Cost Quiz 3

NAME:__________________________________ SECTION: __________________________________
ANSWER SHEET Quiz 3
I. THEORIES (1.5 POINTS EACH) II. PROBLEMS (2.5 POINTS EACH)

1. A 1. 5 300
2. D 2. 42 000
3. D 3. 89 000
4. A 4. 15 600
5. B 5. 16 000
6. D 6. 43 000
7. D 7. 11 000
8. A 8. 900
9. D 9. 5 200
10. C 10. 310 000
11. D 11. 7 880
12. D 12. 1900 underapplied
13. B 13. 27 835
14. D 14. 16 530
15. D 15. 7 020
16. D 16. 45.19
17. B 17. 192 325
18. B 18. 675 285
19. C 19. 482 960
20. A 20. 147 075
21. B 21. 144 950
22. D 22. 198 125
23. D 23. 54 903.23
24. C 24. 1.25
25. D 25. 60 000
26. C 26. 4.25
27. D 27. 144.5
28. C 28. 677
29. B 29. 1.74
30. D 30. 510
TEST II-PROBLEM SOLVING (2.5 POINTS EACH) 70%
A. The Healing Company does not maintain backup documents for its computer files. In June, some of the current
data were lost, and you have been asked to help reconstruct the data. The following beginning balances are
known:
Direct Materials Inventory P12 000

Work-in-Process Inventory 4 500
Finished Goods Inventory 11 000
Manufacturing Overhead Control 16 500
Accounts Payable 6 000
Reviewing old documents and interviewing selected employees have generated the following additional
information:
a. The production superintendents job costs sheets indicated that materials of P2,600 were included in
the June 30 Work-in-Process Inventory. Also, 300 direct labor hours had been paid at P6.00 per hour for
the jobs in process on June 30.
b. The Accounts Payable account is only for direct material purchases. The clerk remembers clearly that
the balance in Accounts Payable on June 30 was P8,000. An analysis of cancelled checks indicated
payments of P40,000 were made to suppliers during June.
c. Payroll records indicate that 5,200 direct labor hours were recorded for June. It was verified that there
were no variations in pay rates among employees during June.
d. Records at the warehouse indicate that the Finished Goods Inventory totalled P16,000 on June 30.
e. Another record kept manually indicates that the Cost of Goods Sold in June totalled P84,000.
f. The predetermined overhead rate was based on estimated 60,000 direct labor hours for the year and an
estimated P180,000 in manufacturing overhead costs.
1. What is the ending balance in the Work-in-Process Inventory on June 30?

2. What is the amount of direct materials purchased during June?
3. What is the Cost of Goods Manufactured for June?
4. How much manufacturing overhead was applied to the Work-in-Process Inventory during June?
5. What is the ending balance in the Finished Goods Inventory on June 30?
6. What is the amount of the materials used?
7. What is the balance of the Raw Materials Inventory on June 30?
8. What is the amount of overhead in the Work-in-Process Inventory on June 30?
B. Papasaa Company uses a job order costing system. The following debits (credits) appeared in Papasaa Co.s
work-in-process account for the month of April 2012:
April Description Amount

1 Balance P4 000
30 Direct Material 24 000
30 Direct Labor 16 000
30 Factory Overhead 12 800
30 To Finished Goods (48 000)
Papasaa Co. Applies overhead to production at a predetermined rate of 80% of direct labor cost. Job No. 5, the
only job still in process on April 30, 2012, has been charged with direct labor of P2,000.
9. What was the amount of direct material charged to Job No.5?

C. Under UST Co.s job order costing, manufacturing overhead was applied to work-in-process using a
predetermined annual overhead rate. During January 2012, USTs transactions included the following:
Direct Materials issued to production P90 000

Indirect Materials issued to production 8 000
Manufacturing Overhead incurred 125 000
Manufacturing Overhead applied 113 000
Direct Labor Costs 107 000
UST had neither beginning nor ending inventory in Work-in-Process Inventory.
10. What was the cost of jobs completed in Januray 2012?

D. The following selected data were taken from the records of Green Box Company. The company uses a job order
costing system to account for its manufacturing costs. Green Box fiscal year runs from January 01 to December
31. The following information relates to August operations.
a. Jobs in process on August 01.
Job. No. Materials Labor Overhead

W12 800 1 200 ?
X13 1 000 1 620 ?
b. Jobs completed during August: W12, X13, Y14.

c. Material requisitions and labor time tickets indicated the following:
Job. No. Requisitions Time Tickets

W12 P 610 P 760
X13 370 1 420
Y14 2 780 3 100
Z15 4 050 1 080
General Use 390 540
d. Jobs sold during August: W12, X13.

e. Green Box applies overhead to production based upon labor costs.
f. Selected account balances on August 1 were:
Overhead 1 400 underapplied

Materials 5 175
Work-in-Process 9 555
Finished Goods -0-
g. Various Overhead incurred during August, P13 500.

h. Materials (direct and indirect) purchased during August, P10, 905.
11. What is the balance in the Material Inventory account o August 31?
12. Is the manufacturing overhead account over- or underapplied on August 31? By how much?
13. Compute the Cost of Goods Manufactured for August.
14. Compute the Cost of Goods Sold for August.
15. What is the balance of the Work-in-Process Inventory account on August 31?
16. If Job X13 was for 185 units, what are the total conversion costs per unit?
E. FEU Company manufactures automated test systems that perform quality inspections during and at the
completion of the manufacturing process. As most manufacturing processes are unique, FEUs test equipment is
designated to customers specifications, and each system has a selling price in excess of P300,000. The company
uses a job order cost systems based on the full absorption of actual costs and applies overhead on the basis of
machine hours using a predetermined overhead rate. For the fiscal year ended November 30, 2012, budgeted
manufacturing overhead was P1,960,000 and the expected activity level was 98,000 machine hours. Data
regarding several jobs at the Carver are presented below.
By the end of November 2012, all the jobs but RX-115 were completed, and all completed jobs had been
delivered to customers with the exception of SL-205.
Job No. Balance Direct Direct Machine

October 31, 2012 Materials Labor Hours
XJ-107 P118 600 P4 000 P8 400 150
ST-211 121 450 2 500 12 160 300
XD-108 21 800 86 400 36 650 3 100
SL-205 34 350 71 800 32 175 2 700
RX-115 -0- 18 990 21 845 1 400
17. Determine the balance in Carver Test Systems Finished Goods Inventory on November 30, 2012.
18. Compute the Cost of Goods Manufactured for November 2012.
19. Compute the Cost of Goods Sold for November 2012.
F. A manufacturing company employs job order costing to account for its costs. There are three production
departments, and separate departmental overhead application rates are employed because the operations of
the departments are so different. All jobs generally pass through all three production departments. Data
regarding the hourly direct labor rates, overhead application rates, and three jobs on which work was done
during the month appear below. Job 101 and Job 102 were completed during the current month.
Production Departments Direct Labor Rate Manufacturing Overhead Application rates

Department 1 P12 50% of direct materials
Department 2 P18 P8 per machine hour
Department 3 P15 75% of direct labor cost
Job 101 Job 102 Job 103

Beginning Work-in-Process P25 500 P32 400 P-0-
Direct Materials
Department 1 P40 000 P26 000 P58 000
Department 2 P3 000 P5 000 P14 000
Department 3 P-0- P-0- P-0-
Direct Labor Hours
Department 1 500 400 300
Department 2 200 250 350
Department 3 1 500 1 800 2 500
Machine Hours
Department 1 -0- -0- -0-
Department 2 1 200 1 500 2 700
Department 3 1 500 1 800 2 500
20. Compute the completed costs of Job 101.

21. Compute the completed costs of Job 102.
22. Compute the value of the Work-in-Process Inventory at the end of the month.
G. Before prorating the manufacturing overhead costs at the end of 2012, the Cost of Goods Sold and Finished
Goods Inventory had applied overhead costs of P57,500 and P20,000 in them, respectively. There was no work-
in-process at the beginning or end of 2012. During the year, manufacturing overhead costs of P74,000 were
actually incurred. The balance in the Applied Manufacturing Overhead was P77,500 at the end of 2012.
23. If the under- or overapplied overhead is prorated between Cost of Goods Sold and the inventory accounts, how
much will be the Cost of Goods Sold after the proration.
H. The Work-in-Process Inventory account of a manufacturing firm has a balance of P2,400 at the end of an
accounting period. The job cost sheets of two uncompleted jobs show charges of P400 and P200 for materials
used, and charges P300 and P500 for direct labor used.
24. From this information, it appears that the company is using a predetermined rate, as a percentage of direct
labor costs, of?
I. The predetermined overhead rate for manufacturing overhead for 2012 is P4.00 per direct labor hour.
Employees are expected to earn P5.00 per hour and the company is planning on paying its employees P100,000
during the year. However, only 75% of the employees are classified as direct labor.
25. What was the estimated manufacturing overhead for 2012?
J. Bonchon Company uses a job-order costing system. At the beginning of January, the company had two jobs in
process with the following costs:
Direct Material Direct Labor Overhead

Job #456 P3 400 P510 P255
Job #461 1 100 289 ?
Bonchon pays its workers P8.50 per hour and applies overhead on a direct labor hour basis.
26. What is the overhead application rate per direct labor hour?
27. How much overhead was included in the cost of Job #461 at the beginning of January?
(Refer to Bonchon Company). During January, Bonchons employees worked on Job #649. At the end of the
month, P714 of overhead had been applied to this job. Total Work in Process at the end of the month was
P6,800 and all other jobs had a total cost P3,981.
28. What amount of direct material is included in Job #649?
K. Hirap Company manufactures picture frames of all sizes and shapes and uses a job-order costing system. There
is always some spoilage in each production run. The following costs relate to the current run:
Estimated overhead (exclusive of spoilage) P160 000

Spoilage (estimated) P25 000
Sales value of spoiled frames (P11 500)
Labor hours 100 000
29. Labor hours are used to determine the predetermined overhead rate. What is the predetermined overhead rate
per direct labor hour?
30. The entry to record spoilage would include a debit to Manufacturing Overhead amounting to ?

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NAME:__________________________________ SECTION: __________________________________

ANSWER SHEET Quiz 3

I. THEORIES (1.5 POINTS EACH) II. PROBLEMS (2.5 POINTS EACH)

Direct Materials Inventory P12 000

1. What is the ending balance in the Work-in-Process Inventory on June 30?

April Description Amount

9. What was the amount of direct material charged to Job No.5?

Direct Materials issued to production P90 000

UST had neither beginning nor ending inventory in Work-in-Process Inventory.

10. What was the cost of jobs completed in Januray 2012?

a. Jobs in process on August 01.

Job. No. Materials Labor Overhead

b. Jobs completed during August: W12, X13, Y14.

Job. No. Requisitions Time Tickets

d. Jobs sold during August: W12, X13.

Overhead 1 400 underapplied

g. Various Overhead incurred during August, P13 500.

Job No. Balance Direct Direct Machine

Production Departments Direct Labor Rate Manufacturing Overhead Application rates

Job 101 Job 102 Job 103

20. Compute the completed costs of Job 101.

25. What was the estimated manufacturing overhead for 2012?

Direct Material Direct Labor Overhead

28. What amount of direct material is included in Job #649?

Estimated overhead (exclusive of spoilage) P160 000

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