Professional Documents
Culture Documents
True/False
1.
T
Easy
2.
F
Easy
3.
F
Easy
4.
F
Medium
Normally a job cost sheet is not prepared for a job until after the
job has been completed.
5.
F
Easy
Job cost sheets contain entries for actual direct material, actual
direct labor, and actual manufacturing overhead cost incurred in
completing a job.
6.
F
Medium
7.
T
Medium
XXX
8.
T
Easy
9.
F
Medium
10.
F
Hard
11.
F
Medium
12.
T
Easy
13.
F
ManagerialAccounting,9/e
50
Medium
14.
T
Easy
Indirect materials are not charged to a specific job but rather are
included in manufacturing overhead.
15.
T
Easy
The labor time ticket contains a detailed summary of the direct and
the indirect labor hours of an employee.
Multiple Choice
16.
B
Easy
Which of the following companies would be most likely to use a joborder costing system rather than a process costing system?
a. fast food restaurant
b. shipbuilding
c. crude oil refining
d. candy making
17.
B
Easy
CMA
adapted
18.
A
Easy
19.
D
Medium
20.
A
Medium
21.
C
Medium
a.
b.
c.
d.
Job-order costing
Yes
Yes
No
No
ManagerialAccounting,9/e
Process costing
No
Yes
Yes
No
51
22.
A
Easy
CPA
adapted
23.
D
Easy
24.
A
Medium
ManagerialAccounting,9/e
52
25.
D
Medium
In a job order cost system, the amount of overhead cost that has been
applied to a job that remains incomplete at the end of a period:
a. is deducted on the Income Statement as overapplied overhead.
b. is closed to Cost of Goods Sold.
c. is transferred to Finished Goods at the end of the period.
d. is part of the ending balance of the Work in Process
inventory
account.
26.
B
Hard
27.
C
Medium
28.
B
Medium
ManagerialAccounting,9/e
53
29.
A
Hard
30.
B
Medium
CPA
adapted
31.
D
Medium
32.
D
Easy
ManagerialAccounting,9/e
54
33.
C
Easy
Dept. A
P56,000
67,200
8,000
4,000
Dept. B
P33,000
45,000
9,000
15,000
P10,000
30,000
40,000
20,000
4,000
8,000
10,000
Kelsh estimates that 5,000 direct labor hours and 10,000 machine hours
will be worked during the year. The predetermined overhead rate per
hour will be:
a. P6.80.
b. P6.40.
c. P3.40.
d. P8.20.
ManagerialAccounting,9/e
55
35.
D
Medium
Simplex Company has the following estimated costs for next year:
Direct materials ....................
Direct labor ........................
Sales commissions ...................
Salary of production supervisor .....
Indirect materials ..................
Advertising expense .................
Rent on factory equipment ...........
P15,000
55,000
75,000
35,000
5,000
11,000
16,000
Simplex estimates that 10,000 direct labor and 16,000 machine hours will
be worked during the year. If overhead is applied on the basis of
machine hours, the overhead rate per hour will be:
a. P8.56.
b. P7.63.
c. P6.94.
d. P3.50.
36.
A
Medium
CR Company has the following estimated costs for the next year:
Direct materials .....................
Direct labor .........................
Rent on factory building .............
Sales salaries .......................
Depreciation on factory equipment ....
Indirect labor .......................
Production supervisors salary .......
P 4,000
20,000
15,000
25,000
8,000
10,000
12,000
CR Company estimates that 20,000 labor hours will be worked during the
year. If overhead is applied on the basis of direct labor hours, the
overhead rate per hour will be:
a. P2.25.
b. P3.25.
c. P3.45.
d. P4.70.
37.
D
Medium
ManagerialAccounting,9/e
56
38.
B
Hard
CPA
adapted
Lucas Co. has a job order cost system. For the month of April, the
following debits (credits) appeared in the Work in Process account:
April
1
30
30
30
30
1, balance .......................
31, direct materials .............
31, direct labor .................
31, manufacturing overhead applied
31, to finished goods ............
12,000
40,000
30,000
27,000
(100,000)
ManagerialAccounting,9/e
57
40.
D
Medium
The Samuelson Company uses a job-order cost system. The following data
were recorded for June:
Job Number
475
476
477
478
June 1
Work in Process
Inventory
P1,000
P 900
P 800
P 600
P47,000
24,000
ManagerialAccounting,9/e
58
43.
D
Medium
Paul Company
completed of
direct labor
and activity
P90,000
25,000
45.
C
Medium
46.
A
Hard
ManagerialAccounting,9/e
59
47.
B
Medium
P 90,000
8,000
125,000
113,000
107,000
49.
C
Hard
Balance
November 30
P 3,000
15,000
27,000
P21,000.
P19,000.
P18,000.
P15,000.
ManagerialAccounting,9/e
60
Reference: 3-1
Wayne company uses a job costing system and applies overhead to jobs using a
predetermined overhead rate based on direct labor-hours. The company had the
following inventories at the beginning and end of March:
March 1
Direct Materials....... P36,000
Work in Process........ 18,000
Finished Goods......... 54,000
March 31
P30,000
12,000
72,000
51.
D
Medium
CPA
adapted
Refer To:
3-1
Reference: 3-2
Hamilton Company uses job-order costing. Manufacturing overhead is applied using a
predetermined rate of 150% of direct labor cost. Any over- or underapplied
manufacturing overhead is closed to the Cost of Goods Sold account at the end of each
month. Additional information is available as follows:
Job 101 was the only job in process at January 31. The job cost sheet for
this job contained the following costs at the beginning of the month:
Direct materials .................. P4,000
Direct labor ...................... P2,000
Applied manufacturing overhead .... P3,000
52.
A
Medium
CPA
adapted
Refer To:
3-2
53.
ManagerialAccounting,9/e
61
D
Medium
CPA
adapted
Refer To:
3-2
a.
b.
c.
d.
P700 overapplied.
P1,000 overapplied.
P2,000 overapplied.
P2,000 underapplied.
Reference: 3-3
Meyers Company had the following inventory balances at the beginning and end of
November:
Raw Materials ......
Finished Goods .....
Work in Process ....
November 1
P17,000
P50,000
P 9,000
November 30
P20,000
P44,000
P11,000
During November, P39,000 in raw materials (all direct materials) were drawn from
inventory and used in production. The company's predetermined overhead rate was P8
per direct labor-hour, and it paid its direct labor workers P10 per hour. A total of
300 hours of direct labor time had been expended on the jobs in the beginning Work in
Process inventory account. The ending Work in Process inventory account contained
P4,700 of direct materials cost. The Company incurred P28,000 of actual manufacturing
overhead cost during the month and applied P26,400 in manufacturing overhead cost.
54.
A
Medium
Refer To:
3-3
55.
C
Medium
Refer To:
3-3
ManagerialAccounting,9/e
62
56.
B
Hard
Refer To:
3-3
57.
C
Hard
Refer To:
3-3
Reference: 3-4
The following T accounts are for Stanford Company:
Raw Materials
Beg. Bal. 7,000 | 24,000(2)
(1)19,000 |
|
|
|
Beg. Bal.
(2)
(4)
(6)
(2)
(3)
(4)
(5)
Work in Process
11,000 |
? (7)
15,000 |
18,000 |
31,000 |
|
Manufacturing Overhead
9,000 |
31,000
(6)
16,000 |
8,000 |
5,000 |
|
Finished Goods
Beg. Bal. 18,000 |
(7) 62,000 |
End. Bal. 15,000 |
|
Accumulated Depreciation
Factory
| 82,000 Beg. Bal.
| 16,000
(3)
ManagerialAccounting,9/e
63
58.
A
Hard
Refer To:
3-4
59.
D
Hard
Refer To:
3-4
60.
C
Hard
Refer To:
3-4
61.
B
Medium
Refer To:
3-4
62.
B
Hard
Refer To:
3-4
63.
A
Hard
Refer To:
3-4
Reference: 3-5
Mallet Company has only Job 844 in process on March 1 of the current year. The job has
been charged with P2,000 of direct material cost, P2,500 of direct labor cost, and
P1,750 of manufacturing overhead cost. The company assigns overhead cost to jobs at a
predetermined rate of 70% of direct labor cost. Any under- or overapplied overhead
cost is closed to Cost of Goods Sold at the end of the month.
ManagerialAccounting,9/e
64
During March, the following activity and amounts were recorded by the company:
Raw materials (all direct materials):
Purchased during the month .....................
Used in production .............................
P29,500
P30,500
Labor:
Direct labor hours worked during the month .....
Direct labor cost incurred .....................
Indirect labor costs incurred ..................
2,500
P26,500
P5,500
P18,500
Inventories:
Raw materials (all direct) March 31 ............
Work in process, March 31 ......................
P7,500
P14,500
65.
A
Hard
Refer To:
3-5
66.
B
Hard
Refer To:
3-5
The entry to dispose of the under- or overapplied overhead cost for the
month would include:
a. a debit of P50 to Cost of Goods Sold.
b. a debit of P50 to Manufacturing Overhead.
c. a debit of P5,500 to Manufacturing Overhead.
d. a credit of P5,500 to Cost of Goods Sold.
67.
D
Hard
Refer To:
3-5
ManagerialAccounting,9/e
65
Reference: 3-6
The Milo Company's records for May contained the following information:
Actual direct labor-hours .......
9,000 hours
Actual direct labor cost ........ P 47,000
Direct material purchased .......
16,000
Direct material used ............
14,000
Cost of goods sold .............. 100,000
Overapplied overhead ............
5,000
Ending inventories:
Raw materials .................
30,000
Work in process ...............
50,000
Finished goods ................
70,000
The company uses a predetermined overhead rate of P5.00 per direct labor hour to
apply manufacturing overhead to jobs.
68.
C
Medium
Refer To:
3-6
69.
B
Medium
Refer To:
3-6
Reference: 3-7
The information below has been taken from the cost records of Tercel Company for the
past year:
Raw materials used in production .........................
Total manufacturing costs charged to jobs during
the year (includes raw materials, direct labor, and
manufacturing overhead applied at the rate of 60 per
cent of direct labor cost) .............................
Cost of goods available for sale .........................
Selling and administrative expenses ......................
P326,000
686,000
826,000
25,000
Inventories
Beginning
Ending
Raw Materials ............. P75,000
P 85,000
Work in Process ...........
80,000
30,000
Finished Goods ............
90,000
110,000
ManagerialAccounting,9/e
66
70.
D
Medium
CMA
adapted
Refer To:
3-7
The cost of raw materials purchased during the year amounted to:
a. P411,000.
b. P360,000.
c. P316,000.
d. P336,000.
71.
B
Medium
CMA
adapted
Refer To:
3-7
Direct labor costs charged to production during the year amounted to:
a. P135,000.
b. P225,000.
c. P360,000.
d. P216,000.
72.
C
Medium
CMA
adapted
Refer To:
3-7
73.
B
Medium
CMA
adapted
Refer To:
3-7
The Cost of Goods Sold for the year (before disposition of any
overhead under- or overapplied) was:
a. P736,000.
b. P716,000.
c. P691,000.
d. P801,000.
Reference: 3-8
The following data are for Potras Company:
Finished goods inventory ............
Work in process inventory ...........
Raw materials inventory .............
Purchases of raw materials ..........
Factory depreciation ................
Other factory costs .................
Direct labor ........................
Indirect labor ......................
Selling expense .....................
Over- or underapplied overhead ......
Beginning
P30,000
P20,000
P21,000
Ending
P40,000
P13,000
P26,000
P71,000
P 5,000
P10,000
P27,000
P 6,000
P12,000
-0-
74.
D
Medium
Refer To:
3-8
75.
C
Medium
Refer To:
3-8
76.
ManagerialAccounting,9/e
67
D
Medium
Refer To:
3-8
a.
b.
c.
d.
P131,000.
P91,000.
P81,000.
P111,000.
Reference: 3-9
The Bus Company uses a job-order cost system. The following information was recorded
for September:
Job Number
1
2
3
4
September 1
Inventory
P1,000
1,400
500
750
The direct labor wage rate is P10 per hour. Overhead is applied at the rate of P5 per
direct labor-hour. Jobs 1, 2, and 3 have been completed and transferred to finished
goods. Job 2 has been delivered to the customer.
77.
B
Medium
Refer To:
3-9
78.
C
Medium
Refer To:
3-9
79.
A
Medium
Refer To:
3-9
The Cost of Goods Sold for September (before disposition of any underor overapplied overhead) is:
a. P2,100.
b. P5,925.
c. P3,700.
d. P1,950.
ManagerialAccounting,9/e
68
Reference: 3-10
The following journal entries without Peso data were taken from the accounting
records of Case Company. Case company has a job-order costing system and applies
overhead to jobs using a predetermined overhead rate.
1. Work in Process ................ XXX
Manufacturing Overhead ......... XXX
Wages Payable ..............
XXX
XXX
XXX
XXX
XXX
XXX
XXX
XXX
80.
A
Medium
Refer To:
3-10
81.
C
Medium
Refer To:
3-10
The entry to transfer the cost of goods manufactured for the period
is:
a. 1.
b. 4.
c. 7.
d. 5.
82.
B
Medium
Refer To:
3-10
ManagerialAccounting,9/e
69
83.
B
Medium
Refer To:
3-10
Reference: 3-11
Summit Company has provided the following inventory balances and manufacturing cost
data for the month of January:
Inventories:
January 1
Direct materials ....... P30,000
Work in process ........ P15,000
Finished goods ......... P65,000
January 31
P40,000
P20,000
P50,000
Month of January
Cost of goods manufactured ........
P515,000
Manufacturing overhead applied ....
P150,000
Direct materials used .............
P190,000
Actual manufacturing overhead .....
P144,000
Under Summit's job-order costing system, any over or underapplied overhead is closed
to the Cost of Goods Sold account at the end of the calendar year (i.e., December
31).
84.
D
Medium
CPA
adapted
Refer To:
3-11
What was the total amount of direct material purchases during January?
a. P180,000
b. P190,000
c. P195,000
d. P200,000
85.
C
Medium
CPA
adapted
Refer To:
3-11
Reference: 3-12
The Tse Manufacturing Company uses a job-order costing system and applies overhead to
jobs using a predetermined overhead rate. The company closes any balance in the
Manufacturing Overhead account to Cost of Goods Sold. During the year the company's
Finished Goods inventory account was debited for P125,000 and credited for P110,000.
The ending balance in the Finished Goods inventory account was P28,000. At the end of
the year, manufacturing overhead was overapplied by P4,500.
86.
B
Hard
Refer To:
3-12
87.
B
Medium
If the estimated manufacturing overhead for the year was P24,000, and
the applied overhead was P26,500, the actual manufacturing overhead
cost for the year was:
ManagerialAccounting,9/e
70
Refer To:
3-12
a.
b.
c.
d.
P19,500.
P22,000.
P28,500.
P31,000.
Essay
88.
Medium
Parker Company uses a job order cost system and applies manufacturing
overhead to jobs using a predetermined overhead rate based on direct
labor-hours. Last year manufacturing overhead and direct labor-hours
were estimated at P50,000 and 20,000 hours, respectively, for the
year. In June, Job #461 was completed. Materials costs on the job
totaled P4,000 and labor costs totaled P1,500 at P5 per hour. At the
end of the year, it was determined that the company worked 24,000
direct labor hours for the year and incurred P54,000 in actual
manufacturing overhead costs.
Required:
a. Job #461 contained 100 units. Determine the unit cost that
would appear on the job cost sheet.
b. Determine the under- or overapplied overhead for the year.
Answer:
a. Direct materials ............
Direct labor ...............
Overhead (300* x P2.50**) ..
Total .....................
Unit cost ..................
P4,000
1,500
750
P6,250
P62.50
ManagerialAccounting,9/e
71
89.
Hard
Gilford, Inc., uses a job order costing system. Costs going through
the company's work in process account during June are given below.
Manufacturing overhead is applied to production using a predetermined
overhead rate based on direct labor cost.
Work in Process
______________________________________________________________________
_____________________________
Balance
-0- | 95,000 Transferred out
Direct materials
20,000 |
Direct labor
30,000 |
Manufacturing Overhead 60,000 |
______________________________________________________________________
______________________________
Balance
15,000 |
Only Job 105 was still in process at the end of the month. This job
had been charged with P3,000 in direct materials cost.
Required:
a. Complete the following job order cost card for Job 105:
Direct materials ..........
Direct labor ..............
Manufacturing overhead ....
Total cost at June 30 ..
P 3,000
_______
_______
_______
completed
Answer:
a. Since only Job 105 was in process at the end of the month,
all
of the P15,000 balance in the Work in Process account
must apply
to it.
Total cost in Work in Process (all Job 105) ...
Less materials cost in Job 105 ................
Direct labor and manufacturing overhead cost ..
P15,000
3,000
P12,000
=
=
=
=
ManagerialAccounting,9/e
P 3,000
4,000
8,000
P15,000
72
91.
Medium
Ending
Balance
P22,000
9,000
77,000
ManagerialAccounting,9/e
73
14,000
315,000
329,000
22,000
307,000
26,000
281,000
377,000
238,000
896,000
27,000
923,000
9,000
914,000
ManagerialAccounting,9/e
62,000
914,000
74
976,000
77,000
899,000
14,000
913,000
P1,253,000
913,000
340,000
172,000
147,000
7,000
326,000
14,000
P 26,000
47,000
133,000
of
job
Required:
Prepare the appropriate journal entry for each of the items above (a.
through j.). You can assume that all transactions with employees,
customers, and suppliers were conducted in cash.
Answer:
a. Raw Materials Inventory ........
Cash ......................
b.
ManagerialAccounting,9/e
411,000
411,000
388,000
21,000
75
d.
e.
f.
g.
h.
i.
j.
409,000
145,000
61,000
190,000
148,000
12,000
114,000
7,000
232,000
783,000
396,000
148,000
12,000
121,000
232,000
783,000
ManagerialAccounting,9/e
1,107,000
768,000
24,000
24,000
76
93.
Medium
86,000
98,000
15,000
175,000
ManagerialAccounting,9/e
86,000
98,000
15,000
70,000
125,000
370,000
77
94.
Hard
15,000
89,000
64,000
16,000
52,500
17,500
11,000
122,500
500,000
1,000,000
600,000
15,000
89,000
80,000
70,000
11,000
122,500
500,000
1,000,000
600,000
Beginning
Balance
P118,600
121,450
21,800
34,350
-
Direct
Materials
P 4,000
2,500
86,400
71,800
18,990
Direct
Labor
P 8,400
12,160
36,650
32,175
21,845
Machine
Hours
150
300
3,100
2,700
1,400
By the end of the first month (January), all jobs but RX-115 were
completed, and all completed jobs had been delivered to customers
except for SL-205.
Required:
What was the balance in Finished Goods inventory at the end of
January?
Answer:
The Finished Goods inventory consists only of job SL-205. The balance
ManagerialAccounting,9/e
78
Machine-hours .................
Direct labor-hours ............
Direct materials cost .........
Direct labor cost .............
Manufacturing overhead cost ...
Department
A
B
70,000
19,000
30,000
60,000
P195,000 P282,000
P260,000 P520,000
P420,000 P705,000
Job 243 entered into production an April 1 and was completed on May 12.
The companys cost records show the following information about the job:
Machine-hours .................
Direct labor-hours ............
Direct materials cost .........
Direct labor cost .............
Department
A
B
250
60
70
120
P840
P1,100
P610
P880
At the end of the year, the records of Dotsero showed the following
actual cost and operating data for all jobs worked on during the year:
Machine-hours .................
Direct labor-hours ............
Direct materials cost .........
Manufacturing overhead cost ...
Department
A
B
61,000
20,000
28,000
66,000
P156,000 P284,000
P385,000 P705,000
Required:
a. Compute the predetermined overhead rates for Department A and
Department B.
b. Compute the total overhead cost applied to Job 243.
c. Compute the amount of underapplied or overapplied overhead in
ManagerialAccounting,9/e
each
79
96.
Medium
P1,500
P2,750
P4,250
Department A
Manufacturing overhead incurred...
P385,000
Manufacturing overhead applied:
61,000 X P6.00 = .............
366,000
P284,000 X 250% = .............
Underapplied (overapplied) overhead P 19,000
Department B
P705,000
710,000
P (5,000)
95,000
P1,710,000
75,000
P1,687,500
year
the
ManagerialAccounting,9/e
80
Answer:
The companys predetermined overhead rate for the year is:
P1,710,000/95,000 = P18 per machine hour
The amount of under-/overapplied overhead is:
Actual overhead ...............
Applied overhead (P18 X 75,000)
Underapplied overhead .........
P1,687,500
1,350,000
P 337,500
337,500
253,125
759,375
P1,350,000
25.00%
18.75%
56.25%
100.00%
P 84,375
63,281
189,844
P337,500
ManagerialAccounting,9/e
81
97.
Medium
P 1,600
2,600
5,100
13,000
2,500
P24,800
P15,000
22,000
Inventories:
Raw materials, beginning ...
Raw materials, ending ......
Work in process, beginning .
Work in process, ending ....
P 5,000
4,400
3,500
4,500
the
year.
Answer:
a. Actual total manufacturing overhead cost ....... P24,800
Manufacturing overhead applied: 6,000 x P4.00 = 24,000
Underapplied manufacturing overhead ............ P
800
b.
Kamas Company
Schedule of Cost of Goods Manufactured
For the Year Just Ended
Direct materials:
Raw materials, beginning ............... P 5,000
Add purchases of raw materials ......... 15,000
Raw materials available for use ........ 20,000
Deduct raw materials inventory, ending .
4,400
ManagerialAccounting,9/e
82
15,600
22,000
24,000
61,600
3,500
65,100
Deduct ending work in process ..............
4,500
Cost of goods manufactured ................. P60,600
ManagerialAccounting,9/e
83
98.
Hard
materials
1,100
determining
ManagerialAccounting,9/e
84
Answer:
Arthur Manufacturing Company
Schedule of Cost of Goods Manufactured
For the Year Just Ended
Raw materials used:
Beginning raw materials inventory ......
Purchases ..............................
Raw materials available ................
Ending raw materials inventory .........
Raw materials used .....................
Direct labor ...........................
Manufacturing overhead applied
to work in process ................
Total manufacturing costs ..............
Add: Work in process, beginning .......
Deduct: Work in process, ending .......
Cost of goods manufactured .............
4,400
68,000
72,400
6,050
66,350
110,000
71,500
247,850
17,000
264,850
19,000
P245,850
Computations:
Raw materials:
Beginning: 1,100 @ P4 .................
Purchases: 7,000 @ P5 ....... P35,000
6,000 @ P5.50..... 33,000
Ending:
1,100 @ P5.50 ..............
Raw materials used .....................
P 4,400
68,000
(6,050)
P69,350
Units:
1,100 + 7,000 + 6,000 13,000 = 1,100 units in ending inventory.
Factory overhead applied to work in process:
P110,000 x 0.65 = P71,500.
ManagerialAccounting,9/e
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