Job-Order Costing

1. The source document which is used to charge departments and job cost records for the cost
of the materials used on a specific job is the
a. Direct materials record
b. General ledger
c. Job cost sheet
d. Materials requisition record
2. A job cost record is also called the
a. Direct materials record
b. General ledger
c. Job cost sheet
d. Materials requisition record
3. The _________ is used to charge departments and job cost records for labor time used
a. Labor requisition record
b. Direct materials record
c. Labor time record
d. Job cost sheet
4. A job costing system has a separate job cost record for each job. This information is stored
in
a. A cost ledger
b. The general ledger
c. The product's ledger
d. A subsidiary ledger
5. The ledger which combines separate job cost records in the Work-in-process Control
Account is called
a. A cost control ledger
b. An operations control ledger
c. A general ledger
d. A subsidiary ledger
6. What is the appropriate journal entry if P200,000 of materials was purchased on account
for the month of December?
a. Raw materials inventory P200,000
Accounts payable control P200,000
b. Materials control P200,000
Accounts payable control P200,000
c. Manufacturing overhead control P200,000
Materials control P200,000
d. Materials overhead control P200,000
Accounts payable control P200,000
7. What is the appropriate journal entry if direct materials of P100,000 and indirect materials
of P6,000 were sent to the manufacturing plant floor?
a. Work-in-process Inventory Materials inventory
b. Work-in-process Inventory Materials inventory
c. Manufacturing overhead control Materials inventory Work-in-process Inventory
d. Work-in-process Inventory Manufacturing overhead control Materials inventory
8. All of the following items are debited to the work-in-process account except
 a. Allocated manufacturing overhead
b. Completed goods being transferred out of the plant
c. Direct labor consumed
d. Direct materials consumed
9. What would be the appropriate journal entry if the following labor wages were incurred in a
furniture manufacturing company?
Assembly workers P60,000
Janitors P40,000
Cafeteria workers P20,000

a. Materials Inventory P120,000

Wages payable control P120,000
b. Work-in-process Inventory P 60,000
Manufacturing overhead control 60,000
Wages payable control P120,000
c. Manufacturing overhead control P120,000
Wages payable control P120,000
d. Wages payable control P120,000
Work-in-process Inventory P120,000
10. Factory overhead costs incurred for the month were P85,000. Utilities were P25,000, and
depreciation on the equipment was P50,000. Repairs were P10,000. Which is the correct
journal entry?
a. Factory overhead control P85,000
Accounts payable control P35,000
Accumulated depreciation control 50,000
b. Factory overhead control P85,000
Accounts payable control P85,000
c. Factory overhead control P50,000
Accumulated depreciation control P50,000
d. Accumulated depreciation control P50,000
Accounts payable control 35,000
Factory overhead control P85,000
11. Which of the following statements related to manufacturing overhead allocated is false?
a. It is comprised of all manufacturing costs which cannot be directly traced to a
product or service.
b. The costs can be grouped in either a single indirect-cost pool or multiple indirect-
cost pools.
c. These costs are allocated because the products could be made without them.
d. The costs are debited to a work-in-process account.
12. Which of the following statements related to manufacturing overhead is true?
a. Credits to subsidiary manufacturing overhead records occur at the time the
manufacturing overhead costs are incurred.
b. Both debits and credits to subsidiary manufacturing overhead records occur at the
time manufacturing overhead costs are incurred.
c. Credits to manufacturing overhead allocated occur as the allocation base is
consumed.
 d. Manufacturing overhead costs incurred are dependent upon the allocation method
used.
13. When goods are completed,
a. the work-in-process control is increased.
b. the total cost of each job will consist of actual direct materials and actual indirect
manufacturing labor.
c. the total cost of each job is computed in the general ledger.
d. actual direct materials, actual direct manufacturing labor and budgeted
manufacturing overhead will comprise the total cost of each job.
14. During an accounting period, job costs are computed on an ongoing basis by the use of
a. actual allocation rates.
b. budgeted indirect-cost rates.
c. overallocated indirect-cost rates.
d. underallocated indirect-cost rates.
15. The allocation of underapplied or overapplied overhead among ending work in-process,
finished goods, and cost of goods sold is called
a. Budgeted indirect allocation
b. Budgeted direct allocation
c. Proration
d. Proration with direct-cost allocation
16. Which of the following is not one of the main alternative for disposing underallocated
manufacturing overhead?
a. Current accounting period write-off
b. Proration based on the allocated overhead amount
c. Proration based on the budgeted overhead amount
d. Proration based on total ending balances in work-in-process, finished goods, and
cost of goods sold.
17. Gerry's Electronics manufactures mouses for computers. In April, the two production
departments had budgeted allocation bases of P5,000 machine hours in Department 1 and
2,500 direct manufacturing labor hours in Department 2. The budgeted manufacturing
overheads for the month were P23,000 and P25,000, respectively. For Job 100, the actual
costs incurred in the two departments were as follows:
Department 1 Department 2
Direct materials purchased on account P44,000 P71,000
Direct materials used 13,000 5,400
Direct manufacturing labor 21,000 21,400
Indirect manufacturing labor 4,400 3,600
Indirect materials used 3,000 1,900
Lease on equipment 6,500 1,500
Utilities 400 500

Job 100 incurred 500 machine hours in Department 1 and 150 manufacturing labor hours
in Department 2. The company uses a budgeted departmental overhead rate for applying
overhead to production.

What is the budgeted manufacturing overhead rate for Department 1?

 a. P 4.60 per hour
b. P 5.00 per hour
c. P 9.20 per hour
d. P10.00 per hour
18. Gerry's Electronics manufactures mouses for computers. In April, the two production
departments had budgeted allocation bases of P5,000 machine hours in Department 1 and
2,500 direct manufacturing labor hours in Department 2. The budgeted manufacturing
overheads for the month were P23,000 and P25,000, respectively. For Job 100, the actual
costs incurred in the two departments were as follows:
Department 1 Department 2
Direct materials purchased on account P44,000 P71,000
Direct materials used 13,000 5,400
Direct manufacturing labor 21,000 21,400
Indirect manufacturing labor 4,400 3,600
Indirect materials used 3,000 1,900
Lease on equipment 6,500 1,500
Utilities 400 500

Job 100 incurred 500 machine hours in Department 1 and 150 manufacturing labor hours
in Department 2. The company uses a budgeted departmental overhead rate for applying
overhead to production.

What is the budgeted manufacturing overhead rate for Department 2?

a. P 4.60
b. P 5.00
c. P9.20 s
d. P10.00
19. Gerry's Electronics manufactures mouses for computers. In April, the two production
departments had budgeted allocation bases of P5,000 machine hours in Department 1 and
2,500 direct manufacturing labor hours in Department 2. The budgeted manufacturing
overheads for the month were P23,000 and P25,000, respectively. For Job 100, the actual
costs incurred in the two departments were as follows:
Department 1 Department 2
Direct materials purchased on account P44,000 P71,000
Direct materials used 13,000 5,400
Direct manufacturing labor 21,000 21,400
Indirect manufacturing labor 4,400 3,600
Indirect materials used 3,000 1,900
Lease on equipment 6,500 1,500
Utilities 400 500

Job 100 incurred 500 machine hours in Department 1 and 150 manufacturing labor hours
in Department 2. The company uses a budgeted departmental overhead rate for applying
overhead to production.
 What is the total cost of Job 100?

a. P18,400
b. P60,800
c. P64,600
d. P82,600
20. Bernadette Manufacturing Company is a new company that needs to make a decision about
the method to use in adjusting cost of goods sold. Because the company used a budgeted
indirect-cost rate for its manufacturing operations, the amount that was allocated
(P100,000) was different from the actual amount incurred (P112,500).

Ending balances in the relevant account were:

Work-in-process P20,000
Finished goods 40,000
Cost of goods sold 340,000

What is the correct journal entry to write off the difference between allocated and actual
overhead directly to cost of goods sold?
a. Manufacturing overhead allocated P100,000
Cost of goods sold P12,500
Manufacturing overhead control. P112,500
b. Manufacturing overhead control P100,000
Cost of goods sold 12,500
Manufacturing overhead allocated P112,500
c. Manufacturing overhead allocated P100,000
Cost of goods sold P240,000
Manufacturing overhead control P440,000
d. Manufacturing overhead allocated P100,000
Work-in-process 12,500
Manufacturing overhead control P112,500
21. Bernadette Manufacturing Company is a new company that needs to make a decision about
the method to use in adjusting cost of goods sold. Because the company used a budgeted
indirect-cost rate for its manufacturing operations, the amount that was allocated
(P100,000) was different from the actual amount incurred (P112,500).

Ending balances in the relevant account were:

Work-in-process P20,000
Finished goods 40,000
Cost of goods sold 340,000

What is the correct journal entry to prorate the write off of the difference between allocated
and actual overhead using the ending balance approach?
a. Manufacturing overhead allocated P100,000
Work-in-process 20,000
Finished goods 40,000
 Manufacturing overhead control P160,000
b. Manufacturing overhead control P100,000
Work-in-process P 625
Finished goods 1,250
Cost of goods sold 10, 625
Manufacturing overhead control P100,000
c. Manufacturing overhead control P112,500
Work-in-process 625
Finished goods 1,250
Cost of goods sold 10,625
Manufacturing overhead allocated P100,000
d. Manufacturing overhead allocated P100,000
Work-in-process 625
Finished goods 1,250
Cost of goods sold 10,625
Manufacturing overhead control P112,500
a. units passing through that operation.