Cost Accounting 2 Answer To Cost Accoutning - Compress
Cost Accounting 2 Answer To Cost Accoutning - Compress
Cost Accounting 2 Answer To Cost Accoutning - Compress
Answer: A
2. For a manufacturing company, the cost of goods sold available for sale during a given
accounting period is
a. The beginning inventory of finished goods
b. The cost of goods manufactured during the period
c. The sum of the above
d. None of the above
Answer: C
Answer: B
Answer: C
Answer: B
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6. Sales commissions are classified as
a. prime costs
b. period costs
c. product costs
d. indirect labor
Answer: B
Answer: C
Answer: C
Answer: D
10. If the amount of “Cost of goods manufactured” during a period exceeds the amount of the
“Total manufacturing costs” for the period, then
a. Ending work in process inventory is greater than or equal to the amount of the
beginning work in process inventory
b. Ending work in process is greater than the amount of the beginning work in process
inventory
c. Ending work in process is equal to the cost of goods manufactured
d. Ending work in process is less than the amount of the beginning work in process
inventory
Answer: D
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Multiple Choice - Proble
Problems
ms
1. For the year 2011, the gross margin of Jumbo Co. was P96,000; the cost of goods manufactured
was P340,000; the beginning inventories of work in process and finished goods were P28,000 and
P45,000, respectively; and the ending inventories of work in process and finished goods were
P38,000 and P52,000, respectively. The sales of Jumbo Co. for 2011, must have been
a. 419,000
b. 429,000
c. 434,000
d. 436,000
Answer: B
Solution:
Cost of Goods Manufactured P 340,000
Finished Goods, Beginning 45,000
Total Goods available for Sale 385,000
Finished Goods, ending (52,000)
Cost of Goods Sold 333,000
Sales (SQ
(SQUEEZE)
UEEZE) P 429,000
COGS 333,000
Gross Profit 96,000
2. The following information was taken from Jeric Comapany’s accounting records for the year ended
December 31, 2011.
Increase in raw materials inventory P 15,000
Decrease in finished goods inventory 35,000
Raw materials purchased 430,000
Direct labor payroll 200,000
Factory overhead 300,000
There was no work-in-process inventory at the beginning or end of the year. Jeric’s 2011 cost of
goods sold is
a. P 950,000
b. P 965,000
c. P 975,000
d. P 995,000
Answer: A
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Solution:
Direct Materials
Purchases 430,000
Less: Increase in raw materials 15,000 415,000
Direct Labor 200,000
Factory Overhead 300,000
Manufacturing Cost 915,000
Add: Decrease in Finished Goods 35,000
Cost of Goods Sold 950,000
Items 3 through 5 are based on the following information pertaining to Glenn Company’s
manufacturing operations.
a. P 90,000
b. P 120,000
c. P 144,000
d. P 150,000
Answer: D
Solution:
Direct Materials
Direct Mats. – Beg. 36,000
Add: Purchases 84,000
Less: Direct Mats. – End. (30,000) 90,000
Direct Labor 60,000
Prime Cost 150,00
150,000
0
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4. For the month of March 2011, conversion cost was
a. P 90,000
b. P 140,000
c. P 144,000
d. P 170,000
Answer: B
Solution:
a. P 218,000
b. P 224,000
c. P 230,000
d. P 236,000
Answer: D
Solution:
Direct Materials used
36,0
Direct Materials, 3/1/11 00
84,0
Add: Purchases 00
Total available for use 120,000
Less: Direct Materials, 3/31/11 30,000 90,000
60,00
Direct Labor 0
80,00
Factory Overhead 0
Total Manufacturing Costs 230,000
Add: Work in process, 3/1/11 18,000
Cost of Goods put into process 248,000
Less: Work in process, 3/31/11 12,000
Cost of Goods manuf
manufactured
actured 236,000
Items 6 and 7 are based on the following data of Matatag Company for the month of March 2011.
March 1 March 31
Materials 40,000 50,000
Work in Process 25,000 35,000
Finished Goods 60,000 70,000
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March 1 to 31, 2011
Direct Labor Cost 120,000
FOH-Applied 108,000
Cost of Goods Sold 378,000
a. 50,000
b. 170,000
c. 180,000
d. 220,000
Answer: C
a. 378,000
b. 388,000
c. 398,000
d. 428,000
Answer: B
Solution:
Direct materials used
Materials, Beg. 40,000
Purchases (SQUEEZE) NoNo.. 6 180,000
Less: Materials, End. (50,000) 170,000
Direct Labor 120,000
Factory Overhead 108,000
Manufacturing Costs 398,000
Add: Work in process, Beg. 25,000
Cost of goods put into process 423,000
Less: Work in process, End (35,000)
Cost of goods manufactured (SQUEEZE) 388,000
No. 7
Add: Finished goods, Beg. 60,000
Goods Available for Sale 448,000
Less: Finished goods, End. (70,000)
Cost of Goods Sold 378,000
Some selected sales and cost data for Alcid Manufacturing Company are given below:
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8. Prime cost was:
a. P 175,000
b. P 250,000
c. P 130,000
d. P 225,000
Answer: B
Solution:
a. P 150,000
b. P 225,000
c. P 250,000
d. P 270,000
Answer: B
Solution:
a. P 225,000
b. P 250,000
c. P 310,000
d. P 325,000
Answer: C
Solution:
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11. Indirect cost was:
a. P 75,000
b. P 135,000
c. P 195,000
d. P 325,000
Answer: B
Solution:
Indirect Selling and Administrative Expense
(P 120,000 x 50%) P 60,000
Factory overhead 75,000
Indirect cost P 135,000
a. P 135,000
b. P 250,000
c. P 325,000
d. P 370,000
Answer: C
Solution:
a. P 250,000
b. P 280,000
c. P 352,000
d. P 370,000
Answer: C
Solution:
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During 2011, there was no change in either the raw material or the work in process beginning and
ending inventories. However, finished goods, which had a beginning balance of P 25,000, increased
by P 15,000.
14. If the manufacturing costs incurred totaled P 600,000 during 2011, the goods available for sale
must have been:
a. P 585,000
b. P 600,000
c. P 610,000
d. P 625,000
Answer: D
Solution:
During the month of May, 2011, Candid Manufacturing Co. incurred P 30,000, P 40,000, and P 20,000
of direct material, direct labor and factory overhead costs respectively.
15. If the cost of goods manufactured was P 95,000 in total and the ending work in process inventory
was P 15,000, the beginning inventory of work in process must have been
a. P 10,000
b. P 20,000
c. P 110,000
d. P 25,000
Answer: B
Solution:
30,000
Direct Materials
Direct Labor 40,000
Factory Overhead 20,000
Manufacturing Costs 90,000
Add: Work in process, Beg. 20,000 The Lion Company’s cost of goods manufactured
(SQUEEZE) was P 120,000 when it sales were P 360,000 and
Cost of goods put into process 110,000 its gross margin was P 220,000.
Less: Work in process, End. 15,000
Cost of Goods Manufactured 95,000
16. If the ending inventory of finished goods was
P 30,000, the beginning inventory of finished goods must have been:
a. P 10,000
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b. P 50,000
c. P 130,000
d. P 150,000
Answer: B
Solution:
Sales 360,000
Cost of Goods Sold
Cost of goods manufactured 120,000
Add: Finished goods, beg. 50,000
(SQUEEZE)
Goods available for sale 170,00
Less: Finished goods, end. 30,000 140,000
Gross Margin 220,000
The gross margin for Cruise Company for 2011 was P 325,000 when sales were P 700,000. The FG
inventory was P 60,000 and the FG inventory, end was P 35,000.
a. P 300,000
b. P 350,000
c. P 230,000
d. P 375,000
Answer: B
Solution:
Sales P 700,000
Less: Gross Margin (325,000)
Cost of Goods Sold P 375,000
Add: Finished Goods, end 35,000
Less: Finished Goods, beginning (65,000)
Cost of Goods Manufac
Manufactured
tured P 350,000
During the month of January, F Co.’s direct labor cost totaled P 36,000, and the direct labor cost was
60% of prime cost.
18. If total mfg. costs during January were P 85,000, the factory overhead was:
a. P 24,000
b. P 25,000
c. P 49,000
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d. P 60,000
Answer: B
Solution:
During 2011, there was no change in the beginning or ending balance in the Materials inventory
account for the DL Co. However, the WP inventory account increased by P 15,000, and the FG
inventory account decreased by P 10,000.
19. If purchases of raw materials were P 100,000 for the year, direct labor costs was P 150,000, and
manufacturing overhead cost was P 200,000, the cost of goods sold for the year would be:
a. P 435,000
b. P 445,000
c. P 465,000
d. P 475,000
Answer: B
Solution:
During the month of March, 2011, Nape Co. used P 300,000 of direct materials. At March 31, 2011,
Nape’s direct materials inventory was P 50,000 more than it was at March 1, 2011.
20. Direct material purchases during the month of March 2011 amounted to:
a. P0
b. P 250,000
c. P 300,000
d. P 350,000
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Answer: D
Solution:
a. P 60
b. P 410
c. P 560
d. P 580
Answer: A
Solution:
a. P 300,000
b. P 340,000
c. P 400,000
d. P 460,000
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Answer: B
Solution:
*Gross profit is attained by getting the difference between Sales and Cost of Goods Sold.
Using the SQUEEZE method we are able to get the number of sales by adding COGS and Gross
Profit.
a. P 115,500
b. P 138,500
c. P 153,000
d. P 190,500
e. P 116,000
Answer: E
Solution:
* The above solution is based on the Cost Goods Sold Statement formula.
Uniflo Manufacturing Company developed the following data for the current year.
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24. Uniflo Company’s direct labor cost for the year is
a. P 12,000
b. P 60,000
c. P 36,000
d. P 48,000
Answer: B
Solution:
*Factory overhead applied is used in determining the total manufacturing cost and not the
actual overhead.
a. P 116,000
b. P 80,000
c. P 76,000
d. P 36,000
Answer: A
Solution:
The following data relate to Maxine Manufacturing Company for the period:
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Finished goods inventory, end 8,000
Total selling, general, and administrative costs 14,000
26. The amount of direct materials put into production during the period
a. P 6,700
b. P 5,600
c. P 4,800
d. P 5,900
Answer: D
Solution:
a. P 14,000
b. P 33,000
c. P 25,000
d. P 19,000
Answer: D
Solution:
Sales 50,000
Cost of Goods Sold (17,000)
Gross Profit 33,000
Total selling, general, and administrative costs (14,000)
Net Income 19,000
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Arizona Manufacturing Company reported the following year-end information
a. P 380,000
b. P 410,000
c. P 350,000
d. P 440,000
Answer: B
Solution:
Materials Used:
Raw Materials, beg 50,000
Add: Purchases 160,000
Total Available for use 210,000
Less: Materials, end 80,000 130,000
Direct Labor 150,000
Factory Overhead Applied 100,000
Total Manufacturing Cost 380,000
Add: Work in process, beg. 180,000
Cost of goods put into process 560,000
Less: Work in process, end. 150,000
Cost of goods manufactured 410,000
Alabama Corporation reported the following for the year. WP inventory, beg – P 90,000; cost of goods
manufactured – P 258,000; FG inventory, beg – P 126,000; WP inventory, end – P 110,000; FG
inventory, end – P 132,000
29. Cost of goods sold for Alabama Corporation during the year
a. P 252,000
b. P 264,000
c. P 232,000
d. P 126,000
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Answer: A
Solution:
a. P 278,000
b. P 368,000
c. P 298,000
d. P 238,000
Answer: A
Solution:
True – F
False
alse Questions
1. When price are rising, higher income will be reported using FIFO as compared with using LIFO.
Answer: TRUE
2. Inventory Methods can be changed at will to control reported net income. (cost of goods sold)
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Answer: FALSE
Answer: FALSE
*When an ending inventory overstatement occurs, the cost of goods sold is stated too low,
which means that net income before taxes is overstated by the amount of the inventory
overstatement; vice versa.
4. An error in determining the cost of the ending inventory of a period generally results in misstated
net income for two periods.
Answer: TRUE
5. The net realizable value of an inventory item can never be greater than its expected selling price
Answer: TRUE
Answer: TRUE
7. Spoiled goods may be sold at an amount higher than the regular sales price. (lower)
Answer: FALSE
*Spoiled goods are goods that do not meet production standards and are either sold for their
salvage value or discarded. When spoiled units are discovered, they are taken out of production and
no further work is performed on them.
8. If spoilage in a job results is due to the exacting specifications of the job, the loss resulting from
the spoiled goods should be shared by all units manufactured during the period. (the specific job)
Answer: FALSE
*If the reason for the spoilage is the job itself, because it requires exacting specifications, or a
difficult, intricate or complicated manufacturing process.
9. The closing entries necessary under the perpetual and periodic inventory systems do not differ
because all expenses and rev
revenues
enues must be close
close. (differ)
Answer: FALSE
*Perpetual inventory systems record cost of goods sold and keep inventory at its current
balance throughout the year. Therefore, there is no need to do a year-end inventory adjustment
unless the perpetual records disagree with the inventory count. In addition, a separate cost of goods
sold calculation is unnecessary since cost of goods sold is recorded whenever inventory is sold.
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*The inventory account in a periodic inventory system keeps its beginning balance until the
end of period adjustment to the physical inventory count. Therefore, a separate cost of goods sold
calculation is necessary.
10. When a company changes from one inventory costing method to another, the change must be
fully disclosed in a footnote to the financial statements explaining the reasons for the change.
Answer: TRUE
11. Graphically, the economic order quality (EOQ) is the point where the carrying cost line intersect
the ordering cost line.
Answer: TRUE
12. The primary goal of inventory management activity is to minimize the risks of a stockout while
maximizing the return on inventory. (inventory related cost
costs)
s)
Answer: FALSE
13. When computing the economic production run size, the costs to set up a production run are
analogous to carrying costs in the basic economic order quantity model. (order costs)
Answer: FALSE
14. The purchase price per unit of inventory is irrelevant in lathe economic order quantity (EOQ)
model.
Answer: TRUE
15. The accounting for spoiled units and defective units is the same. (different)
Answer: FALSE
*When spoiled units are discovered, they are taken out of production and no further work is
performed on them. While defective units do not meet production standards and must be processed
further in order to be salable as good units or as irregulars.
1. According to the net method, which of the following items should be included in the cost of
inventory?
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Answer: A
Explanation:
The cost of inventory should include all expenditures (direct and indirect) incurred to
bring an item to its existing condition and location. Freight charges are thus appropriately
included in inventory costs. Under the net purchase method, purchase discounts not taken are
recorded in a Purchase Discount Lost Account. When this method is used, purchase discounts
lost are considered a financial expense and are thus excluded from the cost of inventory.
2. The weighted average for the year inventory cost flow method is applicable to which of the
following inventory system?
Periodic Perpetual
a. Yes Yes
b. Yes No
c. No Yes
d. No No
Answer: B
Explanation:
Weighted average for the year inventory cost flow method is applicable only to
periodic inventory system because in perpetual inventory system, moving average
method is the one being used.
3. During June, Delta Co. experienced scrap, normal spoilage, and abnormal spoilage in its
manufacturing process. The cost of units produced includes
Answer: C
Explanation:
The cost of units produced includes scrap and normal spoilage but does not include
abnormal spoilage. Abnormal spoilage is recognized as a loss when it is discovered, therefore
it is not included in the cost of units produced.
4. Marsh Company had 150 units of product on hand at January 1, costing P21.00 each. Purchases
of product A during the month of January were as follows:
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18 250 23.00
28 100 24.00
Physical count on January 31 shows 250 units of product A on hand. The cost of inventory at
January 31, under the FIFO method is:
a. P 5, 850
b. P 5, 550
c. P 5, 350
d. P 5, 250
Answer: A
Solution:
150 units x 23 (Unit Cost) = 3,450
100 units x 24 (Unit Cost) = 2,400
250 units 5,850
Explanation:
Under the Fifo method, remaining units are those purchased at the later date. Thus the
units on hand on January 31 are those remaining from January 18 and 28.
5. Harper Company’s Job 301 for the manufacture of 2,200 coats was completed during August 2009
at the following unit costs:
Final inspection of Job 301 discloses 200 spoiled costs which were sold to a jobber for P 6000.
Assume that spoilage loss is charged to all production during August. What would be the unit cost
of the good units produced on Job 301?
a. P 53.00
b. P 55.00
c. P 56.00
d. P 58.00
Answer: C
Explanation:
Under the method, loss charged to all production, the unit cost of the completed units
remains unchanged.
Solution/Entries:
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Materials 44,000
Payroll 39,600
Factory Overhead 39,600
6. Assume instead, that the spoilage loss is attributable to exacting specification of Job 301 and is
charged to this specific job. What would be the unit cost of the good coats produced on Job 301?
a. P 55.00
b. P 57.50
c. P 58.60
d. P 61.60
Answer: B
Solution/Entries:
Palmer Corporation is a manufacturing concern that uses a perpetual inventory system. The following
data on the material inventory account is provided for 2009.
a. P 1,045,000
b. P 770.000
c. P 880,000
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d. P 430,000
Answer: B
Solution:
* Ending Inventory
Material Balance P 275,000
Add: Increase of ending over beginning inventory 55,000
Ending Inventory P 330,000
Job 75 incurred the following costs for the manufacture of 200 units of motors:
Original cost accumulation
The total rework costs were attributable to exacting specifications of Job 75 and the full rework costs
were charged to the specific job.
a. P 316
b. P 266
c. P 280
d. P 292
Answer: A
Explanation:
If the reason for the defect is the job itself, the additional costs incurred of the
reworked 10 units will be charged to all units in the job
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Solution:
The following data on materials purchases and issues during the month of April were reported:
April 1 Beginning balance 400 units at P6
5 Received 100 units at P7
11 Received 100 units at P8
13 Issued 400 units
15 Received 200 units at P6
22 Issued 250 units
27 Returned from factory 50 units
30 Received 300 units at P9
9. Assuming that the company used a perpetual inventory system, the total quantity and cost of
materials purchased for the month of April should be:
Solution:
No. of units Cost per unit Total Cost
April 5 Received 100 units x P7 700
11 Received 100 units x 8 800
15 Received 200 units x 6 1,200
30 Received 300 units x 9 2,700
Cost of materials purchases 700 units 5,400
The Curacha Company uses 20,000 units of Material A in making a finished product. The cost to place
one order for Material A is P8.00 and the annual cost to carry one Material A is P2.00
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10. The economic order quantity for Material A is
a. 100 units
b. 400 units
c. 283 units
d. 565 units
Answer: B
Solution:
= 2(8)(20,000)/2
= 160,000
= 400 units
11. If the cost to place one order increased by P10 and the cost to carry one Material A in stock
remains the same, the economic order quantity will be
a. 600 units
b. 447 units
c. 425 units
d. 500 units
Answer: A
Solution:
EOQ = 2(18)(20,000)/2
= 600 units
One of the products that Justine Corporation sells is "Extra Soft" floor mats. Justine's ordering costs
related to the mat is P12.50 per order. The cost of carrying one mat in inventory for one year is
P16.00. Justine sells 40,000 of these mats evenly throughout the year.
a. 250 units
b. 350 units
c. 400 units
d. 500 units
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Answer: A
Solution:
13. What are Justine's total ordering costs per year and total carrying costs per year at the economic
order quantity?
Answer: C
Solution:
Ordering Cost= Number of units required annually x ordering cost per unit OC
EOQ
= (40,000/250)*12.50
= 2,000
One of the products that Ram Breakfast Foods manufactures is carrot juice. Ram manufactures and
sells 5000 cases of carrot juice evenly each year. Variable manufacturing costs are P4.50 per case. It
costs Ram P3.60 to setup a production run for carrot juice. It also costs Ram P2.50 per case year to
carry a case of carrot juice in inventory.
a. 83 cases
b. 85 cases
c. 120 cases
d. 150 cases
Answer: C
Solution:
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Economic Production Run Size = 2 (Annual Demand) (Setup Cost) / Carrying Cost
= 2(5000) (3.60) / 2.5
= 120
Euphorbia Company produces and sells a single item of product. Inventory at the beginning of
September was 400 units at P1.80 per unit. Further receipts and sales during the month were as
follows:
Units Cost per unit
September 8 Receipts 600 P2.10
20 Receipts 500 -?
25 Sales 1250 4.00
The inventory uses the FIFO method of stock valuation. Gross margin for September was P2,500.
15. What was the cost per unit of the P500 received on September 20?
a. P 1.04
b. P 1.94
c. P 2.00
d. P 2.08
Answer: D
Solution:
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The following information pertains to Material X used by Nikki Company
16. If units of Material X will be required evenly throughout the year, the reorder point is
a. 800
b. 1,600
c. 2,400
d. 3,200
Answer: D
Solution:
Reorder Point =
= 3200 units
17. Assuming that the units will be required evenly throughout the year, what is the EOQ?
a. 200
b. 300
c. 400
d. 450
Answer: B
Solution:
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EOQ =
= 300 units
During March, Mark Company incurred the following costs on Job 209 for the 200 motors
Method A – The rework cost were attributable to the exacting specifications of Job 209, and the full
rework costs were charged to this specific job.
Method B – The defective units fall within the normal range and the rework is not related to a specific
job, or the rework is common to all the jobs.
18. The cost per finished unit of Job 209 using Method A is:
a. P 15.60
b. P 15.80
c. P 13.30
d. P 13.50
Answer: B
Solution:
FOH rate =
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Factory overhead 1,200 P 2,660
Add: Direct costs or reworking 10 units:
Direct Materials 100
Direct Labor 160
Factory overhead 240 500
Total P 3,160
Divide by 200 motors
Cost per finished unit of Job 209 u
using
sing Method A P 15.80
19. The cost per finished unit of Job 209 using Method B is:
a. P 13.30
b. P 15.80
c. P 15.30
d. P 13.60
Answer: A
Solution:
Original Cost P 2,660
Divide by 200 motors
Cost per finished unit of Job 209 u
using
sing Method B P 13.30
Tools Company manufactures electric drills to the exacting specifications of various customers. During
February 2008, Job 403 for the production of 1,100 drills was completed at the following cost per
unit:
Final inspection of Job 403 disclosed 50 defective units and 100 units of normal spoilage. The
defective drills were reworked at a total cost of P5,000 and the spoiled drills were sold to a jobber for
P15,000.
20. The unit cost of the good units produced on Job 403 was:
a. P 330
b. P 320
c. P 300
d. P 290
Answer: B
Solution/Entry:
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Work in Process 330,000
Materials 110,000
Payroll 88,000
Factory Overhead 132,000
21. Assuming that the units of material Y will be required evenly throughout the year, the safety stock
and order point would be
a. 600 600
b. 600 1,350
c. 750 600
d. 750 1,350
No answer
answer,, due to lack of informatio
information.
n.
UFC Inc. manufactures 100,000 special bulbs for its transformer division. The bulbs will be used
evenly throughout the year. The setup cost every time a production run is made is P800 and the cost
to carry bulbs in inventory for the year is P4. UFC’s objective is to produce the bulbs at the lowest
cost possible.
22. Assuming that each production run will be for the same number of bulbs, how many production
runs should UFC make?
a. 10
b. 14
c. 16
d. 19
Answer: C
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Solution:
EOQ =
EOQ =
EOQ = 6,326 units
=
= 16
a. 1,000,000 units
b. 1,960,000 units
c. 1,400,000 units
d. 2,000,000 units
Answer: B
Solution:
EOQ =
R = 1,960,000 units
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24. How many orders will be placed?
a. 143
b. 200
c. 280
d. 286
Answer: C
Solution:
No. of orders =
= 280
Norman buys baseball bats from a manufacturer at P10 each. Norman expects to sell 90,000 bats
evenly over the next year. Norman’s cost of capital is 10 percent. The total out-of-pocket cost to carry
one bat in inventory is P0.50 and the cost of ordering bats is P15 per order.
25. Suppose that Norman orders 3,000 bats at a time. What is the total annual inventory cost?
a. P 750
b. P1,200
c. P2,250
d. P2,700
Answer: D
Solution:
a. 1,342 units
b. 1,643 units
c. 2,324 units
d. 3,000 units
Answer: C
Solution:
EOQ =
4 0
=
= 2,324 units
27. How many times would Norman have to place an order in one year?
a. 67 times
b. 55 times
c. 39 times
d. 30 times
Answer: C
Solution:
Times of order =
= 39 times
28. Norman sells bats for 300 days in a year. The lead time on orders is 2 days. At what point should
Norman place the order?
Answer: B
Solution:
Order Point =
= 600 units
The Sundust Company manufactures 4,000 brooms evenly throughout the year. The setup cost is
P2.00 and using the EOQ approach. The optimum production run would be 200.
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29. The cost of carrying one broom in inventory for one year is
a. 0.05
b. 0.10
c. 0.20
d. 0.40
Answer: D
Solution:
EOQ =
40,000 =
40,000 =
40,000X = 16,000
X = 0.40
During August of the current year, Job 067 for 2,000 handsaws was completed at the following cost
per unit:
Final inspection revealed 100 defective units which were reworked at a cost of P2.00 per unit for
direct labor plus overhead at the predetermined rate.
30. If the defect is due to internal failure. What is the total rework cost and to what account should it
be charged.
Answer: D
4 0
Solution/Entry:
4 0