Manufacturing - MCQs ( Answers) PDF

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**Accounting For Manufacturing Business **MULTIPLE CHOICE QUESTIONS The books of Cross Co. showed the following for the month of January: January 1 January Raw materials P16,000 P17, Work in Process 16,000 24, Finished Goods 28,000 36, Direct labor 32, Factory Overhead: Actual 25, Cost of goods sold...

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Accounting)For)Manufacturing)Business) ) MULTIPLE)CHOICE)QUESTIONS) ) ! 1. The!books!of!Cross!Co.!showed!the!following!for!the!month!of!January:! ! ! January!1! January!31! Raw!materials! P16,000! P17,200! Work!in!Process! 16,000! 24,000! Finished!Goods! 28,000! 36,000! Direct!labor! ! 32,000! Factory!Overhead:! ! ! !!!!!Actual! ! 25,000! Cost!of!goods!sold! ! 112,500! ! What!is!the!cost!of!goods!manufactured?! ! A. P148,500! B. P120,500! C. P144,500! D. P128,500! ! Solution:) ! Finished)Goods)Inventory) Jan.!1! 28,000! ! COGS! 112,500! 120,500& ! Jan.!31! COGM! 36,000! ! ! 2. The! total! manufacturing! cost! for! the! period! is! P600,000.! Total! conversion! cost!is!P300,000.!The!factory!overhead!is!1/3!of!conversion!cost.!How!much! is!the!amount!of!direct!material?! ! A. P100,000! B. P200,000! C. P300,000! D. P500,000! ! ) ) ) ) ) Solution:) )

Total!manufacturing!cost! Less:!Conversion!Cost! Direct!materials!used!

P600,000! !!!!!!!!!!300,000! P300,000!

! 3. The! total! finished! goods! inclusive! of! goods! manufactured! for! the! current! period! is! P575,000.! The! unsold! finished! goods! at! the! end! of! the! period! is! P125,000.!!The!cost!of!goods!sold!is!360%!of!ending!inventory.!How!much!is! the!cost!of!goods!sold!if!sale!is!P562,000?! ! A. P450,000! B. P325,000! C. P162,000! D. P125,000! ! Solution:) ) Total!Goods!Available!For!Sale! P575,000! Less:!Finished!Goods!Inventory,!End! !!!!!!!125,000! Cost!of!Goods!Sold! P450,000! ! ! 4. The!total!cost!of!goods!manufactured!is!P575,000.!The!work!in!process!at!the! end!of!the!period!is!P50,000!more!than!the!work!in!process!at!the!beginning.! How!much!is!the!amount!of!total!manufacturing!cost?! ! A. P625,000! B. P575,000! C. P525,000! D. P475,000! ! Solution:) ! Increase!in!Work!in!Process!Inventory! P!!!50,000! Cost!of!Goods!Manufactured! !!!!!575,000! Total!Manufacturing!Cost! P625,000! ! ! 5. The!total!manufacturing!cost!is!P160,000!and!the!cost!of!goods!manufactured! is!P125,000.!If!the!finished!goods!ending!inventory!is!P50,000!more!than!the! beginning!inventory,!what!is!the!amount!of!cost!of!sales?! ! A. P175,000! B. P110,000! C. P85,000! D. P75,000! !

Solution:) ) Cost!of!Goods!manufactured! Less:!Increase!in!Finished!Goods!Inventory! Cost!of!Sales! ! ! !

P125,000! !!!!!!!!!50,000!!! P!!!75,000!

Or,!

Beg.! COGM!

Finished)Goods)Inventory) -0-! ! COGS! 125,000! ! End.!

75,000& 50,000!

! ! 6. The! total! cost! put! into! process! for! the! period! is! P600,000.! Total! conversion! cost!is!P300,000.!The!factory!overhead!is!1/3!of!direct!materials.!How!much! is!the!amount!of!direct!materials?! ! A. P100,000! B. P200,000! C. P300,000! D. P500,000! ! ! 7. The! total! units! put! into! process! are! 1,000! pieces.! The! total! cost! put! into! process!is!P48,750.!At!the!end!of!the!period,!actual!inventory!count!resulted! to:! ! Units!Counted! Percent!Completed! 250!pcs.! 8%! 150!pcs.! 20%! 600!pcs.! 100%! ! There! are! no! beginning! and! ending! inventories! of! finished! goods.! If! even! distribution!of!costs!is!applied,!what!is!the!amount!of!cost!of!goods!sold?! ! A. P3,750! B. P29,250! C. P45,000! D. P48,750! ! Solution:! Unit!Cost!(P48,750/!1,000!pcs.)! ! P!!48.75! Cost!of!Goods!Sold!(600!pcs.!x!P48.75)! P29,250! ! !

8. The!total!number!of!units!put!into!process!is!1,000!pieces.!The!total!cost!put! in! process! is! P351,425.! At! the! end! of! the! period,! actual! inventory! count! resulted!to:! ! Units!Counted! Percent!Completed! 200!pcs.! 8%! 200!pcs.! 20%! 600!pcs.! 100%! ! If! even! distribution! of! costs! is! applied,! what! is! the! amount! of! the! work! in! process!at!the!end!of!the!period?! ! A. P180,000! B. P126,000! C. P84,000! D. P30,000! ! Answer!not!given.! ! Solution:! Cost!of!goods!completed!!(P351,425!x!60%)!P210,855! Work!in!Process!Inventory,!End!(P351,425!–!P210,855)! P140,570! ! ! 9. The! total! work! in! process! is! P330,000.! The! beginning! work! in! process! is! P30,000! and! work! in! process! at! the! end! is! P50,000.! How! much! is! the! total! manufacturing!costs!for!the!period?! ! A. P330,000! B. P310,000! C. P300,000! D. P280,000! ! Solution:) ! Total!Cost!Placed!in!Process! P330,000! Less:!Work!in!Process!Inventory,!Beg.! !!!!!!!30,000! Total!Manufacturing!Cost! P300,000! ! ! ! ! ! 10. The! total! raw! materials! consumed! are! P100,000.! Total! conversion! cost! is! P200,000,! work! in! process! end! is! P30,000,! cost! of! goods! manufactured! is! P285,000.!What!is!the!work!in!process!beginning?!

! A. P45,000! B. P30,000! C. P15,000! D. P10,000! ! Solution:) ! Cost!of!Goods!Manufactured! ! P285,000! Work!in!Process,!End! ! !!!!!!!!30,000! Total!Cost!Placed!in!Process! ! P315,000! Less:!Total!Manufacturing!Cost:! ! ! ! Direct!materials!used! P100,000! ! ! Conversion!cost! !!!200,000! !!!!!!!300,000! Work!in!Process,!Beg.! ! P!!15,000! ! 11. The!total!manufacturing!cost!is!P150,000,!the!direct!labor!is!P50,000!and!the! direct!material!consumed!is!P60,000.!There!is!no!beginning!!and!ending!work! in! process.! At! what! amount! should! the! cost! of! goods! manufactured! be! reported?! ! A. P260,000! B. P150,000! C. P110,000! D. P40,000! ! Solution:! ! Total!Manufacturing!Cost!(COGM)! P150,000! ! 12. Total! purchases! of! raw! materials! amounted! to! P350,000.! The! ending! inventory! of! raw! materials! is! P20,000! more! than! the! beginning! inventory.! How!much!is!the!amount!of!raw!materials!put!into!process?! ! A. P370,000! B. P350,000! C. P330,000! D. P310,000! ! ) ) ) ) ) ) )

Solution:! ! Beg.! Purchases!

Raw)Materials)Inventory) -0-! ! Used! 350,000! ! End.!

330,000& 20,000!

! 13. Total! purchase! of! raw! materials! at! list! price! of! P250,000;! terms:! 10;! 2/30,! n/60.! Freight!of! P10,000! was!paid,! FOB!Destination! Collect.! Subsequently,!a! portion! of! the! total! purchases! with! a! list! price! of! P10,000! was! returned! to! supplier.! What! is! the! increase! in! the! amount! of! raw! materials! available! for! use?! ! A. P206,000! B. P216,000! C. P196,000! D. P230,000! ! Solution:) ) List!Price!(P250,000!–!P10,000)! P240,000! Trade!Discount!(10%)! !!(24,000)! Invoice!Price!! P216,000! ! 14. The! factory! payroll! was! paid! with! a! total! cash! of! P260,000,! net! of! P4,000! withholding!tax!and!P2,000!SSS!premium.!Eighty!percent!of!the!total!salaries! expense!is!for!direct!factory!labor!cost!and!20%!is!for!the!indirect!labor!cost.! What!is!the!increase!in!the!amount!of!the!prime!factory!costs?! ! A. P266,000! B. P254,000! C. P212,800! D. P203,200! ! Solution:! Direct!labor!(P266,000!x!80%)! P212,800! ! 15. The! prime! cost! is! P1,550,000! and! the! conversion! cost! is! P1,450,000.! The! factory! incurred! an! overhead! of! P950,000! ! with! a! 30%! indirect! labor! and! 30%!indirect!materials.!What!is!the!total!manufacturing!cost?! ! A. P2,000,000! B. P2,050,000! C. P2,500,000! D. P3,000,000! ! )

Solution:) ! Prime!Cost! Factory!Overhead!! Total!Manufacturing!Cost!

P1,550,000! !!!!!!!!!950,000! P2,500,000!

! 16. The! total! manufacturing! cost! is! P1,200,000! and! the! prime! cost! and! conversion!cost!are!P1,000,000!and!P500,000!respectively.!How!much!is!the! factory!overhead?! ! A. P200,000! B. P300,000! C. P500,000! D. P700,000! ! Solution:) ! Total!Manufacturing!Cost! P1,200,000! Less:!Prime!Cost! !!!1,000,000! Factory!Overhead! P!!!200,000! ! 17. Accord!Corp.!has!two!production!departments,!A!and!B,!that!incurred!the! following!manufacturing!costs!during!the!month:! ! ! Department!A! Department!B! Direct!materials! P700,000! P100,000! Direct!labor! 200,000! 800,000! Factory!overhead! 600,000! 400,000! Supplies! 50,000! 20,000! ! How!much!is!the!prime!cost?! ! A. P1,800,000! B. P2,800,000! C. P2,000,000! D. P2,870,000! ! Solution:) ! ! Dept.!A! Dept.!B! Total! Direct!materials! P700,000! P100,000! P!!!800,000! Direct!labor! 200,000! 800,000! !!!1,000,000! Prime!Cost! ! ! P1,800,000! ! ! !

18. The! following! items! appeared! in! the! ledger! account! of! work! in! process! for! the!Wacwac!Manufacturing!for!the!month!of!March:! ! March! 01! Beginning!balance! P12,000! ! 31! Direct!materials! 40,000! ! 31! Direct!labor! 30,000! ! 31! Manufacturing!overhead! 27,000! ! 31! To!finished!goods! 100,000! ! How!much!is!the!total!manufacturing!cost?! ! A. P70,000! B. P57,000! C. P97,000! D. P109,000! ! Solution:) ! Direct!materials! P!!40,000! Direct!labor! 30,000! Manufacturing!overhead! !!!!!27,000! Total!Manufacturing!Cost! P!!97,000! ! ! ! The!factory!ledger!of!Diamond!Corp.!contains!the!following!cost!data!for!the! year!ended!December!31,!2020:! ! ! Opening!Inventories! Closing!Inventories! Raw!materials! P150,000! P170,000! Work!in!process! 160,000! 60,000! Finished!goods! 180,000! 220,000! Raw!materials!used! ! 652,000! ! Total! manufacturing! costs! charged! to! closing! production! during! the! year! (including! raw! materials,! direct! labor,! and! factory! overhead! applied! at! the! rate!of!50%!of!direct!labor!cost),!P1,372,000.! ! 19. The!cost!of!direct!labor!charged!to!production!during!the!year!amounted!to! A. P240,000! B. P368,000! C. P480,000! D. P720,000! ) ) )

Solution:) ))) Total!Manufacturing!Cost! Less:!Direct!materials!used! Conversion!cost! Divide!by! Direct!labor! ! DL!+!FOH!=!CC! DL!+!0.50DL!=!P720,000! 1.50DL!=!P720,000! DL!=!P720,000/1.50! DL!=!P480,000! !

P1,372,000! ! !!!!!!!!652,000! P!!!720,000! !!!!!!!!!!!!150%! P!!!480,000!

! 20. The!total!cost!of!raw!materials!purchased!during!the!year!amounted!to! A. P632,000! B. P672,000! C. P802,000! D. P822,000! ! Solution:) Raw!materials!inventory,!end! P170,000! Raw!materials!used! ! ! !!!652,000! Raw!materials!inventory,!beg.! (150,000)! Raw!materials!purchased! ! P672,000! ! ! The!following!data!were!taken!from!Celeste!Co.!for!2020:! ! Raw!materials!purchased! P300,000! Direct!labor!payroll! 150,000! Indirect!labor! 50,000! Taxes!and!depreciation!–!factory!building! 25,000! Taxes!and!depreciation!–!salesroom!and!office! 20,000! Salesmen’s!salaries! 40,000! Office!salaries! 30,000! Utilities!(60%!factory)! 50,000! Freight!out! 30,000! Increase!in!raw!materials!inventory! 15,000! Decrease!in!goods!in!process!inventory! 10,000! Decrease!in!finished!goods!inventory! 25,000! ! 21. What!is!the!cost!of!goods!sold?! A. P550,000! B. P575,000!

C. P525,000! D. P595,00! ! Solution:! Beg.! COGM!

Finished)Goods)Inventory) 25,000! ! COGS! 550,000! ! End.!

575,000& -0-!

! 22. What!is!the!total!manufacturing!cost?! A. P550,000! B. P540,000! C. P560,000! D. P570,000! ! Solution:) ) Raw!materials!purchased! Less:!Increase!in!raw!materials!inventory! Raw!materials!used! Direct!labor! Factory!Overhead:! ! Indirect!labor! P50,000! ! Taxes!&!Deprcn.!–!F!&B! 25,000! ! Utilities!(60%!x!P50,000)! !!!!!!!!30,000! Total!Manufacturing!Cost! ! ! 23. What!is!the!cost!of!goods!manufactured?! A. P540,000! B. P565,000! C. P550,000! D. P575,000! ! Solution:) ! ! Work)in)Process)Inventory) 550,000& Beg.! 10,000! ! COGM! TMC! 540,000! ! End.! -0-! ! ! !

P300,000! !!!!!!!15,000! P285,000! 150,000! ! ! ! !!!!!105,000! P540,000!...