This Study Resource Was: For The Next 6 Items

TOPIC: COST OF GOODS SOLD
For the next 6 items

Data about Annabelle Company’s production and inventories for the month of June are as follows:
Purchases – direct materials P 143,440

Freight in 5,000
Purchase returns and allowances 2,440
Direct labor 175,000
Actual factory overhead 120,000
Inventories June 1 June 30
Finished goods P 68,000 P 56,000
Work in process 110,000 135,000
Direct materials 52,000 44,000
Annabelle Company applies factory overhead to production at 80% of direct labor cost. Over or
underapplied overhead is closed to cost of goods sold at year end. The company’s accounting period is on
the calendar year basis.
1. Annabelle Company’s prime cost for June was:

A. P 154,000
B. P 329,000
C. P 198,000
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er as
D. P 315,000
co
eH w
DM, beginning 52,000.00
o.
Purchases 143,440.00
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Freight in 5,000.00
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Purchase returns and allowances (2,440.00)

DM, ending (44,000.00)
DM used 154,000.00
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Direct labor 175,000.00

aC s
Prime cost 329,000.00

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2. Annabelle Company’s conversion cost for June was:

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A. P 315,000
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B. P 295,000
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C. P 329,000
D. P 444,000
is

Applied MO 140,000.00
Th
Conversion costs 315,000.00
3. For the month of June, Annabelle Company’s total manufacturing cost was:
sh
A. P 469,000
B. P 444,000
C. P 644,000
D. P 449,000
DM used 154,000.00
Manufacturing costs 469,000.00
4. For June, Annabelle Company’s cost of goods transferred to the finished goods inventory account was:
A. P 579,000
B. P 461,000
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C. P 469,000
D. P 444,000

WIP, beginning 110,000.00
Cost of goods put into process 579,000.00
WIP, ending (135,000.00)
Cost of goods manufactured 444,000.00
5. Annabelle Company’s cost of goods sold for June was:

A. P 441,000
B. P 481,000
C. P 456,000
D. P 444,000

Finished goods, beginning 68,000.00
Cost of goods available for sale 512,000.00
Finished goods, ending (56,000.00)
Cost of goods sold 456,000.00
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6. The amount of over/underapplied factory overhead for the month of June was:
A. P 140,000 overapplied
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B. P 120,000 underapplied
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C. P 20,000 overapplied
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D. P 20,000 underapplied
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Actual MO (120,000.00)
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Overapplied 20,000.00
aC s
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For the next 4 items:
Miracle Company provides you with the following information:
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Inventories: Beginning Ending

ar stu
Materials ? P 50,000
Work in process P 80,000 95,000
Finished goods 60,000 78,000
is
January transactions:
Th
 Purchases materials, P46,000

 Factory overhead (75% of direct labor cost), P63,000
 Selling and administrative expenses (12.5% of sales), P25,000
 Net profit for January, P25,200
sh
Compute for the following:
7. Sales:
A. P 174,800
B. P 200,000
C. P 225,200
D. P 250,000
Selling & Admin 25,000.00

Divided by: 12.5%
200,000.0
Sales 0
8. Cost of goods sold:
A. P 149,800
B. P 174,800
C. P 225,000
D. P 225,200
200,000.0
Sales 0
149,800.0
COGS 0
Gross profit 50,200.00
Selling & Admin 25,000.00
Net profit 25,200.00
9. Cost of goods manufactured:

A. P 116,800
B. P 131,800
C. P 167,800
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D. P 182,800
er as
co
Cost of goods manufactured
eH w 167,800.00
o.
rs e
ou urc

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10. Materials inventory, beginning:

aC s
A. P 26,200
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B. P 39,800
C. P 66,000
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D. P 76,550
ed d
ar stu
DM, beginning 39,800.00

Purchases 46,000.00
DM, ending (50,000.00)
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DM used 35,800.00
Th
sh

WIP, ending (95,000.00)

11. Santol Company had the following inventories:
April 1 April 30
Work in process P 18,000 P 26,000
The following information was available for April, 2017:
Direct labor P 60,000

Direct labor rate per hour P 7.50
Overhead rate per direct labor hour P10.00
Cost of goods manufactured P 153,650
What is the prime cost during April 2017?

A. P 81,650
B. P 80,000
C. P 90,000
D. P 96,000
DM used 21,650.00
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WIP, ending (26,000.00)
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co
eH w
o.
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12. Abner Corporation has manufactured 100,000 units of compound X in 2017 at the following costs: Labor
P242,500 of which 93% represents direct labor. Materials of P182,500 of which 90% represents direct
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materials. Opening work in process inventory is P88,125. Closing work in process inventory is P67,500.
Overhead is applied at 125% of direct labor cost.
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The cost of goods manufactured is

aC s
A. P 671,150
vi re
B. P 692,306
C. P 651,036
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D. P 629,900
ed d
ar stu
DM (182,500 x 90%) 164,250.00

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DL (242,500 x 93%) 225,525.00

Th
FO - Applied (225,525 x 125%) 281,906.25

Manufacturing cost 671,681.25
WIP, beg 88,125.00
CGPIP 759,806.25
sh
WIP. End (67,500.00)

CGM 692,306.25

13. For the year 2017, the gross profit of ABC Co. was P96,000; the cost of goods manufactured was P340,000;
the beginning inventories of work in process and finished goods inventory 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 ABC Co. for 2017 must have been:
A. P 419,000
B. P 429,000
C. P 434,000
D. P 436,000
Gross profit 96,000.00
FG, beginning 45,000.00
(52,000.00
FG, ending )
429,000.00
14. The books of Chico Manufacturing Co. showed the following data for the month of October 2017:
Oct. 1 Oct. 31
Raw materials P 16,000 P 17,200
Work in process 16,000 24,000
Direct labor cost, P32,000

Factory overhead, 75% of direct labor cost
Cost of goods sold, P112,500
What is the cost of materials purchased during the month?

A. P 71,200
B. P 72,000
C. P 73,700
D. P 87,200
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er as
DM, beginning 16,000
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eH w
Purchases
DM available for use
73,700
89,700
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DM, ending (17,200)
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DM used 72,500
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DL 32,000
FO (75% of DL 24,000
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Manufacturing costs 128,500

aC s
WIP, beginning 16,000

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Cost of goods put into process 144,500

WIP, ending (24,000)
Cost of goods manufactured 120,500
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FG, beginning 28,000

ed d
CGAS 148,500
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FG, ending (36,000)

COGS 112,500
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TOPIC: JOB ORDER COSTING

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The Diamond Company uses a job order accounting system. Overhead is applied to production at a
predetermined rate of 80% based on direct labor cost.
The following postings appear in the ledger accounts of the company for the month of September 2017:
sh
Debit
Work in process, Sept. 1 P 30,000
Direct materials 60,000
Direct labor 50,000
Factory overhead 40,000
Cost of goods completed (155,000)
Job No. 327 was the only job not completed in September, and it has been charged P4,600 for factory
overhead.
15. Direct materials charged to Job No. 327 was:

A. P 10,350
B. P 14,650
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D. P 25,000
16. Direct labor charged to Job No. 327 was:

A. P 5,750
B. P 6,784
C. P 8,280
D. P 8,480
Work in process, Sept. 1 30,000.00

Direct materials 60,000.00
Factory overhead 40,000.00
(155,000.00
Cost of goods completed
)
WIP, Sept 30 25,000.00
FO (4,600.00)
DL (5,750.00)
DM 14,650.00

17. Sandy Corporation manufactures a specialty line of dresses using a job order cost system. During January,
m
the following costs were incurred in completing Job H-1:
er as
Direct materials P 27,400
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eH w
Direct labor
Administrative costs
9,600
2,800
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Selling costs 11,200
rs e
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Factory overhead was applied at the rate of P50 per direct labor hour, and Job H-1 required 400 direct labor
hours. If Job H-1 resulted in 4,000 good dresses, the cost of goods sold per unit is:
A. P 9.25
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B. P 14.25
aC s
C. P 14.95
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D. P 17.75
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DM 27,400.00
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DL 9,600.00
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FO (400 DLH x P50) 20,000.00

Manufacturing cost 57,000.00
Divided by: No. of dresses 4,000.00
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14.25
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18. Overhead applied was P120,000, while actual overhead was P124,000. Which of the following is always true
of the above?
A. Direct labor activity was overestimated.
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B. Overhead was underapplied by P4,000.

C. Overhead was overapplied by P4,000.
D. The difference must be reported as a loss.

19. Mangga Inc. employs job order cost system. Its manufacturing activities in July, 2017, its first month of
operation, are summarized as follows:
Job Numbers
201 202 203 204
Direct materials P 7,000 P 5,800 P 11,600 P 5,000
Direct labor cost P 6,600 P 6,000 P 8,400 P 2,400
Direct labor hours 1,100 1,000 1,400 400
Units produced 200 100 1,000
300
The manufacturing overhead is applied at a rate of P2 per direct labor hour to variable overhead, P3 per
direct labor hour for fixed overhead.
Jobs 201, 202 and 203 were completed in July.
What is the cost of the completed jobs?

A. P 62,900
B. P 62,500
C. P 72,900
D. P 65,900
201 202 203 Total

24,400.0
DM 7,000.00 5,800.00 11,600.00 0
21,000.0
DL 6,600.00 6,000.00 8,400.00 0
17,500.0
FO 5,500.00 5,000.00 7,000.00 0
62,900.0
Manufacturing costs 19,100.00 16,800.00 27,000.00 0

20. Banana Corporation has a job cost system. The following debits (credits) appeared in the ledger account
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Work in Process for the month of March 2017:
er as
co
March 1eH w Balance P 12,000
31 Direct materials 40,000
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31 Direct labor 30,000
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31 Factory overhead 27,000
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31 To finished goods (100,000)
Banana applied manufacturing overhead to production at a predetermined rate of 90% based on direct labor
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cost. Job No. 232, the only job still in process at the end of March, 2017, has been charged with factory
aC s
overhead of P2,250. What was the amount of direct materials charged to Job No. 232?
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A. P 2,250
B. P 2,500
C. P 4,250
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D. P 9,000
ed d
ar stu
Balance 12,000.00
DM 40,000.00
DL 30,000.00
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FO 27,000.00
Th
(100,000.00
Cost of goods manufactured )
WIP, ending 9,000.00
FO (2,250.00)
sh
DL (2,250/90%) (2,500.00)
DM 4,250.00
TOPIC: ACTIVITY BASED COSTING

21. Uratex Company manufactures a variety of classroom chairs. Its job-costing system uses an activity-based
approach. There are two direct-cost categories (direct materials and direct labor) and three indirect cost
pools. The cost pools represent three activity areas at the plant.
Cost-
Manufacturing Budgeted Cost Driver used as
allocation
Activity Area Cost for 2017 Allocation Base
Rate
Materials Handling P 200,000 Parts P 0.25
Cutting 2,000,000 Parts 2.50
Assembly 2,000,000 Direct labor hours 25.00
Two styles of chairs were produced in March, the high school chair and the college chair. Their quantities,
direct material costs, and other data for March 2017 are as follows:
Direct
Units Direct materials Number of
manufacturing labor
produced cost parts
hours
High school chair 5,000 P 600,000 100,000 7,500
College chair 100 25,000 3,500 500
The direct labor rate is P20 per hour. Assume no beginning or ending inventory.
What are the unit cost of the high school chair and college chair?
A. P 240.50 and P 571.75 respectively
B. P 242.50 and P 570.25 respectively
C. P 252.50 and P 571.25 respectively
D. P 242.50 and P 571.25 respectively
HS Chair College Chair

DM 600,000.00 25,000.00
DL 150,000.00 10,000.00
MO
Materials handling 25,000.00 875.00
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Cutting 250,000.00 8,750.00
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Assembly 187,500.00 12,500.00
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Manufacturing costs
eH w 1,212,500.00 57,125.00
Divided by: No of units produced 5,000.00 10.00
o.
Unit cost 242.50 5,712.50
rs e
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TOPIC: ACTIVITY BASED COSTING

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Special Products recently installed an activity-based relational data base. Using the information contained in the
activity relational table, the following pool rates were computed:
aC s
 P200 per purchase order

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 P12 per machine hour, process A

 P15 per machine hour, process B
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 P40 per engineering hour

ed d
Two products are produced by Special Products: A and B. Each product has an area in the plant that is
ar stu
dedicated to its production. The plant has two manufacturing processes, process A and process B. Other
processes include engineering, product handling and procurement. The product relational table for Special is as
follows:
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Activity Driver Activity Usage

Name
No.
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Product A Product B
1 Units 200,000 25,000
2 Purchase orders 250 125
3 Machine hours 80,000 10,000
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4 Engineering hours 1,250 1,500
22. How much overhead cost will be assigned to product A using the number of purchase orders?
A. P 50,000
B. P 25,000
C. P 40,000,000
D. P 66,750
P200 x 250 PO
23. How much overhead cost will be assigned to product B using engineering hours?
A. P 50,000
B. P 60,000
C. P 1,000,000
D. P 400,500
P40 x 1,500 hours
24. How much overhead cost will be assigned to product A using process A?
A. P 1,200,000
B. P 2,400,000
C. P 960,000
D. P 120,000
P12 x 80,000
25. How much overhead cost will be assigned to product B using process B?
A. P 1,200,000
B. P 960,000
C. P 120,000
D. P 150,000
P15 x 10,000
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26. What is the unit cost of Product A?
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A. P 4.71
eH w
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B. P 3.76
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C. P 252.00
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D. P 5.30
27. What is the unit cost of Product B?

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aC s
A. P 9.40
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B. P 6.00
C. P 252.00
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D. P 6.41
ed d
ar stu
A B
Purchase order 50,000.00 25,000.00
150,000.0
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Machine hours 960,000.00 0

Engineering hours 50,000.00 60,000.00
Th
1,060,000.0 235,000.0
Total 0 0
Divided by: Units produced 200,000.00 25,000.00
sh
5.30 9.40
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TOPIC: COST OF GOODS SOLD

For the next 6 items

Purchases – direct materials P 143,440

1. Annabelle Company’s prime cost for June was:

Purchase returns and allowances (2,440.00)

Direct labor 175,000.00

Prime cost 329,000.00

2. Annabelle Company’s conversion cost for June was:

Direct labor 175,000.00

Conversion costs 315,000.00

Manufacturing costs 469,000.00

5. Annabelle Company’s cost of goods sold for June was:

Cost of goods manufactured 444,000.00

TOPIC: COST OF GOODS SOLD

Inventories: Beginning Ending

 Purchases materials, P46,000

Compute for the following:

Selling & Admin 25,000.00

9. Cost of goods manufactured:

Cost of goods sold 149,800.00

10. Materials inventory, beginning:

DM, beginning 39,800.00

Cost of goods put into process 262,800.00

TOPIC: COST OF GOODS SOLD

The following information was available for April, 2017:

Direct labor P 60,000

What is the prime cost during April 2017?

The cost of goods manufactured is

DM (182,500 x 90%) 164,250.00

DL (242,500 x 93%) 225,525.00

FO - Applied (225,525 x 125%) 281,906.25

WIP. End (67,500.00)

TOPIC: COST OF GOODS SOLD

Direct labor cost, P32,000

What is the cost of materials purchased during the month?

Manufacturing costs 128,500

WIP, beginning 16,000

Cost of goods put into process 144,500

FG, beginning 28,000

FG, ending (36,000)

TOPIC: JOB ORDER COSTING

For the next 2 items:

15. Direct materials charged to Job No. 327 was:

16. Direct labor charged to Job No. 327 was:

Work in process, Sept. 1 30,000.00

TOPIC: JOB ORDER COSTING

FO (400 DLH x P50) 20,000.00

B. Overhead was underapplied by P4,000.

TOPIC: JOB ORDER COSTING

What is the cost of the completed jobs?

201 202 203 Total

TOPIC: JOB ORDER COSTING

31 To finished goods (100,000)

TOPIC: ACTIVITY BASED COSTING

HS Chair College Chair

TOPIC: ACTIVITY BASED COSTING

 P200 per purchase order

 P12 per machine hour, process A