University of the East

Caloocan City

Cost Accounting October, 2020

Midterm Examination Instructor: John Bo S. Cayetano

1) Machine hours used to set the predetermined overhead rate were 136,000, actual hours were 128,000,
and the budgeted overhead was P285,600. The factory overhead applied was:
A. 303,450
B. 285,600
C. 273,000
D. 268,800

2) Tin uses predetermined factory overhead rate based on direct labor hours. For the month of January,
Tin Corporation budgeted factory overhead was P600,000 based on a budgeted volume 300,000 direct
labor hours.

Actual factory overhead amounted to P650,000 with actual direct labor hours of 320,000. How much
was the over or under applied factory overhead?
A. 10,000 under applied
B. 10,000 over applied
C. 50,000 under applied
D. 50,000 over applied

3) Erice applies factory overhead on the basis of direct labor hours. The budget and actual data for factory
overhead and direct labor hours are as follows:

Budget Actual
Direct labor hours 200,000 220,000
Factory labor cost 240,000 272,000

What is the over or under applied overhead for the year?

A. 8,000 under
B. 24,727 under
C. 32,000 under
D. 32,000 over

Use the following for the next three (3) questions:

Sur Manufacturing Company produces electric iron. The company uses the direct labor hour method of
applying factory overhead. The following data pertain to a recent production period.

Budgeted Actual
Factory overhead 47,000 49,200
Labor hours 1,000 hours 1,025 hours
4) What is the predetermined factory overhead rate?
A. 47 per labor hours
B. 48 per labor hours
C. 45.86 per labor hours
D. 49.20 per labor hours

5) The applied factory overhead is

A. 47,000
B. 49,200
C. 48,000
D. 48,175

6) The over or under applied factory overhead is

A. 2,200 over applied
B. 1,175 under applied

FAR by: John Bo S. Cayetano, CPA, MBA Page 1 of 5

 C. 1,200 under applied
D. 1,025 under applied

7) Octavia uses a predetermined factory overhead rate based on direct labor hours. For the month of
October, the company budgeted overhead was P300,000 based on a budgeted volume of 100,000
direct labor hours. Actual overhead amounted to P325,000 with actual direct labor hours totaling
110,000. How much was the overapplied or underapplied overhead?
A. 30,000 overapplied
B. 5,000 overapplied
C. 30,000 underapplied
D. 5,000 underapplied

8) Rekta Company applies overhead to products on the basis of direct labor cost. The following selected
costs were incurred during the year:

Direct material P 178,000

Direct labor 345,000
Actual overhead:
Indirect material and supplies P 46,000
Indirect labor 235,000
Plant maintenance 73,000
Depreciation on factory equipment 29,000
Other factory cost 76,000 459,000
Rekta’s plan for the year included a budgeted direct labor of P320,000 and factory overhead of
P448,000. Rekta’s overhead for the year was
A. 11,000 over applied
B. 11,000 under applied
C. 24,000 over applied
D. 24,000 under applied

9) Burns Company budgeted total variable overhead at P180,000 for the current period. In addition, the
company budgeted cost for factory rent at P215,000, depreciation on office equipment at P12,000,
office rent at P92,000 and depreciation of factory equipment at P38,000.

All these costs were based upon estimated machine hours of P80,000. At the end of the period, the
factory overhead control account had a balance of P387,875. Actual machine hours were P70,000.

The over or under applied overhead for the period is

A. 9,000 over
B. 9,000 under
C. 82,000 over
D. 82,000 under

10) Villar Company estimated Department’s A overhead at P255,000 for the period based on an estimated
volume of 100,000 direct labor hours. At the end of the period, the factory overhead control account
for Department A was charged with P265,000; actual labor hours used were 105,000.

The over or under applied overhead for the period is

A. 2,250 over
B. 2,250 under
C. 15,000 over
D. 15,000 under

11) Setsuna uses machine hours as the overhead base. At the beginning of last year, Setsuna estimated
38,000 machine hours and P152,000 of manufacturing overhead costs. For the year, only 37,500
machine hours were logged but P153,500 of overhead cost was incurred.

What is Setsuna’s under or over applied manufacturing overhead?

A. 1,500 under applied
B. 1,500 over applied
C. 2,000 under applied
D. 3,500 under applied

Cost Accounting by: John Bo S. Cayetano, CPA, MBA Page 2 of 5

12) The following information relates to Donna Corporation for the last year. Donna uses direct labor hours
as an overhead base.

Estimated direct labor hours 136,000 hours

Estimated manufacturing overhead cost P 108,800
Actual manufacturing overhead cost 108,480
Applied manufacturing overhead cost 110,000

What was the actual number of direct labor hours worked last year at Donna?
A. 86,784 hours
B. 88,320 hours
C. 135,600 hours
D. 137,500 hours

13) Dos Santos uses machine hours as an overhead base. The following information relates to Dos
Santos’ for last year:

Estimated machine hours for the year 42,000

Actual machine hours for the year 40,800
Predetermined overhead rate 1.50 per machine hours
Underapplied factory overhead 2,600
What is the peso amount of the following items?

Estimated Overhead Applied Overhead Actual Overhead

A. 61,200 63,000 60,400
B. 61,200 63,000 65,600
C. 63,000 61,200 58,600
D. 63,000 61,200 63,800

14) Justine Company budgeted total variable overhead costs at P180,000 for the current period. In
addition, they budgeted costs for factory rent at P215,000, costs for depreciation of office equipment
at P12,000 costs for office rent at P92,000, and costs for depreciation of factory equipment P38,000.

All these costs were based upon estimated machine hours of 80,000. At the end of the period, the
Factory Overhead control account had a balance of P387,875. Actual machine hours were 74,000.

What was the over or under applied factory overhead for the period?
A. 12,650 over applied
B. 12,650 under applied
C. 108,850 over applied
D. 108,850 under applied

15) Neue Company applies overhead to products on the basis of direct labor cost. The following selected
costs were incurred during the year:

Direct material P 178,000

Direct labor 350,000
Actual overhead:
Indirect material and supplies P 46,000
Indirect labor 235,000
Plant maintenance 73,000
Depreciation on factory equipment 29,000
Other factory cost 76,000 459,000
Neue’s plan for the year included a budgeted direct labor of P320,000 and factory overhead of
P384,000. Neue’s overhead for the year was
A. 11,000 over applied
B. 24,000 over applied
C. 39,000 under applied
D. 11,000 under applied

Cost Accounting by: John Bo S. Cayetano, CPA, MBA Page 3 of 5

16) Cams has under applied overhead of P45,000 for the year ended December 31. Before disposition of
the underapplied overhead, selected December 31 balance from Cams Company’s records are as
follows:

Cost of goods sold P 720,000

Direct materials 36,000
Work in process 54,000
Finished goods 90,000

Under Cam’s cost accounting system, over or underapplied overhead is allocated to appropriate
inventories and cost of goods sold based on year end balances. In its income statement, Cams should
report cost of goods sold of
A. 682,500
B. 684,000
C. 756,000
D. 757,500

17) Grace estimated its factory overhead at P1,785,000 for the year based on normal capacity of 350,000
direct labor hours. The factory overhead control account at the end of the year showed a balance of
P1,890,000. How much was the over or under applied factory overhead if the actual labor hours is
367,500 hours?
A. 15,750 over
B. 15,750 under
C. 105,000 under
D. 105,000 over

Use the following for the next two (2) questions:

Apolo had the following information for the year 2021:

Budgeted factory overhead P 561,000

Actual factory overhead 587,250
Applied factory overhead 573,750
Estimated direct labor hours 330,000 hours

18) What is the predetermined overhead rate?

A. 1.70
B. 1.74
C. 1.738
D. 1.65

19) What is the total actual direct labor hours used in 2021?
A. 330,000
B. 337,500
C. 345,441
D. 329,741

20) Charm uses machine hours to determine its factory overhead rate. The following information is available
for the year 2020:

Budgeted factory overhead P 761,600

Actual factory overhead 759,360
Applied factory overhead 770,000
Estimated machine hours 952,000 hours

What was the total actual machine hours worked for the year?
A. 618,240
B. 962,500
C. 949,200
D. 952,000

Cost Accounting by: John Bo S. Cayetano, CPA, MBA Page 4 of 5

21) Shirley has the following data for the year 2021:

Budgeted factory overhead P 1,170,000

Actual factory overhead 942,500
Factory overhead rate per unit P 15
Units produced 65,000

The company determines overhead rates based on the estimated units to be produced. How much is
the factory overhead applied for the year?
A. 975,000
B. 1,170,000
C. 942,500
D. 1,404,000

Use the following for the next two (2) questions:

Hubie uses machine hours as a base for its factory overhead rate. The following information is available for
the year 2021:

Budgeted machine hours 273,000 hours

Actual machine hours 265,200
Factory overhead rate P 5.00 per machine hour
Underapplied overhead P 16,900

22) How much is the actual factory overhead cost?

A. 1,342,900
B. 1,309,100
C. 1,381,900
D. 1,348,100

23) How much is the budgeted factory overhead?

A. 1,326,000
B. 1,342,900
C. 1,365,000
D. 1,348,100

24) AXL Corporation uses a predetermined overhead rate based on machine hours to apply factory overhead
to jobs. The company manufactures tolls to customer specifications. The following data pertain to Job
01:
Direct materials used P 21,000
Direct labor hours worked 1,500
Direct labor rate per hour 8
Machine hours used 1,000
Predetermined overhead rate per machine hours P 15
What is the total manufacturing cost recorded on Job 01?
A. 48,000 C. 51,500
B. 44,000 D. 55,500

25) Julius Corporation applied factory overhead to jobs on the basis of direct labor-hours. The following
information related to the company’s 2021 data:

Estimated Actual
Direct labor hours 30,000 29,600
Factory overhead cost P 600,000 P 574,240
What was Julius under-applied or over applied factory overhead for the year 2021?
A. 8,000 under applied C. 17,760 over applied
B. 17,760 under applied D. 8,000 over applied

---- END ----

Cost Accounting by: John Bo S. Cayetano, CPA, MBA Page 5 of 5