AFAR Problem.doc

# The indirect labor cost is 18 of the total labor

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is one-fourth of the total direct material used. The indirect labor cost is 1/8 of the total labor costs. The overhead application rate is 80% of direct labor costs. Any over or under application of overhead is considered material. 111. What is the total manufacturing cost during the current year? A. 1,560,000 B. 1,500,000 C. 1,640,000 D. 1,740,000 112.What is the cost of goods manufactured during the current year? A. 2,040,000 B. 1,860,000 C. 1,940,000 D. 1,800,000 113. What is the over or under application of overhead? A. 60,000 over application B. 140,000 under application C. 40,000 under application D. 160,000 over application

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Page 36 Numbers 114, 115 and 116 (Joint Product and By-Product Costing) Silay Company is conducting a joint production at a total costs of P500,000. The joint production results to the following inventories: Alt Tab Del Units produced 20,000 units 10,000 units 5,000 units Selling price at split off P150 P200 P5 Alt and Tab are considered main products while Del is considered by-product. The entity considers its by-product as material. The by-product requires additional processing cost per unit of P0.80 and its cost of disposal is P0.20 per unit. 114. What is the value to be given to product Del? A. 25,000 B. 21,000 C. 24,000 D. 20,000 115. What is the joint cost allocated to product Alt if the entity employs physical method? A. 333,333 B. 316,667 C. 317,333 D. 320,000 116. What is the joint cost allocated to product Tab if the entity employs relative sales value method? A. 300,000 B. 200,000 C. 192,000 D. 288,000
Page 37 Number 117 (Just-in-Time Inventory and Backflush Costing) Talisay Company is employing backflush costing in connection with just-in-time production process. The entity provided the following production data for the year: The entity acquired direct materials during the year at a cost of P100,000 The entity reported direct labor cost of P200,000. The actual factory overhead incurred during the year amounted to P170,000. The standard factory overhead application rate is 75% of direct labor cost. The ending finished goods inventory is reported at P120,000. What is the cost of goods sold under backflush costing? A. 470,000 B. 350,000 C. 330,000 D. 300,000 Numbers 118, 119 and 120 (Backflush costing) Panay Company has a cycle of 3 days, uses a Raw and In Process Account (RIP) and charges all conversion costs to cost of goods sold. At the end of each month, all inventories are counted, conversion costs components are estimated and inventory account balances are adjusted. Raw material cost is backflushed from Raw and in Process (RIP) Account to finished goods. The following information is provided for the month of June: Beginning Balance of RIP account, including P1,000 conversion cost 5,000 Beginning Balance of finished goods account including P6,000 conversion cost 10,000 Raw materials received on credit 400,000 Direct labor cost 300,000 Factory overhead applied 500,000 Ending RIP inventory per physical count, including P7,000 conversion cost 20,000 Ending finished goods inventory per physical count, including P4,000 conversion cost 6,000 118.What is the amount of conversion cost included cost of goods sold in June?

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