MULTIPLE CHOICE QUESTIONS.

1. Job order costing is:

a. A costing technique
b. A cost flow assumption
c. An inventory system
d. A cost accumulation method

2. Which of the following is an expense account?

a. Cost of goods sold
b. Factory payroll
c. Factory overhead
d. Work in process

3. Which of the items below represent subsidiary ledger accounts?

a. Material requisition Slip
b. A labor time ticket of production staff
c. A job cost sheet of production staff
d. None of the above

4. Under the job cost system, purchases of direct materials are debited to:
a. Purchases
b. Materials Inventory
c. Work in Process
d. Factory Overhead Control

5. Which of the following production operations would most likely to employ a job order
system of cost accounting?
a. Toy manufacturing
b. Candy Manufacturing
c. Shipbuilding
d. Crude oil refining
6. When direct materials that were previously issued for a particular job are returned to
the storekeeper, the journal entry to record the return is:
a. Debit materials inventory and credit factory overhead
b. Debit materials inventory and credit work in process inventory
c. Debit purchase returns and credit work in process inventory
d. Debit work in process inventory and credit materials inventory

7. When materials are issued in the production, the entry to record material usage is:
a. A debit to material inventory and a credit to account payable
b. A debit materials inventory, a debut o factory overhead and a credit to accounts
payable
c. A debit to work in process inventory, a debit to factory overhead and a credit to
accounts payable
d. A debit to work in process inventory, a debit factory overhead and a credit to
materials inventory

8. Which of the following entry is prepared to record application of factory overhead to

jobs?
a. A debit factory overhead control for actual overhead, credit work in process
inventory for applied overhead
b. Debit factory overhead control for applied overhead, credit work in process
inventory for actual overhead
c. Debit work in process inventory for applied overhead, credit factory overhead
control for actual overhead
d. Debit work in process inventory for applied overhead, credit factory overhead
applied for applied overhead

9. The most common treatment of under-or-over applied overhead is closed to:

a. Retained earnings
 b. Finished goods
c. Work in process
d. Cost of goods sold

10. Under applied factory overhead is:

a. An unfavorable overhead variance
b. A debit balance
c. A credit balance
d. Both a and b

11. Which of the following statements is correct?

a. Direct and indirect materials are charged to work in process account
b. Direct materials and direct labor are debited to work in process account
c. Direct materials and direct labor are credited to work in process account
d. Direct materials and direct labor are credited to factory in overhead account

12. The actual factory overhead is recorded as:

a. Debit: work in process inventory for actual overhead
Credit: factory overhead control for actual overhead
b. Debit: work in process inventory for applied overhead
Credit: factory overhead control for actual overhead
c. Debit: factory overhead control for actual overhead
Credit: work in process inventory for applied overhead
d. Debit: factory overhead control for actual overhead
Credit: various accounts for actual overhead

13. In a job order costing system, actual factory overhead is recorded by:
a. Debiting factory overhead control
 b. Crediting various accounts such as accrued expenses and accumulated
depreciation
c. Crediting factory overhead applied
d. Crediting work in process inventory

14. Under an effective system of internal control, the authorization for issuing materials is
made
a. by anyone in the company
b. by the accounting department
c. on a prenumbered requisition slip
d. orally

15. When a job is completed and all costs have been accumulated on a job cost sheet, the
entry that should be made is
a. Debit: Finished Goods Credit: Work in Process
b. Debit: Work in Process Credit Finished Goods
c. Debit: Raw Materials Inventory Credit: Work in Process
d. Debit: Cost of Goods Sold Credit: Finished Goods

16. Alyana Company uses job order costing system and applies manufacturing overhead to
work in process using a predetermined annual overhead rate. During May 2018,
Alyana’s transactions included the following:
Direct materials issued to production ₱50,000
Indirect materials issued to production 4,000
Manufacturing overhead incurred 75,000
Manufacturing overhead applied 80,000
Direct labor costs 60,000
Alyana had neither beginning nor ending work in process inventory. What was the cost
of jobs completed in May 2018?
a. ₱194,000
b. ₱190,000
c. ₱186,000
 d. ₱185,000

17. Crizzy Company uses a job order cost system. The following transactions were
completed in January, which was its first month of operation:
 Received direct materials and supplies costing ₱20,000
 Materials and supplies were requisitioned as follows:
Direct materials Indirect materials 1,000
Job no. 1 ₱3,000
Job no. 2 4,000
Job no. 3 1,000

Factory payroll was distributed as follows:

Direct labor: Indirect labor 2,000
Job no. 1 ( 200 hours) ₱2,000
Job no. 2 ( 300 hours ) 3,000
Job no. 3 ( 400 hours ) 4,000

 Other indirect manufacturing costs totaled ₱3,000

 Indirect manufacturing costs are applied on the basis of direct labor hours.
The budget for 2018 included 9,000 direct labor hours and a total overhead budget of
₱63,000. Factory overhead applied amounted to:
a. ₱4,200
b. ₱4,800
c. ₱6,300
d. ₱7,200
18. Refer to the date for Creasy Company. The ending balance of materials inventory is
a. ₱ 5,000
b. ₱ 7,000
c. ₱ 9,000
d. ₱11,000

19. Refer to the data for Crizzy Company, overhead was:

a. Over applied by ₱300
b. Under applied by ₱300
c. Over applied by ₱500
 d. Under applied by ₱700

20. Darna Company uses a job order cost system and applies factory overhead on the basis
of direct labor cost. The overhead rates for 2018 are 200% for department A and 50%
for department B. Job 123, started and completed during 2018, was charged with the
following costs:
Department A Department B
Direct materials ₱25,000 ₱5,000
Direct labor ? 30,000
Factory overhead 40,000 ?
The total manufacturing costs associated with job 123 would be:
a. ₱135,000
b. ₱180,000
c. ₱195,000
d. ₱240,000

Jorselle Company has a job order cost system. The following debits and credits appeared
in the work in process account for the month of March of the current year:
March Description Amount
1 Balance 25,000
31 Direct Materials 50,000
31 Direct Labor 40,000
31 Factory Overhead 30,000
31 To Finished Goods 125,450
Overhead is applied to production at a predetermined rate based on direct labor cost.
The work in process at March 31 represents the cost of Job 1, which has been charged
with direct labor cost of P3,000, and Job 2, which has been charged with applied
overhead of P2,400.
21. The cost of direct materials charged to Job 1 and 2 amounted to:
a. ₱4,200
b. ₱4,500
c. ₱7,600
d. ₱8,700
22. The prime cost during the month amounted to:
a. ₱ 70,000
b. ₱ 90,000
c. ₱120,000
d. ₱145,000

23. Amaia Company uses job order costing. Factory overhead is applied to production at a
budgeted cost of 150% of direct labor costs. Any over applied or under applied factory
overhead is closed to cost of goods sold account at the end of each month. Job A was
the only job in process at January 31 with accumulated costs of: Direct Materials-
P4,000; Direct Labor- P2,000 and Factory overhead applied- P3,000. Job B, C and D
were started during February. Direct materials requisition for February totaled P26,000.
Direct labor costs of P20,000 were incurred for February. Actual factory overhead was
P32,000. The only job still in process in February was Job D, with costs of P2800 for
direct materials and P1,800 for direct labor.
The cost of goods manufactured is
a. ₱ 85,000
b. ₱ 79,700
c. ₱ 78,000
d. ₱ 77,700

24. Chelle Corporation has manufactured 100,000 units of Compound X in 2018 at the
following costs: Labor of P242,500 of 93% which represents of direct labor. Materials
of P182,500 of which 90% represents direct materials. Opening work in process is
P88,125 and closing work in process inventory is P67,500. Overhead is applied at
125% of direct labor cost.
The cost of goods manufactured is
a. ₱629,900
b. ₱651,036
c. ₱671,150
d. ₱692,306
25. Andy Pri manufactures customer order using job order cost system. For the month just
ended, it registered the following data
Beginning Work in Process 300,000
Orders Completed 2,400,000
Orders Shipped 2,000,000
Materials requisitioned 1,700,000
Direct labor cost 800,000
Factory Overhead rate 150% of DL Cost

The ending work in process was

a. ₱ 500,000
b. ₱ 700,000
c. ₱ 1,400,000
d. ₱ 1,600,000

26. Mendy Company has over applied overhead of ₱45,000 for the year ended December
31, 2018. Before disposition of the over applied overhead, selected December 31, 2018
balances from Mendy’s accounting records are as follows:

Sales ₱1,200,000
Cost of goods sold 800,000
Inventories:
Direct materials 50,000
Work in process 50,000
Finished goods 150,000

Under Mendy’s cost accounting system, over or under applied overhead is allocated
to appropriate inventories and cost of goods sold based on year end balances. In its 2018
income statement, Mendy should report cost of goods sold of:
a. ₱682,500
b. ₱684,000
 c. ₱764,000
d. ₱757,000
The following data were obtained for the records of Lionel Company for the month ended
July 31, 2018:
Sales ₱3,000
Cost of jobs completed and sold 2,400
Factory overhead rate multiplied by actual direct
900
labor hours incurred
Purchase of raw materials 1,500
Sales salaries and other expenses 270
Other factory overhead costs incurred 300
Cost of direct materials used 1,050
Cost of supplies used 180
Direct labor cost incurred 450
Cost of indirect labor incurred 240
Net factory payroll after withholding 630

27. The entry to record the purchase of raw materials is:

a. Debit work in process inventory ₱1,500 / credit accounts payable ₱1,500.
b. Debit work on process inventory ₱1,050 / debit factory overhead ₱450 / credit
accounts payable ₱1,500
c. Debit factory overhead ₱1,500 / credit accounts payable ₱1,500.
d. Debit materials control ₱1,500 / credit accounts payable ₱1.500.
28. Refer to the data for Lionel Company. The entry to record material usage is:
a. Debit materials control ₱1,230 / credit work in process ₱1,050 / credit factory
overhead ₱180.
b. Debit work in process inventory ₱1,050 / debit factory overhead ₱180 /
credit materials control ₱1,230.
c. Debit work in process inventory ₱1,230 / credit materials control ₱1,050 / credit
factory overhead ₱180.
d. Debit factory overhead ₱1,230 / credit materials control ₱180 / credit work in
process inventory ₱1,050.

29. Refer to the data for Lionel. If a control account is used for factory payroll, the entry to
record the factory payroll is:
 a. Debit factory overhead ₱690 / credit factory payroll ₱690.
b. Debit work in process inventory ₱450 / debit factory overhead ₱240 / credit
salaries payable ₱630 / credit withholding accounts ₱60.
c. Debit factory payroll ₱690 / credit salaries payable ₱630 / credit
withholding accounts ₱60
d. Debit factor payroll ₱690 / credit work in process inventory ₱450 / credit
factory overhear ₱240.

30. Refer to the data for Lionel Company. The entry to record the distribution of payroll
cost is:
a. Debit work in process inventory ₱690 / credit factory payroll ₱690.
b. Debit factory payroll ₱690 / credit salaries payable ₱630 / credit withholding
accounts ₱60/
c. Debit factory payroll ₱690 / credit work in process inventory ₱450 / credit
factory overhead ₱240.
d. Debit work in process inventory ₱450 / debit factory overhead ₱240 / credit
factory payroll ₱690.

31. Refer to the data for Lionel Company. The entry to record applied factory overhead is:
a. Debit work in process inventory ₱900 / credit factory overhead ₱900
b. Debit work in process inventory ₱720 / credit factory overhead ₱720
c. Debit factory overhead ₱720 / credit work in process inventory ₱720
d. Debit factory overhead ₱900 / credit materials control ₱180 / credit factory
payroll ₱240 / credit accounts payable ₱300 / credit overhead variances ₱180.

32. Refer to the data for Lionel Company. The entry to record cost of goods manufactured
is:
a. Debit finished good inventory ₱2,400 / credit work process inventory
₱2,400.
b. Debit finished goods inventory ₱2,220 / credit work in process inventory
₱2,220.
 c. Debit finished goods inventory ₱2,490 / credit work in process inventory
₱2,490.
d. Debit work in process inventory ₱2,400 / credit materials control ₱1,050 credit
factory payroll ₱450 / credit factory overhead ₱900.

33. Refer to the data for Lionel Company. The entry to record cost of goods sold is:
a. Debit cost of goods sold ₱2,220 / debit net income ₱180 / credit finished goods
₱2,400.
b. Debit cost of goods sold ₱2,400 / debit net income ₱600 / credit sales ₱3,000.
c. Debit cost of goods sold ₱2,400 / credit finished goods ₱2,400.
d. Debit cost of goods sold ₱2,220 / credit finished goods ₱2,220.

34. Refer to the date for Lionel Company. The entry to record sales is:
a. Debit sales ₱3,000 / credit finished goods ₱3,000
b. Debit account receivable or cash ₱3,000 / credit sales ₱3,000.
c. Debit accounts receivable or cash ₱3,000 / credit cost of goods sold ₱2,400 /
credit net income ₱600
d. Debit accounts receivable or cash ₱3,00 / credit finished goods ₱2,400 / credit
net income ₱600

35. [AICPA] Bark Company uses a job order cost system. The following debits (credits)
appeared in Bark’s account for the month of April 2018:
April Description Amount
1 Balance ₱4,000
30 Direct materials 24,000
30 Direct labor 16,000
30 Factory overhead 12,800
30 To finished goods -48,000
Bark applies overhead to production at a predetermined rate of 80% of direct labor
cost. Job No. 5, the only job still in process on April 30, 2018, has been charged of direct
labor of ₱2,000. What was the amount of direct materials charged to job No.5?
a. ₱3,000
b. ₱5,200
 c. ₱8,800
d. ₱24,000

36. [AICPA] Under Pika Company’s job order costing system, manufacturing overhead is
applied to work in process using a predetermined annual overhead rate. During January
2018, Pika’s transactions included the following:
Direct materials issued to production ₱90,000
Indirect materials issued to production 8,000
Manufacturing overhead incurred 125,000
Manufacturing overhead applied 113,000
Direct labor costs 107,000

Pika had neither beginning nor ending work in process inventory. what was the cost
of jobs completed in January 2018?
a. ₱302,000
b. ₱310,000
c. ₱322,000
d. ₱330,000
37. [AICPA] Clay Co. has considerable excess manufacturing capacity. A speed job
order’s cost sheet includes the following applied manufacturing overhead costs:
Fixed costs ₱21,000
Variable costs 33,000
The fixed cost includes a normal ₱3,700 allocation for the in-house design costs,
although no in-house design will be done. Instead, the job will require the use of external
designers costing ₱7,750. What is the total amount to be included in the calculation to
determine the minimum acceptable price for the job?
a. ₱36,700
b. ₱40,750
c. ₱54,000
d. ₱58,050

38. Alaska Company provided the following data was available for the year ended
December 31, 2018:
 Raw materials purchase ₱80,000
Total manufacturing process costs 220,000
Decrease in raw materials inventory 4,000
Decrease in work in process inventory 20,000
Increase in finished goods inventory 45,000
Gross margin ratio 40%

Factory over head is applied at 60% of direct labor. How much is the factory
overhead cost incurred?
a. ₱ 51,000
b. ₱ 54,000
c. ₱ 85,000
d. ₱136,000

39. Guam Company provided the following data for the month ended October 31, 2018:
Direct labor (2,000 hours @ ₱40/hour) ₱80,000
Inventories, October 1 48,000
Raw materials 55,000
Work in process
Finished goods 81,000
Inventories, October 31
Raw materials 40,000
Work in process 62,000
Finished goods 90,000
Cost of goods sold 204,300

Factory overhead is applied at ₱36 per direct labor hour. Guam made total purchase
of what amount?
a. ₱28,600
b. ₱60,300
c. ₱68,000
d. ₱76,000

40. Alyanna Corporation is a local manufacturer that used a job order costing.
Manufacturing overhead is applied using a predetermined rate based on direct labor
cost. The cost ledger shows the following information for the month of August:
 Work in process
Balance, August 1 ₱250,000 Goods manufactured ₱296,000
Material used 120,000
Direct labor 100,000
Applied FOH 80,000

Alyanna had three outstanding jobs in ending work process that are expected to be
delivered in the following month:
 Job X with direct materials of ₱35,000 and direct labor of ₱20,000
 Job Y with direct materials of ₱45,000 and direct labor of ₱25,000
 Job Z with applied overhead of ₱28,000
Refer to the data for Alyanna Corporation. The total cost of Job Z was:
a. ₱71,000
b. ₱72,000
c. ₱89,000
d. ₱93,000