PROBLEM 1 JOHNSON CORP.

has the following data for the year 20xx

JANUARY 1 DECEMBER 31
Direct Materials 225,000.00 300,000.00
Work in Process 112,500.00 150,000.00
Finished Goods 487,500.00 375,000.00

Additional Information
Actual factory overhead 1,080,000.00
applied factory overhead 1,125,000.00
Direct Materials used 1,425,000.00
cost of goods manufactured 3,862,500.00

1. How much is the cost of goods sold using the costing system ?

a. 3,975,000. c. 3,855,000
b. 3,930,000 d. 3,817,500

2. How much is the cost of goods sold to be presented in the financial statement
 a. 3,975,000 c. 3,855,000
b. 3,930,000. d. 3,817,500

3. How much is the cost of goods sold if the variance is closed to cost of goods sold, finished goods and w
account?

a. 4,014,750 c. 3,930,000
b. 3,817,500 d. 3,935,250.

4. How much is the cost of goods sold if the variance is closed to cost of goods sold

a. 3,975,000 c. 3,855,000
b. 3,930,000. d. 3,817,500

PROBLEM 2 JOSH CORPORATION has the following data for its two products for the year 20xx

Product A Product B
Direct Material Cost 300,000.00 500,000.00
Direct labor Cost 150,000.00 100,000.00
direct labor hours 60,000 hrs 40,000 hrs
Machine Hours 15,000 hrs 45,000 hrs
Unit Produced 100,000.00 250,000.00

The company incurred factory overhead costs of 200,000

ished goods and work in process
 1. Using the direct materials costs, how much factory overhead costs will be allocated to Product A
a. 75,000. c. 120,000
b. 125,000 d. 50,000

2. Using units manufactured, how much factory overhead cost will be allocated to product B.

a. 57,142.86 c. 120,000
b. 142,857.14. d. 50,000

3. Using the direct labor, how much factory overhead cost will be allocated for Product B

a. 120,000 c. 125,000
b. 75,000 d. 80,000.

4.Using the machine hours , how much factory overhead costs will be allocated to Product A
a. 150,000 c. 50,000.
b. 57,142.86 d. 75,000

PROBLEM 3 IRVIN CORP. uses plant wide overhead rate . The following information is available for year 2030

Department 1 Department 2
Direct Material Cost 10,000.00 40,000.00
Direct Labor Cost 20,000.00 40,000.00
Direct labor hours 5,000 hrs. 3,000 hrs
o Product A

r year 2030
Machine Hours 2,000 hrs 2,500 hrs
Units Produced 1,200 1,000
factory overhead cost 40,000.00 80,000.00

1. What is the facory overhead rate if the company uses direct material coss as an allocation base?

a. 20% c. 240%.
b. 33% d. 41.67%

2. Using the diect material costs, how much factory overhead costs will be allocated to Department 2?

a. 24,000 c. 96,000.
b. 80,000 d. 45,000

3. What is the factory overhead rate if the company uses machine hours as an allocation base?

a. 26.67/ hr c. 54.55 / hr
b. 15.00 / hr d. 2.00 / hr

4. What is the factory overhead reate if the company uses machine hours as allocation base?

a. 24,000 c. 75,000
b. 40,000 d. 53,333.

5. What is the factory overhead rate if the company uses direct labor hours as an allocation base?
tion base?

Department 2?
a. 26.67/ hr c. 54.55 / hr
b. 15.00 / hr d. 2.00 / hr

6. Using the direct labor hours, how much factory overhead costs will be allocated Department 2?

a. 125,000 c. 50,000
b. 80,000 d. 45,000
rtment 2?
PROBLEM 1 Raquel Corp has two service Department and two producing department. The following are data available for

Maintenance
Factory Overhead Cost 129,000
Estimated Labor Hours 2,900
Space Occupied 1,200

The maintennce cost are allocated based on estimated labor hours and utilities. The producing departments use
hours with 50,000 for cutting and 25,000 for assembly ti determine the factory overhead rate. The maintenanc
support the greatest number of department

1. Using the direct method, how much is the total service cost allocated to cutting department

a. 71,672
b. 123,216

2. Using the direct method, what is the factory overhead rate of assembly department

a. 8.32
partment. The following are data available for the year 2030

Utilities Cutting Assembly

105,000 416,000 380,000
1,100 2,000 1,600
1,500 1,900 3,200

rs and utilities. The producing departments uses machine

ine the factory overhead rate. The maintenance department

located to cutting department

c. 110,785.
d. 526,785

assembly department

c. 10.54
 b. 20.13.

3. Using step method, how much is the total service cost allocated to assembly department

a. 123,216
b. 128,748.

4. Using the step method , what is the factory overhead rate of cutting department ?
a. 10.54
b. 8.32

5. Using the reciprocal method, what is the factory overhead rate of cutting department?
a. 10.43
b. 10.54

6. Using the reciprocal method, what is the factory overhead rate of assembly department?
a. 20.19.
b. 10.50

PROBLEM 2 Faye Corp has two service department and two producing department and two producing department
The following data available for the year 2030

SERVICE DEPARTMENT
PERSONNEL
Factory Overhead Cost 150,000.00
 d. 15.20

ed to assembly department

c. 105,252
d. 110,785

utting department ?
c. 20.35
d. 10.43.

e of cutting department?
c. 10.20
d.10.50.

e of assembly department?
c. 20.35
d. 20 13

tment and two producing department

VICE DEPARTMENT PRODUCTION DEPARTMENT

MEDICAL REFINING FINISHING
300,000.00 5,000,000.00 6,000,000.00
Service Performed by Personnel
Service Performed by Medical 20%

The producing department uses labor hours with 100,000 for refining and 250,000 for finishing in determining
rate. The personnel department support the greatest number of department

1. Using direct method, the service cost allocated to refining department is

a. 362,500.
b. 375,000

2. Using step method, the personnel cost allocated to finishing department is

a. 45,652
b. 30,000.

3. Using the reciprocal method (algebraic), the medical cost allocated to refining department is

a. 37,500
b. 45,000

4. Using direct method , the factory overhead rate of refining department is

a. 53.65
b. 53.75
 40% 40% 20%
70% 10%

ining and 250,000 for finishing in determining its overhead

epartment

partment is

c. 365,217
d. 84,743

epartment is

c. 60,000
d. 50,000

cated to refining department is

c. 39,130.
d. 45,562

partment is

c. 53.63.
d. 53.70
5. Using the step method , the factory overhead rate of finishing department is

a. 24.35
b. 24.30.

6. Using reciprocal method, the factory overhead rate of refining department is

a. 53.65
b. 53.75.
 department is

c. 24.34
d. 24.40

g department is

c. 53.72
d. 53.70