1.

The employer’s portion of SSS premiums is:

A. an expense for the employee
B. an expense for the employer
C. a revenue for the employee
D. a revenue for the employer

2. “Take home pay” or net pay means

A. gross pay plus the amount paid for you by your employer for SSS Premiums and
Medicare Contributions
B. gross pay less all deductions
C. the amount earned per hour times number of hours worked
D. gross pay less only income tax withheld

3. Factory workers’ fringe benefits are usually charged to

A. work in process
B. direct labor
C. administrative expense
d. factory overhead control

4. Income taxes withheld are levied on the

a. employee only
b. employer only
c. both employee and employer in equal amounts
d. both employee and employer in unequal amounts

5. To avoid congestion at the time clock, it is desirable that one employee punch
in or out for several other employees
a. true
b. false

6. Which of the following deductions are not levied on the employer?

a. income taxes withheld
b. sss premiums
c. medicare contributions
d. none of the given

7. if the entry to assign factory labor shoes only a debit to work in process
inventory, then all labor costs were
a. direct labor
b. indirect labor
c. overtime related
d. regular hours
8. Payroll deductions are based on the gross earnings of the employee (regular
earnings plus overtime pay).
a. true
b. false

9. Which of the following journal entries records the accrual of the cost of indirect
labor used in production?
a. debit work in process inventory, credit wages payable
b. debit work in process inventory, credit manufacturing overhead
c. debit manufacturing overhead, credit work in process inventory
d. debit manufacturing overhead, credit wages payable

10. indirect labor cost is recorded by a debit to work in process account

a. true
b. false

11. which of the following is usually prepared daily by employees for each job
worked on?
a. labor time ticket
b. time card
c. punch card
d. cost control card

12. to better provide for a good division of labor, one individual should be in
charge in time keeping and payroll record keeping and distribution functions.
a. true
b. false

13. idle time of factory workers is usually charged to

a. work in process account
b. direct labor
c. administrative expense
d. factory overhead control

14. employers are required to prepare w-2 forms for every employee at the end
of the calendar year. these forms are used by the employee for:
a. filing for social security benefits when retired
b. filing for an income tax return every year
c. filing for unemployment benefits when unemployed
d. determining how much income tax to withhold form an employee’s earnings
for each pay period next year
15. in ideal circumstances, each payroll check is delivered personally to the
employee who signs a receipt for it.
a. true
b. false

16. the amount debited to the work in process account represents the total
amount of direct labor (at regular rate) charges to the different jobs in process.
a. true
b. false

17. factory labor costs

a. accumulate in advance of utilization
b. accumulate in a control account
c. include sick pay earned by factory workers
d. accumulate in the factory labor expense account

18. an entry is made debiting accrued payroll and crediting cash when payroll
checks drawn against a payroll checking account are issued
a. true
b. false

19. fringe benefits of sales personnel is usually charged to

a. work in process account
b. administrative expense
c. selling expense
d. factory overhead control

20. Overtime premium, incurred on rush jobs are requested by the customer, who
has agreed to pay for the special service, may be charged to
a. work in process account
b. direct labor
c. administrative expense
d. factory overhead control

21. the labor costs that have been identified as indirect labor should be charged
to
a. manufacturing overhead
b. direct labor
c. the individual jobs worked on
d. salary expense
22. the labor time ticket contains a detailed summary of the direct and the
indirect labor hours of an employee
a. true
b. false

23. remuneration for manual labor, both skilled and unskilled, is commonly
referred to as salaries
a. true
b. false

24. A semi-monthly payroll summary made from time tickets shows the following
data:
1. Austria (Direct) with rate of P36 per hour, worked 80 regular hours and 6
overtime,
2. Bautista (Direct) with rate of P36 per hour, worked 80 regular hours and 8
overtime,
3. De Santos (Direct) with rate of P45 per hour, worked 80 regular hours and 6
overtime,
4. Motus (Indirect) with rate of P30 per hour, worked 80 regular hours and 0
overtime, and
5. Reyes (Indirect) with rate of P30 per hour, worked 80 regular hours and 2
overtime.
Overtime is payable at one-and-a-half times the regular rate of pay for an
employee. What is the journal entry for the distribution of the total payroll?

ANSWER:

Work in Process 9,747

FOH-C 4,830
Payroll 14,573

25. Calma Company uses a standard cost system. The following budget, at
normal capacity, and the actual results are summarized for the month of
December:
Direct labor hours 24,000;
Fixed factory OH P108,000;
Total factory OH per DLH P 6.50.
Actual data for December were as follows:
Direct labor hours worked 22,000;
Total factory OH (30% is variable) P147,000.
Compute for Variable Spending variance.

ANSWER: 5,100 favorable

Actual factory overhead 147,000
Less: Budget allowed on actual hours
Fixed (108,000)
Variable (44,100)
Spending variable- favorable 5,100 favorable

26. ABC Company operates its factory on a two-shift basis and pays a late-shift
differential of 15%. ABC also pays a premium of 50% for overtime work. Since ABC
manufactures only for stock, the cost system provides for uniform direct labor
hourly charges for production done without regard to shift worked or work done
on an overtime basis. Overtime are due to customer specifications and late-shift
differentials are normal to the production. The May payroll for production workers
is as follows:
Wages at basis direct-labor rates P325,000;
Shift differentials P25,000;
and Overtime premiums P10,000.
For the month of May, what amount of direct labor should ABC charge to work-
in-process?

ANSWER:
325,000
Wages at basis direct-labor rates P325,000

27. Becker Company developed the following data for the current year:
Beginning work in process inventory P60,000;
Direct materials used P36,000;
Actual overhead P72,000;
Overhead applied P54,000;
Cost of goods manufactured P66,000;
Total manufacturing costs P180,000.
Becker Company's direct labor cost for the year is:

ANSWER: 90,000
Total manufacturing costs 180,000
Direct materials used (36,000)
Overhead applied (54,000)
Direct labor cost 90,000

28. The Norman Company recently adopted an incentive plan. Factory workers
are paid P 7.50 per unit with a guaranteed minimum wage of P 2 000 per day.
Following is a report on employees’ productivity for the week ending May 19,
2018. All employees worked full 40-hour week. Summary of units produced by
each employee: Cruz 240 units, Briones 286 units, David 275 units, Mendoza 240
units, Rivera 225 units, and Tolentino 285 units. How much is charged to total
factory overhead control?
ANSWER: 712.5
Total of gross pay- total of earnings
=12,345-11,632.5
=712.5

29. Calma Company uses a standard cost system. The following budget, at
normal capacity, and the actual results are summarized for the month of
December: Direct labor hours 24,000; Fixed factory OH P108,000; Total factory OH
per DLH P 6.50. Actual data for December were as follows: Direct labor hours
worked 22,000; Total factory OH (30% is variable) P147,000. Idle Capacity
Variance.

ANSWER: 13,000 unfavorable

24,000x6.50=156,000+108,000= 264,000
22,000x6.50=143,000+108,000= (251,000)
13,000 unfavorable

30. In the equation Y = P4,000 + P3X; Y is the cost of workers' compensation

insurance and X is direct labor hours. According to this equation, a 100-hour
change in total direct labor hours will change the cost of workers compensation
insurance by:

ANSWER: 300
3x100=300

31. ABC, an inexperienced accountant, thought that the overtime was due to the
specifications of the customer well in fact it is due to its employees. ABC made
the following Journal Entry for the month of February: 1. Dr. Salaries Expense
P14,000, Cr. Accrued Payroll P14,000; 2. Dr. Work in Process P8,000, Dr. Factory
Overhead Control P2,800, Cr. Accrued Payroll P10,800. Employee B worked 50
hours per week. The company pays their employees at 50 per hour and 70 per
hour for overtime. Prepare the Correcting Entries to be made by ABC:

32. The production manager is unable to locate the 2015 budget. You have
managed to recover the following information for him (Activity Center- OH
Budget/ Cost Driver/ and Budgeted Cost Driver Level, respectively): 1. Quality
Control-P14,000/Inspection Hours/350 hours; 2. Engineering- P42,000/Engineering
Hours/600 hours; 3. Waste Disposal- P15,000/Pounds of Waste/5,000 pounds; 4.
Miscellaneous OH- P ____________/ Direct Labor Hours/ 10,000 hours. You have also
obtained the following information pertaining to the most recent customer order,
which you learned was assigned an overhead cost of P 9,500: Direct Labor Hours
2,000; Engineering Hours 55; Inspection Hours 50; Waste disposed in pounds 430.
The amount of miscellaneous OH budgeted for 2015 was?
33. If annual overhead costs are expected to be P600,000 and direct labor costs
are expected to be P1,000,000, then A P1.67 is the predetermined overhead rate.
B for every peso of manufacturing overhead, 60 cents of direct labor will be
assigned. C for every peso of direct labor, 60 cents of manufacturing overhead
will be assigned. D a predetermined overhead rate cannot be determined.

34. total factory labor cost is composed of direct labor and indirect labor.
A. TRUE
B. FALSE

35. AA Company finished Job 100 having costs charged to Work in Process 30,000,
the overtime was due to the request of AA. The company pays its employee
500/hr and 150% of the regular rate for overtime. If the overtime was due to the
inefficiency of the management, what is the total Payroll cost for Job 100?

36. The Norman Company recently adopted an incentive plan. Factory workers
are paid P 7.50 per unit with a guaranteed minimum wage of P 2 000 per day.
Following is a report on employees’ productivity for the week ending May 19,
2018. All employees worked full 40-hour week. Summary of units produced by
each employee: Cruz 240 units, Briones 286 units, David 275 units, Mendoza 240
units, Rivera 225 units, and Tolentino 285 units. What amount should be charged
to Work in Process?

37. A semi-monthly payroll summary made from time tickets shows the following
data:
1. Austria (Direct) with rate of P36 per hour, worked 80 regular hours and 6
overtime,
2. Bautista (Direct) with rate of P36 per hour, worked 80 regular hours and 8
overtime,
3. De Santos (Direct) with rate of P45 per hour, worked 80 regular hours and 6
overtime,
4. Motus (Indirect) with rate of P30 per hour, worked 80 regular hours and 0
overtime, and
5. Reyes (Indirect) with rate of P30 per hour, worked 80 regular hours and 2
overtime.
Overtime is payable at one-and-a-half times the regular rate of pay for an
employee.
How much is the gross pay of all the employees?

38. FLEX Company uses a flexible budget. The following are sales and cost
budgeted for 2015: No Beginning Inventories; Unit sales 20,000; No Ending
Inventories; Sales P 200,000; Budgeted production Costs P 130,000; Gross Profit P
70,000. The 2015 budgeted sales level was the normal capacity level used in
calculating the predetermined OH rate per direct labor. At the end of 2015, the
company reported production and sales of 18,400 units. Total OH incurred was
exactly equal to the budgeted OH for the year. At December 31, OH was under
applied by P 2,000. How much is the total fixed OH.

39. The following information was collected on three jobs (Job 101, 102, and 103,
respectively) that were completed during the year: Direct Materials - P5,000,
P12,000, and P8,000; Direct Labor - P2,000, P2,000, P4,000; Units Completed - 100,
50, 200; Number of setups - 1, 2, 4; Number of inspections 20, 10, 30; Number of
material moves 30, 10, 50; Engineering Hours - 10, 50, 10. Budgeted direct labor
cost was $100,000, and budgeted direct material cost was $280,000. If the
company uses activity-based costing, how much overhead cost should be
allocable to Job 101?

40. F&B Company pays time and a third for hours in excess of 40 hours per week.
An individual is paid P24.00 per hour and worked 45 hours a week. The weekly
earnings of the employee will amount to:

41. TriCo would like to institute an activity-based costing system to price products.
The company's Purchasing Department incurs costs of P550,000 per year and has
six employees. Purchasing has determined the three major activities that occur
during the year (Activity-Allocation Measure/# of people/Total Cost): 1. Issuing
Purchase Orders - # of purchase orders/ 1/ P150,000; 2. Reviewing receiving hours
- # of receiving reports/ 2/ P175,000; 3. Making phone calls - # of phone calls/ 3/
P225,000. During the year, 50,000 phone calls were made in the department;
15,000 purchase orders were issued; and 10,000 shipments were received.
Product A required 200 phone calls, 150 receiving reports, and 50 purchase
orders. Product B required 350 phone calls, 400 receiving reports, and 100
purchase orders. Determine purchasing department cost per unit if 1,500 units of
Product A and 3,000 units of Product B were manufactured during the year.

42. Twenty workers, paid at a wage rate of P10.50 per hour, worked 40 hours each,
entirely to Job 1010 during the past week. Eighteen others, who are paid at a
wage rate of P7.50 per hour, spent a fifth of their 40-hour week on Job 1010 and
the remainder of their time on Job 1011. In addition, Kyle Motus, a part-timer,
worked on Job 1010 for 16 hours but was unable to work 4 hours because of the
inefficiency of his fellow workers in a prior stage. Kyle earns P9.25 per hour. Salaries
for supervisors and maintenance personnel related to Job 1010 amounted to
P1,250. Assuming that payroll withholdings are ignored and Jobs 1010 and 1011
are the only jobs being performed, what is the entry to record labor cost?

43. The following information was collected on three jobs (Job 101, 102, and 103,
respectively) that were completed during the year: Direct Materials - P5,000,
P12,000, and P8,000; Direct Labor - P2,000, P2,000, P4,000; Units Completed - 100,
50, 200; Number of setups - 1, 2, 4; Number of inspections - 20, 10, 30; Number of
material moves -30, 10, 50; Engineering Hours - 10, 50, 10. Budgeted direct labor
cost was $100,000, and budgeted direct material cost was $280,000. If the
company uses activity-based costing, compute the cost of each unit of Job 102.

44. FLEX Company uses a flexible budget. The following are sales and cost
budgeted for 2015: No Beginning Inventories; Unit sales 20,000; No Ending
Inventories; Sales P 200,000; Budgeted production Costs P 130,000; Gross Profit P
70,000. The 2015 budgeted sales level was the normal capacity level used in
calculating the predetermined OH rate per direct labor. At the end of 2015, the
company reported production and sales of 18,400 units. Total OH incurred was
exactly equal to the budgeted OH for the year. At December 31, OH was under
applied by P 2,000. How much is OH rate per unit?

45. The Norman Company recently adopted an incentive plan. Factory workers
are paid P 7.50 per unit with a guaranteed minimum wage of P 2 000 per day.
Following is a report on employees’ productivity for the week ending May 19,
2018. All employees worked full 40-hour week. Summary of units produced by
each employee: Cruz 240 units, Briones 286 units, David 275 units, Mendoza 240
units, Rivera 225 units, and Tolentino 285 units. What is the total weekly gross pay
of all the employees?

46. The production manager is unable to locate the 2015 budget. You have
managed to recover the following information for him (Activity Center- OH
Budget/ Cost Driver/ and Budgeted Cost Driver Level, respectively): 1. Quality
Control-P14,000/Inspection Hours/350 hours; 2. Engineering- P42,000/Engineering
Hours/600 hours; 3. Waste Disposal- P15,000/Pounds of Waste/5,000 pounds; 4.
Miscellaneous OH- P ____________/ Direct Labor Hours/ 10,000 hours. You have also
obtained the following information pertaining to the most recent customer order,
which you learned was assigned an overhead cost of P 9,500: Direct Labor Hours
2,000; Engineering Hours 55; Inspection Hours 50; Waste disposed in pounds 430.
The amount of miscellaneous OH charged to the most recent customer order
was?

47. Calma Company uses a standard cost system. The following budget, at
normal capacity, and the actual results are summarized for the month of
December:
Direct labor hours 24,000;
Fixed factory OH P108,000;
Total factory OH per DLH P 6.50.
Actual data for December were as follows:
Direct labor hours worked 22,000;
Total factory OH (30% is variable) P147,000.
Compute for Fixed Spending variance.
48. The Evergreen Company produces tools on a job order basis. During May, two
jobs were completed, and the following costs were incurred: JOB 401 (Direct
Materials P28,000 and Direct Labor-Regular P18,000), and JOB 402 ( Direct
Material P37,000, Direct Labor-Regular P23,000, and Direct Labor Overtime
Premium P6,000). Other factory costs for the month totals P 16 800. Factory
overhead costs are allocated one fourth to JOB 401 and three-fourths to JOB 402.
What is the cost of JOB 401 if overtime is caused by a rush order?

49. Escudero Manufacturing Co. has provided you with the following information:
Raw materials purchased P 137,000; Beginning raw materials inventory P100,000;
Ending raw materials inventory P175,000; Factory overhead (excluding P85,000 of
indirect Labor and P20,000 of indirect materials) P227,500; Total manufacturing
cost P970,000. Direct labor cost for the year amounted to:

50. The FLEX Company uses a flexible budget. The following are sales and cost
budgeted for 2015: No Beginning Inventories; Unit sales 20,000; No Ending
Inventories; Sales P 200,000; Budgeted production Costs P 130,000; Gross Profit P
70,000. The 2015 budgeted sales level was the normal capacity level used in
calculating the predetermined OH rate per direct labor. At the end of 2015, the
company reported production and sales of 18,400 units. Total OH incurred was
exactly equal to the budgeted OH for the year. At December 31, OH was under
applied by P 2,000. What is the total spending variance? Favorable or
Unfavorable? What is the total idle capacity variance? Favorable or
Unfavorable?

51. A semi-monthly payroll summary made from time tickets shows the following
data: 1. Austria (Direct) with rate of P36 per hour, worked 80 regular hours and 6
overtime, 2. Bautista (Direct) with rate of P36 per hour, worked 80 regular hours
and 8 overtime, 3. De Santos (Direct) with rate of P45 per hour, worked 80 regular
hours and 6 overtime, 4. Motus (Indirect) with rate of P30 per hour, worked 80
regular hours and O overtime, and 5. Reyes (Indirect) with rate of P30 per hour,
worked 80 regular hours and 2 overtime. Overtime is payable at one-and-a-half
times the regular rate of pay for an employee. How much is the gross pay of De
Santos?

52. Roland Factory provides for an incentive scheme for its factory workers which
features a combined minimum guaranteed wage of P1,875 per week and piece
rate of P11.50. Production report for the week shows the following units produced
by each employee: R 67 units; O 78 units; L 80 units; A 82 units; N 72 units; and D
75 units. The portion of the weekly payroll that should be charged to factory
overhead is:
53. Roland Factory provides for an incentive scheme for its factory workers which
features a combined minimum guaranteed wage of P1,875 per week and piece
rate of P11.50. Production report for the week shows the following units produced
by each employee: R 67 units; O 78 units; L 80 units; A 82 units; N 72 units; and D
75 units. The portion of the weekly payroll that should be charged to work in
process is:

54. The Norman Company recently adopted an incentive plan. Factory workers
are paid P 7.50 per unit with a guaranteed minimum wage of P 2 000 per day.
Following is a report on employees' productivity for the week ending May 19, 2018.
All employees worked full 40-hour week. Summary of units produced by each
employee: Cruz 240 units, Briones 286 units, David 275 units, Mendoza 240 units,
Rivera 225 units, and Tolentino 285 units. What is Briones' weekly gross pay?

55. Kline Manufacturing has the following labor costs: Factory Gross wages
P117,000; Factory-Net wages P96,000; Employer Payroll Taxes Payable P15,000.
The entry to record the cost of factory labor and the associated payroll tax
expense will include a debit to Factory Labor for?

56. The Evergreen Company produces tools on a job order basis. During May, two
jobs were completed, and the following costs were incurred: JOB 401 (Direct
Materials P28,000 and Direct Labor-Regular P18,000), and JOB 402 ( Direct
Material P37,000, Direct Labor-Regular P23,000, and Direct Labor Overtime
Premium P6,000). Other factory costs for the month totals P 16 800. Factory
overhead costs are allocated one fourth to JOB 401 and three-fourths to JOB 402.
What is the cost of JOB 402 if overtime results from the requirements of a specific
job?

57. ABC Corp. which manufactured plastic coated metal clips. The information
was among ABC's year-end manufacturing costs. Wages are: Machine operators
P200,000; Maintenance workers P30,000; Factory foremen P90,000. ABC's year-
end Direct Labor is:

58. New Rage Cosmetics has used a traditional cost accounting system to apply
quality control costs uniformly to all products at a rate of 14.5% of direct labor
cost. Monthly direct labor cost for Satin Sheen makeup is P27,500. In an attempt
to distribute quality control costs more equitably, New Rage is considering
activity-based costing. The monthly data shown in the chart below have been
gathered for Satin Sheen (Activity - Cost Driver/ Cost Rates/ Quantity for Satin
Sheen): 1. Incoming material inspection - Type of material P11.50 per type/ 12
types; 2. In-process Inspection - Number f units/ P0.14 per unit/ 17,500 units; 3.
Product Certification - Per Order/ P77 per order/ 25 orders. At what amount the
monthly quality control cost assigned to Satin Sheen makeup using activity-based
costing is higher than using traditional system.
59. The FLEX Company uses a flexible budget. The following are sales and cost
budgeted for 2015: No Beginning Inventories; Unit sales 20,000; No Ending
Inventories; Sales P 200,000; Budgeted production Costs P 130,000; Gross Profit P
70,000. The 2015 budgeted sales level was the normal capacity level used in
calculating the predetermined OH rate per direct labor. At the end of 2015, the
company reported production and sales of 18,400 units. Total OH incurred was
exactly equal to the budgeted OH for the year. At December 31, OH was under
applied by P 2,000. What is the total spending variance? Favorable or
Unfavorable?

60.