I. The periodic system requires maintenance of records called stock cards.

II. Period cost can be found in the balance sheet or in the income statement.

Only statement I is true

Both statements are false

Only statement II is true

Both statements are true

Question 2

I. Finished goods inventory is an asset, but raw materials and work in process inventory are not
considered as assets until the production is completed.

II. Under the normal costing system, direct materials and direct labor are accumulated using standard
costing and factory overhead are accumulated using actual costing.

Only statement I is true

Both statements are false

Only statement II is true

Both statements are true

Question 3

The recording of application of factory overhead cost to jobs would include a debit to:

Factory overhead control

Cost of goods sold

Work in process

Payroll

Question 4

Which one of the following will not be found on the balance sheet of a manufacturing company?

Materials

Cost of goods sold

Work in process
 Finished goods

Question 5

1-Jul-2020 31-Jul-2020

Work in process 19,000 20,000

Raw materials 23,000 30,000

Finished goods 55,000 29,000

Other data:

Direct labor cost 54,000

Factory overhead cost 82,000

Selling expenses 18,000

Raw materials purchases 58,000

Administrative expenses 42,000

The total conversion cost for the month was:

136,000

112,000

187,000

140,000

Question 6

1-Jul-2020 31-Jul-2020

Work in process 19,000 20,000

Raw materials 23,000 30,000

Finished goods 55,000 29,000

Other data:

Direct labor cost 54,000

Factory overhead cost 82,000

Selling expenses 18,000

Raw materials purchases 58,000

Administrative expenses 42,000

The total prime cost was:

112,000

60,000

105,000

136,000

Question 7

1-Jul-2020 31-Jul-2020

Work in process 19,000 20,000

Raw materials 23,000 30,000

Finished goods 55,000 29,000

Other data:

Direct labor cost 54,000

Factory overhead cost 82,000

Selling expenses 18,000

Raw materials purchases 58,000

Administrative expenses 42,000

The total product cost was:

194,000

166,000

187,000

241,000

Question 8

1-Jul-2020 31-Jul-2020

Work in process 19,000 20,000

Raw materials 23,000 30,000

Finished goods 55,000 29,000

Other data:

Direct labor cost 54,000

Factory overhead cost 82,000

Selling expenses 18,000

Raw materials purchases 58,000

Administrative expenses 42,000

Total expenses:

42,000

18,000

272,000

60,000

Question 9

Zharrize is a merchandising company. Last month the company's merchandise purchases totaled
P278,400. The company's beginning merchandise inventory was P60,800 and its ending merchandise
inventory was P35,200. What was the cost of goods sold.

P287,400

P374,400

P252,800

P304,000

Question 10

I. A cost object is often a product or a department for which costs are accumulated or measured.

II. Committed fixed costs are costs that may be altered, reduced or eliminated in the short term.

Both statements are false

Both statements are true

Only statement I is true

Only statement II is true

Question 11

I. Indirect labor costs are costs paid to workers who are directly involved in the production of goods or
services.

II. Cost behavior refers to the manner in which a cost change as the related activity changes.

Both statements are false

Only statement II is true

Only statement I is true

Both statements are true

Question 12

Which of the following would not be classified as product cost?

Insurance on factory plant

Salesman commissions

Indirect labor

Direct labor

Question 13

The variable cost graph appears as:

A diagonal line that slopes upward to the right

A diagonal line that slopes downward to the right

A horizontal line

A vertical line

Question 14

Janiel Company manufactures toys. During the most productive month of the year 45,000 toys were
manufactured at a total cost of P866,250. In its lowest month, the company produced 18,000 toys at a
cost of P495,000. Using the high-low method of cost estimation, total fixed costs are:

338,750

250,000
 247,500

618,750

Question 15

Shyne Corporation has provided the following data for the first five months of operations:

Inspection Cost Machine Hours

January 750 120

February 800 160

March 870 200

April 790 150

May 840 170

Using the high-low method, the estimated variable inspection cost per machine hour is:

1.25

1.4

0.67

1.5

Question 16

Shyne Corporation has provided the following data for the first five months of operations:

Inspection Cost Machine Hours

January 750 120

February 800 160

March 870 200

April 790 150

May 840 170

Using the high-low method, the estimated monthly fixed component of inspection cost is:

570

585

560
 565

Question 17

Shyne Corporation has provided the following data for the first five months of operations:

Inspection Cost Machine Hours

January 750 120

February 800 160

March 870 200

April 790 150

May 840 170

Using the least square regression method, the estimated variable inspection cost per machine hour is:

0.8

1.28

1.56

1.4

Question 18

Shyne Corporation has provided the following data for the first five months of operations:

Inspection Cost Machine Hours

January 750 120

February 800 160

March 870 200

April 790 150

May 840 170

Using the least square regression method, the estimated monthly fixed component of inspection cost is:

525

572

580

561
Question 19

I. EOQ increases when there is high demand.

II. Transportation in is part of ordering cost.

Both statements are false

Only statement II is true

Both statements are true

Only statement I is true

Question 20

I. Purchasing department's utility bills is part of carrying cost.

II. Ordering costs include salary of storeroom keeper.

Both statements are true

Both statements are false

Only statement I is true

Only statement II is true

Question 21

To compute reorder point the following data must be needed, except:

The rate at which material is used

Carrying cost

Safety stocks

The lead time

Question 22

It is an authorization signed by the purchasing agent sent to a vendor (supplier) to supply goods at the
agreed price, specification, terms and conditions of the product and at a specified time and place of
delivery.

Receiving report
 Bill of materials

Purchase order

Material requisition form

Question 23

Veronica uses 100,000 units of Material C annually in its production. Ordering cost consist of P1,000 for
placing a long distance call to make the order and P4,000 for delivering the order by truck to the
company warehouse. Each material cost P10,000 and the carrying costs are estimated at 15.625% of the
inventory cost

What is EOQ?

1,200

1,000

800

900

Question 24

Veronica uses 100,000 units of Material C annually in its production. Ordering cost consist of P1,000 for
placing a long distance call to make the order and P4,000 for delivering the order by truck to the
company warehouse. Each material cost P10,000 and the carrying costs are estimated at 15.625% of the
inventory cost

What is the total ordering cost?

525,000

550,000

625,000

650,000

Question 25

Veronica uses 100,000 units of Material C annually in its production. Ordering cost consist of P1,000 for
placing a long distance call to make the order and P4,000 for delivering the order by truck to the
company warehouse. Each material cost P10,000 and the carrying costs are estimated at 15.625% of the
inventory cost

What is the total carrying cost?

550,000

525,000

625,000

650,000

Question 26

Lilian operates its factory 300 days per year. Its annual used of material Y is 300,000 gallons. It carries a
2,500 gallon safety stock of material and its lead time is 3 business days. What is the reorder point for
Material Y?

14,500

3,000

5,500

5,000

Question 27

Helen's order quantity for tocino is 5,000 kilos. Helen maintains a safety stock of tocino at 500 kilos, and
its reorder point is 1,500 kilos. What is the lead time, assuming daily usage is 50 kilos.

20 days

30 days

10 days

15 days

Question 28

I. Wages paid to factory supervisors are considered as direct labor.

II. In piece based wage plan, wages are determined on the basis of output produced by the workers
without considering the time spent in performing the job.
 Both statements are false

Only statement I is true

Both statements are true

Only statement II is true

Question 29

I. Timekeeping department has two important activities such as timekeeping and time booking.

II. The cost accounting department is responsible for the planning recruitment, and firing of the labor
force.

Only statement I is true

Only statement II is true

Both statements are false

Both statements are true

Question 30

It is a wage scheme that promotes an increase in production.

Fixed salary per month

Piece work system

Bonus schemes

Time based system

Question 31

A fringe benefit of office staff is charged to

Factory overhead control.

Work in process account

Administrative expenses

Selling expenses

Question 32
Krisnelle Corp. has the following data for the month of October 2020

Gross Wages 50,000

Employee's Taxes 6,500

SSS 1,000

Philhealth 200

Pag-Ibig 100

In October 31, what is the amount to be recorded in the work in process inventory account?

48,700

50,000

42,200

43,500

Question 33

Krisnelle Corp. has the following data for the month of October 2020

Gross Wages 50,000

Employee's Taxes 6,500

SSS 1,000

Philhealth 200

Pag-Ibig 100

The total amount to be credited to accrued payroll for the month of October is:

42,200

50,000

48,700

43,500

Question 34

Mr. JM Lataquin, a machine operator has a wage rate of P400 per hour. The company pays time and half
for time over 40 hours per week.
How much of these earnings should be charged to work in process inventory account if Mr. JM Lataquin
worked for 45 hours in a week.

27,000

16,000

18,000

24,000

Question 35

Mr. JM Lataquin, a machine operator has a wage rate of P400 per hour. The company pays time and half
for time over 40 hours per week.

How much of the earnings are charged to factory overhead control account

9,000

8,000

1,000

5,000

Question 36

Mr. JM Lataquin, a machine operator has a wage rate of P400 per hour. The company pays time and half
for time over 40 hours per week.

The total gross earnings of Mr. JM Lataquin

19,000

17,000

27,000

24,000

Question 37

I. The Normal Costing system determined factory overhead costs as they occur simultaneously with the
manufacturing operation, but the total of these costs is known only as the operation has been complete

II. Cleaning supplies used in the factory are an example of direct materials.

Both statements are false

 Only statement II is true

Both statements are true

Only statement I is true

Question 38

I. Plant-wide uses single overhead rate to allocate all of its factory overhead

costs to jobs, products or departments.

II. Plant-wide overhead rate is appropriate to use, if the company manufactures similar products.

Both statements are true

Only statement II is true

Only statement I is true

Both statements are false

Question 39

If two service departments serve an equal number of service departments, when using the step method,
which service department costs are allocated first?

The service department with the most workers.

The service department with the most amount of costs

The service department most important to the operation

All of the choices

Question 40

It is a system that accumulates factory overhead cost base on a predetermined overhead rate.

Actual costing

Historical costing

Normal costing

Step costing

Question 41
It is a service allocation method that allocates service department costs without considering the service
rendered to other service department.

Reciprocal

Direct

Indirect

You Answered

Step

Question 42

Carlito Corp. has the following data for its two service department and two production departments.

Service Departments

Maintenance Security

Factory Overhead Costs 74,800 36,000

Service Provided to:

Maintenance Dept. 0 10%

Security Dept. 20%

Assembly Dept. 40% 30%

Finishing Dept. 40% 60%

The maintenance department supports the greatest number of departments.

The amount of Security Department cost allocated to Finishing Dept. using the direct method.

37,400

24,000

12,000

61,400

Question 43

Carlito Corp. has the following data for its two service department and two production departments.
 Service Departments

Maintenance Security

Factory Overhead Costs 74,800 36,000

Service Provided to:

Maintenance Dept. 0 10%

Security Dept. 20%

Assembly Dept. 40% 30%

Finishing Dept. 40% 60%

The maintenance department supports the greatest number of departments.

The amount of Service Department cost allocated to Assembly Dept. using the direct method

49,400

12,000

37,400

24,000

Question 44

Carlito Corp. has the following data for its two service department and two production departments.

Service Departments

Maintenance Security

Factory Overhead Costs 74,800 36,000

Service Provided to:

Maintenance Dept. 0 10%

Security Dept. 20%

Assembly Dept. 40% 30%

Finishing Dept. 40% 60%

The maintenance department supports the greatest number of departments.

The amount of Service Department cost allocated to Assembly Dept. using step method.

16,987

46,907

29,920

63,893

Question 45

Carlito Corp. has the following data for its two service department and two production departments.

Service Departments

Maintenance Security

Factory Overhead Costs 74,800 36,000

Service Provided to:

Maintenance Dept. 0 10%

Security Dept. 20%

Assembly Dept. 40% 30%

Finishing Dept. 40% 60%

The maintenance department supports the greatest number of departments.

The amount of Maintenance Department cost allocated to Finishing Dept. using the step method.

63,893

29,920

33,793

16,987

Question 46

Carlito Corp. has the following data for its two service department and two production departments.

Service Departments
Maintenance Security

Factory Overhead Costs 74,800 36,000

Service Provided to:

Maintenance Dept. 0 10%

Security Dept. 20%

Assembly Dept. 40% 30%

Finishing Dept. 40% 60%

The maintenance department supports the greatest number of departments.

The amount of Service Department cost allocated to Assembly Dept. using the reciprocal method

15,600

32,000

78,800

47,600

Question 47

I. When materials are put into production, the materials account is debite

II. Under normal job-order costing system, actual factory overhead is applied at the end of the period.

Both statements are true

Only statement II is true

Both statements are false

Only statement I is true

Question 48

I. Job order cost sheet is only prepared when a job is already completed.

II. Factory overhead is over applied if actual factory overhead costs are greater than the factory overhead
applied to work in process.

Only statement II is true

 Both statements are false

Only statement I is true

Both statements are true

Question 49

The job order cost sheets for incomplete jobs at the end of the period comprise the subsidiary ledger for

Work in process inventory

Finished goods inventory

Raw materials inventory

Supplies Inventory

Question 50

Which transaction would be recorded in the job cost sheet?

Payment of direct labor

Purchase of direct materials

None of the choices

The payment of factory expenses

Question 51

Carlo Corporation's work in process inventory on February 1 per general ledger is P141,360. The job cost
sheet on February is shown below

Per Job Cost Sheets: Feb 1 Job 21 Job 22

Direct Materials37,200 49,600

Direct Labor 18,600 15,500

Amount Charged to Production in February: Job 21 Job 22 Job 23 Job 24

Direct Materials18,600 12,400 37,200 27,900

Direct Labor 6,200 9,300 16,120 12,400

Factory overhead is charged based on direct labor cost. Job 21 and 23 are completed during the month.
The total amount of cost of goods manufactured is:

133,920

158,472

197,160

95,480

Question 52

Carlo Corporation's work in process inventory on February 1 per general ledger is P141,360. The job cost
sheet on February is shown below

Per Job Cost Sheets: Feb 1 Job 21 Job 22

Direct Materials37,200 49,600

Direct Labor 18,600 15,500

Amount Charged to Production in February: Job 21 Job 22 Job 23 Job 24

Direct Materials18,600 12,400 37,200 27,900

Direct Labor 6,200 9,300 16,120 12,400

Factory overhead is charged based on direct labor cost. Job 21 and 23 are completed during the month.

The total work in process inventory is:

149,420

47,740

75,020

27,280

Question 53

JC Corporation uses a job order costing system. The following information was recorded in December:

Cost Added during the Dec.

Job No. 01-Dec Direct MaterialsDirect Labor

101 5,500 1,650 1,100

102 7,700 1,375 1,650

103 2,750 8,250 825

104 4,125 22,000 2,200

The direct labor wage rate is 10 per hour. Factory overhead applied at the rate of P5 per direct labor
hour. Jobs# 101, 102 and 103 have been a completed and transferred to finished goods. Job 102 has
been delivered to the customer.

The total cost of goods manufactured is:

59,125.00

62,012.50

32,587.50

41,937.50

Question 54

JC Corporation uses a job order costing system. The following information was recorded in December:

Cost Added during the Dec.

Job No. 01-Dec Direct MaterialsDirect Labor

101 5,500 1,650 1,100

102 7,700 1,375 1,650

103 2,750 8,250 825

104 4,125 22,000 2,200

The direct labor wage rate is 10 per hour. Factory overhead applied at the rate of P5 per direct labor
hour. Jobs# 101, 102 and 103 have been a completed and transferred to finished goods. Job 102 has
been delivered to the customer.

The total cost of goods sold is:

3,850.00
 11,550.00

21,037.50

32,587.85

Question 55

JC Corporation uses a job order costing system. The following information was recorded in December:

Cost Added during the Dec.

Job No. 01-Dec Direct MaterialsDirect Labor

101 5,500 1,650 1,100

102 7,700 1,375 1,650

103 2,750 8,250 825

104 4,125 22,000 2,200

The direct labor wage rate is 10 per hour. Factory overhead applied at the rate of P5 per direct labor
hour. Jobs# 101, 102 and 103 have been a completed and transferred to finished goods. Job 102 has
been delivered to the customer.

Total amount of work in process end is:

23,787.50

41,662.50

29,425.00

28,325.00

Question 56

I. The net cost of normal spoilage which is specifically identified to specific job should be assigned
directly to the jobs that cause the spoilage.

II. The cost of normal spoilage would be added to the cost of the good units produced.

Both statements are true

Both statements are false

Only statement I is true

 Only statement II is true

Question 57

I. The rework cost of normal defective units which is common to all jobs should be assigned to FOH
control.

II. Abnormal spoilage is a spoilage that is in excess of forecasted spoilage.

Both statements are false

Only statement I is true

Only statement II is true

Both statements are true

Question 58

Spoilage that should not arise under an efficient operating condition is:

Extraordinary spoilage

Abnormal spoilage

Ordinary spoilage

Normal spoilage

Question 59

Spoilage that is an inherent result of the particular production process and arises under efficient
operating conditions is known as:

Ordinary spoilage

Extraordinary spoilage

Normal spoilage

Abnormal spoilage

Question 60

The work in process inventory should be debited with the cost of rework that is:

Abnormal
 Scrap

Normal and common to all jobs

Normal and specific to a job

Question 61

Christine Joy Corporation's Job#24 for the manufacture of 36,300 jerseys was completed during May
2020 at the following unit cost:

Direct Materials 750

Direct Labor 500

Factory Overhead (includes an allowance of P25 for spoiled work) 250

Final inspection of Job#24 disclosed 3,300 spoiled jerseys which were sold to a jobber for P300,000.

Assume that spoilage loss is common to all production. What would be the unit cost of the good jerseys
produced.

1,475

1,573

1,500

1,450

Question 62

Christine Joy Corporation's Job#24 for the manufacture of 36,300 jerseys was completed during May
2020 at the following unit cost:

Direct Materials 750

Direct Labor 500

Factory Overhead (includes an allowance of P25 for spoiled work) 250

Final inspection of Job#24 disclosed 3,300 spoiled jerseys which were sold to a jobber for P300,000.

Assume that spoilage loss is attributable to exacting specification of the job. What would be the unit cost
of the good jerseys produced?
 1,450

1,573

1,613

1,475

Question 63

Joanne Corp incurred normal spoilage of P10,000 and abnormal spoilage of P2,000. How much of the
spoilage cost should Joanne Corp charge as inventoriable for the period?

2,000

12,000

10,000

Question 64

Icy Corp incurred the following cost for Job 456 for the production of 3,000 units of products during the
month of August:

Original Cost:

Direct Materials 11,250

Direct Labor 9,000

Factory Overhead (150% of Direct Labor 13,500

Rework Costs for 75 units

Direct Materials 750

Direct Labor 1,200

The rework costs were attributable to exacting specification of Job 456, and the full rework costs were
charged to specific joThe unit cost of Job 456 was:

11.25

11.61

11.9
 12.5

Question 65

Icy Corp incurred the following cost for Job 456 for the production of 3,000 units of products during the
month of August:

Original Cost:

Direct Materials 11,250

Direct Labor 9,000

Factory Overhead (150% of Direct Labor 13,500

Rework Costs for 75 units

Direct Materials 750

Direct Labor 1,200

The rework costs were attributable to all jobs. The unit cost of Job 456 was:

11.9

12.5

11.61

11.25