CHAPTER 16

Answers to Multiple Choice Theoretical

1. a 6. c
2. b 7. c
3. !. a
". a #. a
$. a 1%. C
&olutions to Multiple Choice Co'putational
1. b
Materials and In Process Inventory (MIP), June 1 P 10,000
Materials received 205,000
Materials and In Process Inventory (MIP), June 30 ( 12,500)
Materials use to be bac()lushe to )inishe *oos P2%2+$%%
2. a
Raw materials purcased P!!0,000
Raw materials used (!50,000)
,alance o) M-P+ en P 3%+%%%
3. c
MIP inventory, "e#innin# P 3!,$00
Raw materials purcased %!0,000
MIP inventory, endin# ( &1,'00)
Materials to be bac()lushe to )inishe *oos P676+!%%
Con.ersion costs to be bac()lushe to )inishe *oos P $+3%%
". c
Raw materials purcased P550,000
Materials used( (21,000 ) P25) (525,000)
MIP inventory, endin# P 25,000
Raw materials used P525,000
*onversion costs (21,000 ) P20) &20,000
+inised #oods '&5,000
*ost o, #oods sold (20,000 ) P&5) ('00,000)
/inishe *oos in.entor0+ enin* P "$+%%%
$. a
Raw materials purcased P5,300,000
Materials standard cost( (1'2,000 ) P2%) ( &,''2,000)
MIP Inventory, endin# P 30!,000
1
Cost o) *oos sol1 21#2+%%% 3 P"14 P7+!72+%%%
6.
Materials in -pril 1 MIP inventory "alance( (31,000 . P1,&00) P 2',%00
Materials received durin# -pril 3%$,000
Materials in -pril 30 MIP, per pysical count (P33,000.P1,!00) ( 31,200)
A'ount to be bac()lushe P 36$+"%%
7. c
Materials in May 1 MIP "alance( (P12,300 . P1,300) P 11,000
Materials received durin# May 2&%,000
Materials in May 31 MIP "alance( (P12,100 . P2,100) ( 10,000)
A'ount to be bac()luse P 2"7+%%%
!. c
-pplied conversion costs P1,300,000
-ctual conversion costs incurred(
/irect la"or P200,000
+actory overead ''5,000 1,1'5,000
5.erapplie con.ersion costs P 1%$+%%%
#. c
Materials used P 300,000
-pplied conversion costs 1,300,000
Cost o) *oos sol P1+6%%+%%%
1%. a
Materials "ac0,lused ,rom +inised 1oods to *ost o, 1oods 2old(
Materials in June 1, MIP "alance (P2',250 . P3,000) P 2%,250
Materials received 5%2,500
Materials in June 30, MIP "alance (P32,000 . P&,500) ( 2$,500)
Materials "ac0,lused to +inised 1oods ,rom MIP 5%1,250
Materials in June 1, +inised 1oods (P30,000 . P10,000) 20,000
Materials in June 30, +inised 1oods (P2%,250 . P!,$50) ( 1$,500)
Materials "ac0,lused to *ost o, 1oods sold P 5%3,$50
-d3ustment o, conversion cost to *ost o, 1oods 2old(
In MIP( (,rom P3,000 to P&,500) P1,500
In +1( (,rom 10,000 to P!,$50) 1,250 ( 2,$50)
Cost o) 6oos &ol+ 7une 3% P $61+%%%
11. a
Materials in MIP, June 30 P 12,500
Materials in MIP, June 1 (10,000)
Materials used 202,500
Raw 'aterials purchase urin* 7une P 2%$+%%%
2
&olutions to Proble's
Proble' 1681
(a) Materials and in Process inventory (MIP) &&0,000
-ccounts paya"le &&0,000
4o record materials purcased5
(") *onversion costs 211,000
6arious accounts 211,000
4o record conversion costs incurred
(c) +inised #oods inventory %25,000
Materials and in Process inventory (MIP) &25,000
-pplied conversion costs 200,000
4o record cost o, ,inised #oods5
(d) *ost o, #oods sold 5'5,000
+inised #oods inventory 5'5,000
4o record cost o, #oods sold5
Proble' 1682
(a) Materials and in Process inventory (MIP) 2,$5&,000
-ccounts paya"le 2,$5&,000
4o record materials purcased5
(") *onversion costs $23,%00
6arious accounts $23,000
4o record actual conversion costs incurred5
(c) +inised #oods inventory (2%,!00 ) P130) 3,&!&,000
MIP inventory (2%,!00 ) P102) 2,$33,%00
-pplied conversion costs (2%,!00 ) P2!) $50,&00
4o record cost o, ,inised #oods
(d) *ost o, #oods sold (2%,500 ) P130) 3,&32,000
+inised #oods 3,&!2,000
3
Proble' 1683
(a) *onversion costs $23,%00
6arious accounts $23,%00
4o record actual conversion costs incurred5
(") +inised #oods inventory &,23&,&00
-ccounts paya"le 3,&!&,000
-pplied conversion costs $50,&00
4o record cost o, ,inised #oods5
(c) *ost o, #oods sold 3,&32,000
+inised #oods 3,&32,000
4o record cost o, ,inised #oods5
(d) -pplied conversion costs $50,&00
*onversion costs $23,%00
*ost o, #oods sold 2%,!00
4o record disposition o, under7over applied
conversion costs5
Proble' 168"
(a) Materials and In Process Inventory 550,000
-ccounts paya"le 550,000
4o record materials purcased5
(") *onversion costs &&0,000
6arious accounts &&0,000
4o record actual conversion costs incurred5
(c) +inised #oods inventory (21,000 ) P&5) '&5,000
MIP inventory (21,000 ) P25) 525,000
-pplied conversion costs (21,000 ) P20) &20,000
4o record cost o, ,inised #oods5
(d) *ost o, #oods sold (20,000 ) P&5) '00,000
+inised #oods inventory '00,000
4o record cost o, #oods sold5
&
Proble' 168$
(a) Materials inventory 550,000
-ccounts paya"le 550,000
4o record materials purcased5
(") *onversion costs &&0,000
6arious accounts &&0,000
4o record actual conversion costs incurred5
(c) *ost o, #oods sold '00,000
Materials inventory 500,000
-pplied conversion costs &00,000
(d) -pplied conversion costs &00,000
*ost o, #oods sold &0,000
*onversion costs &&0,000
4o closed under or over8applied conversion costs5
Proble' 1686

(a) 9o entry ,or materials purcased
(") *onversion costs &&0,000
6arious accounts &&0,000
(c) +inised #oods inventory '&5,000
-ccounts paya"le 525,000
-pplied conversion costs &20,000
4o record cost o, ,inised #oods5
(d) *ost o, #oods sold '00,000
+inised #oods inventory '00,000
4o record cost o, #oods sold5
(e) -pplied conversion costs &20,000
*ost o, #oods sold 20,000
*onversion costs &&0,000
4o dispose under7over8applied conversion costs5
5
Proble' 1687
214 2a4 :;uivalent Production( <5,000 = (&0 ) 50>) ? 5,000
P250,525 @ 5,020 ? P&'5'05 per unit
2b4 P250,000 @ 5,000 ? P50 per unit
2c4 Anits started ( (5,000 = &0 8 35) ? 5,005
P250,000 @ 5,005 ? P&'5'50 per unit
224 &0 ) 550 ) P&'5'05 ? P''0
&0 ) 550 ) P50 ? P1,000
&0 ) 550 ) P&'5'50 ? P'''
234 *onsiderin# tat te results o, Re;uirement (2) were witin two pesos o, eac oter,
ten metod (") would "e recommended "ecause o, its simplicity5
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