BACOSTMX – 3TAY2021 – QUIZ 2 JOB ORDER COSTING SYSTEM

General Instruction: Choose the letter which corresponds to the best answer. Good luck!
😊
1. In a job order costing system, the dollar amount of the entry that debits Finished
Goods Inventory and credits Work in Process Inventory is the sum of the costs
charged to all jobs
A. in process during the period.
B. completed during the period.
C. started in process during the period.
D. completed and sold during the period.

2. Which of the following statements about job-order cost sheets is true?

A. If material requisition forms are used, job-order cost sheets do not need to be
maintained.
B. All job-order cost sheets serve as the general ledger control account for Work in
Process Inventory.
C. Job-order cost sheets can serve as subsidiary ledger information for both Work in
Process Inventory and Finished Goods Inventory.
D. Job-order cost sheets show costs for direct material and direct labor, but not for
manufacturing overhead since it is an applied amount.

3. Factory Overhead Control is debited and Work in Process is credited for

A. Factory supplies used in the production
B. Indirect labor used for production
C. Unrecovered cost of spoiled units attributable to all jobs
D. All of the above

4. Which of the following is true about discounts?

A. Quantity discounts represent cost savings for volume purchase
B. When taken method – purchases and liabilities are recorded at gross amounts at
the time of purchase. The quantity discount is only recognized when the account
is paid within the discount period
C. When not taken method – purchase and liabilities are recorded at net at the time
of purchase; when payment is made after the lapse of the discount period, the
quantity discount not availed of is charged to a “ Purchase Discount Lost”
account.
D. All of the above

5. In job order costing system, the use of indirect materials would usually be reflected in
the general ledger as an increase in
A. Materials Control
B. Work in Process Control
C. Manufacturing Overhead Control
D. Manufacturing Overhead Applied

6. When an order for goods is received from a customer or when goods are needed for
stock, ___________________ is sent to the production foreman.
A. Job cost sheet
B. Production order
C. Purchase Order
D. Materials Requisition

7. A copy of the materials requisition slip

 A. is routed to the treasurer's office for payment.
B. can be used as a subsidiary ledger for Raw Materials Inventory.
C. becomes the subsidiary ledger for the Work in Process Inventory.
D. is retained by the storeroom, and the original is sent to accounting.

8. Managers might prefer to use normal costing because

A. it allows them to estimate the cost of a job as soon as the job is completed
B. managers would be able to determine the cost of a job at the end of the year
C. it enables them estimate the cost of a job as soon as the job before it is
completed
D. it enables them to use the budgeted manufacturing overhead rate determined at
the end of the year

9. Spoiled units are

A. the same as defective units
B. charged to period cost since it can no longer be reworked
C. units that can be economically reworked to bring them up to standard
D. units that cannot be economically reworked to bring them up to standard

10. In a job-order costing system, the net cost of normal spoilage is equal to
A. estimated disposal value plus the cost of spoiled work
B. the cost of spoiled work minus estimated spoilage cost
C. the cost of spoiled work minus the estimated disposal value
D. the units of spoiled work times the predetermined overhead rate

11. All of the following methods may be used to account for the revenue from scrap sales
except:
A. Credit Materials, if the scrap would have been able to be recycled.
B. Credit Work in Process, if the scrap is identified with a specific job.
C. Credit Factory Overhead, if the scrap cannot be identified with a specific job.
D. Credit Scrap Revenue, which is included in the “Other Income” section of the
income statement.

12. Which of the following is statements is true?

A. Normal spoilage is considered a period cost.
B. Abnormal spoilage is considered a period cost.
C. Overapplied factory overhead that is material in amount is closed to cost of good
sold at year end.
D. Choices B and C are correct

13. In a production environment that manufactures goods to customer specifications, a

job order costing system
A. can be used only if standard costs are used for materials and labor.
B. may be maintained using either actual or predetermined overhead rates.
C. emphasizes that large customers create the most costs even though they also
provide the most revenues.
D. will provide reasonable product cost information only when all jobs utilize
approximately the same quantities of material and labor.

14. A company services office equipment. Some customers bring their equipment to the
company’s service shop; other customers prefer to have the company’s service
personnel come to their offices to repair their equipment. The most appropriate
costing method for the company is:
A. Job order costing system
 B. Activity-based costing system
C. Process costing system
D. Operation costing system
15. In a job cost system, factory overhead is: (1) Indirect cost of jobs: _____ ; (2)
Necessary element of production: _____.
A. No ; Yes
B. No ; No
C. Yes ; Yes
D. Yes ; No

16. In BAC Company, Job No. 26 is completed at a cost of P4,500 and immediately
delivered to the customer for P7,000 cash. Which of the following should be included
in the journal entry for the above transaction?
A. Debit to cost of sales, P4,500 and credit to Work in Process for P4,500
B. Debit to cost of sales, P7,000 and credit to Finished Goods, P7,000
C. Debit to Finished Goods, P4,500 and credit to Work in Process, P4,500
D. Debit to Accounts Receivable, P7,000 and credit to Sales, P7,000

17. The cost of rework units that are normal and due to the nature of particular jobs
should be charged to:
A. Materials
B. Work in Process
C. Factory Overhead
D. Loss account

For the next two questions:

Danny Manufacturing Company uses job order costing system. Factory
overhead is applied to production at a predetermined rate based on direct labor cost.
Any over or under applied factory overhead is closed to the cost of goods sold
account at the end of each month. Additional information is available as follows:

a. Job 101 was the only job in process at January 31, with accumulated costs of
direct materials, P4,000, direct labor; P2,000 and applied overhead of P3,000.
b. Jobs 102, 103, and 104 were started during February.
c. Direct materials requisition for February totaled P 26,000.
d. Direct labor cost of P20,000 was incurred for February
e. Actual factory overhead was P32,000 for February.
f. The only job still in process on February 28 was job 104, with costs of P2,800
for direct materials and P 1,800 for direct labor.
g. Job 101, 102, and 103 were sold in February.

18. The cost of goods sold for February was (assume after closing the variance if
problem is silent:
A. P 75,700
B. P 77,700
C. P 79,700
D. P 80,000

19. The work in process at end of February was

A. P4,600
B. P6,400
C. P7,300
D. P7,472

For the next three questions:

Rosal Inc. uses a job order cost system. The company purchased direct
materials, 30,000 pieces at P1.40 per piece. The inventories on June 1

Job
Inventories Amount No.
12,000.
Finished goods P 00 1000
1,400.
Work in Process 00 1001
4,500.
Direct Materials 00

Additional costs incurred for the month are presented in the table below.
Manufacturing overhead costs are charged to the jobs on the basis of P35 per direct
labor hour used. The actual manufacturing overhead cost for the month totaled
P35,300. At the end of June, Job Order numbers 1003 and 1006 were still in
process. Only Job Order numbers 1001 and 1005 were left unsold. Mark up is 40%
on cost.
D
i
r
e
c
t
L
a
b
o
r

H
Jo o
b Direct Direct u
No Material Labor r
. s Cost s
4 3
, ,
1 0
10 0 0 5
01 P 0 P 0 0
9 9
, ,
1 0 1
10 5 0 5
02 0 0 0
10 1 2 3
 1 1
, ,
1 0
5 0 5
03 0 0 0
1
3 2
, ,
4 0 2
10 0 0 0
04 0 0 0
1
6 5
, ,
4 0 2
10 5 0 5
05 0 0 0
2 4
, ,
7 8
10 0 0 8
06 0 0 0

20. The cost of goods manufactured is:

A. P62,750
B. P64,150
C. P84,850
D. P86,250

21. Total sales amounted to

A. P47,460
B. P64,120
C. P64,260
D. P80,920

22. Some units of output failed to pass final inspection at the end of the manufacturing
process. The production and inspection supervisors determined that the incremental
revenue from reworking the units exceeded the cost of rework. The rework of
defective units was authorized, and the following costs were incurred in reworking the
units:
 Direct materials requisitioned from stores: 5,300
 Direct labor: 14,000

The supervisors determined that it is proper that the manufacturing overhead budget
should include an allowance for rework. Predetermined manufacturing overhead rate
is 150% of direct labor cost. Which of the following accounts should be charged and
the amount of rework cost to be charged in that account?

A. Work in process inventory, P19,000

B. Work in process inventory, P5,300 and factory overhead control for P35,000
C. Factory overhead control, P19,300
D. Factory overhead control, P40,300

For the next two questions:

Legaspi Company’s Job 143, includes the manufacture of 1,000 coats, which
was completed during September at the unit costs presented below. Final inspection
of Job 1 disclosed 100 spoiled coats which were sold to a jobber for P2,500. Factory
overhead includes allowance for spoilage of P5 per unit.

 Direct materials P60

 Direct labor 40
 Factory Overhead 65

23. Assume that the spoilage is attributable to the exacting specifications of Job 143 and
is charged to this specific job. What would be the unit cost of the good coats
produced on Job 143?
A. P160
B. P165
C. P175
D. P181

24. Assuming that spoilage loss is charged to all production during September. What
would be the unit cost of the good coats produced on Job 143?
A. P160
B. P165
C. P175
D. P181

For the next two questions:

During June, RCR Corporation incurred the following costs on Job 17 for the
manufacture of 2,000 motors.
Direct materials P42,000.00
Direct labor 80,000.00
Factory overhead
(150% of DL) 120,000.00
P242,00
Total 0.00

Direct unit cost of reworking

100 units
P20
Direct materials per unit .00
Direct labor per unit 50.00
P70.
Total 00

25. The cost per unit of this job if the cost to rework was attributable to exacting
specification?
A. P121.00
B. P121.08
C. P124.50
D. P128.25

26. In addition to the rework, the final inspection showed that there are 50 spoiled units
(due to customer’s specifications) which can be sold for a total amount of P3,000.
What would be the selling price per unit if the GP rate based on cost is 40%?
A. P174.30
B. P176.62
C. P179.55
D. P182.00

For the next two questions:

Racquel Manufacturing Corp’s Job 501 for the manufacture of 2,000 coats,
which was completed during June at the unit costs as follows:

27.
Direct materials P 00

28.
Direct labor 00

Factory overhead (includes allowance 35.

for spoilage of P1) 00

90.
Unit Cost P 00

Final inspection of Job 501 disclosed 200 spoiled coats which were sold to a
local jobber for P57.50 per unit.

27. If the spoilage is attributable to the exacting specification of Job 501, the unit cost of
good coats is
A. P89.00
B. P90.00
C. P92.50
D. P98.89

28. If the spoilage is normal and common to all jobs, what was the total sales if gross
profit is 1/3 of sales?
A. P216,000
B. P243,000
C. P249,750
D. P270,000

For the next two questions:

MODCOS Corp has the following data:
Inventories: March 1 March 31
Raw material P18,000 P15,000
Work in process 9,000 6,000
Finished goods 27,000 36,000
 Additional information for March:
Raw material purchased P42,000
Direct labor payroll 30,000
Direct labor rate per hour 7.50
Overhead rate per direct labor hour 10.00

29. Prime cost incurred were

A. P75,000.
B. P69,000.
C. P45,000.
D. P39,000.

30. Cost of Goods Manufactured was

A. P118,000.
B. P115,000.
C. P112,000.
D. P109,000.

31. Work in process inventory of Sunshine Company increased P115,000 from the
beginning to the end of October. Cost incurred during October were P120,000 for
materials used, P630,000 for direct labor, and P210,000 for overhead. What is the
cost of goods manufactured for October?
A. P 730,000
B. P 845,000
C. P 960,000
D. P1,075,000

32. Sam knows the following about the production process in her plant: Prime costs are
40 percent of total manufacturing cost. Direct labor is 25 percent of factory overhead
costs. Factory overhead is P600,000. What is the direct materials costs?
A. P 150,000
B. P 250,000
C. P 400,000
D. P1,000,000

33. Trump Company manufacture Micro Chips for electronics industry. It receives
various job orders. For the month of October. It started work on two orders, Acer and
Asus.
 The total materials costs for both orders were estimated at P800,000 of which
60% applies to Acer and 40% to Asus.
 Direct labor hours were estimated at 700 for Acer and 400 for Asus. Labor
rate amounted to P180 per hour.
 Variable overhead varies at the rate of P100 per hour.
 By the end of October, 75% of the required materials were issued to
production amounted to P 900,000. Also, the two orders were all 50%
completed with respect to labor and overhead. Labor hours for the month
were charged 360 to Acer and 180 to Asus. Variable overhead equated to
the hourly rate given.
 The total actual cost for Acer order for the month is:

A. P 523,500
B. P 640,800
C. P 658,000
D. P 676,000

34. Under Love Company’s job order costing system, manufacturing overhead is applied
to work-in-process using a predetermined annual overhead rate. During January
2020 Love’s transactions included the following:
 Direct materials issued to production: 90,000
 Indirect materials issued to production: 8,000
 Manufacturing overhead incurred: 125,000
 Manufacturing overhead applied: 113,000
 Direct labor costs: 107,000
Love had neither beginning nor ending work-in-process inventory. What was the cost
of jobs completed in January 2020?
A. 318,000
B. 310,000
C. 322,000
D. 330,000

35. If production loss ka sa job order costing system, ano ka at bakit?

A. Scrap inventory po dahil tira-tira na lang yung pag-ibig na nakukuha ko mula sa
kanya. Pero may pag-asa pa po kasi baka i-reuse.
B. Normal spoilage po dahil wala na talagang pag-asa na ma-recover.
C. Defective units po kasi kahit complicated, pwede pa naman i-rework ang
relationship.
D. Pasensya na pero good units po ako sa cost of goods manufactured. Can’t
relate.