 30,000
September 30, factory overhead 27,000
September 30, to finished goods (100,000)
WORK IN PROCESS, ending 9,000

Marco applies overhead to production at a predetermined rate of 90% based on the direct labor
cost. Job no. 232, the only job still in process at the end of September of the current year has
been charged with factory overhead of P2,250.

18. What was the amount of direct materials charged to Job 232 as at end of September?

a. P2,250 b. P2,500 c. P4,250 d. P9,000

Direct Materials 4,250

 Direct Labor 2,500
Factory OH 2,250
WORK IN PROCESS, ending 9,000

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)

19. The January 31 od materials inventory should be

a. P20,000
 b. P25,000

c. P30,000

d. P50,000

20. 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

21. 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

22. 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

23. 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

24. 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.

25. 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