1.

Badjao Manufacturing Company uses a raw and in

process (RIP) inventory account and expenses all
conversion costs to the cost of goods sold account.
At the end of each month, all inventories are
counted, their conversion cost components are
estimated, and inventory account balances are
adjusted accordingly. Raw material cost is
backflushed from RIP to Finished Goods. The
following information is for the month of April:
Beginning balance of RIP account,
including P1,400 of conversion
cost
Raw materials received on credit
Ending RIP inventory per physical
count, including P 1,800
conversion cost estimate

P 31,000
367,000
33,000

Compute the amount to be backflushed from RIP to

Finished goods
a. P365,000
b. P368,600
c. P367,000
d. 365,400

2. The Bakuring Manufacturing Company produces only for

customer order and most work is shipped within thirty-six
hours of the receipt of an order. Bakuring uses a raw and in
process (RIP) inventory account and expenses all conversion
costs to the cost of goods sold account. Work is shipped
immediately upon completion, so there is no finished goods
account. At the end of month, inventory is counted, its
conversion cost component is estimated, and the RIP
account balance is adjusted accordingly. Raw material cost is
backflushed from RIP to Cost of Goods Sold. The following
information is for the month of May:
Beginning balance of RIP
account, including P1,300 of
conversion cost
P12,300
Raw materials received on
credit
246,000
Ending RIP inventory per
physical count, including
P2,100 conversion cost
estimate
12,100
Compute the amount to be backflushed from RIP to Cost of
Goods Sold
a. P246,000
b. P246,200
c. P247,000
d. P245,000

3. Leila Delima, owner of BuCor Supply Company in Muntinlupa,

which manufactures chopsticks for restaurants, has recently
decided to implement a JIT costing system. Transactions for
August are as follows:
a. Raw materials were purchased at the cost of P950,000.
b. All materials purchased were requisitioned for
production.
c. Direct labor costs of P2,500,000 were incurred.
d. Actual factory overhead costs amounted to P6,000,000.
e. Applied conversion costs totaled P8,100,000. This
included P2,500,000 of direct labor.
f. All units were completed.
Compute the amount to be backflushed from RIP to Finished
Goods
a. P2,100,000
b. P2,550,000
c. P950,000
d.
P3,100,000
4. Using the same information in No. 4, compute the amount of
Finished goods after all transactions have been completed
a. P8,500,000
b. P9,050,000
c. P10,600,000
d. P9,650,000

5. Ronald Dela Rosa, general manager of Bato Corporations

Visayas Division, has provided the following information for
transactions that occurred during March. This division uses a
JIT costing system.
(a) Raw materials were purchased at the cost of P97,000
(b) All materials purchased were requisitioned for
production.
(c) Direct labor costs of P77,000 were incurred.
(d) Actual factory overhead costs amounted to P225,000.
(e) Applied conversion costs totaled P300,000. This
included P77,000 direct labor.
(f) All units were completed.
Compute the March 31 balance in the Conversion Cost:
a. P2,000 debit
b. P2,000 credit c. P25,000 credit d.
P22,000 debit
Using the same information in No. 2, compute the March 31
balance in the Finished goods account:
a.P397,000 credit b.P397,000 debit
P377,000 debit

c. P320,000 debit

d.

6. Bong Go, general manager of a highly automated

coffee production plant in Sasa, Davao City, has
provided the following information for transactions
that occurred during October. The production plant
uses a JIT costing system.
(a) Raw materials costing P300,000 were purchased
(b) All materials costing P300,000 were
requisitioned for production
(c) Direct labor costs of P200,000 were incurred
(d) Actual factory overhead costs amounted to
P995,000
(e) Applied conversion costs totaled P1,300,000.
This includes the direct labor cost
(f) All units are completed and immediately sold.
What is the October 31 balance in the Cost of Goods Sold
account? (No adjustment has been made for overapplied or
underapplied conversion cost)
a. P1,300,000
b. P1,495,000
c. P1,600,000
d. P1,195,000
7. Using the same information in No. 4, what was the
overapplied or underapplied conversion cost for the month?

a.
b.
c.
d.

P305,000
P195,000
P105,000
P105,000

overapplied
underapplied
overapplied
underapplied

8. Using the same information in Nos. 4 and 5, what is the Cost

of Goods Sold after all transaction adjustments have been
completed?
a. P1,304,000
b. P1,495,000
c. P1,600,000
d. P1,195,000