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Quiz1 Actg7

Strategic Cost Management Quiz1

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93 views4 pages

Quiz1 Actg7

Strategic Cost Management Quiz1

Uploaded by

Rovic Sumido Cordis
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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QUIZ NO.

ACTG7 - PROCESS COSTING

1.) Which is the most accurate statement?

a) Financial accounting is a subset of cost accounting


b) Management accounting is a subset of cost accounting
c) Cost accounting is a subset of both management & financial accounting
d) Management accounting is a subset of both cost and financial accounting

2.) Which of the following statements is true?

a) The higher is the production within the relevant range, the higher is the variable cost per unit
b) The higher is the production within the relevant range, the higher is the fixed cost per unit
c) The lower is the production within the relevant range, the lower is the total fixed cost
d) The lower is the production within the relevant range, the lower is the total variable cost

3.) Within the relevant range, the amount of variable cost per unit

a) Differs at each production level


b) Increases as production increases
c) Decreases as production increases
d) Remains constant at each production level

4.) Which of the following best describes a fixed cost?

a) It is constant per unit of changes in production.


b) It may change in total when such change is related to changes in production.
c) It may change in total when such change is unrelated to changes in production.
d) It may change in total when such change depends upon production or within the relevant range.

5.) What would be an example of a discretionary fixed cost?

a) Depreciation on equipment
b) Rent on a factory building
c) Salaries of top management
d) Research and development

6.) Statement 1: Reports prepared in financial accounting are general-purpose reports, whereas reports
prepared in managerial accounting usually special-purpose reports.

Statement 2: Determining the unit cost of manufacturing a product is an output of financial accounting.

a) Both statements are true


b) Only statement 1 is true
c) Only statement 2 is true
d) Both statements are false

7.) Statement 1: Product cost consists of the sum of prime cost and conversion cost.

Statement 2: A fixed cost is constant per unit of product.

a) Both statements are true


b) Only statement 1 is true
c) Only statement 2 is true
d) Both statements are false

8.) Statement 1: Factory rent is included in manufacturing overhead, but office rent is a period cost.

Statement 2: A cost that is present under one alternative but absent in whole or in part under another
alternative is known as differential cost.

a) Both statements are true


b) Only statement 1 is true
c) Only statement 2 is true
d) Both statements are false

9.) Statement 1: Process Costing is used when products are manufactured under the conditions of
continuous processing or mass production methods where the products manufactured within a
department (or cost center) are homogenous (similar products) with equal amount of materials, labor,
and overhead applied to such products.
Statement 2: In process costing, the cost accumulation of materials, labor and overhead must be by
department or cost center.

a) Both statements are true


b) Only statement 1 is true
c) Only statement 2 is true
d) Both statements are false

10.) Statement 1: Since cost are accumulated by department, there is no need for a finished goods
inventory account in a process costing system.
Statement 2: It is important to identify labor costs with each customer order in a process costing system

a) Both statements are true


b) Only statement 1 is true
c) Only statement 2 is true
d) Both statements are false

11-15.) Brighter Company is using process costing system. The following were taken from the books for
Department 2 for the month of June. Quality control inspection is done when the units are 80%
completed and materials are added 100% after inspection.
Units received - 50,000
Units completed and transferred - 40,000
Units in process, end (60% completed) - 5,000
Units lost (normal) - 5,000

1. Equivalent production for materials is:

a. 50,000 b. 45,000 c. 40,000 d. 43,000

2. Equivalent production for conversion costs is:

a. 43,000 b. 44,000 c. 48,000 d. 45,000

Same data as in 1 & 2, this time we assume that the units in process, end are 90% completed.

3. Equivalent production for materials is:

a. 50,000 b. 45,000 c.40,000 d. 43,000

4. Equivalent production for conversion costs is:

a. 43,000 b. 44,000 c. 44,500 d. 48,500

Same data as in 1 & 2, this time we assume that the lost units are classified as abnormal.

5. Equivalent production for materials is:

a. 50,000 b. 45,000 c. 40,000 d. 48,000

16-19.) A company records show the following information for August:

a. Started this month - 38,000 units


b. Ending inventory - 12,000 units. 15% completed as to materials and 10% complete as to
conversion costs.
1. How many units were transferred during the month?

a. 22,000 units b. 26,000 units c. 18,000 units d. 42,000 units

2. How many units were started and completed during the month?

a. 18,000 units b. 22,000 units c. 26,000 units d. 30,000 units

3. For materials, how many equivalent units were produced?

a. 25,800 EU b. 26,000 EU c. 27,800 EU d. 50,000 EU

4. For conversion costs, how many equivalent units were produced?

a. 24,000 EU b. 27,200 EU c. 27,800 EU d. 50,000 EU


20.) Prior department costs are most similar to:

a) Conversion costs that are added continuously throughout the process


b) Costs in beginning inventory
c) Materials added at the beginning of the period
d) Transferred-out cost

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