COSTACC

FINAL EXAMINATION

1. Adams Company is a manufacturing company that has worked on several production jobs during the first quarter of the
year. Below is a list of all the jobs for the quarter:
Balance
Job No. 356 ₱ 450
Job No. 357 1,235
Job No. 358 378
Job No. 359 689
Job No. 360 456
Jobs 356, 357, 358, and 359 were completed. Jobs 356 and 357 were sold at a profit of ₱500 on each job.

What is the balance of Sales for Adams Company at the end of the first quarter?
A ₱2,685
B ₱1,685
C ₱1,000
D ₱685

2. Adams Company is a manufacturing company that has worked on several production jobs during the first quarter of the
year. Below is a list of all the jobs for the quarter:
Balance
Job No. 356 ₱ 450
Job No. 357 1,235
Job No. 358 378
Job No. 359 689
Job No. 360 456
Jobs 356, 357, 358, and 359 were completed. Jobs 356 and 357 were sold at a profit of ₱500 on each job.

What is the gross profit for Adams Company at the end of the first quarter?
A ₱685
B ₱1,000
C ₱1,685
D ₱2,685

3. The Cavy Company estimates that the factory overhead for the following year will be ₱1,250,000. The company has
decided that the basis for applying factory overhead should be machine hours, which is estimated to be 40,000 hours.
The machine hours for the month of April for all of the jobs was 4,780. If the actual factory overhead totaled ₱141,800,
determine the over- or under applied amount for the month.
A ₱7,575 under applied
B ₱35,220 over applied
C ₱7,575 over applied
D ₱35,220 under applied

4. The Winston Company estimates that the factory overhead for the following year will be ₱1,250,000. The company has
decided that the basis for applying factory overhead should be machine hours, which is estimated to be 50,000 hours.
 The total machine hours for the year was 54,300. The actual factory overhead for the year was ₱1,375,000. Determine
the over- or under applied amount for the year.
A 17,500 over applied
B ₱118,250 over applied
C ₱118,250 under applied
D ₱17,500 under applied

5. Sanders Inc. has applied ₱567,988 of overhead to jobs in the cost ledger. Actual overhead at the end of the year is
₱575,000. The adjustment for over or under applied overhead is
A ₱7,012 over applied, increase Cost of Goods Sold
B ₱7,012 under applied, increase Cost of Goods Sold
C ₱7,012 over applied, decrease Cost of Goods Sold
D ₱7,012 under applied, decrease Cost of Goods Sold

6. The EGBERT Company uses an industrial chemical, XRG, in a manufacturing process. Information as to balances on
hand, purchases, and requisitions of XRG is given in the following table.
Number of Price per Balance of
Date Transaction
Kilograms Kilogram Kilograms
Jan. 1 Beginning balance 1,000 ₱2.10 1,000
Jan. 24 Purchased 2,500 ₱2.25 3,500
Feb. 8 Issued 700 2,800
Mar. 16 Issued 1,200 1,600
Jun. 11 Purchased 1,500 ₱2.75 3,100
Aug. 18 Issued 800 2,300
Sep. 6 Issued 1,600 700
Oct. 15 Purchased 2,000 ₱2.80 2,700
Dec. 29 Issued 600 2,100

If a perpetual inventory record of XRG is maintained on a FIFO basis, the March 16 issue will consist of:
A 300 kilograms @ ₱2.10 and 900 kilograms @ ₱2.25.
B 1,000 kilograms @ ₱2.10 and 200 kilograms @ ₱2.25.
C 1,200 kilograms @ ₱2.25.
D 700 kilograms @ ₱2.10 and 500 kilograms @ ₱2.25.

7. The BEACHES Company uses metal grates when assembling appliances. Information as to balances on hand,
purchases, and requisitions of the grates is given in the following table.
Number of Balance of
Date Transaction Unit Price
Units Units
Jan. 1 Beginning balance 150 ₱2.80 150
Jan. 24 Purchased 450 ₱3.10 600
Feb. 8 Issued 120 480
Mar. 16 Issued 210 270
Jun. 11 Purchased 225 ₱3.34 495
Aug. 18 Issued 195 300
Sep. 6 Issued 165 135
Oct. 15 Purchased 225 ₱3.40 360
Dec. 29 Issued 210 150

If a perpetual inventory record of the metal grates is maintained on a FIFO basis, the September 6 issue will consist of:
A 15 units @ ₱2.80, 120 units @ ₱3.10 and 30 units @ ₱3.34.
B 75 units @ ₱2.80 and 90 units @ ₱3.10.
C 165 units @ ₱3.10.
D 75 units @ ₱3.10 and 90 units @ ₱3.34.
8. The BISSET Corporation uses Raw Material A in a manufacturing process. Information as to balances on hand,
purchases, and requisitions of Raw Material A is given in the following table.
Number of Balance of
Date Transaction Unit Price
Units Units
Jan. 1 Beginning balance 100 ₱1.40 100
Jan. 24 Purchased 300 ₱1.55 400
Feb. 8 Issued 80 320
Mar. 16 Issued 140 180
Jun. 11 Purchased 150 ₱1.62 330
Aug. 18 Issued 130 200
Sep. 6 Issued 110 90
Oct. 15 Purchased 150 ₱1.70 240
Dec. 29 Issued 140 100

If a perpetual inventory record of Raw Material A is maintained on a FIFO basis, 200 units on hand on August 18 will
consist of:
A 100 units @ ₱1.40, 80 units @ ₱1.55 and 20 units @ ₱1.62.
B 100 units @ ₱1.55 and 100 units @ ₱1.62.
C 150 units @ ₱1.62 and 50 units @ ₱1.55.
D 200 units @ ₱1.55.

9. The JORDAN Corporation uses Raw Material A in a manufacturing process. Information as to balances on hand,
purchases, and requisitions of Raw Material A is given in the following table.
Number of Balance of
Date Transaction Unit Price
Units Units
Jan. 1 Beginning balance 100 ₱1.45 100
Jan. 24 Purchased 300 ₱1.55 400
Feb. 8 Issued 80 320
Mar. 16 Issued 140 180
Jun. 11 Purchased 150 ₱1.62 330
Aug. 18 Issued 130 200
Sep. 6 Issued 110 90
Oct. 15 Purchased 150 ₱1.70 240
Dec. 29 Issued 140 100

If a perpetual inventory record of Raw Material A is maintained on a moving average basis, the 140 units issued on March
16 will have a unit cost of (round to 3 decimal places):
A ₱1.525.
B ₱1.475.
C ₱1.500.
D ₱1.438.

10. At a certain level of operations, per unit costs and selling price are as follows: manufacturing costs, ₱50; selling and
administrative expenses, ₱10; selling price, ₱80. Given this information, the mark-on percentage to manufacturing cost
used to determine selling price must have been:
A 20%
B 60%
C 33%
D 25%

11. ARNOLD Furniture Company produced 4,000 tents in July. The manufacturing costs were:
Direct materials ₱25,000
Direct labor 11,000
Factory overhead 12,000
Selling expense 5,000
 Administrative expense 6,000

The cost per tent is:

A ₱14.75.
B ₱12.00.
C ₱9.00.
D ₱6.25.

12. MOUNTAIN Company produced 20,000 blankets in June to be sold during the holiday season. The manufacturing
costs were:
Direct materials ₱125,000
Direct labor 55,000
Factory overhead 60,000

Management has decided that the mark-on percentage necessary to cover the product’s share of selling and administrative
expenses and to earn a satisfactory profit is 30%. The selling price per blanket should be:
A ₱12.00.
B ₱15.60.
C ₱23.60.
D ₱31.20.

13. Selected data concerning the past fiscal year's operations (000's omitted) of the STANLEY Manufacturing Company
are presented below:
INVENTORIES
Beginning Ending
Materials ₱ 90 ₱ 85
Work in process 50 65
Finished goods 100 90
Other data:
Direct materials used ₱365
Total manufacturing costs charged to production during the
year (includes direct materials, direct labor, and
factory overhead) 680
Cost of goods available for sale 765
Selling and general expenses 250

Assuming Stanley does not use indirect materials, the cost of materials purchased during the year amounted to:
A ₱455.
B ₱450.
C ₱365.
D ₱360.

14. Selected data concerning the past fiscal year's operations (000's omitted) of KRAIG Fabricators are presented below:
INVENTORIES
Beginning Ending
Materials ₱180 ₱ 170
Work in process 100 130
Finished goods 200 180
Other data:
Direct materials used ₱ 730
Total manufacturing costs charged to production during the year
(includes direct materials, direct labor, and factory overhead)
1,360
Cost of goods available for sale 1,530
Selling and general expenses 500
The cost of goods manufactured during the year was:
A ₱1,410.
B ₱1,330.
C ₱1,420.
D ₱1,470.

15. Selected data concerning the past fiscal year's operations (000's omitted) of HERCULES Mills are presented below:
INVENTORIES
Beginning Ending
Materials ₱ 18 ₱ 17
Work in process 10 13
Finished goods 20 18
Other data:
Direct materials used ₱ 73
Total manufacturing costs charged to production
during the year (includes direct materials, direct labor,
and factory overhead) 136
Cost of goods available for sale 153
Selling and general expenses 50

The cost of goods sold during the year was:

A ₱135.
B ₱146.
C ₱153.
D ₱155.

16. The SHIPLETT Company’s payroll summary showed the following in November:
Supervisors’ salaries ₱50,000
Legal department salaries 10,000
Maintenance workers’ wages 30,000
Machine operators’ wages 70,000
Assembly workers’ wages 50,000
Sales department salaries 20,000

What is total factory overhead for November?

A ₱250,000
B ₱200,000
C ₱80,000
D ₱40,000

17. The following data are from BURTON Corporation, a manufacturer, for the month of September:
Direct materials used ₱145,000
Supervisors’ salaries 6,000
Machine operators’ wages 200,000
Sales office rent and utilities 22,000
Machine depreciation 35,000
Secretary to the Chief Executive Officer salary 3,000
Factory insurance 15,000

Total prime costs are:

A ₱354,000
B ₱145,000
C ₱345,000
D ₱256,000
18. The following data are from BAKER Company, a manufacturer, for the month of October:
Machine operators’ wages ₱110,000
Supervisors’ salaries 3,000
Factory insurance 7,500
Secretary to the Chief Executive Officer salary 1,500
Machine depreciation 17,500
Sales office rent and utilities 11,000
Direct materials used 67,500

Total conversion costs are:

A ₱177,500
B ₱114,500
C ₱150,500
D ₱138,000

19. Selected accounts with amounts omitted are as follows:

Work in Process
Aug. 1 Balance 275,000 Aug. 31 Goods finished 1,030,000
31 Direct materials X
31 Direct labor 450,000
31 Factory overhead X

Factory Overhead
Aug. 1–31 Costs incurred 145,000 Aug. 1 Balance 15,000
31 Applied
(30% of direct labor cost) X

If the balance of Work in Process at August 31 is ₱220,000, what was the amount debited to Work in Process for direct
materials in August?
A ₱390,000
B ₱525,000
C ₱170,000
D ₱580,000

20. Selected accounts with some amounts omitted are as follows:

Work in Process
Aug. 1Balance 275,000 Aug. 31 Goods finished 1,030,000
31 Direct materials X

31 Direct labor 450,000

31 Factory overhead X

Factory Overhead
Aug. 1–31 Costs incurred 145,000 Aug. 1 Balance 15,000
31 Applied X

If the balance of Work in Process at August 31 is ₱220,000, what was the amount debited to Work in Process for factory
overhead in August, assuming a factory overhead rate of 30% of direct labor costs?
A ₱135,000
B ₱10,000
C ₱120,000
 D ₱70,000

21. Selected amounts with some amounts omitted are as follows:

Work in Process
Oct. 1 Balance 20,000 Oct. 31 Goods finished X
31 Direct materials 96,700
31 Direct labor 201,000
31 Factory overhead X

Finished Goods
Oct. 1 Balance 52,000
31 Goods finished 360,000

If the balance of Work in Process at October 31 is ₱21,000, what was the amount of factory overhead applied in October?
A ₱63,300
B ₱21,300
C ₱11,300
D ₱42,300

22. Selected amounts with some amounts omitted are as follows:

Work in Process
Apr. 1 Balance 7,000 Apr. 30 Goods finished X
30 Direct materials 78,400
30 Direct labor 195,000
30 Factory overhead 136,500

Finished Goods
Apr. 1 Balance 42,000
30 Goods finished 387,000

What was the balance of Work in Process as of April 30?

A ₱8,100
B ₱35,000
C ₱29,900
D ₱22,900

23. Reynolds Manufacturers Inc. has estimated total factory overhead costs of ₱95,000 and expected direct labor hours of
9,500 for the current fiscal year. If job number 117 incurred 2,300 direct labor hours, Work in Process will be debited
and Factory Overhead will be credited for
A ₱23,000
B ₱95,000
C ₱2,300
D ₱21,850

24. When Job 117 was completed, direct materials totaled ₱4,400; direct labor, ₱5,600; and factory overhead, ₱2,400. A
total of 1,000 units were produced at a per-unit cost of
A ₱12.40
B ₱124
C ₱1,240
D ₱12,400

25. The entries to record cost and sale of a finished good on account is
A debit Cost of Goods Sold, credit Finished Goods
B debit Cost of Goods Sold, credit Finished Goods, debit Accounts Receivable, credit Sales
 C debit Sales Expense, credit Finished Goods, credit Cash, credit Accounts Receivable
D debit Work in Process, credit Finished Goods, debit Accounts Receivable, credit Sales

26. All of the following are examples of activity bases except

A salaries of supervisors
B quality inspections of products
C number of machine setups
D raw materials storage

27. Materials purchased on account during the month totaled ₱190,000. Materials requisitioned and placed in production
totaled ₱165,000. The journal entry to record the material purchase on account is
A Materials 165,000
Accounts Payable 165,000

B Materials 190,000
Accounts Payable 190,000

C Materials 190,000
Cash 190,000

D Accounts Payable 190,000

Materials 190,000

28. Materials purchased on account during the month amounted to ₱190,000. Materials requisitioned and placed in
production totaled ₱156,000. The entry to record the transaction for materials requisitioned by the production
department is
A Materials 156,000
Work in Process 156,000

B Work in Process 190,000

Materials 190,000

C Work in Process 156,000

Materials 156,000

D Work in Process 156,000

Cash 156,000

29. During the period, labor costs incurred on account amounted to ₱175,000, including ₱150,000 for production orders
and ₱25,000 for general factory use. In addition, factory overhead charged to production was ₱32,000. The entry to
record the direct labor costs is
A Work in Process 150,000
Wages Payable 150,000

B Work in Process 175,000

Wages Payable 175,000

C Wages Payable 175,000

Work in Process 175,000

D Wages Payable 150,000

Work in Process 150,000
30. During the period, labor costs incurred on account amounted to ₱175,000, including ₱150,000 for production orders
and ₱25,000 for general factory use. Factory overhead applied to production was ₱32,000. The entry to record the actual
factory overhead costs incurred is
A Accounts Payable 25,000
Factory Overhead 25,000

B Factory Overhead 32,000

Accounts Payable 32,000

C Work in Process 25,000

Wages Payable 25,000

D Factory Overhead 25,000

Wages Payable 25,000

31. During the period, labor costs incurred on account amounted to ₱175,000, including ₱150,000 for production orders
and ₱25,000 for general factory use. Factory overhead applied to production was ₱23,000. The entry to record the
factory overhead applied to production is
A Work in Process 25,000
Factory Overhead 25,000

B Factory Overhead 23,000

Work in Process 23,000

C Work in Process 23,000

Factory Overhead 23,000

D Factory Overhead 25,000

Accounts Payable 25,000

32. The cost of production of completed and transferred goods during the period amounted to ₱540,000, and the finished
products shipped to customers had total production costs of ₱375,000. The entry to record the transfer of costs from
work in process to finished goods is
A Finished Goods 375,000
Work in Process 375,000

B Finished Goods 540,000

Work in Process 540,000

C Work in Process 540,000

Finished Goods 540,000

D Work in Process 375,000

Finished Goods 375,000

33. The cost of production of completed and transferred goods during the period amounted to ₱540,000, and the finished
products shipped to customers had production costs of ₱375,000. The entry to record the transfer of costs from finished
goods to cost of goods sold is
A Finished Goods 540,000
Cost of Goods Sold 540,000

B Finished Goods 375,000

Cost of Goods Sold 375,000

C Cost of Goods Sold 375,000

 Finished Goods 375,000

D Cost of Goods Sold 540,000

Finished Goods 540,000

34. Aspen Technologies has the following budget data:

Estimated direct labor hours 15,000
Estimated direct labor pesos ₱90,000
Estimated factory overhead costs ₱198,000

If factory overhead is to be applied based on direct labor hours, the predetermined overhead rate is
A ₱7.50
B ₱13.20
C ₱2.20
D ₱16.50

35. A manufacturing company applies factory overhead based on direct labor hours. At the beginning of the year, it
estimated that factory overhead costs would be ₱360,000 and direct labor hours would be 30,000. Actual factory
overhead costs incurred were ₱377,200, and actual direct labor hours were 36,000. What is the amount of over applied
or under applied manufacturing overhead at the end of the year?
A ₱6,000 over applied
B ₱6,000 under applied
C ₱54,800 over applied
D ₱54,800 under applied

36. The following budget data are available for Sharp Company:
Estimated direct labor hours 12,000
Estimated direct labor pesos ₱90,000
Estimated factory overhead costs ₱179,000
Actual direct labor hours 11,500
Actual direct labor pesos ₱92,000
Actual factory overhead costs ₱180,000

If factory overhead is to be applied based on direct labor pesos, the predetermined overhead rate is
A 199%
B 196%
C ₱14.92
D ₱15.65

37. A manufacturing company applies factory overhead based on direct labor hours. At the beginning of the year, it
estimated that factory overhead costs would be ₱360,000 and direct labor hours would be 30,000. Actual manufacturing
overhead costs incurred were ₱377,200, and actual direct labor hours were 36,000. What is the predetermined overhead
rate per direct labor hour?
A ₱10.48
B ₱12.57
C ₱10.00
D ₱12.00

38. A manufacturing company applies factory overhead based on direct labor hours. At the beginning of the year, it
estimated that factory overhead costs would be ₱360,000 and direct labor hours would be 30,000. Actual manufacturing
overhead costs incurred were ₱377,200, and actual direct labor hours were 36,000. The entry to apply the factory
overhead costs for the year would include a
A debit to factory overhead for ₱360,000
 B credit to factory overhead for ₱360,000
C debit to factory overhead for ₱377,200
D credit to factory overhead for ₱432,000

39. The following budget data are available for Sharp Company:
Estimated direct labor hours 12,000
Estimated direct labor pesos ₱90,000
Estimated factory overhead costs ₱180,000
Actual direct labor hours 11,500
Actual direct labor pesos ₱92,000
Actual factory overhead costs ₱181,000

If factory overhead is applied based on direct labor hours, the amount of overhead to be applied is
A ₱180,000
B ₱184,000
C ₱181,000
D ₱172,500

40. Adams Company is a manufacturing company that has worked on several production jobs during the first quarter of the
year. Below is a list of all the jobs for the quarter:
Balance
Job No. 356 ₱ 450
Job No. 357 1,235
Job No. 358 378
Job No. 359 689
Job No. 360 456
Jobs 356, 357, 358, and 359 were completed. Jobs 356 and 357 were sold at a profit of ₱500 on each job.

What is the ending balance of Work in Process for Adams Company at the end of the first quarter?
A ₱3,208
B ₱2,752
C ₱456
D ₱0

41. Adams Company is a manufacturing company that has worked on several production jobs during the first quarter of the
year. Below is a list of all the jobs for the quarter:
Balance
Job No. 356 ₱ 450
Job No. 357 1,235
Job No. 358 378
Job No. 359 689
Job No. 360 456
Jobs 356, 357, 358, and 359 were completed. Jobs 356 and 357 were sold at a profit of ₱500 on each job.

What is the ending balance of Cost of Goods Sold for Adams Company at the end of the first quarter?
A ₱456
B ₱685
C ₱1,685
D ₱2,685
42. Adams Company is a manufacturing company that has worked on several production jobs during the first quarter of the
year. Below is a list of all the jobs for the quarter:
Balance
Job No. 356 ₱ 450
Job No. 357 1,235
Job No. 358 378
Job No. 359 689
Job No. 360 456
Jobs 356, 357, 358, and 359 were completed. Jobs 356 and 357 were sold at a profit of ₱500 on each job.

What is the ending balance of Finished Goods for Adams Company at the end of the first quarter?
A ₱456
B ₱1,067
C ₱1,685
D ₱2,752

43. MURPHY Company uses 3,000 yards of material each day to make hats. It usually takes five days from the time
Murphy orders the material to when it is received. If Murphy’s desired safety stock is 6,000 yards, what is Murphy’s
order point?
A 6,000 yards
B 12,000 yards
C 15,000 yards
D 21,000 yards

44. Expected annual usage of a raw material is 1,200,000 units, and standard order size is 10,000 units. The invoice cost
of each unit is ₱145, and the cost to place one purchase order is ₱105. The estimated annual order cost is:
A ₱12,000.
B ₱17,400.
C ₱12,600.
D ₱800,000.

45. The following data refer to various annual costs relating to the inventory of a single-product company that requires
10,000 units per year:
Cost per Unit
Order cost ₱0.05
Transportation-in on purchases 0.18
Storage 0.16
Insurance 0.10

Total per Year

Interest that could have been earned on alternate investment of funds ₱800

What is the annual carrying cost per unit?

A ₱ 0.21
B ₱ 0.29
C ₱ 0.34
D ₱ 0.44

46. The following data pertains to WESTERN Company’s materials inventory:

Number of pounds required annually 16,000
Cost of placing an order ₱20
Annual carrying cost per pound of material ₱4
What is Western Company’s EOQ?
A 4,000 pounds
B 800 pounds
C 400 pounds
D 200 pounds

47. Expected annual usage of a particular raw material is 180,000 units, and standard order size is 12,000 units. The invoice
cost of each unit is ₱300, and the cost to place one purchase order is ₱80. Assuming the company does not maintain
safety stock, the average inventory is:
A 10,000 units.
B 7,500 units.
C 15,000 units.
D 6,000 units.

48. The following data were taken from MANSFIELD Merchandisers on January 31:
Merchandise inventory, January 1 ₱ 100,000
Sales salaries 35,000
Merchandise inventory, January 31 65,000
Purchases 560,000

What was the Cost of goods sold in January?

A ₱595,000
B ₱660,000
C ₱630,000
D ₱545,000

49. UMBERG Merchandise Company’s cost of goods sold last month was ₱1,450,000. Merchandise Inventory at the
beginning of the month was ₱250,000 and ₱325,000 at the end of the month. Umberg’s merchandise purchases were:
A ₱1,450,000
B ₱1,375,000
C ₱1,525,000
D ₱1,775,000

50. CHEN Corp. had finished goods inventory of ₱60,000 and ₱70,000 at May 1 and May 31, respectively, and cost of
goods manufactured of ₱175,000. Cost of goods sold in May was:
A ₱165,000
B ₱175,000
C ₱185,000
D ₱225,000

51. The balance in ELECTRIC Industries’ Finished Goods account at December 31 was ₱325,000. Its December cost of
goods manufactured was ₱1,350,000, its total manufacturing costs were ₱1,500,000 and its cost of goods sold in
December was ₱1,455,000. What was the balance in Electric’s Finished Goods at December 1?
A ₱280,000
B ₱220,000
C ₱370,000
D ₱430,000

52. The LAUREN Company’s payroll summary showed the following in November
Sales department salaries ₱10,000
Supervisor salaries 20,000
Assembly workers’ wages 45,000
Machine operators’ wages 35,000
Maintenance workers’ wages 15,000
Accounting department salaries 5,000
What amount would be included in direct labor in November?
A ₱25,000
B ₱80,000
C ₱45,000
D ₱140,000

53. The Thomlin Company forecasts that total overhead for the current year will be ₱15,500,000 with 250,000 total machine
hours. Year to date, the actual overhead is ₱16,000,000 and the actual machine hours are 330,000 hours. The
predetermined overhead rate based on machine hours is
A ₱48 per machine hour
B ₱62 per machine hour
C ₱45 per machine hour
D ₱50 per machine hour

54. The Thomlin Company forecasts that total overhead for the current year will be ₱15,000,000 with 300,000 total machine
hours. Year to date, the actual overhead is ₱16,000,000 and the actual machine hours are 330,000 hours. If the Thomlin
Company uses a predetermined overhead rate based on machine hours for applying overhead, as of this point in time
(year to date), the overhead is
A ₱1,000,000 over applied
B ₱1,000,000 under applied
C ₱500,000 over applied
D ₱500,000 under applied

55. At the end of the year, overhead applied was ₱42,000,000. Actual overhead was ₱40,300,000. Closing over/under
applied overhead into Cost of Goods Sold would cause net income to
A increase by ₱1,700,000
B decrease by ₱1,700,000
C increase by ₱3,400,000
D decrease by ₱3,400,000

56. The following information is provided for the year:

Actual direct labor hours worked 27,500
Budgeted overhead P525,000
Budgeted direct labor hours 30,000
Actual overhead costs incurred P481,250

If normal costing is used, the amount of overhead applied for the year is
A. P568,750.00.
B. P441,031.25.
C. P481,250.00.
D. P525,000.00.

57. The Brookstone Company produces 9 volt batteries and AAA batteries. The Brookstone Company uses a plantwide rate
to apply overhead based on direct labor hours. The following data is given:
Actual overhead P325,000
Estimated Overhead P350,000
Estimated activity:
9 volt battery 100,000 direct labor hours
AAA battery 400,000 direct labor hours
Actual activity:
9 volt battery 125,000 direct labor hours
AAA battery 400,000 direct labor hours
Units produced:
9 volt battery 500,000
 AAA battery 250,000

How much overhead is applied to each 9 volt batteries and AAA batteries respectively? (round to 2 decimal places)
A. P87,500; P280,000
B. P70,000; P280,00
C. P81,250; P260,000
D. none of these

58. WINTER Manufacturing has four categories of overhead. The four categories and expected overhead costs for each
category for next year are listed as follows:
Maintenance P255,000
Materials handling 125,000
Setups 30,000
Inspection 105,000

Currently, overhead is applied using a predetermined overhead rate based upon budgeted direct labor hours. 100,000
direct labor hours are budgeted for next year.

The company has been asked to submit a bid for a proposed job. The plant manager feels that obtaining this job would
result in new business in future years. Usually bids are based upon full manufacturing cost plus 10 percent.

Estimates for the proposed job are as follows:

Direct materials P15,000
Direct labor (8,000 hours) P12,000
Number of material moves 100
Number of inspections 120
Number of setups 24
Number of machine hours 4,000

The plant manager has heard of a new way of applying overhead that uses cost pools and activity drivers. Expected
activity for the four activity drivers that would be used are:
Machine hours 60,000
Material moves 20,000
Setups 3,000
Quality inspections 12,000

What is the amount of overhead allocated to the proposed job if Winter Manufacturing uses direct labor hours as its only
activity driver?
A. P20,800
B. P30,400
C. P30,000
D. P41,200

59. The Molotov plant of Kaboom Industries has two categories of overhead: maintenance and inspection. Costs expected
for these categories for the coming year are as follows:
Maintenance P50,000
Inspection 75,000

The plant currently applies overhead using direct labor hours and expected capacity of 50,000 direct labor hours. The
following data have been assembled for use in developing a bid for a proposed job:
Direct materials P500
Direct labor P2,000
Machine hours 500
Number of inspections 4
 Direct labor hours 800

Total expected machine hours for all jobs during the year is 25,000, and the total expected number of inspections is 1,500.

Using activity-based costing and the appropriate activity drivers, the total cost of the potential job would be
A. P1,200.
B. P1,800.
C. P3,700.
D. P3,875.

60. Bienvenue, Inc., has identified the following overhead costs and activity drivers for next year:
Expected Expected
Overhead Item Cost Activity Driver Quantity
Setup costs P100,000 Number of setups 500
Ordering costs 40,000 Number of orders 3,200
Maintenance 200,000 Machine hours 4,000
Power 20,000 Kilowatt hours 80,000

The following are two of the jobs completed during the year:
Job CC Job DD
Direct materials P375 P1,000
Direct labor P350 P1,200
Units completed 100 160
Direct labor hours 50 80
Number of setups 1 4
Number of orders 4 5
Machine hours 20 25
Kilowatt hours 30 50

The company's normal activity is 4,000 direct labor hours.

If the activity drivers are used to allocate overhead costs, the unit cost (rounded to two decimal places) for Job DD would
be
A. P21.40.
B. P26.56.
C. P26.95.
D. P27.03.

61. Samson Company recently installed an activity-based relational database. Using the information contained in the activity
relational table, the following pool rates were computed:
P400 per purchase order
P24 per machine hour, Process 1
P30 per machine hour, Process 2
P80 per engineering hour

Two products are produced by SAMSON: L and M. The plant has two manufacturing processes, Process 1 and Process
2. Other processes include engineering, product handling, and procurement. Product L goes through Process 1 while
Product M goes through Process 2. The product relational table for SAMSON is as follows:

Product L
Activity Driver # Name Activity Usage
1 Units 200,000
2 Purchase Orders 250
 3 Machine Hours 80,000
4 Engineering Hours 1,250

Product M
Activity Driver # Name Activity Usage
1 Units 25,000
2 Purchase Orders 125
3 Machine Hours 10,000
4 Engineering Hours 1,500

What is the unit cost of Product M?

A. P 18.80
B. P504.00
C. P 10.60
D. P 12.00

62. Magnitude Company produces A and B with contribution margins per unit of P40 and P30, respectively. Only 500 labor
hours and 300 machine hours are available for production.

Time requirements to produce one unit of A and B are as follows:

Product A Product B
Labor hours per unit 5 2
Machine hours per unit 1 4

What is the constraint on machine hours for Magnitude Company?

A. 1A + 4B ≤ 300
B. 5A + 2B ≤ 500
C. 1A + 4B ≤ 500
D. 40A + 30B ≤ 500

63. Luzon manufactures three joint products A, B and C and a by product D, all in single process. Results for the month of
August were as follows:
Materials used 10,000 kgs P24,000
Conversion costs P28,000

No. of Kilos on hand No. Of Kilos of sold Product SV kilo

3,000 1,000 A 11
3,000 0 B 10
0 1,000 C 26
1,000 1,000 D 1

Revenue from by product is credited to sales account. Process costs are apportioned on a relative sales value approach.
What is the cost per kilo of Product C for the month?
A. P13.52
B. P0
C. P5.61
D. P35.58

Items 64-65 are based on the following:

Paul provided the following information for the transaction occurred during August. The production plant uses the JIT
costing system.
 - Raw materials costing P750,000 were purchased
- All direct materials costing P750,000 were requisitioned for production
- Direct labor costs of P500,000 were incurred
- Actual factory overhead costs amounted to P2,487,500.
- Applied conversion cost totaled P3,250,000. This includes the direct labor cost.
- All units are completed and immediately sold.

64. What is the RIP used backflushed to FG?

A. 750,000
B. 4,000,000
C. 3,737,500
D. 1,250,000

65. What is the adjusted Cost of Goods Sold?

A. 3,237,000
B. 3,737,500
C. 4,000,000
D. 4,500,000

66. Which of the following scenarios will decrease the cost of goods sold during the year?
A. Increase in raw materials inventory during the year
B. Decrease in work in process inventory during the year
C. Decrease in finished goods inventory during the year
D. Increase in direct labor costs during the year

Items 67-68 are based on the following:

Materials are added at the start of the process in Super Bless blending department, the first stage of the production cycle.
The following information is available in August:
Work in process, Aug 31 (50% complete as to conversion cost) 175,000
Transferred to next department 275,000
Started in August 375,000
Work in process, Aug 1 (60% complete as to conversion cost) 150,000
Loss in production (normal) 75,000

67. Under FIFO, what are the EUP for conversion?

A. 347,500
B. 437,500
C. 372,500
D. 362,500

68. Under weighted Average, what are the EUP for conversion?
A. 347,500
B. 362,500
C. 437,500
D. 272,500

Items 69-70 are based on the following:

Barney makes a single product in two Departments. The production data for Dept. 2 for Aug 2020 follows:
Production Cost Last Month This Month
Transferred in 40,750 222,750
Materials 9,500 168,750
Conversion 4,850 202,500

Quantities
 In Process beginning (40% done) 10,000
Received from Dept. 1 75,000
Completed and Transferred 62,500
In Process end (60% done) 15,000

Materials are added at the start of the process, and losses normally occur during the early stages of operation.

69. Under weighted average, what is the cost of WIP end?

A. 111,400
B. 70,000
C. 68,600
D. 111,600

70. Under FIFO, what is the cost of goods completed?

A. 488,125
B. 537,500
C. 535,100
D. 528,700

Items 71-72 are based on the following information:

The controller for DIKATIBAYAN Mfg. Co. has established the following activity cost pools and cost drivers.

Activity Cost Pool Budgeted Cost Driver Budgeted Level for Cost
Overhead Cost Driver Pool Rate
Machine setups P100,000 Number of setups 100 set-ups P1,000/set-up
Material handling 50,000 Weight of raw material 50,000 pounds P1/pound
Hazardous waste 25,000 Weight of hazardous 10,000 pounds P2.50/pound
control chemical used
Quality control 37,500 Number of inspections 1,000 inspections P37.50/inspection
Other overhead 100,000 Machine hours 20,000 MH P5.00/MH
costs
TOTAL P312,500

An order for 2,000 boxes of film development chemicals has the following production requirements:
Machine setups 4 setups
Raw materials 10,000 pounds
Hazardous materials 2,000 pounds
Inspections 10 inspections
Machine hours 500 machine hours

71. Under the activity-based cost system, how much is the overhead cost per box of chemicals?
A. P 10.9375
B. P 21.875
C. P7.8125
D. P3.90625

72. Using a single predetermined overhead rate based on machine hours, compute the rate per box of chemicals.
A. P 10.9375
B. P 21.875
C. P 7.8125
D. P 3.90625

73. AWTOMATIK Company has the following information for July:

Units started 200,000 units
Beginning Work in Process: (65% incomplete) 40,000 units
 Normal spoilage (discrete) 7,000 units
Abnormal spoilage 10,000 units
Ending Work in Process: (30% incomplete) 29,000 units
Transferred out 194,000 units
Beginning Work in Process Costs:
Material P 30,000
Conversion 20,000

All materials are added at the start of the production process. AWTOMATIK Company inspects goods at 75 percent
completion as to conversion.

What are equivalent units of production for conversion costs, assuming FIFO?
A. 217,800
B. 207,800
C. 213,050
D. 217,300

Items 74-75 are based on the following information:

Kupasin Textiles Company manufactures a variety of natural fabrics for the clothing industry. The following data pertain
to the Weaving Department for the month of September.
Weighted average FIFO
Equivalent units of direct materials 120,000 80,000
Equivalent units of conversion 104,000 88,000
Units completed and transferred out during September 100,000 100,000

The cost data for September is as follows:

Work in process, September 1 40,000 units
Direct material P 188,000
Conversion 88,800

Cost incurred during September

Direct material P 328,000
Conversion 545,600

74. Under the average method, how much is the cost of units transferred out during September.
A. P1,040,000
B. P 1,030,000
C. P 1,043,600
D. P 894,800

75. Under the FIFO method, what is the cost of work in process ending inventory during September.
A. P110,400
B. P 106,800
C. P 120,400
D. P 255,600
End of Examination