REVIEWER # 2

1. A company producing furniture would probably use a job-order costing system. TRUE
2. A job order costing system is most appropriate when a large volume of uniform products is
produced. FALSE, process costing system
3. Selling and administrative expenses should be added to the Manufacturing Overhead
Account. FALSE, expensed outright
4. A predetermined overhead rate is computed using estimates of cost and activity. TRUE
5. If more overhead is applied to Work in Process than what is actually incurred, the overhead
is overapplied. TRUE
6. In management accounting, product costs are historical figures and therefore are of little
use to the manager. FALSE, still useful for analysis
7. A costing system in which overhead costs are applied to a job by multiplying a
predetermined overhead rate by the actual amount of the allocation base incurred by the
job is called normal costing. TRUE
8. Job cost sheets only records costs traced from direct materials. FALSE, it also records DL
and FOH
9. When raw materials are purchased, Work in Process Inventory is debited. FALSE, RM
Inventory is debited
10. Process costing utilize averaging concepts in computing unit costs. TRUE

MULTIPLE CHOICE (Theories)

11. In job order costing, the basic document to accumulate the cost of each order is the
A. Invoice
B. Purchase Order
C. Requisition Order
D. Job-cost Sheet

12. In job order-cost system, direct labor costs usually are recorded initially as an increase in:
A. Finished Goods Control
B. Work in Process Control
C. Factory Overhead Account
D. Factory Overhead Applied

13. In job order-cost system, applied factory overhead is usually reflected in the general ledger
as an increase in:
A. Finished Goods Control
B. Cost of Goods Sold
C. Work in Process Control
D. Factory Overhead Control.

14. The most common treatment of under- or over-applied overhead is to close it to:
A. Work in Process
B. Retained Earnings
C. Cost of Goods Sold
D. Finished Goods

15. Which of the following production operations would be most likely to employ a job order
system of cost accounting?
A. Toy Manufacturing
B. Shipbuilding
C. Crude Oil Refining
D. Candy Manufacturing

16. Someone told Lalisa Manobal, president of B’Pink Company, that under- or over-applied
manufacturing overhead can be allocated to three accounts. What are those three
accounts?
 A. Cost of goods sold, Work in Process, and Finished Goods
B. Cost of goods sold, Work in Process, and Raw Materials
C. Raw Materials, Finished Goods, and Cost of Goods Sold
D. Raw Materials, Finished Goods, and Direct Materials

17. Under a job-order costing system of cost accounting, the peso amount of the general ledger
entry involved in the transfer of inventory from work in progress to finished goods is the sum
of costs charged to all jobs:
A. Started in process during the period
B. In process during the period
C. Completed and sold during the period
D. Completed during the period.

18. A costing system used in situations where many different products, jobs, or services are
produced each period is called
A. Absorption Costing
B. Process Costing
C. Job Order Costing
D. Normal Costing

19. A rate used to charge manufacturing overhead cost to jobs that is established in advance
for each period.
A. Allocation Base
B. Non-Manufacturing Cost
C. Exchange Rate
D. Predetermined overhead rate

20. A non-manufacturing organization may use:

A. Job-order costing but not process costing
B. Process costing but not job-order costing
C. Either job-order or process costing
D. Neither job-order costing nor process costing

PROBLEM SOLVING.
21. Incomplete accounts of the Mika Company appear as follows on January 31.

Materials Inventory Work In Process

Bal. 15,000 Bal. CGM 40,000
Purch. 35,000 Materials 20,000
Labor ?
FOH ?

Finished Goods
Bal. 10,000 COGS 20,000
CGM 40,000

Additional information:
a) There were 5,500 direct labor hours at the rate of P8.00 per direct labor hour
b) Overhead is applied at the rate of P4.00 per direct labor hour
The January 31 of materials inventory should be
A. P20,000
B. P25,000
C. P30,000
D. P50,000
22. 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

23. The January 31 balance of Work in Process account is

A. P46,000
B. P75,000
C. P76,000
D. P82,000

24. JiSoo Corporation has manufactured 10 units of Job XYZ in January 2023 at the following
cost. Labor is P242,500 of which 93% represents direct labor; materials is P182,500 of
which 90% represents direct materials. Opening work in Process is P88,125. Ending Work
in Process inventory is P67,500. Overhead is applied at 125% of Direct Labor Cost.

Compute the total manufacturing cost (TMC) of Job XYZ.

A. P671,681.25
B. P692,306.25
C. P681,671.75
D. P629,603.75

25. Using the information from JiSoo Corporation, compute for the Cost of Goods Manufactured

A. P671,681.25
B. P692,306.25
C. P681,671.75
D. P629,603.75

26. Jihyo Corporation gathered that its actual manufacturing overhead for the month is
P430,500. On the other hand, its predetermined overhead rate is P10.00 per machine hour.
Jihyo Corporation accounted for 43,250 machine hours during the month. In this case, Jihyo
Corp.’s manufacturing overhead is
A. 2,000 underapplied
B. 2,000 overapplied
C. 20,000 underapplied
D. 20,000 overapplied

27. Based on company’s estimate, Pepito Company assumes to require 55,000 direct labor
hours to complete its estimated production for the month of November. Fixed manufacturing
overhead is estimated at P700,000 while variable manufacturing cost is P5.00. Compute for
the estimated manufacturing overhead cost of Pepito Company.
A. P700,000
B. P275,000
C. P920,000
D. P975,000

28. Using the given from Pepito Company, what is the predetermined overhead rate (POHR)
per direct labor hour?
A. P18.60
B. P17.41
C. P17.73
 D. P17.90

29. Thor Company uses activity-based costing in its two departments: Direct Labor-Hours and
Machine Hours in its Cutting and Grilling Departments, respectively. The predetermined
overhead rate in the Cutting Department P20 per DLH. The company's direct labor wage
rate is P10 per hour. Additional information is shown below:

Estimate for the Period Cutting Grilling

Total overhead costs P450,000 P300,000
Machine hours 1,000 20,000
Job HC-99
Direct materials P290 P340
Direct labor P400 P100
Machine hours 6 28

How much is the applied factory overhead for the Cutting Department?
A. P800.00
B. P1,490.00
C. P2,350.00
D. P1,590.00

30. Using the given above, compute for the total manufacturing cost from Grilling Department?
A. P860.00
B. P490.00
C. P750.00
D. P590.00

31. What is the total manufacturing cost of Job HC-99?

A. P1,490.00
B. P860.00
C. P2,350.00
D. P1,850.00

32. Job TW134 at Twice Manufacturing required P700 of direct materials and 24 direct labor-
hours at P60 per hour. The company's estimated total overhead and estimated direct labor-
hours for the period were P600,000 and 30,000, respectively. What is the cost of Job
TW134?
A. P1,300.00
B. P2,380.00
C. P3,580.00
D. P2,620.00

33. After gathering all costing needed, Jojo Company’s manufacturing overhead is 50,000
overapplied. The company decided to allocate Work in Process, Finished Goods and Cost
of Goods Sold with balances of P100,000, P150,000 and P250,000 respectively. What is
the overapplication to be allocated to Cost of Goods Sold?
A. P5,000
B. P15,000
C. P25,000
D. P35,000

34. Based on its record, the Beginning Work in Process of Jherinz Company was P320,000. Its
total manufacturing cost added to production for the month was P700,000. Lastly,
unfinished goods recorded in Work in Process inventory at the end of the month amounts
P240,000. What is the Cost of Goods Manufactured (CGM) for the month?
 A. P780,000
B. P670,000
C. P240,000
D. P920,000

35. The beginning raw materials inventory for Sabariaga Company was P42,000. During the
month, material purchases amounts to P350,000. A count at the end of the month revealed
that P60,000 raw materials was left unused. Direct labor amounts to P210,000 while applied
factory overhead is at P165,000. What is the total manufacturing cost of Sabariaga
Company for the month?
A. P820,000
B. P750,000
C. P707,000
D. P864,000