COSAC Final Exam
COSAC Final Exam
FINAL EXAM
A.Y. 2021 – 2022, 2ND SEMESTER
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
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
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
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.
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.
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.
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:
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
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:
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:
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:
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)
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:
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.
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
Maintenance Utilities
Overhead costs P18,700 P9,000
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:
Page 7 of 9
The company's products and other operating statistics are as follows:
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