Materials JIT

1.
The Pampanga Manufacturing Company uses a raw and in process (RIP) inventory account and
expenses all conversion costs to the cost of goods sold account. At the end of each month, all
inventories are counted, their 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:
Beginning balance of RIP account, including P 1,400 of conversion cost…………………….P 31,000

Raw materials received on credit……………………………………………………………………………… P 367,000
Ending RIP inventory per physical count, including P 1,800 conversion cost estimate P 33,000
Compute the amount to be backflushed from RIP to Finished goods:

a. P 365,000 c. P 367,000
b. P 368,600 d. P 365,400
2. The Bulucan Manufacturing Company produces only for customer order and most work is
shipped within thirty-six hours of the receipt of an order. Bulucan uses raw and in process (RIP)
inventory account and expenses all conversion costs to the cost of goods sold account. Work is
shipped immediately upon completion, so there Is no finished goods account: At the end of each
month, inventory is counted, its conversion cost component is estimated, and the RIP account
balance is adjusted accordingly. Raw material cost is backflushed from RIP to Cost of Goods Sold.
The following information is for the month of May:
Beginning balance of RIP account, including P 1,300 of conversion cost…………………….P 12,300

Raw materials received on credit……………………………………………………………………………… P 246,000
Ending RIP inventory per physical count, including P 2,100 conversion cost estimate..P 12,100
Compute the amount to be backflushed from RIP to Cost of Goods Sold:
a. P 246,000 c. P 247,000
b. P 246,200 d. P 245,000
3. Using the same information in No. 2 compute the amount of Cost of Goods Sold after all
transactions and adjustments were made:
a. P 246,000 c. P 247,000
b. P 246,200 d. P 245,000
4. Chang Ong, general manager of Casio Corporation’s Midwest Division, has provided the
following information for transactions that occurred during March. This division use a JIT costing
system.
a. Raw material was purchased at the cost of P 97,000

b. All materials purchased were requisitioned for production.
c. Direct labor cost of P 77,000 was incurred.
d. Actual factory overhead costs amounted to P 225,000
e. Applied conversation costs totaled P 300,000. This included P 77,000 of direct labor.
f. All units were completed.
Compute the March 31 balance in the Conversion Cost:

a. P 2,000 debit c. P 25,000 credit
b. P 2,000 credit d. PO 22,000 debit
5. Using the same information in No. 4, Compute the March 31 balance in the Finished goods
account.
a. P 397,000 credit c. P 320,000 debit
b. P 397,000 debit d. P 377,000 debit
6. Katherine, owner of KCO Supply Company in Cebu, which manufactures chopsticks for
restaurants, has recently decided to implement a JIT costing system. Transactions for August are
as follows:
a. Raw material were purchased at the cost of P 950,000

b. All materials purchased were requisitioned for production
c. Direct labor costs of P 2,500,000 were incurred.
d. Actual factory overhead costs amounted to P 6,000,000
e. Applied conversion costs totaled P 8,100,000. This included P 2,500,000 of direct labor.
f. All units were completed.
Compute the amount to be backflushed from RIP to Finished Goods.
a. P 2,100,000 c. P 950,000
b. P 2,550,000 d. P 3,100,000
7. Using the same information in No. 6, compute the amount of Finished goods after all
transactions have been completed.
a. P 8,500,000 c. P 10,600,000
b. P 9,050,000 d. P 9,650,000
8. G. Bello, general manager of a highly automated coffee production plant in Laguna, Ilocos Sur,
has provided the following information for transactions that occurred during October. The
production plant uses a JIT costing system.
a. Raw materials costing P 300,000 were purchased.

b. All materials costing P 300,000 were requisitioned for production.
c. Direct Labor costs of P 200,000 were incurred.
d. Actual factory overhead costs amounted to P 995,000.
e. Applied conversion costs totaled P 1,300,000. This includes the direct labor cost
f. All units are completed and immediately sold.
Determined the October 31 balance in the Cost of Goods Sold account. No adjustments has been made
for overapplied or under applied conversion cost.
a. P 1,300,000 c. P 1,600,000
b. P 1,495,000 d. P 1,195,000
9. Using the same information in No. 8, what was the overapplied or underapplied conversion cost
for the month?
a. P 305,000 overapplied c. P 105,000 overapplied
b. P 195,000 underapplied d. P 105,000 underapplied
10. Using the same information in Nos. 8 and 9, what is the Cost of Goods Sold after all transactions
adjustments have been completed?
a. P 1,304,000 c. P 1,600,000
b. P 1,495,000 d. P 1,195,000
11. Harper Co.’s Job 501 for the manufacture of 2,200 coats, which was completed during August at
the unit costs presented below. Final inspection of Job 501 disclosed 200 spoiled coats which
were sold to a jobber for P 6,000.
Direct materials ……………………………………………………………………………….. P 20

Direct Labor……………………………………………………………………………………… 18
Factory overhead (includes an allowance of P 1 for spoiled work)…… 18
56
Assume that spoilage loss is charged to all production during August. What would be the unit
cost of the good coats produced on Job 501?
a. P 53.00 c. P 56.00
b. P 55.00 d. P 58.60
12. Using the same information in No. 11, assume instead that the spoilage loss is attributable to
the exacting specifications of Job 501 and is charged to this specific job. What would be the unit
cots of the good coats produced on Job 501?
a. P 55.00 c. P 58.60
b. P 57.50 d. P 61.60
13. During March, Hart Company incurred the following costs on Job 109 for the manufacture of
200 motors.
Original cost accumulation

Direct materials………………………………………………….. P 660
Direct labor………………………………………………………… 800
Factory overhead (150% of DL)………………………….. 1,230
P 2,660
Direct cost of reworking 10 units

Direct materials ………………………………………………….. P 100
Direct labor…………………………………………………………. 160
P 260
The rework cost were attributable to the exacting specialization of Job 109, and the full rework
cost were charged to this specific job. What is the cost per finished unit of Job 109?
a. P 15.80 c. P 14.00
b. P 14.60 d.P13.30
14. Using the same information in No. 13, assuming the rework cost were attributable to internal
failure or charged to factory overhead, what is the cost per finished unit of Job 109?
a. P 15.80 c. P 14.00
b. P 14.60 d. op 13.30
15. In a job order accounting situation, assume that there are P 45,000 charges to a given job
consisting of P 25,000 material, P 10,000 direct labor, and P 10,000 applied overhead. The job
yields 500 units of a product of which 100 are rejected as spoiled with no salvage value. The
cost of the spoilage is determined to be P 9,000. If the firm wishes to use this job as the basis for
setting a spoilage standard for comparison to future work, the conceptuality superior way to
express the spoilage rate would be.
a. 20% of total inputs c. 90% of labor inputs
b. 25% of good outputs d. 36% of material inputs

Materials JIT

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1.

Beginning balance of RIP account, including P 1,400 of conversion cost…………………….P 31,000

Compute the amount to be backflushed from RIP to Finished goods:

Beginning balance of RIP account, including P 1,300 of conversion cost…………………….P 12,300

Compute the amount to be backflushed from RIP to Cost of Goods Sold:

a. Raw material was purchased at the cost of P 97,000

Compute the March 31 balance in the Conversion Cost:

a. Raw material were purchased at the cost of P 950,000

Compute the amount to be backflushed from RIP to Finished Goods.

a. Raw materials costing P 300,000 were purchased.

Direct materials ……………………………………………………………………………….. P 20

Original cost accumulation

Direct cost of reworking 10 units

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