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COST ACCOUNTING What is the cost of materials purchased during the month?
MIDTERM EXAMINATIONS A. P87,200
B. P73,200
1. Maganda company manufactures pipes and uses a job C. P72,000
order costing system. During May, the following jobs were D. P71,200
started (no other jobs were in process) and the following
costs were incurred: 4. Durian Company has the following data on April 30, 2011:
Job X Job Y Job Z Total April manufacturing overhead P30,101.80
Materials P10,000 P20,000 P15,000 45,000
45,000 Decrease in ending inventories:
Direct Labor 5,000 4,000 2,500 11,500 Materials 2,430.00
Goods in process 590.00
In addition, estimated overhead of P300,000 and direct labor costs
of P150,000 were estimated to be incurred during the year. Actual Increase in ending inventory
overhead of P24,000 was incurred in May; overhead is applied on Finished goods 1,320.40
the basis of direct labor costs. If only Job X and Job Z were
completed during the month, the journal entry to record the The manufacturing overhead amounts to 50% of the direct
initiation of all jobs would be: labor, and the direct labor and manufacturing combined
equal 50% of the total cost of manufacturing. All materials
A. Work-in process 79,500 are purchased F.O.B. shipping point.
Material 45,000
Wages payable 11,500 What is the cost of goods manufactured?
Applied factory overhead 23,000 A. P180,610.80
B. Work-in-process 80,500 B. P181,200.80
Direct material 45,000 C. P182,300.00
Direct labor 11,500 D. P183,200.80
Factory overhead 24,000
C. Work-in-process 80,500 5. Mangga, Inc. employs a job order cost system. Its
Direct materials 45,000 manufacturing activities in July 2011, its first month of
Direct labor 11,500 operation, are summarized as follows:
Applied factory overhead 24,000 JOB NUMBERS
D. Direct labor 11,500 201 202 203 204
Direct materials 45,000 Direct P7,000 P5,800 P11,600 P5,000
Work-in-proces 56,500 materials
Direct labor P6,600 P6,000 P8,400 P2,400
2. Malakas Company is a manufacturing concern using the cost
perpetual inventory system. The following materials Direct labot 1,100 1,000 1,400 400
inventory account data is provided: hours
Beginning balance P275,000 Units 200 100 1,000 300
Other debits to the account 825,000 produces
Excess of ending inventory over beginning 55,000
inventory Manufacturing overhead is applied at a rate of P2 per
direct labor hour to variable overhead, P3 per hour for
How much is the cost of materials issued to production? fixed overhead.
A. P 770,000 Jobs 201, 202 and 203 were completed in July.
B. P1,045,000
C. P1,100,000 What is the cost of the completed jobs?
D. P1,155,000 A. P62,900
B. P62,50
3. The books of Chico Manufacturing Co. showed the C. P72,900
following data for the month of October 2011: D. P65,900
Opening and closing inventories:
Oct 1 Oct 31 6. The Atis Corporation manufactures one product and
Raw materials P16,000 17,200 accounts for cost by a job order cost system. You have
Work-in-process 16,000 24,000 obtained the following information for the year ended
Finished goods 28,000 36,000 December 31, 2011 from the corporation's books and
records:
Direct labor cost, P32,000 Total manufacturing cost added during 2011 based on actual
Factory overhead, 75% of direct labor cost. direct materials, actual direct labor and applied factory
Cost of goods sold, P112,500 overhead on actual direct labor cost - P1,000,000

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Cost of goods manufactured based on actual direct materials The August 31, 2011 work in process inventory is:
and direct labor and applied factory overhead - 970,000 A. P 4,00
B. P14,000
Applied factory overhead to work in process based on direct C. P16,000
labor cost - 75% D. P20,000

Applied factory overhead for the year, based on total 9. Job No.210 has at the end of the second week in February,
manufacturing cost - 27% an accumulated total cost of P4,200. In the third week,
P1,000 of direct materials were used on the loh together
Beginning work in process inventory was 80% of ending work in with P10 of indirect materials.
process inventory. Twenty (20) hours of direct labor services were applied to
the job at a cost of P5 per hour.
What is the cost of direct materials used for year ended Manufacturing overhead was applied at the basis of P2.50
December 31, 2011? per direct labor hour for fixed overhead and P2 per hour
A. P370,000 for variable overhead.
B. P970,000 Job No. 210 was the only job completed during the third
C. P990,000 week.
D. P970,500
The total cost of Job Order No. 210 is:
7. The Papaya Company uses a job order cost system. The A. P5,390
following data were obtained from the company's cost B. P5,360
records as of June 30. No jobs were in process at the C. P5,350
beginning of June, all costs listed being incurred during the D. P5,400
month.
Job order Direct Direct labor Direct labor 10. Peanuts Corporation uses a job-order cost system and has
No. materials hours cost two production departments, M and A, budgeted
1001 P4,320 1,300 P1,600 manufacturing costs for 2011 are as follows:
1002 9,150 3,700 7,250 Dept. M Dept A
1003 11,275 8,200 14,325 Direct materials 700,000 P100,000
1004 3,225 1,500 2,800 Direct labor 200,000 800,000
1005 6,500 3,200 6,100 Manufacturing overhead 600,000 400,000
1006 2,750 908 1,650
The actual material and labor costs charged to Job No. 432
Manufacturing overhead costs are charged to jobs on the during 2011 were as follows:
basis of P1.50 per direct labor hour. The actual Direct material P25,000
manufacturing overhead cost for the month totalled Direct labor
P30,350. During June, Job Order Nos. 1001, 1002. 1004 Dept. M P8,000
and 1005 were completed. Jobs 1001 and 1002 were Dept. A 12,000 P20,000
shipped out and the customers were billed P9,000 for Job
1001 and P20,000 for Job 1002. Peanuts Corporation applies manufacturing overhead to
production orders on the basis of direct-labor cost using
The cost of goods manufactured would be: departmental rates predetermined at the beginning of the
A. P55,500 year based on the annual budget. The total manufacturing
B. P55,495 cost associated with Job No. 432 for 2011 should be:
C. P56.495 A. P50,000
D. P57,500 B. P55,000
C. P65,000
8. The Apple Manufacturing Company manufactures a D. P75,000
product exclusively to customer order, employing a job
order cost system. 11. Banana Corporation has a job order cost system. The
On August 1, 2011, its work in process inventory (5 following debits (credits) appeared in the ledger account
partially completed jobs) had a cost of P3,000. work-in process for the month of March, 2011:
During August, no additional orders were put into March, 1 Balance P12,000
production and 18 orders were completed (total cost, 31 Direct materials 40,000
P24,000) of which 14 (cost P20,000) were shipped. 31 Direct labor 30,000
Material requisition in August totalled P17,000 and direct 31 Factory overhead 27,000
labor cost were P8,000. at the beginning of the year, 2011, 31 To finished goods (100,000)
a predetermined overhead rate of 150% of expected direct
labor cost was established. Banana applied overhead to production at a
predetermined rate at 90% based on the direct labor cost.

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Job No. 232, the only job still in process at the end of  The total manufacturing costs added during 2011
March, 2011, has been charged with factory overhead of was P900,000 based on actual direct materials
P2,250. What was the amount of direct materials charged and direct labor but with manufacturing
to Job No. 232? overhead applied on actual direct labor pesos.
A. P2,250  The manufacturing overhead applied to process
B. P2,500 was 72% of the direct labor pesos, and it was
C. P4,250 equal to 25% of the total manufacturing costs.
D. P9,000  The cost of goods manufactured, also based on
12. The work-in-process account of the Matamis Company actual direct materials, actual direct labor and
which uses a job order cost system follows: applied manufacturing overhead, was P850,000.

Work-in-process The cost of direct materials used and the work in

April 1 balance P25,000 Finished goods 125,450 process inventory on December 31, 2011 are:
Direct materials 50,000 Direct materials used WIP Invetory, 12/31/11
Direct labor 40,000 A. 1,075,000 200,000
FOH Applied 30,000 B. 362,500 250,000
C. 312,500 250,000
Overhead is applied to production at a predetermined D. 1,100,000 275,000
rate, based on direct labor cost. The work in process at
April 30 represents the cost of Job No. 456, which has 15. The Narra Company uses a job order cost accounting
been charged with direct labor cost of P3,000 and Job No. system. Overhead is applied to production at a
789, which has been charged with applied overhead of predetermined rate based on direct labor cost.
P2,400. The following postings appear in the ledger accounts of
The cost of direct materials charged to Job No. 456 and Job the company for the month of September, 2011:
No. 789 amounted to: Debit
A. P8,700 Work in process, Sept 1 P30,000
B. P7,600 Direct materials 60,000
C. P4,500 Factory overhead 40,000
D. P4,200 Direct labor 50,000

13. The following data were taken from the records of On September 30, 2011, finished goods completed, from
Sampaloc Company: work in process cost P160,000.
08/31/11 09/30/11 Job No. 327 was the only job not completed in September,
Inventories and it has been charged P4,600 for factory overhead.
Raw materials P? P50,000 Direct materials charged to Job No. 327 was:
Work-in-process 80,000 95,000 A. P10,350
Finished goods 60,000 78,000 B. P14,650
C. P 9,650
Raw materials purchases, P46,000. D. P25,000
Factory overhead, 75% of direct labor cost, P63,000.
Selling and administrative expenses, 12.5% of sales, 16. Pears Factory uses a job order cost system. Per company
P25,000. records, the total chargesto work-in-process in March,
Net income for September, 2011, P25,000. 2011 were as follows:
Direct materials P125,000
What is the cost of raw materials inventory on August 31, Direct labor 122,000
2011? Overhead – 75 % of direct labor cost
A. P30,000
B. P40,000 No jobs were in process at the beginning of the month.
C. P46,000 During the month, work-inprocess in the amount of
D. P50,000 P310,500 was charged to finished goods. On March 31,
2011, the only job order remaining was Job No. 100 with a
14. Macopa Corporation manufactures rattan furniture sets direct labor cost of P10,000.
for export and uses the job order cost system in The cost of direct materials charged to Job No. 100 was:
accounting for its costs. You obtained from the A. P20,500
corporation's books and records the following information B. P14,875
for the year ended December 31, 2011: C. P10,500
 The work in process inventory on January 1 was D. P15,000
20% less than the work in process inventory on
December 31. 17. The factory ledger of the Molave Manufacturing Co.
contains the following account:

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approach. There are two direct-cost categories (direct In comparison to the traditional costing system used by Manila
materials and direct labor) and three indirect cost pools. Company, the total manufacturing cost of the machines sold under
The cost pools represent three activity areas at the plant. the ABC is:
A. P114,850 higher 
Manufacturing Budgeted Cost driver Cost- B. P141,850 lower 
activity area cost for used as allocation C. P114,950 higher 
2011 allocation rate D. Equal 
base
Materials 25. El Mondo Company uses a standard cost system and
handling P200,000 Parts P0,25 prepared the following budget at normal capacity for the
Cutting 2,000,000 Parts 2.50 month of January 2011:
Assembly 2,000,000 Direct 25,000 Direct labor – hours 24,000
labor hours Variable factory overhead P48,000
Fixed factory overhead P108,000
Two styles of chairs were produced in March, the high Total factory overhead per direct
school chair, and the college chair. Their quantities, direct labor hour P6.50
material costs, and other data for March 2011 are as
follows: Actual data for January 2011 were as follows:
Units Direct Number Direct Direct labor hours worked P22,000
produced materials of parts manufacturing Total factory overhead 147,000
costs labor hours Standard direct labor hours allowed 21,000
High 5,000 P600,000 100,000 7,500 for capacity attained
school
chair Using the two-way analysis of overhead variances what is
College 100 25,0000 3,500 500 the budget (controllable) variance for January 2011?
chair A. P 3,000 favorable
B. P 5,000 favorable
The direct labor rate is P20 per hour. Assume no beginning or ending C. P 9,000 favorable
inventory. D. P10,500 unfavorable
What are the unit cost of the high school chair and the college chair?
A. P240.50 and P571.75 respectively  -END-
B. P242.50 and P570.25 respectively 
C. P252.50 and P571.25 respectively 
D. P242.50 and P571.25 respectively 

24. The Manila Company manufactures and sells packaging

machines. It recently used an activity-based approach to
refine the job costing system at its Bulacan plant. The
resulting job costing system has one direct-cost category
(direct materials) and four indirect manufacturing cost
pools. These four indirect cost pools and their allocation
bases are:

Indirect Cost allocation base Budgeted cost

manufacturing cost allocation rate
pool
Materials handling Component parts P8 per part
Machining Machine - hours P68 per hour
Assembly Assembly - hours P75 per hour
inspection Inspection – hours P104 per hour

Manila Company recently sold 50 can-packaging machines to Ilocos

Company. Each machine has direct material costs of P3,000 requires
50 component parts, 12 machine-hours, 15 assembly-hours, and 4
inspection hours.
Manila Company's previous costing system had one direct-cost
category (direct materials) and one indirect-cost category
(manufacturing overhead allocated at the rate of P100 per assembly-
hour).

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