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Quiz 1

Name: _____________________________________ Score: _________________________

Subject & Section: ____________________________ Date:

__________________________

Choose the letter of the best answer and write the letter of your choice on the answer
sheet provided.

1. An activity that adds costs to the product or service, but does not make such
product or service more valuable to consumers is called

a. Non-value-adding activity.

b. Value adding activity.

c. Costly activity.

d. Valuable activity.

2. Which of the following costs is not a product cost?

a. Wages paid to workers for rework on defective products.

b. Wages paid to truck loaders who load finished goods onto outgoing delivery
trucks.

c. Benefits paid to factory workers.

d. Wages paid to workers for idle time due to machine breakdown in a

production department.

3. It is an event, action, transaction, task, or unit of work that consumes resources

and with a specified purpose.

a. Cost object

b. Activity

c. Cost Driver

d. Direct Labor

4. Which of the following is a direct product cost?

a. Wood in a furniture factory.

b. Salary of the foreman in the assembly division of an automobile company.

c. Depreciation of factory equipment.

d. Salesman’s commission.

5. Differential costs

a. Are variable costs.

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b. Are anticipated future costs that will differ among various alternatives.

c. Are the differences in costs between any two alternative courses of action.

d. Are costs that differ under alternatives.

6. An income or benefit that is given up when one alternative is selected over

another is called

a. Loss.

b. Opportunity cost.

c. Relevant cost.

d. Differential cost.

7. This costing method uses predetermined factors to compute the standard costs
of materials, labor, and factory overhead.

a. Job order costing

b. Process costing

c. Standard costing

d. Back flush costing

8. It involves collecting costs by natural classification, such as materials or labor.

a. Cost accumulation c. Cost assignment

b. Cost allocation d. Cost collection

9. This system is used by firms that produce many units of a single product.

a. Process costing

b. Job order costing

c. Standard costing

d. Hybrid product costing

10.Depreciation computed using the straight line method is classified as

a. Variable cost.

b. Fixed cost.

c. Relevant cost.

d. Opportunity cost.

11.Mixed costs are costs that have

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a. Variable and fixed costs components.

b. Manufacturing and administrative costs components.

c. Selling and administrative costs components.

d. Direct and indirect costs components.

12.The following data were collected from the records of the Receiving Department
of a company:

Month Number of items received Receiving and handling

January 2,800 costs
Php17,500
February 2,000 12,500
March 1,190 7,450
April 5,200 32,500
May 4,410 27,600
June 4,016 25,100

The receiving and handling cost is most likely to be a

a. Step cost.

b. Variable cost.

c. Fixed cost.

d. Semi-variable cost.

13.It is a part of the accounting system that measures costs for decision-making
and financial reporting purposes.

a. Financial accounting

b. Cost accounting

c. Management accounting

d. Segment accounting

14.Which of the following alternatives does not correctly classify the business
application to the appropriate costing system?

Process Costing System Job-order Costing System

a. Car repair shop Paint manufacturer

b. Soft drinks manufacturer Dress making

c. Paint manufacturer Car repair shop

d. Pen manufacturer Renovation job contractors

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15.Anything for which cost is computed

a. Cost object c. Product cost

b. Cost driver d. Period cost

16.These are costs incurred in the factory to convert raw materials into finished
goods

a. Product costs c. Manufacturing costs

b. Value adding costs d. Direct costs

17.Costs that are related to a particular cost object and can economically and
effectively be traced to that cost object.

a. Traceable costs.

b. Product costs.

c. Direct costs.

d. Manufacturing costs

18.Focus of the report is on the company’s value chain, such as a business

segment, product line, supplier, or customer.

a. Financial accounting

b. Management & Cost Accounting

c. Government Accounting

d. Advanced accounting

19.Reports usually cover a year, quarter, or month

a. Financial accounting

b. Management & Cost Accounting

c. Government Accounting

d. Advanced Accounting

20.Financial reports relate to the business as a whole

a. Financial Accounting

b. Management & Cost Accounting

c. Government Accounting

d. Advanced Accounting
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21.Castillejos Company produces and sells rattan baskets. The number of units
produced and the corresponding total production costs for six months, which
are representatives for the year, are as follows:

Month Units Produced Production Costs

April 500 Php 4,000

May 700 8,000

June 900 6,000

July 600 7,500

August 800 8,500

September 550 7,250

If the least squares method is to be used to segregate the variable and fixed
cost components of the total production costs, the equation(s) required to
express the relationship between fixed and variable costs are

a. ∑y = na + b∑x and ∑xy = a∑x + b∑x²

b. ∑xy = a∑x + b∑x²

c. ∑y = na + b∑x.

d. ∑y = a∑x + b∑x² and ∑xy = na + b∑x

22.The monthly production costs can be expressed as

a. Y = a + bx c. Y = ax + b

b. Y = b + ax d. X = a + by

23.Using the least squares method, the variable production cost per unit is
approximately

a. Php 5.00 c. 0.27

b. 10.00 d. 3.74

24.Using the least squares method, the monthly fixed production cost is
approximately

a. 1, 500.00

b. 18, 000.00

c. 4, 350.00

d. 52, 200.00

25.If the high – low method is used, the results when compared with those under
the method of least squares, are
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Variable Cost per unit Total fixed Costs

a. Equal Equal

b. Higher by 1.26 Lower by 2, 850

c. Lower by 1.26 Higher by 2, 850

d. Higher by 5 Lower by 1, 500

26.Fine Company is engaged in selling shirts. The number of units produced and
total production costs are as follows:

Number of units produced Total

production Costs

May 250 10, 000

June 240 9, 750

July 300 11, 250

August 280 10, 750

September 320 11, 750

October 410 14, 000

November 290 11, 000

December 285 10, 875

Using High – Low Method, the variable cost per unit produced is

a. 25

b. 3, 750

c. 24.99

d. 25.08

27.Using High – Low Method, monthly fixed cost shall be

a. 3, 500

b. 25

c. 3, 750

d. 3, 650

28.Using Least Square Method, the variable cost per unit produced is

a. 25

b. 30, 000
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c. 3, 750

d. 25.08

29.Non manufacturing costs are costs that include selling, administrative, and
research and development costs. These costs are expensed in the period of
incurrence and do not become part of the cost of inventory.

a. Period costs. c. Manufacturing costs.

b. Product costs d. Non manufacturing costs.

30.Indirect Materials and Indirect Labor are

Prime cost Conversion cost Manufacturing cost

a. Yes Yes Yes

b. No No Yes

c. No Yes Yes

d. Yes No No

END OF EXAMINATION

Answer Sheet

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Suffering the bitterness of ignorance is dreadful, thus, hard work and resilience
hinders its occurrence. 