1
CHAPTER 6
Multiple Choice Questions – Theor Theoretical etical
1. 2. . ". $.
a d a a a
6. 7. !. #. 1%.
b a a c d
11. 12. 1. 1". 1$.
c b d b C
Multiple Choice Questions – Co&putational 1.
'a(
P800,000 / 10,000 units = P!% per unit. 2.
'a(
P800,000 / P400,000 = 2%%) o* &aterial cost .
'a(
P800,000 / P600,000 = 1) o* direct direct labor cost. ".
'a( hour. P800,000 / 25,000* = P2 per direct labor hour.
* P600,000 / P24 = 25,000 estimated direct labor hour.’ hour.’ $.
'a(
P800,000 / 3.333* 3.333* = P2."% per &achine hour
20 minutes / 60 minutes = 1/3 machine hour er unit
1/3 hour er unit ! 10,000 units = 3.333 estimated machine hours. 6.
'a(
P800,000 / 12,500 units* = P6" o+erhead per unit . *10,000 units / 80s" = 12,500 units. 7.
'a(
P800,000 / P500,000* = 16%) o* &aterial cost. * P40 ! 12,500 units
16. 17.
a b
2 !.
'a(
P800,000 / #1/3 hour ! 12,500 units$ = P%2 er machine hour. hour. #.
'a(
&stimated o'erhead / &stimated units o( roduction = )'erhead er unit.
1%.
2%%#
P180,000 / P15 = 12,%%% esti&ated units o* production .
2%1%-
P1%8,000 / P18 = 11,%%% esti&ated units o* production
'b(
+lied (actor o'erhead #10,000 units ! P1 P 15$ +ctual (actor o'erhead # P50,000 - P%5,000$ +erapplied o+erhead 11.
P150,000 145,000 P $,%%%
'b(
+ctual (actor o'erhead #P #P55,000 = P150,000$ +lied (actor o'erhead #1 #11,000 units ! P18$ /nderapplied o+erhead 12.
'a(
+ctual outut )'erhead rate i!ed i!ed o'erhe o'erhead ad rate rate P1,440 P1,440 / #48,00 #48,000 0 / 12$ = ariable o'erhead rate Applied &anu*acturin0 o+erhead 1.
4,100 units P0.36 P0.36 2.10
P2.46 P1%,%!6
'a(
+lied manu(acturin o'erhead +ctual manu(acturin o'erhead +erapplied &anu*acturin0 o+erhead 1".
P205,000 1%8,000 P 7,%%%
P10,086 %,000 P 1,%!6
'c (
+ctual roduction 2,00 hours )'erhead rate i!ed o'erhead o'erhead rate #P16,%20/12$ #36,000/12$ P0.4 ariable o'erhead rate 2.10 2.5 Applied &anu*acturin0 o+erhead P6,## 1$.
'c (
+ctual manu(acturin o'erhead +lied manu(acturin o'erhead /nderapplied &anu*acturin0 o+erhead
P,800 6,%3% P !61
3 16.
'a(
+ctual manu(acturin o'erhead +l +lie ied d manu manu(a (act ctur urin in o'er o'erhe head ad #248, #248,30 300 0 ! 6.45 6.45*$ *$ /nderapplied o+erhead
P1,618,340 1,60 1,601, 1,53 535 5 P 16,!%$
*P1,6,000 / 260,000 = P6.45 er 17.
'b(
udeted (i!ed o'erhead +lied (i!ed o'erhead #248,300 ! 2. 2.25*$ olu&e +ariance '/(
P 585,000 558,65 P 26,2$
*P585,000 / 260,000 = P2.25 er 1!.
'c (
udeted o'erhead7 i!ed o'erhead P 585,000 ariable o'erhead o'erhead #248,300 #248,300 ! P4.20*$ P4.20*$ 1,042,860 1,042,860 +ctual manu(acturin o'erhead pendin0 +ariance '3( 1#.
'a(
olume 'ariance #$ 9endin 'ariance #$ 4et o+erhead +ariance '/( 2%
P
26,325 %,520 P 16 16,!%$
'd(
+ctual o'erhead i!ed ariable +lied o'erhead )'eralied o'erhead 21.
P1,62,860 P1,62,860 1,618,340 P #,$2%
P348,000 63,880
P%85,880 %%5,880 P 10,000
'b(
udeted (i!ed o'erhead +lied (i!ed o'erhead #115,800 ! P2.%0*$ olu&e +ariance '/(
P348,000 335,820 P 12,1!%
* P348,000 / 120,000 = P2.%0 er 22.
'b(
udeted o'erhead i!ed o'erhead ariable #115,800 ! P5.0*$ +ctual o'erhead pendin0 +ariance '3(
P348,000 660,060
P684,000 / 120,000 = P5.0 er
P1,008,060 %85,880 P 22,1!%
4 2.
'b(
olume 'ariance #$ 9endin 'ariance #$ Total +ariance '3( 2".
'b(
9ales :ost o( oods sold ini inish shed ed ood oods, s, ;ul ;ul 1, 200% 200% :ost o( oods manu(actured
P12,180 22,180 P1%,%%%
P%0,60 P 33,5 33,500 00 450,00 484,200 83,000 401,200 4,200
'b(
i!ed (actor o'erhead eat and liht ereciation
26.
3%,000 3%3,60 15,500 P26,17%
P
54,%00 %3,000 300,500 P1,148,400
ariable (actor o'erhead >ndirect labor &mloee bene(its 9ulies Po?er
P 240,000 %0,000 60,000 48,000 P 438,000
i!e i!ed d o'er o'erhe head ad rate rate #P1, #P1,14 148 8,400 ,400 / 220 220,000 ,000 $ $ ariable o'erhead rate #P438,000 / 60,000 $
P 5.22 5.22 er .30 er P 12.52 220,000 P2,7 P2,7$ $","%% ,"%%
'c (
i! i!ed o'erhead rate #P1,200,000 / 240,000 ma machine hrs.$ ariab ariable le o'er o'erhe head ad rate rate #P2, #P2,40 400, 0,00 000 0 / 240, 240,00 000 0 mach machin inee hrs.$ hrs.$ Predeter&ined o+erhead rate 27.
'b(
2!.
'b(
P 5 10 P1$
21,%% ,%%% &achine hours P1$
+lied 'ariable o'erhead #21,000 ! P1 P10$ +ctual 'ariable o'erhead /nderapplied +ariable &anu*acturin0 o+erhead
P210,000 214,000 P ",%%%
5 2#.
'c (
+ctual 'ariable o'erhead udeted 'ariable o'erhead #21,000 hrs. ! P1 P 10$ ariable spendin0 +ariance '/( %.
P214,000 210,000 P ",%%%
'c (
udeted (i!ed o'erhead +lied (i!ed o'erhead #21,000 hrs. ! P5$ olu&e +ariance '3(
P100,000 105,000 P $,%%%
6 PR8EM Proble& 691 '1(
#2$
@orA in rocess 22,040,000 +lied (actor o'erhead
22,040,000
actor o'erhead control arious credits
22,384,000
+ctual (actor o'erhead +lied (actor o'erhead nderalied (actor o'erhead
P22,384,000 22,040,000 P 344,000
22,384,000
Proble& 692 1.
@orA in rocess in'entor 400 inished oods in'entor 2,533 :ost o( oods sold 5,06 nderalied o'erhead
2.
.
".
)'eralied o'erhead @orA in rocess in'entor inished oods in'entor :ost o( oods sold
8,000
P 400 400 2,53 2,533 3 5,06 5,06
8,000 400 2,533 5,06
:ost o( oods sold 10,000 nderalied o'erhead
10,000
400 3,200 6,400
@orA in rocess #P4,000 / P100,000$ ! P10,000 = P 400 inished oods #P32,000 / P100,000$ ! P10,000 = 3,200 :ost o( oods sold #P64,000 / P100,000$ P100,000$ ! P10,000 = 6,400
10,000
Proble& 69 'a(
@orA in rocess 630,000 Baterials #18,000 ! P15$ actor aroll #18,000 ! P1$ +lied (actor o'erhead #18,000 ! P3*$
20,000 306,000 54,000
* #P22,000 - P16,000 - P,000 - P5,000 - P10,000$ / 20,000 = P3 actor o'erhead control arious credits
56,500
+lied (actor o'erhead nderalied o'erhead actor o'erhead control
54,000 2,500
56,500
56,500
+lternati'e entr i( alied (actor o'erhead is not used. nderalied o'erhead 2,500 actor o'erhead control
'b(
:ost o( oods sold nderalied o'erhead
2,500
2,500 2,500
Proble& 69" 1.
+ctual o'erhead #P283,400 - P64,426.6$ +lied o'erhead #168,630 hrs. ! P5.4%$ nderalied o'erhead
P%30,826.6 %25,8.0 P 5,04.%
2.
Volume variance i!ed o'erhead alied #168,630 ! P1.65*$ i!ed o'erhead budeted olume 'ariance #$
P28,23%.50 22,250.00 P 5,%8%.50
*P22,250 / 165,000 = P1.65
Spending variance: +ctual o'erhead er ear udeted o'erhead i!ed ariable #168,630 ! 3.84*$ 9endin 'ariance #$
P%30,826.6 P22,250.00 64,53%.20
%1%,8%.20 P 11,03.4
*P633,600 / 165,000 = P3.84
P
5,04.%
8
Proble& 69$ Elena Machiner5 Corporation :nco&e tate&ent ;ear Ended
9ales 9ales returns and allo?ances Cet 9ales :ost o( oods sold inis inishe hed d ood oodss in'e in'ent ntor or , 1/1 1/1 :ost oods manu(actured
P%60,500 43,00 %16,800 P%8, P%8,0 00 0 641,100 3%,800 %4,500 645,300 3,500
P 65,400 82,500
648,800 268,000
14,%00 120,100 36,030 P 84,00
Proble& 696 1.
i!ed manu(acturin o'erhead ariable manu(acturin o'erhead D#P60,000/12$ ! P.50E udeted manu(acturin o'erhead (or the month
2.
i!ed o'erhead rate #P,500 / 5,000 units/mo.$ ariable o'erhead rate
P
.
+ctual manu(acturin o'erhead udeted (actor o'erhead :ontrollable o'erhead 'ariance #$
P 46,500 45,000 P 1,500
+lied manu(acturin o'erhead udeted manu(acturin o'erhead olume 'ariance ##$
P 43,200 45,000 P 1,800
:ontrollable o'erhead 'ariance #$ olume 'ariance #$ Cet o'erhead 'ariance #$
P
".
P , ,500 3,500 P 45 4 5,000 1.50 .50 P %. %.00 4,800 P 43,200
P
1,500 1,800 3,300
)r +ctual o'erhead incurred +lied o'erhead nderalied o'erhead
P 46,500 43,200 P 3,300
% Proble& 697 1.
i!ed o'erhead ariable o'erhead #36,000 ! P6.30$ udeted manu(acturin o'erhead
P 16,%20 226,800 P243,20
2.
i!ed o'erhead rate #P16,%20 / 36,000 hrs.$ ariable o'erhead rate
P
3.
+ctual manu(acturin o'erhead udeted manu(acturin o'erhead i!ed o'erhead #P16,%20 / 12$ ariable #2,00 ! P6.30$ :ontrollable 'ariance #$
P 23,8
4
0.4 6.30 P 6. 2,00 P 18,2%
P 1, 1,410 1,010
18,420 P 5,45
i!ed o'erhead alied #2,00 ! .4$ i!ed o'erhead budeted #16,%20 / 12$ olume 'ariance #$
P
1,26% 1,410 P 14 141
:ontrollable 'ariance #$ olume 'ariance #$ Cet 'ariance #$
P P
5,45 141 5,5%8
)r +ctual o'erhead +lied o'erhead nderalied o'erhead
P 23,8 18,2% P 5,5%8
Proble& 69! i!ed o'erhead rate #P%00,000 / 150,000 machine hours $ ariable o'erhead rate #P450,000 / 150,000 machine hours$
P
2.
+ctual manu(acturin o'erhead +lied ma manu(actur turin o'erhead #1 #140,00 ,000 hr hrs. ! P%.00$ nderalied o'erhead
P1,305,000 1,260,000 P 45,000
.
+ctual manu(acturin o'erhead udeted manu(acturin o'erhead #based on actual hrs.$ i!ed o'erhead P%00,000 ariable #140,000 hrs. ! P3$ 420,000 :ontrollable 'ariance #$
P1,305,000
+lied (i!ed o'erhead #140,000 hrs. ! P6$ udeted (i!ed o'erhead olume 'ariance #$
P 840,000 %00,000 P 60,000
1.
".
P
6.00 3.00 %.00
1,320,000 P 15,000
10 Proble& 69#
i!ed o'erhead rate #P42,000 / 60,000 $ ariab iable o'erhead rate #P168,000 / 60,000 $
1,
P 2.80 .80 P
0.0 3.50
2.
+ctual direct labor hours )'erhead rate +lied o'erhead
62,400 F P3.50 P218,400
3.
+ctual manu(acturin o'erhead +lied manu(acturin o'erhead )'eralied o'erhead #$
P213,100 218,400 P 5,300
Fixed overhead volume variance variance +lied (i!ed o'erhead #62,400 ! .0$ udeted (i!ed o'erhead olume 'ariance #$
P 43,680 42,000 P 1,680
4.
Spending variance: +ctual o'erhead udeted o'erhead based on 9td. hours i!ed o'erhead ariable #62,400 ! P2.80$ :ontrollable 'ariance #$
P213,100 P 42,000 14,20
216,20 P 3, 3,620
Proble& 691% +ctual manu(acturin o'erhead udeted manu(acturin o'erhead Controllable +ariance '3(
P 60,000 64,000 P ", ",%%%
+lied manu(acturin o'erhead udeted manu(acturin o'erhead olu&e +ariance '/(
P 58,000 64,000 P 6,%%%
b.
+lied manu(acturin o'erhead olume 'ariance #$ ud0eted &anu*acturin0 o+erhead :ontrollable 'ariance #$ Actual &anu*acturin0 o+erhead
P 30,000 14,000 16,%%% 2,000 P 1!,%%%
c.
+ctual manu(acturin o'erhead :ontrollable 'ariance #$ ud0eted &anu*acturin0 o+erhead +lied manu(acturin o'erhead olu&e +ariance '3(
P 48,000 12,000 6,%%% 48,000 P 12,%%%
a.
11 udeted manu(acturin o'erhead :ontrollable 'ariance #$ Actual &anu*acturin0 o+erhead
P 36,000 2,000 P ",%%%
udeted manu(acturin o'erhead olume 'ariance #$ Applied &anu*acturin0 o+erhead
P 36,000 4,000 P "%,%%%
e.
+ctual manu(acturin o'erhead :ontrollable 'ariance #$ ud0eted &anu*acturin0 o+erhead +lied manu(acturin o'erhead olu&e +ariance
P 36,000 6,000 "2,%%% 40,000 P 2,%%%
*.
+ctual manu(acturin o'erhead :ontrollable 'ariance #$ ud0eted &anu*acturin0 o+erhead olume 'ariance #$ Applied &anu*acturin0 o+erhead
P 54,000 12,000 "2,%%% 4,000 P !,%%%
0.
+ctual manu(acturin o'erhead :ontrollable 'ariance ud0eted &anu*acturin0 o+erhead +lied manu(acturin o'erhead olu&e +ariance
P 32,000 G0G 2,%%% 32,000 P 9%9
d.
Proble& 6911 @orA in rocess, )ct. 1 :urrent cost irect materials irect labor #P204,000 ! /1$ +lied o'erhead #,000 P%$
P10%,000
2.
4,000 ! P% =
P 36,000
.
1,000 total direct labor hours ! P% =
P153,000
".
9ulies >ndirect labor 9uer'isor salaries uildin occuanc costs actor eHuiment costs )ther (actor costs
P
$.
:lose to cost o( oods sold account.
6,
Co. n'entor account, inished oods >n'entor account and :ost o( oods 9old.
1.
%0,000 84,000 63,000 P346,000
4,000 30,000 83,000 ,000 12,000 10,000 P150,000
12
Proble& 6912 1.
>ndirect materials and sulies >ndirect labor &mloee bene(its ereciation 9uer'ision
P 30,000 106,000 46,000 24,000 40,000 P246,000
2.
P140,000 actual direct labor cost ! 160" =
P224,000
.
+ctual manu(acturin o'erhead +lied manu(acturin o'erhead nderalied o'erhead
P246,000 224,000 P 22,000
Proble& 691 1.
irect materials irect labor +lied o'erhead @>P #4,000 hours ! P.20$ #10,000 hours ! P.20$
Work in ProcessFinished Goods P 18,000 P 20,000 36,000 40,000 28,800 2,000 P132,000
P 82,800
2.
9uer'ision >ndirect labor tilities ereciation I (actor buildin Proert ta! reihtGin ereciation I (actor eHuiment >nsurance Jeairs and maintenance Biscellaneous
P 3,000 58,100 45,600 15,000 8,000 13,000 15,000 6,000 16,500 1%,800 P234,000
.
+ctual manu(acturin o'erhead ud udet eted ed manu manu(a (act ctu urin rin o'erh 'erhea ead d #P14 #P141 1,50 ,50 - P85, P85,05 050$ 0$ :ontrollable 'ariance #$
P234,000 226, 226,80 800 0 P ,200
udeted manu(acturin o'erhead +lied manu(acturin o'erhead olume 'ariance #$
P226,800 230,400 P 3,600
Cet o'erhead 'ariance #$
P
3,600
13
Problem 6-13 (continued)
Manuel Company Statement of Cost of Goods Manufactured and Sold Month Ended anuary !"# $%"% irect materials used Baterials in'entor, ;an. 1 Purchases #P216,000 I P10,100$
P 42,000 205,%00 24,%00 18,000
P 22%,%00 512,000 230,400 %2,300 65,000 1,03,300 82,800 %54,500 36,000 %%0,500 132,000 858,500 3,600 P 862,100