Part 1: True or False 1. Factory overhead includes all manufacturing costs which may be variable or fixed, except direct material and direct labor. 2. Wages earned by machine operators in producing the firm's product should be categorized as direct labor. 3. In cost accounting, the term "relevant range" refers to the range over which the cost relationships are invalid. 4. A fixed cost is constant per unit of change in production 5. Job Order Costing is the best cost accumulation procedure to use when many batches, each differing as to product specification, are produced. 6. The fixed portion of the semi-variable cost of electricity for a manufacturing plant is both factory overhead cost and period cost. 7. In a job order cost system, the application of factory overhead would usually be reflected in the general ledger as an increase in work in process. 8. In a job order cost system, direct labor costs usually are recorded initially as an increase in factory overhead control 9. Underapplied factory overhead results when factory overhead costs incurred are less than the costs charged to production 10. In a job order cost system, the use of direct materials previously purchased usually is recorded as a decrease in work in process. Part 2: Problem Provide the journal entry for the following. Prepare the entries (online exam in canvas may include questions about journal entries on these transactions) The following events took place at the Rounin Company over the past year. Incurred direct labor costs of P47,000 Purchased manufacturing equipment for P75,000 Purchased direct materials for P176,000 Incurred manufacturing overhead of P81,000 Transferred 73% of the direct materials to work in process Completed work on 85% of the goods in work in process Sold 90% of the completed goods Marketing and administrative costs were P85,000 Sales amounted to P400,000 There were no beginning balances in any of the inventory accounts. Costs are assigned equally across all work in process Based on the above data: 11. What is the cost of goods sold? 12. What is the company's net income or net loss? 13. How much is the value of the ending finished goods inventory