QUIZ 2- AFAR 1 (2nd sem Sy 2021-2022) BSA 2-2

Quiz in CA Cycle, JOCosting, Acctg for Mat , Jit, Production Losses

1. A company that manufactures small quantities of identifiable products will use a job order
costing system.
2. Cost flows and physical flows of units are identical.

True, True

True, False

False, false

False, True

1. In a normal job order costing system, factory overhead is applied using actual rates times
actual input
2. In a standard job order costing system, factory overhead is applied using actual rates times
standard input.

True, True

True, False

False, False

False, True

1. When indirect labor is applied to a job in process, the manufacturing overhead account is
debited.
2. If a normal loss is anticipated on a specific job, the overhead application rate should include an
amount for the cost of defective units less disposal value.

True, True

False, True

False, False

True, False
1. The journal entry to record normal spoilage specifically identified with a particular job includes
a debit to Work in Process
2. Spoilage occurring on specific jobs should be considered in computing predetermined factory
overhead rates

True, True

True, False

False, False

False, True

1. When a job is begun, the first document in the job order process is the materials requisition.
2. When manufacturing overhead is applied to a job in process, the manufacturing overhead
account is credited.

True, true

True, False

False, true

False, False

1. When job order costing is used, the primary focal point of cost accumulation is the item.
2. One of the drawbacks to applying actual overhead to production fluctuations in quantities
produced during a period could cause varying per-unit charges for fixed overhead.

True, true

True, False

False, False

False, True

1. The primary accounting document in a job order costing system is a material requisition.slip
2. In job order costing, payroll taxes paid by the employer for factory employees are commonly
accounted for as direct labor cost.

True, True

True, False

False, false

False, True
1. Production overhead does not include the costs of production line labor.
2. Overhead is applied to jobs in a job order costing system at the end of a period or as jobs are
completed, whichever is earlier.

True, True

False, False

True, False

False, trues

1.In a perpetual inventory system, a transaction that requires two journal entries (or one
compound entry) is needed when goods are sold for either cash or on account.
2. After the completion of production, standard and actual costs are compared to determine the
effectiveness of the production process.

True, True

False, True

True, False

False, False

1. A total quality system should place an emphasis on inspection.

2. Testing and adjusting manufacturing equipment is an appraisal cost.

True, True

True, False

False, False

False, true

1. Costs that preclude product defects resulting from flaws in processing are referred to
as prevention costs.
2. Costs of monitoring and compensating for mistakes not eliminated through prevention
activities are referred to as appraisal costs

True, True

True, False

False, False
False, true

1. An all-inclusive definition of quality views it as the ability of products/services to produce with

no rework costs.
2. Recalls are fairly common events for automobile manufacturers. The costs of recalling and
repairing a car create internal and external failure cost, and prevention cost.

True, True

False False

True, False

False, True

1. Economic order quantity (EOQ) is compatible with just-in-time systems.

2. The EOQ formula can be modified to calculate the number of units that should be
manufactured in a production run.

True, true

False, False

False, true

True, False

1. A system of producing inventory where goods are produced only when needed by a customer
or work center is referred to as a pull system.
2. Making only those items in demand by customers and making those items without waste is
referred to as _lean manufacturing.

True, False

True, True

False, True

False, False

1. The cost of receiving inventory is regarded as an ordering cost.

2. JIT is a philosophy concerned with when to do something.
True, True

False, False
True, False

False, true

GEMS company annually consumes 10,000 units of Part C. The carrying cost of this part is P2 per
year and the ordering costs are P100. The company uses an order quantity of 500 units. By how
much could the company reduce its total costs if it purchased the economic order quantity
instead of 500 units?

PEARL Corporation operates its factory 300 days per year. Its annual consumption of Material AB
is 1,200,000 gallons. It carries a 10,000 gallon safety stock of Material AB and its lead time is 12
business days.
What is the order point for Material AB?

Refer PEARL Corporation. If the EOQ for Material AB is 30,000 gallons, and the carrying cost per
gallon per year is p.25, what is the total annual carrying cost for Material AB?

For Raw Material XYZ , a company maintains a safety stock of 5,000 units . Its average inventory
(taking into account the safety stock) is 8,000 units. What is the apparent order quantity?

OPAL Manufacturing Company estimates that it will consume 400,000 units of Material QRS in
the coming year. The ordering cost for this unit is P3.20. What would be the carrying costs per
unit if the EOQ model indicates that it is optimal to place exactly 50 orders for the upcoming
year?

DIAMOND CORPORATION has just finished its first year of business. DIAMOND makes
decorative outdoor furniture. The firm manufactured 2,500 pieces of furniture during the year:
2,400 were sold at garden centers for P456,000; 100 pieces were defective and could only be sold
as scrap metal (25 pounds each and can be sold for P2.50 per pound). No defective units could
be reworked. During the year the following costs were incurred: Total appraisal cost, P9,000; Total
prevention cost P25,700; Total production cost P250,000 and Total selling and administrative cost
P70,000
Compute the total profits lost by the company from selling scrap units during its first year of
operations.

Refer to DIAMOND COMPANY Compute the total quality cost incurred by the company during
the first year of operations.

TOPAZ COMPANY incurred prime cost of P1,500,000 and conversion cost of P1,800,000.
Overhead is applied at the rate of 200% of direct labor cost. How much is the direct material
cost?

Items 24-26 ONYX CORPORATION produces product based on customer specifications. losses of
less than 5% are considered normal. The company applies FOH rate using machine hours.
Expected overhead other than rework P850,000 and expected rework costs P75,000. In 2022 the
following ere given.
a. total units completed 2M units; total defects 40k units; ending inventory 75k units; expected
machine hours 100 k machine hours.
b. Direct material cost for Job 201 P687,100; Direct labor cost for Job 201 P157,750 total machine
hours spend 3,080 hours. Cost of reworking defects in 2022 P75,500
c. Actual overhead cost for 2022 P862,000
How much is the total cost of Job 201?

Assume that ONYX company does not include rework cost in developing the factory overhead
rate how much is the cost of Job 201?

Assume that 20% of the rework cost was specifically related to 200 units produced for Job 201.
the reworked units can be sold for P3.50 per unit , what is the cost of JOb 201?
MS. EMERALD, CPA uses job order costing system to bIll its client engagements. During May to
July 2022 EMERALD recorded 95 hours on client B.
some additional info related to client B. were: typing (35 hours) and copying 1,450 pages,
EMERALD's secretary works 160 hours per month with a salary of P4,800 per month. the average
cost per copy is P0.06 for paper, ink and others.Telephone and fax charges on client B, P145 and
the total estimated office overhead was P9,600 per month. Overhead are allocated to clients
based on number of hours of secretary's time. If MS EMERALD wants to set a billing rate to earns
a minimum of P190 per hour, What is the minimum charge per hour should MS EMERALD charge
Client B?

If MS EMERALD will consider billing client B for direct cost plus allocatedd indirect cost plus a
40% margin to cover other miscellaneous cost, what will be the total charges to client B

Items 29-33 SAPPHIRE COMPANY shows the following data for the month of March 2022

a. Purchased raw materials in the amount of P542,000

b. Indirect labor incurred was P54,000; and direct labor was P602,800 distributed to Jobs as: Job A
17,400; Job B P8,800; Job C P21,000 ; Job D P136,600; Job E P145,000 ;Job F P94,600 and Job G
P179,400
c. Indirect material issued to production P76,000; and direct materials issued were: Job A P12,400;
Job B P6,200; Job C P16,800; JOb DP105,200 ;Job E P119,800; Job FP 72,800; Job G P133,200
d. Overhead is applied to jobs based on direct labor cost. Other actual factory expenses were
P114,400
e. Jobs A to E were completed and sold in the amount of P2,264,774
f. The work in Process account at the beginning of March were supported by job cost sheets as
follows:

How much is the Work in process end?

How much is the cost of goods manufactured for the month?

How much is the gross margin realized on sale?

What is the amount of Factory overhead variance? state whether its FV or UF ex. 3000FV

What is the actual cost of sales?

Items 34-37 Zirconian Corporation uses perpetual inventory system in controlling its materials.
Data related to Material VMW during April are given below;

What is the material ending inventory under FIFO method?

Using Weighted Average method , how much is the cost of ending inventory?

Using WAverage method what is the amount issued to production?

AMETHYST Company started 300 units in process on Job # 2. Direct materials in the amount of
P60,000 and P36,000 Direct labor cost has been placed in production. A predetermined rate of
133 and 1/3 of direct labor cost has been applied. Upon completiion of the job, units equal to
20% of good output were rejected. The company sells rejected units as scrap at only 1/3 of
production cost and bill customers at 150% of production cost If rejected units were attributable
to company failure, the billing price of Job #2 would be?

How much is the unrecovered cost ?

If lost unit were attributable to specific Job. How much is the billing price of Job #2?

How much is the unit cost of the remaining good units?