PROBLEM 11 CR Company has the following estimated costs for the next year. Direct materials Direct labor P4,000 20,000 15,000 25,000 8,000 10,000 12,000 Rent on factory building Sales salaries Depreciation on factory equipment . Indirect labor Production supervisor's salary 14. CR Company estimates that 20,000 labor hours will be worked during the year. If overhead is applied on the basis of direct labor hours, the overhead rate per hour will be: a. P2.25. b. P3.25. c. P3.45. d. P4.70.
PROBLEM 11 CR Company has the following estimated costs for the next year. Direct materials Direct labor P4,000 20,000 15,000 25,000 8,000 10,000 12,000 Rent on factory building Sales salaries Depreciation on factory equipment . Indirect labor Production supervisor's salary 14. CR Company estimates that 20,000 labor hours will be worked during the year. If overhead is applied on the basis of direct labor hours, the overhead rate per hour will be: a. P2.25. b. P3.25. c. P3.45. d. P4.70.
Chapter4: Job Order Costing
Section: Chapter Questions
Problem 12PA: The following data summarize the operations during the year. Prepare a journal entry for each...
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Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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Transcribed Image Text:PROBLEM 11
CR Company has the following estimated costs for the next year:
Direct materials
P4,000
20,000
15,000
25,000
8,000
10,000
12,000
Direct labor
Rent on factory building
Sales salaries
Depreciation on factory equipment .
Indirect labor
Production supervisor's salary
14. CR Company estimates that 20,000 labor hours will be worked during the year. If overhead is applied on the
basis of direct labor hours, the overhead rate per hour will be:
a. P2.25.
b. Р3.25.
с. Р3.45.
d. P4.70.
PROBLEM 12
Lucy Sportswear manufactures a specialty line of T-shirts. The company uses a job-order costing system. During
March, the following costs were incurred on Job ICU2: direct materials P13,700 and direct labor P4,800. In
addition, selling and shipping costs of P7,000 were incurred on the job. Manufacturing overhead was applied a the
rate of P25 per machine-hour and Job ICU2 required 800 machine-hours.
15. If Job ICU2 consisted of 7,000 shirts, the Cost of Goods Sold per shirt was:
a. P6.50
b. P6.00
c. P5.70
d. PS.50
PROBLEM 13
Worrell Corporation has a job-order cost system. The following debits (credits) appeared in the Work in Process
account for the month of March:
March 1, balance.
March 31, direct materials
March 31, direct labor .
P12,000
40,000
30,000
27,000
(100,000)
March 31, manufacturing overhead applied
March 31, to finished goods .
Worrell applies overhead at a predetermined rate of 90% of direct labor cost. Job No. 232, the only job still in
process at the end of March, has been charged with manufacturing overhead of P2,250.
16. What was the amount of direct materials charged to Job No. 232?
a. P2,250
b. Р2.500
c. P4,250
d. P9,000
PROBLEM 14
Wayne company uses a job costing system and applies overbead to jobs using a predetermined overbead rate
based on direct labor-hours. The company had the following inventories at the beginning and end of March:
March 31
P30,000
12,000
72,000
March 1
Direct Materials..
Work in Proces..
P36,000
18,000
54,000
Finished Goods.
The following additional data pertain to operations during March:
Direct materials purchased.
Direct labor cost.
P84,000
P60,000
P7.50 per direct labor-hour
P10.00 per direct labor-hour
Direct labor rate.
Overhead rate..
17. During March total debits to Work in Process were:
a P84,000.
b. P220,000.
c. P144,000.
d. P230,000.
Transcribed Image Text:Use the following to answer the next three questions:
The following were taken from the books of Marvin Company.
March 31
P167,000
January 1
P268,000
Raw materials
Work in process
Finished goods
P43,000
(100 units)
Materials purchased
Direct labor
(200 units)
P1,946,700
2,125,800
Factory overhead
Sales
764,000
(12,400 units at P535)
The company uses the FIFO method for costing inventories.
7. The number of units manufactured is:
c. 12,500
d. 15,200
a 11.900
b. 12,000
8. The cost of goods manufactured per unit is:
a. P300
b. P350
c. P395
d. P420
9. The cost of goods sold is:
a. P4,091,500
b. P4,109,500
c. P4,901,500
d. P4,910,500
PROBLEM 7
The Work in Process inventory acount of a manufacturing company shows a balance of P2,400 at the end of an
accounting period. The job cost sheets of the two uncompleted jobs show charges of P400 and P200 for direct
materials, and charges of P300 and PS00 for direct labor.
10. From this information, it appears that the company is using a predetermined overhead rate, as a percentage of
direct labor costs, of:
a 80%.
b. 125%.
c. 300%.
d. 240%.
PROBLEM 8
Freeman Company uses a predetermined overhead rate based on direct labor hours to apply manufacturing overhead
to jobs. At the beginning of the year, the company estimated manufacturing overhead would be PI50,000 and direct
labor hours would be 10,000. The actual figures for the year were P186,000 for manufacturing overhead and 12,000
direct labor hours.
11. The cost records for the year will show:
a. overapplied overhead of P30,000.
b. underapplied overhead of P30,000.
c. underapplied overhead of P6,000.
d. overapplied overhead of P6,000.
PROBLEM 9
Harrell Company uses a predetermined overhead rate based on direct labor hours to apply manufacturing overhead
to jobs. At the beginning of the year the company estimated its total manufacturing overhead cost at P400,000 and
its direct labor-hours at 100,000 hours. The actual overhead cost incurred during the year was P350,000 and the
actual direct labor hours incurred on jobs during the year was 90,000 hours.
12. The manufacturing overhead for the year would be:
a. PI0,000 underapplied.
b. PI0,000 overapplied.
c. P50,000 underapplied.
d. P50,000 overapplied.
PROBLEM 10
Simplex Company has the following estimated costs for next year:
Direct materials ....
Direct labor .
Sales commissions .
Salary of production supervisor
Indirect materials
P15,000
55,000
75,000
35,000
5,000
11,000
16,000
Advertising expense
Rent on factory equipment
13. Simplex estimates that 10,000 direct labor and 16,000 machine hours will be worked during the year. If
overhead is applied on the basis of machine hours, the overhead rate per hour will be:
a. P8.56.
b. P7.63.
c. P6.94.
d. P3.50.
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