CAVITE STATE UNIVERSITY – DON SEVERINO DE LAS ALAS CAMPUS

College of Economics, Management and Development Studies

Department of Accountancy
Departmental Midterm Examination in ACTG22a – Cost Accounting and Control
Part I: Theories
1) A cost accounting information system necessarily should accomplish all of the following except ____.
a. reflect the division of authority so that individual managers can be held accountable
b. provide management with information that facilitates prompt identification of activities needing
attention
c. be more sophisticated than is required by legal, regulatory, and contractual requirements
d. be tailored to give the most efficient blend of sophistication and simplicity

2) Cost is the amount measured by the current monetary value of economic resources given up or to
be given up in obtaining goods and services. Costs may be classified as unexpired or expired. Which
of the following costs is not always considered to be expired immediately upon being recognized?
a. Cost of sales
b. Sales salaries
c. Depreciation expense for plant machinery
d. Freight out

3) A fixed cost that would be considered a direct cost is ____.

a. salary of the sales manager when the cost object is the sales department
b. salary of the controller when the cost object is a unit of producting
c. fees of the Board of Directors when the cost object is the Production Department
d. the rental cost of the finished goods warehouse when the cost object is the Accounting
Department

4) The salaries of the factory janitorial and maintenance staff should be classified as ____.
a. direct labor cost c. Prime cost
b. period cost d. factory overhead cost

5) Manufacturing costs do not include ____.

a. prime costs
b. conversion costs
c. indirect materials
d. salary of the company president, under whom is the vice pres for production

6) A component of per-unit costs that remains constant as the production varies is the ____.
a. general and administrative expenses
b. variable factory overhead
c. commercial expenses
d. fixed factory overhead

7) The fixed and variable components of mixed costs may be separated by using any of the following
methods, except
a. High-low method c. Least squares method
b. Scattergraph method d. Weighted average method

8) If annual overhead costs are expected to be $600,000 and direct labor costs are expected to be
$1,000,000, then ____.
a. $1.67 is the predetermined overhead rate
b. for every dollar of manufacturing overhead, 60 cents of direct labor will be assigned
c. for every dollar of direct labor, 60 cents of manufacturing overhead will be assigned
d. a predetermined overhead rate cannot be determined

9) Finished Goods is debited and Work-in-Process is credited for a ____.

a. transfer of materials to the factory
b. return of unused materials from the factory
c. purchase of goods on account
d. transfer of completed production

10) The two major steps in the flow of costs are ____.
a. allocating and assigning c. accumulating and assigning
b. acquiring and accumulating d. accumulating and amortizing

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 CAVITE STATE UNIVERSITY – DON SEVERINO DE LAS ALAS CAMPUS
College of Economics, Management and Development Studies
Department of Accountancy
Departmental Midterm Examination in ACTG22a – Cost Accounting and Control
11) Cost of raw materials are debited to Raw Materials Inventory when the ____.
a. materials are ordered c. materials are put into production
b. materials are received d. the bill for the materials is paid

12) In job-order costing, when materials previously issued to the factory for cleaning supplies are
returned to the storekeeper, the journal entry that should be made is ____.
a. Dr. Materials, Cr. Factory overhead
b. Dr. Materials, Cr. Work-in-Process
c. Dr. Purchase Returns, Cr. Work in Process
d. Dr. Work in Process, Cr. Materials

13) Overapplied factory overhead would result if ____.

a. the plant was operated at less than normal capacity
b. factory overhead costs incurred were less than costs charged to production
c. factory overhead costs incurred were unreasonably large in relation to units produced
d. factory overhead costs incurred greater than costs charged to production

14) The best cost accumulation procedure to use when many batches, each differing as to product
specifications, are produced is ____.
a. absorption c. process
b. job order d. actual

15) A major purpose of cost accounting is to ____.

a. classify all costs as operating or nonoperating
b. measure, record, and report period costs
c. provide information to stockholders for investment decisions
d. measure, record, and report product costs

Part II: Computation

The following information relates to items 16 to 18:
Fred Company employs a job order costing system. Only three jobs, #105, #106, and #107 were worked
during November and December 2001. Job#105 was completed December 10; the other two jobs were still
in production on December 31, the end of the company’s operating year. Job cost sheets on the three job
follows:
#105 #106 #107
November costs:

Direct Materials P16,500 P9,300 -0-

Direct Labor 13,000 7,000 -0-
Factory Overhead 20,800 11,200 -0-

December costs;

Direct Materials P–0- P8,200 P21,300

Direct Labor 4,000 6,000 10,000
Factory Overhead ? ? ?
The following additional information is available:
 Manufacturing overhead is assigned to jobs on the basis of direct labor cost
 Indirect materials used during December totaled P4,000
 Indirect labor cost for December totaled P8,000
 Various manufacturing overhead incurred during December was P19,000
 Balances in the inventory accounts at November 30 were as follows:
Raw Materials P40,000
Work in Process ?
Finished Goods 85,000
16) The total overhead costs applied during December is ____.
a. P12,500 c. P32,000
b. P12,000 d. P31,000

17) The balance of the work in process on December 31 is _____.

a. P27,500 c. P32,000
b. P23,800 d. P73,000

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 CAVITE STATE UNIVERSITY – DON SEVERINO DE LAS ALAS CAMPUS
College of Economics, Management and Development Studies
Department of Accountancy
Departmental Midterm Examination in ACTG22a – Cost Accounting and Control
18) The overhead resulted to a variance of ____.
a. P3,000 underapplied c. P19,000 unfavorable
b. P3,000 overabsorbed d. P19,000 credit

Items 19 and 20 depend on the following data:

The work in process account of the Malinta Company which uses a job order cost system follows:

Work in Process April 1 Balance ₱ 25,000

Direct materials 50,000
Direct Labor 40,000
Factory Overehead applied 30,000
Finished Goods 125,450

Overhead is applied to production at a predetermined rate, based on direct labor cost. The work in process
at April 30 represents the cost of Job No 456, which has been charged with direct labor cost of P3,000 and
Job No 789, which has been charged with applied overhead of P2,400.

19) The cost of direct materials charged to Job No. 456 and 789 amounted:
a. P8,700 b. P7,600 c. P4,500 d. P4,200

20) The prime cost during the month amounted to:

a. P70,000 c. P120,000
b. P90,000 d. P145,000

For items 21 and 22:

Pitino Company has a beginning inventory of direct materials on March 1 of $30,000 and an ending inventory
on March 31 of $36,000. The following additional manufacturing cost data were available for the month of
March:
Direct materials purchased $84,000
Direct labor 60,000
Factory overhead 80,000

21) During March, prime cost added to production was:

a. $140,000 c. $144,000
b. $138,000 d. $150,000

22) During March, conversion cost added to production was:

a. $80,000 c. $140,000
b. $144,000 d. $138,000

23) Fixed cost per unit is ₱60 when 20,000 units are produced and ₱40 when 30,000 units are
produced. What is the total fixed cost when nothing is produced?
a. ₱1,200,000 c. ₱100
b. ₱-0- d. ₱120,000

24) Justin Manufacturing Corporation wants to develop a cost estimating equation for its monthly
electricity bill. It has the following data:
Month Electricity Cost Direct labor hours
January ₱13,500 3,000
February ₱15,000 3,400
March 17,000 4,000
April 14,500 3,200

Using the high-low method, the equation of the electricity cost is ____.
a. TC = ₱13,500 + ₱5.00X c. TC = ₱1,500 + ₱5.00
b. TC = ₱3,000 + ₱3.50X d. TC = ₱1,500 + ₱3.50

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 CAVITE STATE UNIVERSITY – DON SEVERINO DE LAS ALAS CAMPUS
College of Economics, Management and Development Studies
Department of Accountancy
Departmental Midterm Examination in ACTG22a – Cost Accounting and Control
25) The following cost functions were developed for manufacturing costs:

Manufacturing overhead cost Cost function

Utilities ₱1,000 + ₱25 per DLH
Maintenance ₱5,000 + ₱30 per DLH
Foreman’s salary ₱20,000 per month
Other indirect laborers ₱10 per DLH
If August production is expected to be 2,000 requiring 2,000 direct labor hours, estimated
manufacturing costs would be ____.
a. ₱56,000 c. ₱150,000
b. ₱156,000 d. ₱130,000

26) The following cost formula for total purchasing cost in a factory was developed using monthly data:
Total cost = $235,000 + ($75 x Number of purchase orders)

Next month, 8,000 purchase orders are predicted. The total cost predicted for the purchasing
department next month is ___.
a. $8,000 c. $600,000
b. $235,000 d. $835,000

27) Becker Company developed the following data for the current year:
Beginning work in process inventory $ 60,000
Direct materials used 36,000
Actual overhead 72,000
Overhead applied 54,000
Cost of goods manufactured 66,000
Total manufacturing costs 180,000

Becker Company's direct labor cost for the year is ____.

a. $18,000 c. $54,000
b. $90,000 d. $72,000

28) The following information is available for completed Job No. 402: Direct materials, $20,000; direct
labor, $30,000; manufacturing overhead applied, $15,000; units produced, 5,000 units; units sold,
4,000 units. The cost of the finished goods on hand from this job is ____.
a. $10,000 c. $13,000
b. $65,000 d. $52,000

Items 29 and 30 are based on the following data:

The following cost data pertain to Matatag Company for March 2000:

March 1 March 31
Materials ₱40,000 ₱50,000
Work in Process 25,000 35,000
Finished Goods 60,000 70,000

March 1-31
Direct Labor Cost ₱120,000
Factory Overhead applied 108,000
Cost of good sold 378,000

29) The cost of goods manufactured during March was ____.

a. ₱378,000 c. ₱398,000
b. ₱388,000 d. ₱425,000

30) The amount of materials purchased for the month was ____.
a. ₱50,000 c. ₱180,000
b. ₱170,000 d. ₱220,000

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 CAVITE STATE UNIVERSITY – DON SEVERINO DE LAS ALAS CAMPUS
College of Economics, Management and Development Studies
Department of Accountancy
Departmental Midterm Examination in ACTG22a – Cost Accounting and Control
Surname: ________________________ Given Name: _____________________________ M.I.: ___
BSAcc 1 - _____ November 21, 2023

Instructions: Shade the letter of the most correct answer using a permanent marker. Strictly no erasure(s)
and/or change(s) of answer(s) allowed. If there is no correct answer among the choices, shade E.

Part I: Theories
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Part II: Computation

16) A B C D E
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