MULTIPLE CHOICE-COMPUTATIONAL

1. The following cost data were taken from the records of JGG manufacturing company:

Depreciation on factory equipment P 1,000

Depreciation on sales office 500
Advertising 7,000
Freight-out (shipping) 3,000
Wages of production workers 28,000
Raw materials used4 7,000
Sales salaries and commissions 10,000
Factory rent 2,000
Factory insurance 500
Materials handling 1,500
Administrative salaries 2000

Based upon this information, the manufacturing cost incurred during the year was:

a. P18,500
b. 80,000
c. 80,500
d. 83,000

2. The following information was taken from Kate Company’s accounting records for the year
ended December 31, 2014:

Increase in materials inventory P15,000

Decrease in finished goods inventory 35,000
Raw materials purchased 430,000
Direct-labor payroll 200,000
Factory overhead 300,000
Freight-out 45,000
There was no work-in-process inventory at beginning or end of the year. Kate’s cost of goods
sold is:
a. P950,000
b. 965,000
c. 975,000
d. 995,000

3. Joy Corp. manufactures plastic coated metal clips. The following were among Joy’s 2014
manufacturing costs:
Wages
Machine operators P200,000
 Maintenance workers 30,000
Factory foreman 90,000

Materials used
Metal wire P500,000
Lubricant for oiling machinery 10,000
Plastic coating 380,000

In 2014, Joy’s direct labor and direct materials amounted to:

Direct Labor Direct materials

a. P230,000 P510,000
b. 220,000 500,000
c. 320,000 880,000
d. 200,000 880,000

4. Katherine Company manufactures special machines according to customers’ specifications. The

following data were available at the beginning and ending of April:
Beginning Ending
Materials inventory P32,400 P34,000
Work in process inventory 7,200 16,240
Finished goods inventory 8,000 6,000

During April, direct materials costing P40,000 were purchased, direct labor cost totaled P33,000,
and factory overhead was P17,160.
For April, the cost of good manufactured is:
a. P90,560
b. 81,520
c. 79,520
d. 88,560
5. The December 31, 2014 trial balance of Jean Company showed the following information:

Sales P1,400,000 Sales returns and allowances P2,000

Purchases 240,000 Factory overhead 188,000
Freight-in 3,000 Advertising expense 15,000
Direct labor 320,000 Delivery expense 6,000
Sales salaries 20,000

Inventories:
December 31, 2014 January 1, 2014
Finished goods P46,000 P62,000
Work in process 13,000 12,000
 Materials 19,000 17,000

Compute the (1) total factory costs, and (2) cost of goods sold:
a. (1) P749,000 ; (2) P763,000
b. (1) 790,000 ; (2) P805,000
c. (1) 753,000 ; (2) 738,000
d. (1) 749,000 ; (2) 764,000
6. The accounting department of Mafe Company provided the following data for 2014:

Sales P144,000
Marketing expenses 7,200
Administrative expense 1,440
Other expense 720
Purchases ?
Factory overhead 20,000
Direct labor 30,000
Cost of goods sold 100,600
Inventories, January 1:
Finished goods 14,000
Work in process 16,000
Materials 16,000
Inventories, December 31:
Finished goods 20,400
Work in process 30,000
Materials 17,000
Compute for 2014 the cost of materials purchased:
a. P82,640
b. 72,000
c. 29,200
d. 72,000
7. The following data were taken from the records of Marlene Company for the fiscal year ended
December 31, 2014:
Materials used:
Direct P100,000
Factory supplies 6,000 P106,000
Factory payroll:
Direct labor P250,000
Indirect labor 50,000 300,000
Machine maintenance and repair 10,000
Factory rent, light and power 24,000
Depreciation of machinery 10,000
Payroll taxes (factory payroll) 30,000
 Inventories:
January 1 December 31
Work in process P30,000 P40,000
Finished goods 50,000 60,000

Compute for 2014: (1) the cost of goods manufactured, and (2) the cost of goods sold:
a. (1) P470,000 ; (2) P470,000
b. (1) 460,000 ; (2) 470,000
c. (1) 470,000 ; (2) 460,000
d. (1) 480,000 ; (2) 460,000
8. A manufacturing company had inventories at the beginning and end of 2014 as follows:
Beginning and end of 2014 as follows:
Beginning End
Materials P44,000 P60,000
Work in process 80,000 96,000
Finished goods 50, 000 36,000

During 2014, the following costs and expenses were incurred:

Raw materials purchased P600,000
Direct labor cost 240,000
Indirect labor cost 120,000
Taxes, utilities and depreciation of
factory building 100,000
Sales and office salaries 128,000
The cost of goods sold during the period was:
a. P1,028,000
b. 1,042,000
c. 1,044,000
d. 1,078,000
9. You have been trying to reconstruct the records of the Yvette Company. Some employees are
suspected of having taken some inventories. Many records are missing. Nevertheless, you have
gathered the following data regarding the current year:

Work in process, beginning P200,000 Administrative expenses P300,000

Work in process, end 250,000 Purchases of raw materials 800,000
Gross profit 2,500,000 Factory overhead 700,000
Finished goods inventory, end 760,000 Sales 4,100,000
Cost of goods sold 1,600,000 Direct labor 600,000
Selling expenses 400,000 Direct materials used 500,000

The beginning finished goods inventory was:

 a. P50,000
b. 610,000
c. 600,000
d. 310,000
10. A mentally deranged employee, Mr. Arson, put a torch to a factory on February 20, 2014. The
resulting fire completely destroyed the plant and its contents. Fortunately, certain accounting
records were kept in another building. They revealed the following for the period December 31,
2013 to February 20, 2014:

Prime cost, P301,000

Gross profit rate on sales, 20%
Cost of goods available for sale, P460,000
Direct materials purchased, P170,000
Work in process, December 31, 2013, P34,000
Direct materials, December 31,2013, P16,000
Finished goods, December 31, 2013, P30,000
Factory overhead, 40%of conversion cost
Sales, P500,000
Direct labor, P180,000

The insurance company wants to know the approximate cost of the inventories as a basis for
negotiating a settlement.

Compute for February 20,2014: (1) the direct materials inventory; (2) work in process inventory,
and (3) finished goods inventory:
a. (1) P65,000; (2) P25,400; (3) P60,000
b. (1) 49,000; (2) 25,000; (3) 30,000
c. (1) 6,000; (2) 25,400; (3) 30,000
d. (1) 65,000; (2) 25,000; (3) 60,000

11. The following accounts of Josie Manufacturing Co. appeared in its balance sheets on December
31, 2013 and December 21, 2014:
2013 2014
Materials inventory P60,000 P90,000
Work in process inventory 34,000 35,000
Finished goods inventory 46,000 36,000
Accrued factory payroll 6,200 7,000

The following amounts appeared in the company’s statement of comprehensive income for
2014:
Materials used P600,000
Cost of goods sold 1,840,000
 Direct labor 410,000
Indirect labor 140,000

Compute for 2014: (1) the amount of raw materials purchased, (2) the cost of goods
manufactured, and (3) the payment of payroll:
a. (1) P630,000 ; (2) P1,830,000 ; (3) P549,200
b. (1) 630,000 ; (2) 1,876,000 ; (3) 550,000
c. (1) 690,000 ; (2) P1,830,000 ; (3) 550,000
d. (1) 690,000 ; (2) 1,876,000 ; (3) 549,000
12. The Angie Manufacturing Company makes one model of a product known as Brand A. On
January 1, 2014, there was 500 units of the finished product which were included in the finished
goods inventory. Other inventories on January 1 were:

Work in process P5,740

Materials 11,620

Among the data available for December 31, 2014 were the following:

Indirect labor P12,160

Direct labor 32,640
Freight-in 5,570
Materials inventory 9,640
Other factory overhead expenses 31,730
Work in process inventory 7,820
Sales (15,000 units) 360,000
Indirect materials 21,390
Total factory costs 194,080

There were 1,500 units of Brand A in the finished goods inventory at December 31,2014.
Compute for the year: (1) the amount of materials purchased (gross); and (2) the gross profit:
a. (1) P105,800 ; (2) P180,000
b. (1) 88,610 ; (2) 180,000
c. (1) 96,160 ; (2) 108, 000
d. (1) 88,610 ; (2) 108,000
13. The accounting department of the Lorelei Company provided the following data for June: sales,
P72,000; marketing senses, 5% administrative expenses, 1%; other expenses, 5% of all sales;
purchases, P36,000;factory overhead, 2/3 of direct labor, P15,000

Beginning inventories:
Finished goods P7,000
Work in process 8,000
Materials 8,000
 Ending inventories:
Finished goods P10,200
Work in process 15,000
Materials 8,500

Compute for June: (1) the cost of goods sold, and (2) income before income tax:
a. (1) P50,300 ; (2) P13,780
b. (1) 53,500 ; (2) 13,780
c. (1) 50,300 ; (2) 17,020
d. (1) 62,800 ; (2) 1,280
14. Barney Inc., submits the following data for December:

Direct labor cost, P30,000

Cost of goods sold, P111,000
Factory overhead is applied at the rate of P150% of direct labor cost

Inventory accounts showed these beginning and ending balances:

December 1 December 31
Finished goods P15,000 P17,500
Work in process 9,600 13,000
Materials 7,000 7,400

Other data:
Marketing expenses P14,000
General and administrative expenses 22,900
Sales for the month 182,000

Compute for December: (1) the cost of goods available for sale, and (2) operating income:
a. (1) P128,500 ; (2) P34,100
b. (1) 111,000 ; (2) 34,100
c. (1) 113,500 ; (2) 31,500
d. (1) 128,500 ; (2) 31,500
15. Cost data on the activities of Ruth Manufacturing for March are as follows:
March 1 March 31
(a) Account balances:
Finished goods P45,602 P ?
Work in process 60,420 52, 800
Direct material 10,250 12,700
Indirect material 5,600 5,180

(b) Transactions in March:

 Supplies purchased P16,500
Cost of goods sold 280,000
Raw materials purchased 105,000
Indirect labor 22,000
Factory heat, light, and power 11,220
Factory rent1 8,500
Factory insurance 2,000
Sales commissions 48,000
Administrative expenses 25,000
Production supervisor’s salary 5,000

(c). 4,250 direct labor hours were worked in March. Laborers work a 40-hour week and are
paid P22 per hour for the regular shift and 5 hour of overtime. Of the 4,250 hours 250 hours
were worked in overtime in March. Ruth treats the overtime premium as a part of
overhead.

Compute for (1) the factory overhead incurred in March, and (2) finished goods inventory at
March 31:
a. (1) P75,640 ; (2) P47,662
b. (1) 78,390 ; (2) 52,800
c. (1) 76, 390 ; (2) 45, 602
d. (1) 78, 390 ; (2) 47,662
16. Selected data concerning last year’s operations of Terry Company are as follows:
Inventories
Beginning Ending
Finished goods P90,000 P110,000
Work in process 80,000 30,000
Materials 75,000 85,000

Other data:
(a) Materials used, P326,000
(b) Total manufacturing costs charged to jobs during the year (includes materials, direct labor,
and factory overhead applied at a rate of 60% of direct labor cost), P686,000
(c) Cost of goods available for sale, P826,000
(d) Marketing and administrative expenses, P25,000

Compute for(1) cost of materials purchased; (2) direct labor cost charged to production, and (3) cost of
goods manufactured:

a. (1) P336,000 ; (2) P225,000 ; (3) P716,000

b. (1) 326,000 ; (2) 135,000 ; (3) 736,000
c. (1) 411,000 ; (2) 326,000 ; (3) 716,000
d. (1) 336,000 ; (2) 225,000 ; (3) 736,000
17. The following data are provided by the controller of the Marlene Corporation :
Cash P240,000
Accounts receivable 348,000
Inventories:
July 1, 2009 July 31, 2010
Finished goods P44,200 P66,000
Work in process 29,800 38,800
Materials 88,000 64,000

Materials purchased P366,000

Sales discount 8,000
Factory overhead (excluding depreciation) 468,400
Marketing and administrative expenses
( excluding depreciation) 344,400
Depreciation( 90% manufacturing,
10% marketing and administrative expenses) 116,000
Sales 1,844,000
Direct labor 523,000
Freight on materials purchased 6,000
Rental income 64,000
Interest on bonds payable 16,000

Compute for: (1) manufacturing costs, and (2) cost of goods sold:
a. (1) P1,522,800 ; (2) P1,461,000
b. (1) 1,509,000 ; (2) 1,478,200
c. (1) 1, 491,800 ; (2) 1,461,000
d. (1) 1,491, 800 ; (2) 1,484,000

18. On December 1, the Amor Company had the following inventories; materials, P24,000; work in
process, P12,000; and finished goods, P36,000. During the month, materials purchases totaled
P56,000. Direct labor for December was P40,000, at a uniform wage of P6.40 per hour.
Marketing and administrative expenses for the month amounted to 10% of net sales.
Inventories on December 31, were as follows: materials, P20,000; work in process, P8,000; and
finished goods, P40,000. Net sales for December totaled P200,000. Factory overhead is applied
on the basis of P8 per direct labor hour.

Compute for: (1) Prime costs, and (2) Conversion costs:

a. (1) P110,000; (2) P90,000
 b. (1) 100,000 ; (2) 90,000
c. (1) 100,000 ; (2) 100,000
d. (1) 90,000 ; (2) 100,000
19. The transporter Company is a small machine shop that uses highly skilled labor and job-order
cost system. The total debits and credits in certain accounts just before year end are:
December 31, 2014
Total Debits Total Credits
Direct materials control P100,000 P70,000
Work in process control 320,000 305,000
Factory department overhead control 85,000
Finished goods control 325,000 300,000
Cost of goods sold 300,000
Factory department overhead applied 90,000

Note that “total debits” in the inventory accounts would include beginning inventory balances, if
any.
The above accounts do not include the following:
a. The labor cost recapitulation for the December 31 working day: direct labor P5,000 and
indirect labor P1,000.
b. Miscellaneous factory overhead incurred on December 30 and December 31: P1,000
Additional information:
Factory overhead has been applied as a percentage of direct labor cost through December
31.
Direct material purchases during 2014 were P5,000
There were no returns to suppliers.
Direct labor costs during 2014 totaled P150,000, not including the December 31 working
day described above.

Compute for the ending inventory of (1) Direct materials, (2) Work in process control; and
(3) Finished goods.

Compute for the ending inventory of (1) Direct materials, (2) Work in process control; and
(3) Finished goods.
a. (1) P30,000 ; (2) P23,000 ; (3) P45,000
b. (1) 30,000 ; (2) 23,000 ; (3) 25,000
c. (1) 45,000 ; (2) 15,000 ; (3) 25,000
d. (1) 30,000 ; (2) 15,000 ; (3) 25,000
20. The Angeli Company uses perpetual inventories and a normal cost system. Balances from
selected accounts were:
Balances Balances
December 31, 2013 December 31, 2014
 Factory department overhead control P56,000
Finished goods control P50,000 46,000
Cost of goods sold 180,000
Direct materials control ? 20,000
Work in process control ? 35,000
Factory overhead control 72,000

The cost of direct materials requisitioned for production during 2013 was P100,000. The cost of
direct materials purchased during 2013 was P90,000. Factory overhead is applied at 200% of
direct labor cost.

Before considering any year-end adjustments for overapplied or underapplied overhead,

compute: (1) Direct materials accounts, December 31, 2014 and (2) Work in process account,
December 31,2014:
a. (1) P30,000 ; (2) P3,000
b. (1) 30,000; (2) 38,000
c. (1) 50,000 ; (2) 3,000
d. (1) 35,000 ; (2) 0
21. The cost department of the Marlyn Corporation prepared the following data and costs for the
year 2014:
January 1 December 31
Finished goods P48,600 ?
Work in process 81,500 42,350
Materials 34,200 49,300
Depreciation-factory equipment 21,350
Interest earned 6,300
Finished goods inventory: January 1: 300 units; December 31: 420 units, all from current year’s
production
Sold during 2014; 3,880 units at P220 per unit.
Materials purchased P364,000
Direct labor 162,500
Indirect labor 83,400
Freight-in 8,600
Miscellaneous factory overhead 47,900
Purchase discount 5,200

Compute for: (1) unit cost of the finished goods inventory, December 31, 2014, and (2) total
gross profit.
a. (1) P176.65 ; (2) 172,593
b. (1) 210.95 ; (2) 187,000
c. (1) 162.00 ; (2) 157,612
d. (1) 176.65 ; (2) 187,000
22. The records of Aurora, Inc. show the following information as of March 31, 2014:

Materials used P440,000

Direct labor Indirect labor 290,000
Indirect labor 46,000
Light and power 4,260
Depreciation 4,700
Repairs to machinery 5,800
Miscellaneous factory overhead 29,000
Work in process inventory, April 1, 2013 41,200
Finished goods inventory, April 1, 2013 34,300
Work in process inventory, March 31, 2014 42,500
Finished goods inventory, March 31, 2014 31,500

During the year, 18,000 units were completed

Compute for: (1) unit cost of goods manufactured, and (2) the amount of over-or underapplied
overhead if the company applies overhead on the basis of 30% of direct labor cost.
a. (1) P45.65 ; (2) P2,760 underapplied
b. (1) 47.38 ; (2) 0
c. (1) 45.32 ; (2) 2,760 underapplied
d. (1) 45.47 ; (2) 2,760 overapplied
23. The Violy Company reports the following data for October.
Product X Product Y
Production 10,000 units 8,000 units
Per unit production costs applicable to beginning
inventories and September production:
Direct materials P4 P3
Direct labor 10 20
Applied factory overhead 7 14
P21 P37
Sales price per unit P30 P50
Beginning inventories 1,000 units 900 units
Ending inventories 2000 100

Actual factory overhead was P180,000; factory overhead is applied at a rate of P.70 per direct
labor peso. Over-or underapplied factory overhead is closed to the cost of goods sold account.
Marketing and administrative expenses were P100,900.

Compute for: (1) over-underapplied factoryoverhead, and (2) operating income for October.
a. (1) P2,000 underapplied ; (2) P92,500
b. (1) 2,000 overapplied ; (2) 96,500
c. (1) 2,000 overapplied ; (2) 197,400
 d. (1) 2,000 underapplied ; (2) 96,500
24. Last month Marjorie Company put P60,000 of materials into production. The Grinding
Department used 8,000 labor hours at P5.60 per hour, and the Machining Department used
4,600 hours at a cost of P6 per hour. Factory overhead is applied at a rate of P6 per labor hour in
the Grinding Department and P8 per labor hour in the Machining Department. Inventory
accounts had the following beginning and ending balances:
Beginning Ending
Finished Goods P22,000 P17,000
Work in process 15,000 17,600
Materials 20,000 18,000

Compute: (1) conversion cost, and (2) cost of good sold:

a. (1) P92,800 ; (2) P219,600
b. (1) 157,200 ; (2) 214,600
c. (1) 64,400 ; (2) 155,200
d. (1) 157,200 ; (2) 221,600
25. The records of the Eunice Equipment Company show the following information for the three
months ended June 30, 2014.

Materials purchased P1,946,700

Inventories: April 1, 2014
Finished goods (100 equipments) 43,000
Materials 268,000
Direct labor 2,125,800
Factory overhead (40% variable) 764,000
Marketing expenses (all fixed) 516,000
General and administrative expenses (all fixed) 461,000
Sales (12,400 equipments) 6,634,000

Inventories, June 30, 2014:

No unfinished work on hand
Finished goods (200 equipments), costed at P395 each
Materials 167,000

Compute for: (1) unit cost for each equipment manufactured, (2) gross profit per unit sold, and
(3) income per unit sold.
a. (1) P398 ; (2) P139.72 ; (3) P60.93
b. (1) 395 ; (2) 138.60 ; (3) 60.44
c. (1) 395 ; (2) 139.72 ; (3) 60.93
d. (1) 349 ; (2) 137.50 ; (3) 59.96
26. Ong Company applies factory overhead using a percentage of direct labor cost. Costs for the
year 2014 have been estimated as follows:
 Direct labor cost P120,000
Factory overhead cost 96,000

During January 2014, costs were recorded as follows:

Direct labor cost P8,000

Factory overhead costs 7,200

Compute for (1) The applied factory overhead costs for January, and (2) overapplied-
underapplied factory overhead costs amounted:
a. (1) P7,200 ; (2) P800 underapplied
b. (1) 7,200 ; -0-
c. (1) 6,400 ; 800 overapplied
d. (1) 6,400 ; (2) 800 underapplied
27. Chan Corporation uses job order costing. Factory cost is applied to all production activities at the
rate of P7 per direct labor hour based on predetermined annual estimates. The following
information were available for the year ended December 31, 2014:

Direct materials used P250,000

Direct labor 300,000
Indirect labor 6,000
Rent-factory building 60,000
Indirect materials used 8,000
Other factory overhead costs 40,000
Direct labor hours worked 16,000

There were no work in progress inventories or finished job inventories at either the beginning or
end of the year.
Compute for: (1) the total factory overhead costs for the year; (2) factory overhead applied to
jobs completed during the year, and (3) cost of goods sold for the year based on applied factory
overhead:
a. (1) P114,000 ; (2) P114,000 ; (3) P664,000
b. (1) 112,000 ; (2) 114,000 ;(3) 664,000
c. (1) 112,000 ; (2) 112,000 ; (3) 662,000
d. (1) 114,000 ; (2) 112,000 (3) 664,000
28. The Arlyn Company uses job order costing. Overhead applied to production is at predetermined
rate of 80% based on direct labor costs. The following accounts appear in the general ledger of
the company for the month of April 2014:

Debits
Work in process, April 1 P60,000
 Direct Materials 120,000
Direct Labor 100,000
Factory overhead 80,000

On April 30, 2014 finished goods completed from work in process cost P320,000. Job No.30 was
the only job not completed in April and had been charged P9,200 for factory overhead.

The cost of Job No.30 at April 30 was:

a. P27,360
b. 29,200
c. 50,000
d. 40,000
29. Taal Corporation manufactures rattan furniture sets for export, using the job order costing for
its costs. For its costs. For the year ended December 31, 2014, you obtained the following
information:
Work in process, January 1, 2014 was 20% less than the workin-process inventory on December
31, 2014

Total manufacturing costs added during 2014 was P900,000 based on actual direct materials
and direct labor, while factory over head was applied on actual direct labor costs.

Factory overhead applied to work in process was 72% of direct labor costs. Applied factory
overhead for the year was 25% of total factory costs.

Cost of goods manufactured, also based on actual direct materials, actual direct labor and
applied factory overhead, was P850,000.

Compute for: (1) the Direct Materials used, and (2) Work in Process Inventory on December 31,
2014:
a. (1) P312,500 ; (2) P250,000
b. (1) 362,500 ; (2) 200,000
c. (1) 225,500 ; (2) 275,000
d. (1) 362,500 ; (2) 250,000
30. The Work in Process account of Lourdes Company, which uses job order costing, follows:
Work in Process
May 1 balance P100,000 Finished Goods P501,800
Direct Materials used 200,000
Direct Labor 160,000
Applied Factory Overhead 120,000

Factory overhead is applied to production at a predetermined rate based on direct labor cost.
 The work in process at May 31 represents the costs of Job No. 123 which has been charged with
direct labor cost of P12,000, and Job No. 456 which has been charged with applied overhead of
P9,600.

The cost of direct materials charged to Job order Nos. 123 and 456 totaled
a. P16,800
b. 18,000
c. 34,800
d. 30,000
31. Ronella uses a job order cost system and applies factory overhead to production orders on the
basis of direct-labor cost. The overhead rates for 2014 are 200% for Department A and 50% for
Department B. Job 123, started and completed during 2014, was charged with the following
costs:
Departments
A B
Direct materials P25,000 P5,000
Direct labor ? 30,000
Factory overhead 40,000 ?

The total manufacturing costs associated costs associated with Job 123 should be:
a. P135,000
b. 180,000
c. 195,000
d. 240,000
32. Yvette Co. uses a job order cost system . The following debits (credits) appeared in Yvette’s
work-in-process account for the month of April 2014:
April Description Amount
1 Balance P4,000
30 Direct materials 24,000
30 Direct labor 16,000
30 Factory overhead 12,800
30 To finished goods (48,000)

Yvette applies factory overhead to production at a predetermined rate of 80% of direct labor
costs. Job No. 5, the only job still in process on April 30, 2014, has been charged with direct
labor of P2,000. What was the amount of direct materials charged to Job No. 5?
a. P3,000
b. 5,200
c. 8,800
d. 24,000
33. The work in process account of Marjorie Company showed:
 Work in Process
Materials P15,500 Finished Goods P37,500
Direct Labor 14,750
Factory overhead 11,800

Materials charged to the one-job still in process amounted to P3,200. Factory overhead is
applied as a predetermined percentage of direct labor cost.

The amount of (1) direct labor costs, and (2) factory overhead in finished goods:
a. (1) P25,200 ;(2) P11,800
b. (1) 14,000 ; (2) 11,200
c. (1) 25,200 ; (2) 11,200
d. (1) 14,000 ; (2) 14,750
34. Data relating to Mavic Company’s manufacturing activities for December follow:
Inventories
December 1 December 31
Finished goods P12,000
Direct materials P5,000
Direct labor 3,000
Machine time 60 hours

Work in process 3,000 units 2,000 units

Direct materials, P2.40 per unit
Direct labor,P0.80 per unit
Machine time 48hours 32hours
Materials P9,000 P4,500

Total December manufacturing cost was P180,000, of which P30,000 was direct labor cost. A
total of 600 machine hours were used in the month. Mavic uses a predetermined overhead rate
of P100 per machine hour to assign factory overhead to work in process and finished goods
inventories. Materials purchased in December were P84,000 and freight-in on these purchases
totaled P1,500.
Compute for: (1) the materials used in December ; (2) cost of goods manufactured; and (3) cost
of goods sold for December.
a. (1) P90,000 ; (2) P184,000 ; (3) P196,800
b. (1) 88,500 ; (2) 183,300 ; (3) 181,300
c. (1) 90,000 ; (2) 184,800 ; (3) 182,800
d. (1) 85,500 ; (2) 194,400 ; (3) 182,800
35. Evelyn Company is to submit a bid on the production of 22,500 ceramic plates. It is estimated
that the cost of materials will be P26,000 and the cost of direct labor will be P30,000. Factory
overhead is applied at P2.70 per direct labor hour in the Molding Department and at 35% of the
direct labor cost in the Decorating Department. It is estimated that 2,000 direct labor hours, at a
 cost of P18,000 will be required in Molding. The company wants a markup of 45% of its total
production cost.

Compute for: (1) estimated cost to produce, and (2) the bid price for the ceramic plates:
a. (1) P65,600; (2) P87,290
b. (1) 60,200 ; (2) 87,290
c. (1) 56,000 ; (2) 95,120
d. (1) 65,600 ; (2) 95, 120
36. During August, Violeta Machine Company started production orders 116,117, and 118. Order
115 was in process at the beginning of the month with direct materials costs of P35,000, direct
labor costs of P21,000 and applied factory overhead of P25,200. During the month, direct
materials were requisitioned, and direct labor was identified with the orders as follows:

Order No. Direct Materials Direct Labor

115 P - P26,000
116 39,000 45,000
117 53,000 47,000
118 47,000 16,000

Factory overhead is applied to the orders at 120% of direct labor cost. Oders 115, 116 and 117
were completed and sold in August Order 118 was incomplete on August 31.

Compute for August: (1) the cost of goods manufactured, and (2) Work in Process on August 31:
a. (1) P432,800 ; (2) P 138,000
b. (1) 432,800 ; (2) 82,200
c. (1) 376,000 ; (2) 138,400
d. (1) 358,600 ; (2) 156,400
37. A schedule of cost of goods manufactured shows:
Materials used P600,000
Direct labor 1,600,000
Overhead costs 1,280,000
Work in process, ending inventory 280,000

Compute: (1) the rate of factory overhead to direct labor cost, and (2) the direct materials
included in the work in process inventory, assuming that the direct labor cost included in the
work in process is P100,000.
a. (1) 80% ; (2) P80,000
b. (1) 125% ; (2) 60,000
c. (1) 80% ; (2) 100,000
d. (1) 125% ; (2) 100,000

Item 38 and 39 are based on the following information for March:

 Accounts payable, March 1 P12,000
Work in process, March 1 60,000
Finished goods, March 1 100,000
Materials, March 31 30,000
Accounts payable, March 31 20,000
Finished goods, March 31 120,000
Actual factory overhead 300,000
Cost of goods sold 600,000
Payment of accounts payable (assume this account is used
for materials only) 70,000

Factory overhead is applied at 200% of direct labor cost. Jobs still in process on March 31have
been charged P12,000 for materials and P24,000 for direct labor (3,000 hours). Actual direct
labor hours, 20,000 at P8 per hour.
38. Compute: for (1) cost of materials purchased, and (2) materials inventory on March 1:
a. (1) P 78,000 ; (2) P116,000
b. (1) 116,000 ; (2) 116,000
c. (1) 78,000 ; (2) 78,000
d. (1) 116,000 ;(2) 78,000
39. Compute for: (1) applied factory overhead and (2) over underapplied factory overhead:
a. (1) P480,000 ; (2) P180,000 overapplied
b. (1) 320,000 ; (2) 20,000 underapplied
c. (1) 300,000 ; (2) -0-
d. (1) 320,000 ; (2) 20,000 overapplied

Items 40 and 41 are based on the following data:

The Doris Company uses job order costing. At the beginning of May, two jobs were in
process:

Job 769 Job 772

Materials P4,000 P1,400
Direct labor 2,000 600
Applied factory overhead 3,000 900

There was no inventory of finished goods on May 1. During the month, Jobs 773, 774, 776,
778, and 779 were started

Materials requisitions for May totaled P26,000, direct labor cost, P20,000 and actual factory
overhead, P32,000. Factory overhead is applied at a rat of 150% of direct labor cost.
 The only job still in process at the end of May is Job No.779, with costs of P2,800 for
materials and P1,800 for direct labor

Job 776, the only finished job on hand at the end of May, has a total cost of P4,000.

40. Compute for: (1) prime costs in May, and (2) conversion costs in May:
a. (1) P52,000 ; (2) P50,000
b. (1) 46,000 ; (2) 50,000
c. (1) 58,000 ; (2) 46,000
d. (1) 46,000 ; (2) 58,000
41. Compute for (1) the cost of goods manufactured, and (2) the cost of goods sold at normal:
a. (1) P80,000 ; (2) P78,600
b. (1) 76,000 ; (2) 78,600
c. (1) 80,600 ; (2) 76,600
d. (1) 76,600 ; (2) 80,600
42. The Christine Company uses a job-order cost system for manufacturing missile parts. The
following transactions relate to the month of March:
1. Direct materials issued to production, P98,000
2. Direct labor analysis, P50,000
3. Manufacturing overhead is applied to production on the basis of P30 per machine hour.
There were 2,000 machine hours incurred.
4. Total manufacturing overhead incurred overhead for the month was P64,000
5. Job orders that cost P210,000, were completed during the month
6. Job orders that cost P200,000 were shipped and invoiced to customers during the month at
a gross margin of 20% based on manufacturing cost.

Compute the ending balance of work in process if the beginning work in process was
P40,000:
a. P50,000
b. 60,000
c. 78,000
d. 38,000
43. Consider the following budgeted data for a client case of Finn and Company, a law firm. The
client wants a fixed price quotation.

Direct professional labor P30,000

Direct support labor 9,000
Other operating costs applied at 100% of total direct costs ?
Fringe benefits for all direct labor 13,000
Photocopying 1,000
Telephone calls 1,000
Computer time 6,000
 Suppose a competing law firm has the same set of costs. However, its cost accounting system
traces only direct professional labor as a direct cost of a case. The firm’s policy is to quote a fixed
fee at 500% of direct professional labor. What fee would the competitor quote?

a. P150,000
b. 300,000
c. 120,000
d. 600,000
44. ZTE Company has the following data on April 30, 2014:

April manufacturing overhead P30,101.80

Decrease in ending inventories:
Materials 2,430.00
Work in process 590.00
Increase in ending inventory:
Finished goods 1,320.40

The manufacturing overhead amounts to 50% of the direct labor and manufacturing combined
equal 50% of the total cost of manufacturing.

What is the cost of goods manufactured?

a. P180,610.80
b. 181,200.80
c. 182,300.00
d. 183,200.80
45. A company manufactures pipes and uses a job-order costing system. During May, the following
jobs were started (no other jobs were in process) and the following costs were incurred:
Job X Job Y Job Z Total
Direct materials
Requisitioned P10,000 P20,000 P15,000 P45,000
Direct labor 5,000 4,000 2,500 11,500
P15,000 P24,000 P17,500 P56,500

In addition, estimated factory overhead of P300,000 and direct labor costs of P150,000 were estimated
to be incurred during the year. Actual overhead of P24,000 was incurred in May; overhead is applied on
the basis of direct labor pesos. If only Job X and Job Z were completed during the month, the
appropriate entry to record the initiation of all jobs would be

a. Work in process 79,500

Direct materials 45,000
 Direct labor 11,500
Applied factory overhead 23,000
b. Work in process 80,500
Direct materials 45,000
Direct labor 11,500
Applied factory overhead 24,000
c. Work in process 80,500
Direct materials 45,000
Direct labor 11,500
Applied factory overhead 24,000
d. Direct labor 11,500
Direct materials 45,000
Work in process 56,500
46. Jenny Corporation is a manufacturing company engaged in the production of a single special
product known as “Sad” Productions costs are accumulated with the use of a job order cost
system, and the following information are available as of June 1, 2014:

Work in process P21,420

Direct materials inventory 97,200

In analyzing the job order cost sheets, the records disclosed the composition of the work in
process on June 1, 2014 was as follows:

Direct materials used P7,920

Direct labor (900hours) 9,000
Factory overhead applied 4,500
P21,420

The following manufacturing activities occurred during the month of June 2014:

Purchased direct materials costing P120,000.

Direct labor hours worked were 19,800 at P5 per hour.
Factory overhead was applied to production at a rate of P2.50 per direct labor hour.

At the end of June 2014 the following information were gathered in connection with the
inventories:

An inventory of work in process:

Direct materials (used) P25,920
Direct labor( 3,000 hours) 15,000
Factory overhead applied 7,500
P48,420
 Inventory of direct materials P102,000

Compute for: (1) the manufacturing costs, and (2) cost of goods manufactured:
a. (1) P263,700 ; (2) P193,260
b. (1) 236,700 ; (2) 263,700
c. (1) 236,700 ; (2) 193,260
d. (1) 263,700 ; (2) 236,700
47. The following account balances and other information for Florinda Company pertain to
November operations:
Account Balances
November 1 November 30
Finished goods P70,000 P60,000
Work in process 50,000 ?
Direct materials 10,000 20,000
Accounts payable ? 15,000
Accrued payroll 10,000 20,000
Accumulated depreciation-factory equipment 80,000 90,000

Other information:
a. Direct materials purchased on account during November, P50,000.
b. Florinda Company applies factory overhead at predetermined rate of P3 per direct labor
hour.
c. During November, direct labor employees worked 25,000 hours at a rate of P4 per direct
labor hour.
d. Jobs 385, 386, and 387 were still in process at the end of November. A total of P5,000 direct
materials has been charged to these three jobs. To date, 5,000 direct labor hours have been
worked on these jobs.
e. The accrued payroll account is used for factory employees only.
Assuming no payroll deductions, payment to factory employees during the month totaled
P140,000.
f. Factory overhead was underapplied by P5,000.
g. Payments on account totaled P55,000

Compute for: (1) Work in process, on November 30, and (2) cost of goods manufactured:

a. (1) P40,000 ; (2) P220,000

b. (1) 40,000; (2) 230,000
c. (1) 35,000 ; (2) 220,000
d. (1) 50,000 ; (2) 230,000
Use the following data in answering items 48 to 50:
 Roman Company uses normal costing. Its job costing system has two direct-cost categories
(direct materials and direct labor) and one indirect cost category (manufacturing overhead). The
following information is obtained from the company’s records for 2014:

Total manufacturing costs, P8,000,000.

Cost of finished goods manufactured, P7,920,000
Manufacturing overhead applied, P3,600,000
Manufacturing overhead was applied to production at a rate of 200% of direct labor costs.
The peso amount of work in process inventory on January 1,2014 was P320,000

48. What is the total direct labor cost in 2014?

a. P1,800,000
b. P1,500,000
c. P1,700,000
d. P3,600,000
49. What is the total cost of direct materials used in 2014?
a. P2,600,000
b. P2,500,000
c. P1,800,000
d. P3,600,000
50. What is the peso amount of work in process inventory on December 31, 2014?
a. P400,000
b. P800,000
c. P500,000
d. P320,000