ACC 115 - Quiz | Prof. L. B.

Virador, CPA

Job Order Costing

October 7, 2021

Problem 1 (20 marks)

Suarez Inc. had the following inventories on September 1:

Finished Goods P15,000.00
Work in Process 18,762.50
Materials 17,000.00
The work in process account controls three jobs:
Job A Job B Job C
Materials 2,800 3,400 1,800
Labor 2,100 2,700 1,350

The following information pertains to September operations:

a) Materials purchased and received cost P19,000 at terms n/30.
b) Materials requisitioned for production cost P21,000. Of this amount, P2,400 was for indirect
materials; the difference was distributed: P5,200 to Job A; P7,500 to Job B; and P5,900 to Job
C.
c) Materials returned to the storeroom from the factory totaled P600, of which P200 was for
indirect materials, the balance from Job B.
d) Materials returned to vendors totaled P800.
e) Payroll of P38,000 was accrued in September.
f) Of the payroll, direct labor represented 55%; indirect labor 20%; sales salaries, 10%; and
administrative salaries, 15%. The direct labor cost was distributed: P6,420 to Job A; P8,160
to Job B; and P6,320 to Job C.
g) Factory overhead, other than any previously mentioned, amounted to P9,404.50. Included in
this figure were P2,000 for depreciation of factory building and equipment and P250 for
expired insurance on the factory. The remaining overhead, P7,154.50, was unpaid at the end
of September.
h) Factory overhead is applied based on the direct labor costs.
i) Jobs A and B were completed and transferred to the finished goods warehouse.
j) Both Jobs A and B were shipped and billed at a gross profit of 40% of the cost of goods sold.
k) Cash collections from accounts receivable during September were P69,450.
l) Over- or under-applied FOH is closed to cost of goods sold.

Required:
1. Cost of goods sold for the month ended September 30 (5 marks)
2. Materials balance as of the end of September (5 marks)
3. Work in process balance as of the end of September (5 marks)
4. Finished goods balance as of the end of September (5 marks)

Problem 2 (15 points)

TFC Manufacturing Company had the following account balances as of August 1:

Raw materials inventory (direct and indirect) P7,250
Work in process inventory 11,400
Finished goods inventory 2,300

During august, the company had the following transactions. Factory overhead is applied based on
direct labor cost.
a. Purchased raw materials, P50,000; terms 1/50, n/60.

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 ACC 115 - Quiz | Prof. L. B. Virador, CPA

Job Order Costing

October 7, 2021

b. Materials requisitioned for the month – P45,000; 20% for Job #10; 25% for Job #11; 40%
for Job #12; balance for indirect materials.
c. The time tickets of payroll summaries indicated:
Production Department Supervision and Others
Cost # of hours
Job 10 P15,000 5,000 P 500
Job 11 21,000 7,000 1,500
Job 12 30,000 10,000 2,000
d. Recorded the applied overhead. Additional Factory overhead incurred was P38,500.
e. Only Job #s 10 and 11 were completed and cash collected for the agreed-on price of cost
plus 15%.
f. Over- or under-applied FOH is closed to cost of goods sold.
g. On August 1, there were two Jobs in process:
Total Cost Direct Materials Direct Labor Applied FOH
Job 10 6,500 3,000 ? ?
Job 11 ? ? 2,100 1,575

Required:
5. Raw materials inventory as of August 31 (5 marks)
6. Work in Process Inventory as of August 31 (5 marks)
7. Cost of goods sold for the month ended August 31 (5 marks)

Problem 3 (9 marks)

ABC Company manufactures custom tables for home builders. During September, an order for 2,000
tables was begun as Job 123 for Du Sik Builders. The custom tables are priced at 200 percent of cost.
Total costs charged to Job 123 are:
Materials P184,000
Labor (6,000 hours x P12 per hour) 72,000
Factory overhead (P24 per labor hour) 144,000
After inspection, they discovered that 200 tables had defects. Materials costing P4 and ½ hour of
labor are required to correct each defective unit.

Required:
8. Assuming the defective units resulted from internal failure, how much is the increase in
factory overhead control account? (2 marks)
9. Assuming the defective units resulted from a design change specified by Du Sik Builders,
how much is the increase in work in process inventory? (2 marks)
10. Assuming the defective units resulted from a design change specified by Du Sik Builders,
how much is the cost of goods sold? (5 marks)

Problem 4 (5 marks)

The following information are available for ABC Company during March:
Accounts payable, March 1 P 54,000
Work in process, March 1 270,000
Finished goods, March 1 450,000
Materials, March 31 135,000
Accounts payable, March 31 90,000

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 ACC 115 - Quiz | Prof. L. B. Virador, CPA

Job Order Costing

October 7, 2021

Finished goods, March 31 540,000

Actual factory overhead for March 1,350,000
Cost of goods sold 2,700,000
Payment of accounts payable (account is used for materials only) P315,000. Factory overhead is
applied at 200% of direct labor costs. Jobs still in process on March 31 have been charged P54,000
for materials and P108,000 for direct labor (4,500 hours). Actual direct labor hours, 90,000 at P8 per
hour.
11. Compute for materials inventory on March 1.

Problem 5 (11 marks)

Due to heavy rains, the basement of Riverside Manufacturing Company was flooded. As a result, the
accounting and other relevant data were destroyed. On May 1, when the flooding was subsided, the
accountants were able to gather the following information:
April 1 April 30
Raw materials (direct and indirect) P 19,200
Work in process inventory 30,800
Finished goods inventory 33,600 P 26,400
Accounts payable 24,400 72,000

• During April, the company’s total payroll costs was P116,800. The total indirect materials used
for the month of April was P23,200. The accountants also found documents relating to other
nonmaterial and nonlabor overhead items for the month of April costing P10,000.
• Payroll records showed that April’s direct labor was worth P72,800 and represented 17,600 labor
hours.
• The production budget showed that the predetermined overhead application rate is based on
planned annual direct labor hours of 201,600 and expected factory overhead of P604,800.
• The records of factory superintendent revealed that only two jobs were still on process on April
30, these jobs had been started during April. The combined costs of direct material and direct
labor were P9,600 and P18,000, respectively. These jobs have used 4,288 of direct labor hours.
• The cost of goods manufactured schedule showed a total of P192,000.
• Based on the invoices related to raw materials purchases on account, the total purchases for the
month was P112,000.

Required:
12. Cost of raw materials used during April (5 marks)
13. Work in process inventory on April 30 (2 marks)
14. Over- or under-applied factory overhead (2 marks)
15. Adjusted cost of goods sold for the month ended April 30 (2 marks)

End of Quiz