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Week 9 - Job Order&process Costing Activity

The document contains a test with multiple choice and problem solving questions related to cost accounting concepts like job order costing, process costing, normal and abnormal spoilage, equivalent units, and allocation of overhead. It provides information on jobs and costs for a manufacturer named YSL for May and June 2020. It also provides information on a manufacturer of salad dressing regarding work in process, gallons completed/transferred, beginning and ending inventory levels, and costs for materials, labor and overhead for August. It asks to compute work in process for June, cost of goods manufactured, equivalent units using different costing methods, and total costs allocated to completed units.

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Mark Ilano
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112 views

Week 9 - Job Order&process Costing Activity

The document contains a test with multiple choice and problem solving questions related to cost accounting concepts like job order costing, process costing, normal and abnormal spoilage, equivalent units, and allocation of overhead. It provides information on jobs and costs for a manufacturer named YSL for May and June 2020. It also provides information on a manufacturer of salad dressing regarding work in process, gallons completed/transferred, beginning and ending inventory levels, and costs for materials, labor and overhead for August. It asks to compute work in process for June, cost of goods manufactured, equivalent units using different costing methods, and total costs allocated to completed units.

Uploaded by

Mark Ilano
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Name: _______________________________________________________________

Year/Section: _________________________________________________________

THEORIES- Choose the best answer among the choices.

____1. Which document serves as a subsidiary ledger for the general ledger balance of Work in Process
Inventory?

a. Job cost sheets


b. Material requisitions
c. Labor time tickets
d. Material stockyards

____2. Unacceptable units of production that are subsequently repaired and sold as acceptable finished
goods.

a. Reworked units
b. Spoilage
c. Scrap
d. Defective units

____3. Spoilage that is an inherent result of the particular production process and arises under efficient
operating condition is referred to as:

a. Ordinary spoilage
b. Normal spoilage
c. Abnormal spoilage
d. There is no special term for this type

____4. A difference between job-costing and process costing is that:

a. Job costing systems usually do not distinguish between normal spoilage attributable to all jobs
and normal spoilage attributable to a specific job
b. Job costing system usually distinguishes between normal spoilage attributable to a specific job
and spoilage common to all jobs
c. Process costing normally does not distinguish between normal spoilage attributable to a specific
job, and spoilage common to all jobs
d. Both b and c

____5. 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

____6. Which of the following conditions usually exists when comparing normal and abnormal spoilage
to controllability?
Normal spoilage Abnormal spoilage

a. Controllable Controllable
b. Uncontrollable Controllable
c. Controllable Uncontrollable
d. Uncontrollable Uncontrollable

____7. Cost of normal spoilage are usually counted as:

a. Part of costs of sales


b. A separate line item in the income statement
c. Part of cost of goods manufactured
d. An asset in the balance sheet

____8. Managers often cite reductions in the cost of spoilage as a (an)

a. Major justification for implementing a just in time production system


b. Measurement of improved output quality
c. Immaterial item that is not to be tracked
d. Indication of improvement in the accounting system

____9. When the number of units manufactured increases, the most significant change in unit cost will
be reflected as:

a. Decrease in the fixed element


b. Decrease in variable element
c. Increase in the fixed element
d. Decrease in the variable element

____10. In BAC Company, Job No. 26 is completed at a cost of P4,500 and immediately delivered to the
customer for P7,000 cash. A correct entry to record above is:

a. Debit cost of sales for P4,500 and credit work in process for P4,500
b. Debit cost of sales for P7,000 and credit finished goods for P7,000
c. Debit finished foods for P4,500 and credit work in process for P4,500
d. Debit accounts receivable for P7,000 and credit sales for P7,000

____11. The FIFO method of process costing will produce the same cost of goods transferred out
amount as the weighted average method when

a. The goods produced are homogenous


b. There is no beginning WIP
c. There is no ending WIP
d. Beginning and ending WIP are each 50 percent complete

____12. An equivalent unit of material or conversion cost is equal to:

a. The prime cost


b. The amount of material or conversion cost necessary to complete one unit of production
c. A unit of work in process inventory
d. The amount of material or conversion costs necessary to start a unit of production into work in
process
e. 50% of the material or conversion costs of a unit of finished goods inventory, assuming a linear
production pattern

____13. An item that does not appear on a cost of production report is:

a. Work in process beginning inventory


b. Cumulative costs through the end of departmental production
c. Finished goods ending inventory
d. Materials used in the department
e. Unit costs added by the department

____14. Assuming that there was no beginning work in process inventory and the ending work in
process inventory is 50% complete as to conversion costs, the number of equivalent units as to
conversion costs would be:

a. Less than the units completed


b. More than the units completed
c. The same as the units placed in process
d. The same as the units completed
e. Less than the units placed in process

____15. A characteristics of a process costing system is that:

a. Costs are accumulated by order


b. It is used by a company manufacturing customized items
c. Standard costs are not applicable
d. It requires a lot more detailed accounting that does a job order system
e. Work in process inventory is restated in terms of completed units
PROBLEMS- Read the question carefully and provide the correct answer. Show your solution.

YSL employs a job order costing system. Only three jobs #105, #106 and #107 were worked during May
and June 2020. Job #105 was completed in June 10; the other two jobs were still in production in June
30. Job cost sheets on the three jobs follow:

#105 #106 #107


May costs:
Direct materials P16,500 P9,300 -
Direct labor 13,000 7,000 -
Overhead 20,800 11,200 -
June costs:
Direct materials - 8,200 21,300
Direct labor 4,000 6,000 10,000
Overhead ? ? ?

The following additional information is available:

 Manufacturing overhead is assigned to jobs on the basis of direct labor cost


 Indirect materials used during June totaled P4,000
 Indirect labor cost for June totaled P8,000
 Various manufacturing overhead incurred during June was P19,000
 Balances in the inventory accounts at May 31 were as follows:
Raw materials P40,000
Work in process ?
Finished goods P85,000

Required:

1. Compute for the total amount charged to Work in Process in the month of June
2. Compute for the cost of goods manufactured
The following information is available from the records of a manufacturer of salad dressing:

In process, percentage of completion

Aug. 1 (CC) 45%

Aug. 31 (CC) 60%

Gallons of dressing in IP, beg 36,000

Gallons completed 242,000

Gallons of dressing in IP, end 23,500

Costs, IP beg

Direct materials P183,510

Direct labor 98,526

Factory overhead 78,273

Costs added in August

Direct materials P1,136,025

Direct labor 451,450

Factory overhead 723,195

Additional information: 50% materials are added at the start of the process while 50% are added at the
end of the process

Required:

1. The EUP for materials and conversion costs using FIFO method is
2. The EUP for materials and conversion costs using Weighted Average method is
3. Using FIFO method, the total costs allocated to completed and transferred amounted to
4. Using WA method, the total costs allocated to finished and transferred amounted to

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