0% found this document useful (0 votes)
5 views9 pages

COSAC Final Exam

The document is a final exam for a Cost Accounting course, consisting of multiple-choice questions that cover theoretical and computational aspects of cost accounting. Topics include cost allocation methods, fixed and variable costs, activity-based costing, and various costing methods. The exam is structured to assess students' understanding of key concepts and calculations in cost accounting.

Uploaded by

Dianne Pineda
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
0% found this document useful (0 votes)
5 views9 pages

COSAC Final Exam

The document is a final exam for a Cost Accounting course, consisting of multiple-choice questions that cover theoretical and computational aspects of cost accounting. Topics include cost allocation methods, fixed and variable costs, activity-based costing, and various costing methods. The exam is structured to assess students' understanding of key concepts and calculations in cost accounting.

Uploaded by

Dianne Pineda
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 9

COST ACCOUNTING

FINAL EXAM
A.Y. 2021 – 2022, 2ND SEMESTER

MULTIPLE CHOICE-THEORETICAL: Choose the letter of the best answer.

1. Which of the following method of allocating the costs service departments provides
the broadest recognition of departments served?
a. Reciprocal allocation
b. Step-down allocation
c. Direct allocation
d. Arbitrary allocation

2. What are fixed costs that cannot be reduced or avoided within a short period of
time?
a. Committed
b. Variable
c. Avoidable
d. Unnecessary

3. In cost terminology, conversion costs consists of:


a. Direct and indirect labor
b. Direct labor and direct materials
c. Direct labor and factory overhead
d. Indirect labor and factory overhead

4. The materials control method that is based on the premise that the quantities of
most stock items are subject to definable limits is the
a. Min-max method
b. Cycle review method
c. Two-bin method
d. ABC plan

5. The person who is responsible for the protection of the materials in the storeroom,
and for identification of the materials is the:
a. Receiving clerk
b. Purchasing agent
c. Storeroom supervisor
d. Storeroom clerk

6. The bin tag:


a. is an informal but carefully maintained record showing the quantities of the
materials received, issued and on hand.
b. is a name tag used by employees for identification purposes.
c. is a record of materials requisitions.
d. is a record showing the vouchers issued.

7. The costing method that is no longer permitted by PAS No. 2 is: 151
a. FIFO
b. LIFO
c. Moving average
d. Specific identification

8. The overtime premium spent on a regular job order that cannot be completed in the
regular working hours should be charged to:
a. Manufacturing overhead control account
b. Work-in process account

Page 1 of 9
c. Selling expense account
d. General expense account

9. A credit balance in manufacturing overhead control account is:


a. Overapplied overhead
b. Underapplied overhead
c. Idle capacity variance
d. Spending variance

10. In determining the right method for allocating depreciation of equipment to


departments, the best recommendation is to:
a. Use the cost of equipment in the department as a basis for allocation.
b. Allocate on the basis of square footage used in a given department.
c. Charge the amounts to General Plant.
d. Use algebraic technique.

11. The following statement that best described cost allocation is:
a. A company, as a general rule, should allocate indirect costs randomly or based
on an "ability to bear" criterion.
b. A company's total income will remain unchanged no matter how indirect
costs are allocated
c. A company can affect total income the most strongly by using the algebraic
method of allocating indirect costs
d. A company can maximize or minimize total company income by selecting
different bases in which to allocate indirect costs.

12. All of the following are distinctions that usually exist between traditional and ABC
costing sytems, except that:
a. The number of overhead cost pools tends to be lower in ABC systems.
b. The number of allocation bases tends to be higher in ABC system.
c. Costs within an ABC cost pool tend to be more homogeneous than the costs
within a traditional system's cost pool.
d. All ABC systems are two-stage costing systems, while traditional C. systems may
be one or two stage.

13. Activity-based costing:


a. Is the initial phase of converting to just-in time operating environment
b. Can be used only in a job order costing system.
c. Is a two-phase overhead cost allocation system that identifies activity cost
pools and cost drivers.
d. Uses direct labor as its primary cost driver.

14. Waste materials consists of:


a. Raw materials remaining from the production cycle but not usable for any
purpose.
b. Finished goods that do not meet quality control standards and cannot be
reworked.
c. Defective units that may be used or sold.
d. Raw materials remaining from the production cycle but usable for purposes other
than the original purpose.

15. A manufacturing process normally results in defective units equal to 1% of


production. Defective units are subsequently reworked and sold. The cost of
reworking these defective units should be charged:
a. Manufacturing overhead
b. Work-in-process
c. Finished goods

Page 2 of 9
d. Cost of goods sold

16. Spoilage that is an inherent result of a particular production and arises even under
efficient operating conditions is:
a. Normal spoilage
b. Abnormal spoilage.
c. Defective units.
d. Scrap units.

17. Joint Costs are:


a. Indivisible
b. Present throughout the production process of joint products.
c. Common costs.
d. A collection of direct materials, direct labor, and manufacturing overhead costs
that serve as the primary base for establishing a sales value for joint products.

18. Which one of the following characteristics is not applicable to joint products?
a. The processing of one product incidentally leads to the processing of one or
more products.
b. A split-off point is always present.
c. The product doesn't significantly vary in value.
d. None of the above.

19. Plant depreciation is an example of which activity-level group?


a. Unit-level activity
b. Facility-level activity
c. Batch-level activity
d. Product-level activity

20. Assigning overhead using ABC often:


a. Shifts overhead costs from high-volume products to low-volume products
b. Shifts overhead costs from low-volume products to high-volume products
c. Provides the same results as traditional costing
d. Requires one predetermined overhead rate

MULTIPLE CHOICE-COMPUTATIONAL: Choose the letter of the best answer.

1. Lebanon manufactures two versions of a product. Production and cost information


show the following: d. Activities
Model A Model B
Units produced 100 200
Material moves 10 40
Direct labor hours per unit 1 2

Under ABC, what is the materials handling costs of P 100,000 allocated to a unit of
Model A?
a. P10
b. P200
c. P333
d. P400

2. Iran Manufacturing produces three products. Production and cost information show
the following:
Model F Model A Model Q
Units produced 1,000 3,000 6,000
Direct labor hours 2,000 1,000 2,000

Page 3 of 9
Number of 20 30 50
inspections

Using ABC, what would be the inspection costs of P 50,000 allocated to each unit of
Model F?
a. P 5.00
b. P 10.00
c. P 20.00
d. Some other number

3. Iraq Company uses activity-based costing to determine unit product costs for
external reports. The company has two products: A and B. The annual production
and sales of Product A is 10,000 units and of Product B is 4,000 units. There are
three overhead activity centers, with estimated overhead costs and expected activity
as follows:

Activity Estimated Overhead Product A activity Product B activity


Center Costs
Activity 1 P25,000 150 100
Activity 2 P65,000 800 200
Activity 3 P90,000 1,000 2,000

What is the overhead cost per unit of Product A under activity-based costing (ABC)?
a. P 6.00
b. P 9.70
c. P 1.70
d. P 3.00

The Zingapore Airline has two service departments (A and B) and two operating
departments (X and Y).
Service Departments Operating Departments
A B X Y
Direct Costs P150 P300
Service perform by dep. 40% 40% 20%
A
Service perform by 20% 70% 10%
dept. B

Compute allocated cost to departments X and Y using the following methods:


4. Direct method
a. X - 362.50 ; Y – 87.50
b. X - 250.50 ; Y – 90.50
c. X - 300.70 ; Y – 60.20
d. X - 350.70 ; Y – 100.00

5. Step-down method (cost of department A is allocated first)


a. X – 375.00 ; Y – 75.00
b. X – 275.00 ; Y – 85.00
c. X – 475.00 ; Y – 80.00
d. X – 365.00 ; Y – 70.00

6. Step-down method (cost of department B is allocated first)


a. X – 350.00 ; Y – 100.00
b. X – 215.00 ; Y – 95.00
c. X – 470.00 ; Y – 80.00
d. X – 360.00 ; Y – 70.00

Page 4 of 9
7. Reciprocal method
a. X – 365.21 ; Y – 84.78
b. X – 355.72 ; Y – 85.63
c. X – 257.69 ; Y – 80.01
d. X – 365.40 ; Y – 78.14

8. The following cost data were taken from the records of JGG manufacturing
company:

Depreciation on factory equipment P 1,000


Depreciation on sales office 500
Advertising 7,000
Freight-out (shipping) 3,000
Wages of production workers 28,000
Raw materials used 47,000
Sales salaries and commissions 10,000
Factory rent 2,000
Factory insurance 500
Materials handling 1,500
Administrative salaries 2,000

Based upon this information, the manufacturing cost incurred during the year was:
a. P18,500
b. 80,000
c. 80,500
d. 83,000

9. The following information was taken from Kate Company's accounting records for
the year ended December 31, 2014:

Increase in materials inventory P 15,000


Decrease in finished goods inventory 35,000
Raw materials purchased 430,000
Direct-labor payroll 200,000
Factory overhead 300,000
Freight-out 45,000

There was no work-in-process inventory at the beginning or end of the year. Kate's
cost of goods sold is:
a. P950,000
b. 965,000
c. 975,000
d. 995,000

10. The Cloth Center, Inc. buys and sells fabrics to a wide range of industrial and
consumer users. One of the product it carries is denim cloth, used in the
manufacture of jeans and carrying bags. The supplier for the denim cloth pays all
incoming freight. No incoming inspection of the denim is necessary because the
supplier has a track record of delivering high-quality merchandise. The purchasing
officer of the Cloth Center, Inc. has collected the following information:

Annual demand for denim cloth 20,000 yards


Ordering costs per purchase order P160
Carrying costs per year 205 of purchase costs
Safety stock requirements None
Cost of denim cloth P8 per year

Page 5 of 9
The purchasing lead time is 2 weeks. The Cloth Center is open 250 days a year (50
weeks for 5 days a week)

What is the EOQ for denim cloth?


a. 2,000 yards
b. 2,200 yards
c. 1,500 yards
d. 2,500 yards

11. Using the data in No. 10, what is the number of orders that will be placed each year?
a. 10 orders
b. 12 orders
c. 15 orders
d. 20 orders

12. The job cost sheet show the following data for Job 055 for the month of November,
2014:

Requisition Returned Materials Report


044 P31,920 039 P 340
045 143 043 34
049 1,592 048 103
150 2,933
154 338

What is the materials cost for Job 055?


a. P36,449
b. P35,450
c. P36,559
d. P36,926

13. During June 2014, Star Pools had requisitions totaling P44,810 for direct materials
and P4,880 for indirect materials.

What is the entry to record the cost of materials requisition for the month?
a. Work in process 44,810
Mfg. overhead control 4,880
Materials 49,690
b. Work in process 44,810
Indirect materials 4,880
Materials 49,690
c. Direct materials 44,810
Indirect materials 4,880
Materials 49,690
d. Mfg. overhead control 4,880
Direct materials 44,810
Materials 49,790

14. The data given below relate to Material XXX used by Jose Shoes Factory, Inc.

Beginning balance 480 at P4.80 each


Purchase Order 30 600 at P4.90 each
Requisition 46 175
Requisition 49 225
Requisition 50 280
Purchase Order 96 400 at P4.95 each

Page 6 of 9
Requisition 52 310
Returned Material Report 24 (from Requisition 50) 20

What is the cost of ending inventory using the FIFO costing method?
a. P2,519.00
b. P2,421.00
c. P2,500.00
d. P2,400.00

15. Based on the data given in No. 14, what is the cost of ending inventory using the
moving average inventory costing method?
a. P2,499.59
b. P2,450.59
c. P2,459.60
d. P2,949.60

Items 16 and 17 are based on the following data

VV Company allocates the service department overhead costs directly to producing


departments without allocation to the other service departments. Information for the next
mont of January 2014 is as follows:

Maintenance Utilities
Overhead costs P18,700 P9,000

Service provided to:


Maintenance department ----- 10%
(MD)
Utilities department (UD) 20% -----
Producing department A 40% 30%
Producing department B 40% 60%

16. The amount of Utilities Department costs distributed to Producing Department A for
January should be:
a. P3,600
b. P4,500
c. P5,400
d. P6,000

17. If VV Company allocates the service department's overhead costs based on the step
method, which of the following procedures is true?
a. Allocate maintenance expense to Department A and B.
b. Allocate maintenance expense to Department A and B and the Utilities
Department.
c. Allocate utilities expense to the Maintenance Department and Departments A
and B.
d. All of the above.

18. BM Motors Corporation has identified activity centers to which overhead costs are
assigned. The cost pool amounts for these centers and their selected cost drivers for
2014 are as follows:

Activity Centers Costs Cost Drivers


Utilities P 600,000 30,000 machine hours
Scheduling and setups 546,000 390 setups
Material handling 1,280,000 800,000 kilos of materials

Page 7 of 9
The company's products and other operating statistics are as follows:

Product A Product B Product C


Direct costs P 40,000 P 40,000 P 45,000
Machine hours 15,000 5,000 10,000
Number of setups 65 190 135
Kilos of material 250,000 150,000 400,000
Number of units 20,000 10,000 30,000
produced
Direct labor hours 16,000 9,000 25,000

The company sets selling prices at cost plus a 20% markup.

What is the unit cost of Product A using the appropriate cost drivers?
a. P49.86
b. P52.50
c. P41.55
d. P48.96

19. Using the data in No. 18, assuming that the company before installing ABC system,
used a traditional costing system that allocated manufacturing overhead to products
using direct labor hours. What is the unit selling price of Product B?
a. P57.20
b. P51.30
c. P50.69
d. P59.16

20. If Edsa Company has material cost of P10,000 in the June 1 MIP inventory account,
and P12,500 in the June 30 MIP inventory account and the amount of raw materials
used back flushed from MIP inventory account on June 30 is P202,500. what is the
amount of raw materials purchased on credit for the month of June?
a. P205,000
b. P200,000
c. P225,000
d. P200,000

END

Page 8 of 9
Page 9 of 9

You might also like