COMPILATION OF ASSIGNMENTS IN COST 8.

Property taxes on a manufacturing plant is an

ACCOUNTING element of:
Assignment 1 a. Conversion cost
b. Prime cost
1. Prime cost and conversion cost share what c. Period cost
common element? d. Fixed cost
a. Direct material e. None of the above
b. Variable overhead
c. Direct labor 9. The cost of insurance for manufacturing plant
d. Fixed overhead is a
e. None of them a. Product cost
b. Prime cost
2. What are prime cost c. Conversion cost
a. The first cost incurred in job d. Period cost
b. Direct materials and overhead
c. Indispensable as distinguished from 10. The flow of cost parallels the flow of
avoidable cost resources and all manufacturing cost flow
d. Cost incurred on joint products before through the
split off a. Payroll account
e. None of the above b. Materials account
c. Work in process account
3. Direct materials are d. Income statement
I. Prime Cost e. None
II. Conversion cost
III. Manufacturing cost 11. Total Manufacturing cost less Conversion
cost + Direct Labor=
a. I, II and II a. Direct materials
b. I and III only b. Prime cost
c. I and II only c. Overhead
d. II and III only d. Conversion cost
e. I only e. Product cost

4. Factory supplies for manufacturing plant are 12. Direct Materials and indirect materials are
generally both
a. Prime cost a. Conversion cost
b. Fixed cost b. Manufacturing cost
c. Period cost c. Prime cost
d. Variable cost d. Overhead cost

5. Indirect labor is a 13. Wages for factory assembler and production

a. Non mfg cost superintendent are:
b. Prime cost a. Prime cost c. Conversion cost
c. Conversion cost b. Direct labor d. Manufacturing cost
d. Period cost
14. An actual cost system may be used in the:
6. Wages paid to timekeeper in a factory is a a. neither process costing nor job order
a. Prime cost costing
b. Direct Material b. process costing only
c. Conversion cost c. Job order costing and process costing
d. Direct labor d. Job order costing only

7. Factory overhead includes 15. A non-manufacturing organization may use:

a. All manufacturing cost a. neither process costing nor job order
b. Indirect materials and direct labor costing
c. All manufacturing cost except DM and b. process costing only
DL c. Job order costing and process costing
d. All cost d. Job order costing only
16. Transactions of X Corp are as follows: March, the company produced 6,000 units and
total electricity cost is 66,000. What is the total
a. Purchased raw materials from supplier estimated cost in April if the company will
amounting to P 40,000 on account. produce 10,000 units?
Answer: 98,000
b. During the month, raw materials costing P
30,000 were issued to production. (P Assignment 2
10,000 pertains to indirect materials and
the remaining balance are direct 1. No 1. Cost accounting is a management
materials) accounting plus a small part of financial
accounting to the extent that its product costing
c. Payroll of production personnel totaled P functions satisfies the needs of external
50,000 (gross of taxes) reporting.

d. Payroll of selling and admin personnel is P No 2. Cost accounting is a system that records,
10,000 summarizes, analyzes and interprets the details
of the cost of materials, labor and overhead
e. Applied all the labor cost to production. necessary to produce and sell an article.

f. Incurred other overhead cost of P 15,000.

a. Both are true
b. Both are false
g. Applied all overhead cost to production at
the end of the month. c. Only No. 1 is true
d. Only No. 2 is true
h. Ending Work in Process is P 1,000; NO 2. No 1. Manufacturing cost includes direct
beginning WIP.
materials, direct labor and overhead. Direct
materials also called raw materials, are those
i. Ending FG inventories; costing P 45,000.
NO beginning FG. materials used in manufacturing process that
become a significant part of the finished
j. Sales on account is P 70,000 product.

k. Cash sales is P 20,000. No 2. Manufacturing overhead are cost that

cannot be traced directly to the product or
What is the cost of goods manufactured? cannot be considered as direct material or
Answer: 94,000 direct labor. Manufacturing overhead is also
called manufacturing expense or factory
17. Based on item 16, what is the net income? burden.
Answer: 31,000
a. Both are true
18. Based on item 16, what is the
b. Both are false
manufacturing cost?
Answer: 95,000 c. Only No. 1 is true
d. Only No. 2 is true
19. Data are as follows: Raw materials 3. No 1. When raw materials are issued to
purchased is 20,000; Raw materials inventory
production, these will become part of work in
decreased by 2,000; Total Payroll is 30,000
process inventory. Raw materials Inventory
(includes payroll of Sales Dept of 5,000); Rental
cost of mfg plant is 2,000 and sales commission account reflects the cost of materials and
is 4,000. WIP inventory increased by 6,000 while factory supplies that will be used in the
FG inventory decreased by 3,000. Receivables manufacturing process.
increased by 10,000 while total collections from
customers amounted to 50,000. What is the net a. Both are true
income? b. Both are false
Answer: 5,000 c. Only No. 1 is true
d. Only No. 2 is true
20. In February, total cost of electricity is 50,000
when the company produced 4,000 units. In
4. No 1. When goods are sold, their cost is 1,200,000, what is the gross profit?
debited to Cost of goods sold.
a. 560,000
No 2. Work in process account pertains to b. 440,000
inventory not yet completed or needs further c. 380,000
processing. When completed, Work in process d. 540,000
account is debited. e. None of the above

8. GENOCIDE Inc. is a manufacturing company

a. Both are true
using the perpetual system. The beginning
b. Both are false
inventory of materials totaled P 150,000 & all
c. Only No. 1 is true debits to 'materials account" amounted to P
d. Only No. 2 is true 400,000. The excess of beginning inventory over
5. Flor company consumed P 450,000 worth of its ending inventory is P 60,000.00. how much is
the total materials issued to production?
direct materials during May 2011. At the end of
the month, the direct materials inventory of
a. 490,000
Flor was P 25,000 lower than the May 1 b. 460,000
inventory level. How much was the direct c. 400,000
materials procured during May 2011? d. 340,000
e. None of the above
a. 450,000
b. 475,000 9. Sales salaries commissions are 10,000 when
c. 425,000 80,000 units are sold, and 14,000 when 120,000
d. Cannot be determined units are sold. Using the high low method. What
is the fixed portion of sales salaries and
6. ASTA company incurred the following cost commissions?
during the month; direct labor, P120,000,
factory overhead, P108,000 and direct material a. 3,000
purchases, P160,000. Inventories show the b. 1,000
following costs: c. 8,000
d. 12,000
Finished Goods inventory has beginning and e. None of the above
ending balances of P 27,000 and P 30,000,
respectively. 10. Prime cost and conversion cost share what
common element
Work in process has beginning and ending
inventory balances of 61,500 and 57,500, a. Direct material
respectively. b. Variable overhead
c. Direct labor
Direct materials inventory has beginning and d. Fixed overhead
ending balances of 37,500 and 43,500, e. None of them
respectively.
11. What are prime cost
How much is the cost of goods manufactured?
a. 369,000 a. The first cost incurred in job
b. 396,000 b. Direct materials and overhead
c. 386,000 c. Indispensable as distinguished from avoidable
d. 368,000 cost
e. None of the above d. Cost incurred on joint products before split
off
7. SAN JOSE Corp has the following data: e. None of the above
Purchases of Raw materials of 200,000; Ending
Raw materials of 10,000; Conversion cost of 12. Direct materials are
500,000; Cost of Goods manufactured of I. Prime Cost
800,000; Work in process, beginning of 50,000; II. Conversion cost
FG inventory, beginning of 30,000 and Finished III Manufacturing cost
Goods inventory, ending is 70,000. If sales are
a. l, II and III through the
b. I and III only
c. I and II only a. Payroll account
d. II and III only b. Materials account
e. I only c. Work in process account
f. None of the above d. Income statement
e. None of the above
13. Factory supplies for manufacturing plant are
generally
20. Net sales are 490,000. Gross profit rate is
a. Prime cost 40% based on cost. What is the gross profit?
b. Fixed cost Answer: 140,000
c. Period cost 21. Net sales are 490,000. Gross profit rate is
d. Variable cost 40% based on sales. What is the gross profit?

Answer: 196,000
14. Indirect labor is a
22. Cost incurred are as follows, RM used is
a. Non mfg cost 10,000; Indirect materials use dis 2 points
b. Prime cost 1,000; Direct labor is 10,000, Indirect labor is
c. Conversion cost
2,000; Rental cost of plant is 6,500. OH rate is
d. Period cost
50% of total production labor cost WIP
15. Wages paid to timekeeper in a factory is a decreased by 800 while FG increased by 200.
What are the COGS before adjustment of
a. Prime cost under/over applied OH under normal cost?
b. Overhead
Answer: 25,600
c. Conversion cost
d. b and c 23. Cost incurred are as follows; RM used is
e. Direct labor 10,000; Indirect materials use dis 1,000; Direct
labor is 10,000, Indirect labor is 2,000; Rental
16. Factory overhead includes cost of plant is 6,500. OH rate is 50% of total
production labor cost. WIP decreased by 800
a. All manufacturing cost
while FG increased by 200. What are the COGS
b. Indirect materials and direct labor
AFTER adjustment of under/over applied OH?
c. All manufacturing cost except DM and DL
d. All cost Answer: 29,100
e. none of the above
24. Under applied OH is closed to COGS:
17. Property taxes on a manufacturing plant is
an element of: a. when immaterial / by debiting the COGS
account
a. Conversion cost b. when material / by debiting the COGS
b. Prime cost account
c. Period cost c. when immaterial / by crediting the COGS
d. Fixed cost account
e. None of the above d. None of the above

18. The cost of insurance for manufacturing 25. Data are as follows: Gross sales of 100,000;
plant is a Sales return of 2,000; Cost of Sales at normal
cost is 60,000; Over applied OH is 3,000.
a. Product cost Operating expenses of 10,000. What is the net
b. Conversion cost income?
c. Prime cost Answer: 31,000
d. both a and b
e. Period cost
Assignment 3
19. The flow of cost parallels the flow of
resources and all manufacturing cost flow
1. No 1. Perpetual inventory system is used No 2. Normal costing uses applied overhead
when there are large numbers of inventory thru overhead rates established by the
which is usually interchangeable. company.
 
No.2. PAS 2 prescribes the use of the FIFO and a. True True
Average methods to compute the cost of b. False False
inventories. c. True False
d. False True
a. True True
b. False False 6. No 1. Indirect materials or factory supplies
c. True False consist of items that are used in manufacturing
d. False True process but does not become significant part of
the finished product.

No 2. When raw materials are issued to

2. No.1 A new average unit cost shall be production, these will become part of Finished
calculated under moving average cost method Goods inventory on the date/time of its
after each issue of inventory. issuance.
NO.2 LIFO is no longer permitted under PAS 27. a. True True
b. False False
a. True True
c. True False
b. False False
d. False True
c. True False
d. False True 7. The following data are available for SAN JOSE
CORP: Purchased raw materials from supplier
3. No 1. Materials returned to storerooms are
amounting to P 40,000 on account.; During the
reported in the returned Material Report.
month, raw materials costing P 30,000 were
Different person must be involved in the storing
issued to production. (P 10,000 pertains to
and issuing operations. All material issuances
indirect materials and the remaining balance
must be processed only upon proper written
are direct materials); Total Payroll of the
authorization
company is P 60,000 (Payroll of selling and
No 2. The bin tag is an informal but carefully admin personnel is P 10,000); Applied all the
maintained record showing the quantities of labor cost to production; Incurred other
materials received, issued and on hand. overhead cost (rent and utility cost) of P 15,000;
Applied all actual overhead cost to production
a. True True
at the end of the month; Ending Work in
b. False False
Process is P 1,000; Ending FG inventories;
c. True False
costing P 45,000; Sales on account is P 70,000;
d. False True
Cash sales is P 20,000 and there is no beginning
4. No 1. Work In process account is debited for inventories. What is the cost of goods sold?
direct materials purchased, direct labor cost Answer: 49,000
incurred, and overhead cost applied to
production.
8. The following data are available for SAN JOSE
NO 2. Work in Process account is classified as CORP: Depreciation of Factory Equipment         
inventory of the company. Finished goods P 1,000; Depreciation of Sales Office      P 500;
inventory is classified as cost of sales until sold Advertising         P 4,000; Freight out       P 2,000;
to customers. Wages of production workers   P 28,000; Raw
materials used   47,000; Factory rent       P
a. True True 2,000; Sales salaries and commission P 10,000;
b. False False Indirect materials used            P 3,000;
c. True False Administrative salaries     P 2,000; Utility cost of
d. False True factory site         P 2,000; Supplies used in the
5. No 1. Indirect materials and indirect labor Office P 1,000; Factory packaging supplies       P
cost are credited to manufacturing overhead 1,000. What is the manufacturing cost incurred
control account when incurred. by the company? Answer: 81,000
9. The following are LORE INC's production costs Depreciation of store building 4,500;
for Oct 2011: Direct materials       200,000.00; Depreciation of factory plan  2,800; Total
Direct labor        100,000.00 and Factory Materials purchased, (includes indirect
Overhead    50,000.00. What amount of cost materials of 4,000) is 40,000; Increase in Direct
should be traced to specific products in the materials inventory  15,000.00 ; Increase in
production process? Answer: 300,000 Indirect materials inventory  0; Decrease in WIP
8,900; Increase in Finished goods 12,500. What
10. The following information relates to
is the Cost of goods sold (COGS)? 
production of MARCELO CORP for the month of
Oct 2011: Answer: 74,250  

Direct Materials used 10,000; Direct labor rate 14. Data are as follows: Beginning inventory
per hour 5.00; Overhead cost 2,300.00; Direct balances for WIP and Finished Goods inventory
labor hours employed 500.00; Gross Profit are P 67,000 and P 54,000, respectively. Ending
rate 25% based on selling price; Increase in WIP balances of raw materials, WIP and Finished
1,100.00; Ending inventory of Finished goods is goods inventory are as follows: P 39,000, P
30% of its beginning balance; Total 59,000 and P 48,000, respectively. Raw
sales 50,000.00. What is the ending inventory of materials purchases is P 45,000. Factory
Finished goods of the company? overhead totaled P 7,500 (this is 75% of total
Direct labor cost). Total expenses of the
Answer: 10,500
company totaled P 11,500 which is 11.5% of
11. The following data are available for ABC total sales. Net income is 31,000. What is
Corp: In 2019, Purchases of Material A are: On COGS? Answer: 57,500
Jan, 5,000 units at 40 per unit; Feb, 12,000 units
15. Data are as follows: Beginning inventory
at 45 per unit; April, of 17,000 units at 50 per
balances for WIP and Finished Goods inventory
unit and on July, of 10,000 units at 60 per unit.
are P 67,000 and P 54,000, respectively. Ending
In 2020, purchases of material A on Jan 2020 is
balances of raw materials, WIP and Finished
10,000 units at 30 per unit and another 10,000
goods inventory are as follows: P 39,000, P
units on May at 40 per unit. Raw materials used
59,000 and P 48,000, respectively. Raw
in 2019 and 2020 are 39,000 units and 18,000
materials purchases is P 45,000. Factory
units, respectively. What is the cost of raw
overhead totaled P 7,500 (this is 75% of total
materials used in 2020 using FIFO?
Direct labor cost). Total expenses of the
Answer: 720,000 company totaled P 11,500 which is 11.5% of
total sales. Net income is 31,000. Compute the
12. The following data are available for ABC total Prime cost.
Corp: In 2019, Purchases of Material A are: On
Jan, 5,000 units at 40 per unit; Feb, 12,000 units Answer: 36,000
at 45 per unit; April, of17,000 units at 50 per
16. A, worked a total of 186 hours for the
unit and in July, of 10,000 units at 60 per unit. In
month of June 2020. His rate per hour is 450
2020, purchases of material A on Jan 2020 is
per hour. Overtime premium is 30%. The
10,000 units at 30 per unit and another 10,000
regular working hours of the company is 8 hours
units on May at 40 per unit. Raw materials used
a day. The company’s regular working days is
in 2019 and 2020 are 39,000 units and 18,000
from Monday to Friday or 5 days a week.
units, respectively. What is the cost of raw
Overtime was due to company’s production
materials used in 2020 using Simple Average?
inefficiency. What is the amount of labor cost
Answer: 683,100 charged to Overhead?

13. The cost data of LOREGE INC. for the month Answer: 3,510
of April 2011 shows the following:              
17. A, worked a total of 186 hours for the
Payroll of Factory employees, net of taxes month of June 2020. His rate per hour is 450
amounting to 5,600, is 33,450.00; Property per hour. Overtime premium is 30%. The
taxes of Factory plant      6,000 ; Salary of regular working hours of the company is 8 hours
security guard of factory plant 5,000; a day. The company’s regular working days is
Depreciation of Office building 3,500; from Monday to Friday or 5 days a week.
Overtime was due to customer’s specifications / c. Factory supplies
order. What is the amount of labor cost charged d. Common packaging materials
to WIP? e. Depreciation of factory equipment
f. None of the above
Answer: 87,210
2. I. Under normal cost system, overhead is
18.  ABC Corp has just started its operations in
applied though overhead rate so that the
2020. After 6 months, the company has the
product cost per unit will be computed only the
following data: Cost of goods sold is 540,000;
end of the period. 
30% of Manufacturing cost were distributed to
Direct labor cost. Applied overhead is 375,000. II. When the applied overhead is greater than
WIP, ending was 10% of total manufacturing the actual OH account, then, if insignificant, the
cost. Finished goods remaining in stock were cost of sales account will be credited to closed
20% of total cost of goods manufactured.  Over under/over applied overhead.
applied overhead is 10,000 (OH rate is based on
a. TT
DL). What is the overhead rate used for the
b. FF
period?
c. FT
a. 150% d. TF
b. 133%
3. Which of the following costing system makes
c. 167%
use of predetermined overhead rate?
d. 100%
e. Cannot be determined a. Actual
f. None of the above b. Normal
c. Standard
19. One morning, a customer brings a rush
d. Any of the above
order of 2,600 units of product X at a unit sales
price of 50 per unit. The company agrees to 4. I. Manufacturing overhead is the same as
produce the goods at weekend. The regular manufacturing cost.
working days of the company is from Monday
to Friday. Sixty of the direct labor employees II. When actual OH is less than the Applied OH,
who earns 50 per hour worked eight hours each then, if material, shall be closed by debiting the
day on Saturday and Sunday to complete the Finished Goods, WIP and Cost of sales account
job. The company’s policy on overtime during a. TT
weekend is time and a half. Materials costing 3 b. FF
per unit was used on the order. Overhead rate c. FT
is 12 per hour. What is the total product cost d. TF
per unit of product X?
5. The under / over applied overhead shall be
a. 32.91 per unit “presented” at the end of the year in the:
b. 25.89 per unit
c. 35.12 per unit  a. An addition /deduction to cost of sales if
d. 32.50 per unit material
e. None of the above b. Balance sheet
c. Income statement
20. Annual demand is 62,500 units; Purchase d. Deferred charge
price is 100 per unit; Ordering cost is 20 per e. Equity
order and carrying cost is 10% of purchase f. None of the above, because it will be closed
price. How much is the total inventory cost? at the end of the year
Answer: 5000 6. Overhead rate is 42 per machine hour based
Assignment 4 on budgeted OH of 745,000. During the period,
direct labor hours is 26,000 hours and machine
1. The following are included in the Overhead hour sis 25,000. Actual OH is 1,075,000. Per
account except: company’s policy, any amount exceeding
50,000 will be considered material. What is the
a. Salary of material issuers
b. Salaries of Factory managers
amount of OH debited to WIP account under OH is 156,000 and cost of sales is 350,000 at
actual costing system? actual cost. Assume that under or overapplied
overhead is immaterial. What is the ending
a. 1,050,000
balance of WIP account? Answer: 8,000
b. 1,075,000
c. 1,092,000 11. Under this method, overhead of service
d. 1,020,000 departments are allocated not only to
e. None of the above Producing department but also to some other
service departments.
7. Overhead rate is 42 per machine hour based
on budgeted OH of 745,000. During the period, a. Direct method
direct labor hours is 26,000 hours and machine b. Algebraic method
hour sis 25,000. Actual OH is 1,075,000. Per c. Step method
company’s policy, any amount exceeding d. Combination of direct and step
50,000 will be considered material. The under /
12. The following data are available:
over applied will be:
SAN JOSE has two service departments and two
a. Debited to COGS at 25,000
production departments (A and B). Data
b. Debited to COGS at 17,000
provided are as follows:
c. Debited to FG, WIP and COGS for total
amount of 25,000 Assuming direct method is used to allocate
d. Debited to FG, WIP and COGS for total service department cost, what is the total cost
amount of 17,000 of department A?
8. The following data are available for ABC Corp:
Budgeted Overhead is 100,000; Budgeted Direct
labor hours is 25,000 hours; Direct labor rate is
10 per hour; actual direct labor hours is 15,000
hours; raw materials used is 120,000; indirect
labor of 10,000, indirect materials used of
5,000; other overhead cost of 40,000; WIP a. 879.17
increased by 8,000 and Finished Goods b. 612.50
decreased by 2,000. What is the cost of goods c. 1,021.44
sold at normal cost? Assume that under or d. 1,100
overapplied overhead is immaterial. Answer: e. None of the above
319,000 13. Assuming step down method is used to
9. Data are as follows: Beginning balance of RM allocate service department cost, what is the
is 12,000; Purchases of materials totaled total cost of department A? Answer: 6,912.50
400,000; Raw materials account balance 14. SAN JOSE has two service departments and
increased to 20,000; Total Payroll of the two production departments (A and B). Data
company is 300,000 (80% was attributable to provided are as follows:
Production/Factory and remaining was part of
Gen Admin expenses). Indirect material is Assuming reciprocal method is used to allocate
10,000 and indirect labor cost is 5,000. OH rate service department cost, what is the total cost
is 200% of Direct labor cost. Actual OH is of department A?
500,000. WIP increased by 22,000 and FG
inventory decreased by 30,000. What is the cost
of sales at normal cost? Assume that under or
overapplied overhead is immaterial. Answer:
1,095,000

10. Conversion cost is 250,000; Prime cost is a. 455.12

200,000; OH rate is 150% of Direct labor cost; b. 1,212.52
Indirect materials used is 10,000 and indirect c. 365.22
labor is 24,000. Work in process, beginning is d. 256.50
6,000; FG Inventory increased by 4,000; actual e. None of the above
15. Beginning WIP balance is 20,000 (composed
of twos job: Job 1 with total cost of 12,000 and
Job 2). For 2020, three jobs were being
monitored by the company namely: Job 1, Job 2
and Job 3. DM issued to production totaled
50,000 (includes DM issued of 20,000 for Job 1
and 20,000 to Job 2.). Factory payroll, net of
deductions of 5,000, totaled 60,000. Factory
payroll includes DL cot allocated to Job 1 of
10,000. OH rate is 80% of Direct labor cost. OH
applied to Job 2 amounted to 11,200. Assuming
that Job 2 were still in process at the end of the
year. What is the COGM?

Answer: 133,800

16. In general, idle time of direct laborer is

classified as?

a. Overhead
b. Direct labor
c. Period cost
d. Not accounted

17. X Corp produces product X from its two

producing departments. Dept A and Dept B
have budgeted overhead of 1,000,000 and
2,000,000, respectively. Budgeted DL hours are
50,000 hrs and 40,000 hrs for A and B,
respectively. Dept A has actual DL cost of
200,000 (DL rate of 100 per hr) and Dept B has
300,000 (at 150 rate per hr). DM used is
220,000. Using departmental OH rate, what is
the total mfg cost?

Answer: 860,000

18. It supports the materials issued to

production. It includes qty, description and unit
cost of materials issued to production.

a. Material requisition slip 

b. Production report
c. Material issuance report
d. None of the above