ACCTG 201 Finals

G02 - Group Activity 2 Comprehensive

Prepared by: Group 4

1. Wanpipti Company uses a job order costing system. During April 2016, b. $4,480
the following costs appeared in the Work in Process Inventory account:
c. $6,920
Beginning balance $ 24,00
0
Budgeted direct labor Budgeted machine d. $8,000
65,000 9,000
hours
Direct material used hours 70,000

Budgeted overhead
Direct labor incurred $350,000 Direct material
60,000 $110,500

Direct labor
Applied cost
overhead $70,000 48,000

Cost of goods manufactured 185,00

0 2. Chupapi Company uses a job order costing system. Assume that Job
#504 is the only one in process. The following information is available:

What is the overhead application rate if Chupapi Company uses a

predetermined overhead application rate based on direct labor hours
(rounded to the nearest whole dollar)?

a. $ 0.20

b. $ 5.00

c. $ 5.38

d. $ 38.8
Wanpipti Company applies overhead on the basis of direct labor cost. There
3. On the month of October,Rocky Company had 5,000 units in its beginning
was only one job left in Work in Process at the end of April which contained
Work-in-Process Inventory which were 100% complete as to materials and
$5,600 of overhead. What amount of direct material was included in this
30% complete as to conversion costs. 15,000 units were started on the
job?
month October. The ending Work-in-Process Inventory consisted of 2,000
a. $4,400 units that were 50% complete as to materials and 70% complete as to
ACCTG 201 Finals

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conversion costs. The assembling department uses FIFO process costing. Dept. B
What are the equivalent units of production for the conversion costs during Beg WIP (80% complete as to CC) 14500
the period?
End WIP (90% complete as to DM) 9000
a. A.19,800

b. B.20,500

c. C.17,900
Dept. A
d. D.18,600
Beg WIP cost:

Materials: 40,000

Conversion: 70,000
4. Cayapha Copany has two processing departments; Dept. A and B. The
completed units from department A are transferred in Dept. B for further Current Cost:
processing. The following information relates to the two departments for Materials: 75,500
January. The actual loss is 5000 units and occurred in the first part of
processing which is in Department A. Conversion: 100,850

Dept. A units Dept. B

Beg WIP (70% complete as to CC) 15000 Beg WIP cost:

End WIP (50% complete as to CC) 20000 Transferred in: 10000

Normal Spoilage (continous) 3000 Materials: 18000

Total Units accounted for 80000 Conversion: 19000

Current Cost:
ACCTG 201 Finals

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Materials: 22100 6. Labanlang Company has the following informationfpr the month of
February wherein Labanlang Company produced 3250 units of garment.
Conversion:102800

Standard Cost:
What is the cost per EUP for transferred in, material and conversion cost in
the second dept. Material 4.0 feet per unit @ P7 per foot.

Labor 2 hours per unit @ P8 per hour.

a. DM- 0.02 CC 1.78 Trans-in - 3.35

b. DM- 1.78 CC 3.35 Trans-in - .62 Actual Cost:

c. DM- 3.35 CC 1.78 Trans-in - .62 Material 9000 feet used, 10000 feet purchased @ P15 per foot.

d. DM- .62 CC 1.78 Trans-in - 3.35 Labor 6000 direct labor hours @ P6.25 per hour

What is the material price variance at point of purchase and the material
quantity variance?
5. Refer to Cayapha Company. What is the total cost assigned to total units
transferred out from Dept A. a. 21,120U ; 25000F

a. 222 750 b. b. 20,000F ; 28,000F

b. 222 570 c. 0 ; 27,750U

c. 275 222 d. d. 19,050 ; 0

d. 250 750

7. What is the labor rate variance and labor efficiency variance?

a. 0 ; 3,750U
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b. b. 9,856U ; 2,790F  Direct labor; 0.6 hours ₱24 per hour: ₱14.40

c. c. 10,250F ; 0  Variable manufacturing overhead; 0.6 hours @ ₱5.00: ₱3.00

d. d. 10,500F ; 4000F

10. During August 2012, company produced and sold 3,000 boxes of Tide
with downey scent. 8,000 pounds of direct materials were purchased @
8. Assigning cost to product units requires the use of what? ₱11.50 per pound. Out of these 8,000 pounds, 6,000 pounds were used
a. Average process during August. There was no inventory at the beginning of August. 1600
direct labor hours were recorded during the month at a cost of ₱40,000. The
b. Packaging process variable manufacturing overhead costs during August totaled ₱7,200.
c. Distribution process

d. Allocation process How much is variable overhead spending variance?

a. 800 F

b. 880 U
9. Ariel company produces many products for household use. Company c. 900 F
sells products to storekeepers as well as to customers. Tide with downey
scent is one of the products of Arial. It is a cleaning product that is d. 800 U
produced, packed in large boxes and then sold to customers and
storekeepers.
11. Arcya Glass Corporation manufactures a glass bottle. The company
need workers for Assembly, Maintenance, and Inspection. It requires raw
Ariel uses a traditional standard costing system to control costs and has materials such as sand, soda ash, and limestone as well as Assembly
established the following materials, labor and overhead standards to Labor, Maintenance Labor, and Inspection Labor to produce one glass
produce one box of Tide with downey scent. bottle. Arcya Glass Incorporation manufactured 150 glass bottles during the
current month. The following data needed is presented below:
 Direct materials; 1.5 pounds @ ₱ 12 per pound: ₱ 18.00
ACTUAL STANDARD
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SAND: 6,000 pounds SAND: 600 pounds @

purchased and used @
$4.75 per pound
SODA ASH: 3,750 pounds
purchased and used @
$3.10 per pound
LIMESTONE: 8,500
pounds purchased and
used @ $2.75 per pound
$5.00 per pound
12. David France sells phone for the future of his wife Christoph for $ 664
per unit, and the standard cost card for the product shows the following
SODA ASH: 350 pounds
costs:
@ $3.00 per pound
LIMESTONE: 400 pounds Direct material $ 129
@ $2.50 per pound
Direct labor. $ 202

Overhead (80% fixed) $ 111

Assembly labor hours: Assembly Labor: 6 hours Total. $ 442

1,480 @ $16.20 per hour @ $18 per hour

Maintenance labor hours: Maintenance Labor: 2

1,055 @ $11.60 per hour
Inspection Labor: 500
hours @ $ 10 per hour
hours @ $ 11 per hour
Inspection Labor: 2 hours
@ $ 10 per hour
David France received a special order for 1,000 units of the product. The
only additional cost to Robertson would be foreign import taxes of $ 29 per
unit. If Robertson is able to sell all of the current production domestically,
what would be the minimum sales price that Robertson would consider for
this special order?

What is the total material yield variance and total labor mix variance? a. $ 665.00

a. 7,481.5 F and 4,311 U b. $ 765.00

b. 7,481.5 F and 4,311 F c. $ 693.00

c. 7,481.5 U and 4,311 U d. $ 998.00

d. 7,481.5 U and 4,311 F

ACCTG 201 Finals

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13. Christ Philip Stein Rolex manufactures high-end smartwatch. The of sales
company manufactures 75,000 smartwatch a year at a variable cost of
215,550,000 php and a fixed cost of 117,050,000 php. Based on Administrative costs 22 000 22 000 22 000 66 000
Christopher's estimate and previous records, 67,000 smartwatch will be sold allocated equally
at the regular price of 450,000 php each. In addition, a special order was Total expenses P 340 000 P 277 200 P 308 000 P 925 200
placed for 8,000 smartwatch to be sold at 35% dicount off based on the
regular price. The unit relevant cost per unit for Christopher's decision is? Operating Income/Loss P 60 000 P 82 800 P (8 000) P 134 800

a. 2784 php
b. 2874 php
Management is considering discontinuing Product C operations.
c. 7284 php
d. 4728 php

Assuming that in addition to the data given, the following changes are
14. Suppose a company furnishes the following recent operating statement expected:
for its three product lines, A, B and C.
1. Sales of Product A and Product B increase by 10% and 15%,
respectively.
A B C Total 2. Marketing costs will remain unchanged.
Sales P 400 000 P 360 000 P 300 000 P 1 060 3. Salaries of Product A and B’s product line supervisors would
000 increase by 8% and 10% respectively due to the increased sales.
Variable expenses P 280 000 P 216 000 P 240 000 P 736 000 4. No increase in total assets is required.
Fixed expenses:

Salaries of product line 30 000 32 000 40 000 102 000 Which product should the company drop?
supervisors
a. It is not good for the company to drop Product C.
Marketing cost allocated 8 000 7 200 6 000 21 200
to product lines on basis b. The company may decide to drop Product C.

c. The company should drop Product B.

ACCTG 201 Finals

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d. The company should not drop any product. Raw materials received on credit P 380 000

Ending RIP inventory per physical count, including P 65 000

P 2 000 conversion cost estimate

15. FJP Ltd. makes three components F, J and P. The following costs have
been recorded: Compute the amount to be backflushed from RIP to Finished goods:
Another company has offered to supply the components of FJP Ltd. at Components of Components of Components of
the following prices: F J P
Unit Cost(₱) Unit Cost(₱) Unit Cost(₱)
Variable Cost 100 200 300
Which component(s), if any, should FJP Ltd. consider buying in? Fixed Cost 250 150 300
a. Buy in F only Total Cost 350 350 600
b. Buy in J only Components of Components of Components of
c. Buy in F and P F J P
d. Buy in all three components Price each ₱ 200 ₱ 120 ₱ 350
a. P 358 450

b. P 368 600
16. Plus Manufacturing Company uses a raw and in process (RIP) inventory
c. P 365 000
account and expenses all conversion costs to the cost of goods sold
account. At the end of each month, all inventories are counted, their d. P 362 450
conversion cost components are estimated, and inventory account balances
are adjusted accordingly. Raw material cost is backflushed from RIP to
Finished Goods. The following information is for the month of April:

17. Pelone Company has two products namely: X and Y. Product X and Y
Beginning balance of RIP account, including P 4 P 50 000 has an annual production and sales of 2000 units and 1500 units,
550 of conversion cost respectively.The company traditionally used dirct labor-hours as the basis
for applying all manufacturing overhead to products. Product X and Y
ACCTG 201 Finals

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requires 0.2 and 0.4 direct labor-hours, respectively. $ 690,000 is the total 18. CIC Company manufactures a device that is used by cell phone users to
estimated overhead for the next period. obtain solar energy for the battery of their phones without needing
electricity. The following data relates to the first month of operation:
The company is using an activity-based costing system next period and
the system would have three overhead activity cost pools: Activity 1, Activity Beginning Inventory: 0 units
2, and General Factory----with estimated overhead cost and expected Units produced: 60 000 units
activity as follows: Units sold: 45 000 units
Selling Price: $130 per unit

Activity Cost Pools Estimated OH Cost Expected Activity Total Manufacturing Costs:
 Direct material cost per unit: $40
X Y  Direct labor cost per unit: $18
 Variable manufacturing overhead cost per unit: $8
Activity 1 $ 280,000 550 450 1,000
 Fixed manufacturing overhead cost per month: $1 320 000
Activity 2 $ 310,000 100 150 250
Using the given information above, what is the unit product cost using
General Factory $ 100,000 400 600 absorption costing and variable costing respectively.
1,000

Total $ 690,000 a. $78 and $68

b. $98 and $66
c. $88 and $66
d. $76 and $58
Based on the data above, the predertimed overhead rate or the activity rate
for Activity 1 under activity-based costing system is:
a. $ 300 19. Data concerning Melecto Company's activity for the first 5 months of the
b. $ 275 year appear below:
c. $ 280
d. $ 305 Machine Hours Electrical Cost
January 8,000 ₱5,500
February 5,000 3,650
March 6,800 4,300
ACCTG 201 Finals

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April 3,000 2,500 a. ₱76,075

May 5,600 3,900
b. ₱62,075
Using the high-low method of analysis, What is the estimated variable c. ₱62,062.50
electrical cost per machine hour?
d. ₱65,625
a. ₱0.60

b. ₱0.50

c. ₱0.40
21. Rey Frances Company produces three products: x, y, z from the same
d. ₱0.80 process joint cost for this production run are 4, 100.

20. Electro company has two service departments, Power and Maintenance, Disposal
Sales price Further Final sales
and two production departments, Machining and Assembly. All costs are Poun cost per
per pound processing price per
regarded as strictly variable. For September the following information is ds pound at
at split off per pound pound
available: split off

Service Departments Production Departments x 700 7.5 3.5 2 8.5

Power Maintenance Machining Assembly y 1200 8.5 4 3.25 11
Direct costs ₱95,500 ₱50,200 ₱35,000 ₱20,100 z 1600 9 4.5 3.5 12
Actual activity:
Kilowatt hrs. 60,000 130,000 70,000
If the products are processed further, Gordon Comp. will incur the ff.
Maintenance hours 450 2000 3000
disposal costs upon sale.

X, 2.5, y, 3, and z, 2.0

If the company uses the direct method for allocating service departments
costs to production departments, what amount of Power Department cost
will be allocated to the Machining Department for September?
ACCTG 201 Finals

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Using the information given above, what amount of joint processing cost is c. Standard quantity purchased × (Actual rate + Standard rate)
allocated to product Y using the net realizable value at split off? (Round off
to the nearest dollar) d. Actual quantity purchased × (Actual rate + Standard rate)
a. $1358

b. $1241 24. Which of the following statements is false?

c. $1065 Statement 1: Under some circumstances, a sunk cost may be a
d. $1438 relevant cost.

Statement 2: Future costs that do not differ between alternatives are

irrelevant.
22. The use of standard material or labor costs in job order costing
Statement 3: The same cost may be relevant or irrelevant depending
a. is similar to the use of predetermined overhead rates in a normal on the decision context.
costing system.
Statement 4: Only variable costs are relevant costs. Fixed costs cannot
b. will keep actual costs of jobs from fluctuating due to changes in be relevant costs.
component costs.

c. is appropriate for any company making a units to customer

specification. a. 1 and 2

d. all answers are correct. b. 1 only

c. 3 and 4

d. 1 and 4

23. Which of the following is a correct formula for computing direct materials
price variance? 25. A mixed cost
a. Standard quantity purchased × (Actual rate - Standard rate) a. is fixed over a wider range of activity than a step cost.
b. Actual quantity purchased × (Actual rate - Standard rate)
ACCTG 201 Finals

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b. is a fixed cost over the relevant range and a variable cost everywhere
else.

c. always increases on a per unit basis.

d. contains both fixed and variable components.

ANSWERS:

1. A (Jadie Joshua Medina)

ACCTG 201 Finals

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2. C (Jadie Joshua Medina) 21. D (Christen Hope C. Ressureccion)

3. C (Kirstine Verdida) 22. A (Kirstine Verdida)

4. D (Rina Mae Lawian) 23. B (John Robert Pagunsan)

5. A (Rina Mae Lawian) 24. D (Stefany O. Pelayo)

6. B (Clynt Villamor) 25. D (Christen Hope C. Ressureccion)

7. D. (Clynt Villamor)

8. D (Clynt Villamor)

9. A (Kirstine Verdida)

10. B (Kyla Marie Yap)

11. C (Christopher Sotto)

12. B (Christopher Sotto)

13. B (Stefany O. Pelayo)

14. B (Ferrer Jay Pelone)

15. D (Stefany O. Pelayo)

16. C (Ferrer Jay Pelone) SOLUTIONS:

17. C (Christine I. Cabuenas)

18. A (Christen Hope C. Ressureccion) 1.

19. B. (Christen Hope C. Ressureccion) Total Costs Incurred

202,000
20. D (Christine I. Cabuenas)
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Less: Cost of Goods Units Accounted For 20,000

Manufactured (185,000)

Costs remaining in WIP

Material Conversion
17,000
Beginning WIP 5,000 0 3500
Overhead 5,600
Started & Completed 13000 13000 13000
Direct Labor (5,600/.80) 7,000
(12,600) Transferred Out 18000
Direct Materials Ending WIP 2000 1000 1400
4,400
Units Accounted For 20000 13100 17900

Production data
2. Beginning WIP inventory 14,500
Trans. In 55,000
Total units to account for 69,500
3.

Budgeted Budgeted Direct Overhead 5. Beg. WIP inventory 14,500

Overhead Labor Hours Application Rate Started and Completed 46,000
Completed 60,500
$350,000 65,000 $5.38 Ending WIP inventory 9,000
Total units accounted for 69,500

4. Transferred in
Beginning WIP 5,000 14,500
46,000
Started 15,000
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9,000 2,000
69,500 80,000

Material DM
14,500 15,000
46,000 40,000
4,500 20,000
65,000 2,000
77,000
Conversion
14,500 Conversion costs
46,000 15,000
8,100 40,000
68,600 10,000
2,000
6. Beg. Started and completed 67,000
Completed
Ending WIP Cost data: Beg.
Normal Spoilage Cost Current cost
Abnormal Spoilage
Total units accounted for Total
110,000
Units 176,350
5,000 286,350
40,000 4.05
55,000
20,000 DM
3,000 40,000
ACCTG 201 Finals

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75,500 10,500 F
115,500
77,000
1.5 Labor Efficiency Variance

P8 x 6,000 8x(2 hr/ unit x 3250)

Conversion cost
70,000 48,000 52,000
100,850 4000 F
170,850
67,000 9.
2.55 Variable overhead spending variance

Transferred out: 55,000*4.05=222,750 Actual hours worked at actual rate ₱7, 200

Actual hours worked at standard

7. Material Price Variance
P 5 x 10,000 P7 x 10,000 rate( 1,600 hours x ₱5) ₱8,000
` 50 000 70 000 Variable overhead spending variance ₱ 800 Favorable
20,000 F

Material Quantity Variance

P7 x 9000 P7 x (3250 x 4)
7 x 13000
63,000 91000 Variable overhead spending variance
28,000 F
Actual hours worked at actual rate ₱7, 200
8. Labor Rate Variance Actual hours worked at standard
P6.25 x 6,000 8x 6000
37500 48000 rate( 1,600 hours x ₱5) ₱8,000
ACCTG 201 Finals

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Variable overhead spending variance ₱ 800 Favorable Fixed expenses:

10.

SM x AQ x SP SM x SQ x SP
11. 18,250 x (60/135) x 5.00 = 9,000 x 5.00 =
40,555.55 45,000
215,550,000 / 75,000 = 2874 the relevant cost will be the variable cost per 18,250 x (60/135) x 3.00 = 5,250 x 3.00 =
unit of smartwatch. 14,194.44 15,750
18,250 x (60/135) x 2.50 = 6,000 x 2.50 =
13,518.51 15,000
12. 68,268.50 75,750
7,481.50 F
664 + 29 = 693.00 the company would increase its minimum sales price to Material Yield
reflect the foreign import tax of $1 per unit. Variance
AM x AH x SR SM x AH x SR
1,480 x 16.20 = 23,976 1,821 x 18 = 32,778
13.
1,055 x 11.60 = 12,238 607 x 11 = 6,677
Analysis: The following schedule shows the projected operating statement
assuming the company discontinued Product C operations. 500 x 10.00 = 5,000 607 x 10 = 6,070
41,214 45,525
4,311 F
Product Lines
Labor Mix Variance
A B Total Salaries of 32 400 35 200 67 600
product line
Sales P 440 000 P 414 000 P 854 000 supervisors
Variable P 308 000 P 248 400 P 556 400 Marketing costs 10 923 10 277 21 200
expenses
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Administrative 33 000 33 000 66 000 Beginning balance of RIP account (P 50 000 -P 4 450) P 45 450
costs
Add: Raw materials received on credit 380 000
Total P 384 323 P 326 877 P 711 200
Total 425 450
Operating P 55 677 P 87 123 P 142 800
Income/Loss Less: Ending balance of RIP inventory per physical 63 000
before taxes count ( P65 000- P2 000)

Amount to be backflushed from RIP to Finished goods P 362 450

As shown above, overall net income will be P 142,800. This is slightly higher
than the present overall income of P 134,800 with no increase in total assets
required. However, management should consider other factors, such as the
future sales of product C and whether the increased sales of Product A and 16.
B will continue or would occur without eliminating Product C operations.
(Estimated Overhead Cost)$ 280,000/(Total Activity)1,000 = $ 280

14.
17.
Components Components of Components of
of F J P Absorption Costing Variable Costing
Variable Cost in ₱ 100 ₱ 200 ₱ 300
Making Direct Material $40 $40
Variable Cost in 200 120 350 Direct Labor $18 $18
Buying Variable MOH $8 $8
(100) 80 (50)
Fixed MOH *$22 -
Unit Product Cost $88 $66

*1320000/60000 = $22
15.
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18. Machining 65% 13/20 ₱62,075 62,075

Assembly 35% 7/20 33,425 33,425
High Point - Low Point = Change Total ₱95,500 (95,500)
Cost ₱5,500 ₱2500 ₱3000 Maintenance
Activity 8,000 3000 5000 Machining 40% 2/5 ₱20,080 20,080
Assembly 60% 3/5 30,120 30,120
Change in Cost $ = ₱3000 = ₱0.60 variable Total ₱50,200 (50,200)
cost/unit Allocated cost (₱95,500) (₱50,200) ₱82,155 ₱63,545
Change in Activity 5000 Total Cost - - ₱117,155 ₱83,645

19.

Solution:

High Point - Low Point = Change

Cost ₱5,500 ₱2500 ₱3000
Activity 8,000 3000 5000

Change in Cost $ = ₱3000 = ₱0.60 variable cost/unit

Change in Activity 5000

Bibliography
20.

Direct Method
Power Maintenace Machining Assembly
Direct Cost ₱95,500 ₱50,200 ₱35,000 ₱20,100 Harper College.(2015). High-low method [PDF file].
Add: Allocated Cost
Power
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https://www.harpercollege.edu/academics/academic_support/tutoring/subjec https://www.harpercollege.edu/academics/academic_support/tutoring/subjec
ts/pdf/High-Low%20Method%20CR.pdf ts/pdf/High-Low%20Method%20CR.pdf

Harper College.(2015). High-low method [PDF file]. CPA Diary. (2013). Allocation of Joint Cost and Accounting for By-products
[PDF file]
https://www.harpercollege.edu/academics/academic_support/tutoring/subjec Retrieved from https://cpadiary.files.wordpress.com/2013/05/chapter-
ts/pdf/High-Low%20Method%20CR.pdf 111.doc

Cost and Management Accounting. (0AD). Retrieved from

https://www.zeepedia.com/read.php?decision_making_choice_of_product_p
roduct_mix_decisions_make_or_buy_decisions_cost_and_management_ac
counting&b=42&c=45

Mustafaaltawashy. (2013). Service Cost Allocation [PDF file].

Retrieved from https://mustafaaltawashy.files.wordpress.com/2013/06/23-

service-cost-allocation.pdf

Harper College.(2015). High-low method [PDF file].

https://www.harpercollege.edu/academics/academic_support/tutoring/subjec
ts/pdf/High-Low%20Method%20CR.pdf

Harper College.(2015). High-low method [PDF file].

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