SOUTHERN LUZON STATE UNIVERSITY

College of Administration, Business, Hospitality, and Accountancy

Bachelor of Science in Accountancy

COST ACCOUNTING AND CONTROL

Prelim Formative – Summative Assessment No. 1

Name: Course, Year, and Section:

Instruction: For multiple choice questions, write the letter of your answer on the space before the number. For
computation, write your answer on the space before the number.

1. The following terms are used in exchange for the term factory overhead, except
a. Manufacturing overhead c. factory burden
b. Indirect materials d. factory expenses
2. The following are prime costs, except
a. Assembly costs in a toy company c. rubber in a rubber band
d. Salary of factory guard in a lens company d. none of the choices
3. If manufacturing costs and cost of goods manufactured are the same
a. the work-in-process beginning is higher than work-in-process ending
b. the work in process beginning is lower than the work in process ending
c. the work in process beginning and work in process ending are the same
d. None of the choices
4. Many companies recognize three major categories of costs of manufacturing a product. These are direct materials,
direct labor, and overhead. Which of the following is an overhead cost in the production of an automobile?
a. The cost of small tools used in mounting tires on each automobile
b. The cost of tires in each automobile
c. The cost of the laborers who place tires on each automobile
5. Examples of factory overhead costs are
a. lubricants for factory machinery c. Both of the preceding choices
b. depreciation of the factory machinery d. None of the choices
6. For manufacturing company, which of the following is an example of period costs?
a. depreciation of factory equipment c. wages of salesperson
b. wages of machine operators d. insurance on factory equipment
Use the following information to answer the next three questions:
The following costs relate to Antonio industries for the last quarter:
Conversion Cost P435,000
Direct Materials P215,000
Manufacturing Overhead P190,000
Selling and administrative expenses P185,000
7. What is Antonio’s prime costs for the last quarter?
8. Antonio’s total manufacturing costs is
9. Antonio’s total period costs is

Use the following information to answer the next two questions:

Justine Company produced 5,500 outdoor chairs for Job Order No. 610. Total material cost was P51,700. Each chair
required 2.2 hours of direct labor at P8.90/hour. A total of P53,845 of factory overhead was traced to order 610.
10. What is the prime costs per unit of this order?
11. What is the conversion costs per unit of this order?

Use the following information to answer the next three questions

A manufacturing company shows the following amounts in the cost of goods sold statement and income statement for
the year 2016
January 1, 2016 December 31, 2016
Materials P100,000 P150,000
Work in process P87,000
Finished goods P80,000
Materials used P590,000
Cost of Goods Sold P750,000
Cost of Goods P800,000
Manufactured
Total Manufacturing cost P790,000
12. How much is the work in process in January 1, 2016?
13. How much is the finished goods inventory in December 31, 2016
14. How much is the amount of materials purchased during 2016?

15. Cost of goods sold is

a. an expense b. a period cost c. is an asset d. None of the choices
16. For a manufacturing company, the cost of goods available for sale during a given period is
a. the beginning inventory of finished goods
b. the costs of good manufactured during the period
c. the sum of the above
d. the difference choices a and b
17. The wage of a timekeeper in the factory would be classified as
a. prime costs b. direct labor c. indirect labor d. administrative expenses
18. As current technology changes manufacturing processes, it is likely that
a. direct labor will increase c. conversion costs will decrease
b. indirect material will decrease d. prime cost will increase
19. A manufacturing company reports costs of goods manufactured as
a. a current asset on the balance sheet
b. an administrative expense on the income statement
c. a component in the calculation of costs of goods sold
d. a component of raw materials inventory on the balance sheet

Use the following information to answer the next four questions

The following information was taken from Jeric Company’s accounting records for the year-ended December 31,
2016
Increase in raw materials inventory P25,000
Decrease in finished goods inventory P45,000
Raw materials purchased P450,000
Direct labor payroll P200,000
Factory overhead P300,000
There was no work-in process inventory at the beginning and at the end of the period.

20. How much is the cost of goods sold?

21. How much is the cost of goods manufactured?
22. How much is the manufacturing costs?
23. How much is the raw materials used?

Use the following information to answer the next three questions:

M Company has the following information for the month of March 2016

March 1 March 31
Materials P40,000 P50,000
 Work in Process P25,000 P35,000
Finished Goods P60,000 P70,000
Direct labor costs P120,000
Factory overhead applied P108,000

24. The total amount of direct materials purchased during the month is
25. The cost of goods manufactured during March 2016 was
26. How much is the cost of goods sold?

Use the following information to answer the next two questions

U Company developed the following data for the current year.
Work in process inventory, January 1 P40,000
Direct materials used P24,000
Applied factory overhead P36,000
Cost of goods manufactured P44,000
Total manufacturing costs P120,000
27. U Company’s direct labor cost for the year is
28. U Company’s work in process inventory on December 31 is
29. D Company’s 2016 manufacturing costs were as follows
Direct materials and direct labor P100,000
Depreciation of manufacturing equipment P70,000
Depreciation of manufacturing building P40,000
Janitor’s wages for cleaning factory premises P15,000
How much of these of costs should be inventoried for external purposes?
a. P225,000 b. P210,000 c. P385,000 d. P200,000

30. McBright Company produces radio for cars. The following cost information is available for the period ended
December 31, 2008:
Materials put into production: P1,200,000, P800,000 of which are direct materials.
Factory labor cost for the period: P900,000, of which P250,000 was for indirect labor
Factory overhead cost for utilities: P400,000
Selling, general and administrative expenses: P600,000
Compute the factory overhead cost.

31. In cost terminology, conversion costs consists of

a. direct and indirect labor b. direct labor and direct materials
c. direct labor and factory overhead d. Indirect labor and variable factory overhead
32. Which of the following best describes direct labor?
a. prime costs b. period costs c. product costs d. Both a and c

33. Katherine Company manufactures special machines according to customer’s specifications. The following data
were available at the beginning and ending of April:
Beginning Ending
Materials Inventory 34,000 32,400
Work in Process Inventory 16,240 7,200
Finished Goods Inventory 6,000 8,000
During April, direct material costing 40,000 were purchased, direct labor costs totalled 33,000, and factory overhead was
17,160. What is the costs of goods manufactured for the month of April?