one element of the control environment

PROB.1

Carley Products has no work in process or finished goods inventories at the close of business on December 31. The balance of Carley's account as of December 31, are as follows:

Cost of goods sold 2,040,000

Selling and administrative expenses 900,000

Sales 3,600,000

Factory overhead control 700,000

Factory overhead applied 648,000

Carley Products' pretax income for the year is

a. 608,000

b. 660,000

c. 712,000

d. 52,000

PROB. 2

Baker Co. has two departments (Processing and Packing) and uses a job order costing system, Baker applies overhead in Processing based on machine hours and on direct labor cost in Packaging. The following information is available for July:

Processing Packaging

Machine hours 2,500 1,000

Direct labor cost P44,500 P23,000

Applied overhead 55,000 51,750

2a. What is the overhead application rate per machine hour for Processing?

a. 22.00

b. 1.24

c. 17.80

d. 0.81

2b. What is the over applied application rate for Packaging?

a. 23.00

b. 51.75

c. 2.25

d. 0.44

PROB. 3

Zew Co. has a job order costing system and an overhead application rate of 120% of direct labor cost. Job #33 is charged with material of P12,000 and overhead of P7,200. Job # 34 has direct material of P2,000 and direct labor of P9,000. What amount of direct labor costs has been charged to Job #33?

a. 6,000

b. 8,640

c. 7,200

d. 14,400

PROB. 4

Queen Co. is a print shop, which produces jobs to customer specification. During January, Job #123 was worked on the following information is available:

Direct materials used P2,500

Direct labor hours worked 15

Machine time used 16

Direct labor rate per hour P7.00

Overhead application rate per machine hour P18.00

What was the total cost of Job #123 for January?

a. 3 025

b. 2,812

c. 2,770

d. 2,713

PROB. 5

The Lotus Co. manufactures a specialty line of product using a job order costing system. During May, the following costs were incurred in completing Job #03: direct materials, P13,700; direct labor, P4,800; administrative, P1,400; and selling, P5,600. Factory overhead was applied at the rate of P25 per machine hour Job #03 requires 800 machine hours. If Job #03 resulted in 7,000 good units, what is the cost of goods sold per unit?

a. 6.50

b. 6.30

c. 5.70

d. 5.50

PROB. 6

Selected cost data concerning the past fiscal year's operations of the Moscow Manufacturing Co. are presented below:

Inventories

Beginning Ending

Materials P75,000 P85,000

Work in process 80,000 30,000

Finished goods 90,000 110,000

Materials used P326,000. Total manufacturing costs charged to production during the year (including direct materials, direct labor, and factory overhead applied at the rate of 60% of direct labor cost), P686,000. Cost of goods sold available for sale, P826,000. Selling and general expenses, P25,000.

6a.What is the amount of direct materials purchase during the year?

a. 360,000

b. 316,000

c. 336,000

d. 411,000

6b. What is the direct labor cost charged to production during the year?

a. 216,000

b. 135,000

c. 225,000

d. 360,000

6c.What is the cost of goods manufactured during the year?

a. 736,000

b. 716,000

c. 636,000

d. 766,000

6d.What is the cost of goods sold during the year?

a. 716,000

b. 691,000

c. 801,000

d. 736,000

PROB. 7

Beginning Ending

Direct materials P67,000 P60,000

Work in process 145,000 170,000

Finished goods 85,000 70,000

Production data for the same month are:

Direct labor P220,000

Actual factory overhead 145,200

Direct materials purchased 179,300

Transportation in 4,400

Purchase returns and allowances 2,200

Matrix uses one factory overhead control account and charges factory overhead to production at 70% of direct labor cost. The company does not formally recognize over or underapplied overhead until year-end

7a.What prime cost should be reported for October?

a. 408,500

b. 365,000

c. 188,500

d. 181,500

7b. What were the total manufacturing costs incurred during October?

a. 553,700

b. 569,500

c. 408,500

d. 562,500

7c. What was the cost of goods transferred to finished goods inventory for October?

a. 543,700

b. 552,500

c. 528,700

d. 573,500 C.A: 537,500

7d. What was the cost of goods sold for October?

a. 537,500

b. 552,500

c. 522,500

d. 543,700

7e. What was the net debit or credit to factory overhead control for the month of October?

a. Debit of P8,800 overapplied

b. Debit of P8,800 underapplied

c. Credit of P8,800 overapplied

d. Credit of P8,800 underapplied

PROB.8

The following was taken from Kay Co's accounting records for the year ended December 31:

Increase in raw materials inventory 15,000

Decrease in finished goods inventory 35,000

Raw materials purchased 430,000

Direct manufacturing labor payroll 200,000

Factory overhead 300,000

Freight out 45,000

There was no work in process inventory at the beginning or end of the year. Kay's cost of goods sold is

a. 950,000

b. 965,000

c. 975,000

d. 995,000

PROB. 9

Following are Mill Co.'s production costs for October:

Direct materials 100,000

Direct labor 90,000

Factory overhead 4,000

What amount of cost should be treated to specific products in the production process?

a. 194,000

b. 190,000

c. 100,000

d. 90,000

PROB. 10

The following information pertains to Arp. Co's manufacturing operations:

Inventories 3/1 3/31

Direct materials 36,000 30,000

Work in process 18,000 12,000

Finished goods 54,000 72,000

Additional information for the month of March:

Direct materials purchased 84,000

Direct manufacturing labor 60,000

Direct manufacturing labor rate per hour 7.50

Factory overhead rate per direct labor hour 10.00

10a. For the month of March, prime cost was

a. 90,000

b. 120,000

c. 144,000

d. 150,000

10b. For the month of March, conversion cost was

a. 90,000

b. 120,000

c. 144,000

d. 170,000 C.A: 140,000

10c.For the month of March, cost of goods manufactured was

a. 218,000

b. 224,000

c. 230,000

d. 236,000