Angel

Cor Jesu College

Sacred Heart Avenue, Digos City
College of Accountancy, Business and Entrepreneurship
Final Exam
Cost Accounting and Control

Name:_____________________________________________Score: _______

Course and Year__________________

”God Bless”

Test I. True-False
Direction: Write T if the statement is correct and F if it is wrong beside
the number. 1 point each
1. Marketing, selling and administrative costs are three broad
classifications of costs incurred in manufacturing company.
2. Lumber can be both a finished product and a material.
3. Product costs consist of the sum of the prime cost and conversion
cost.
4. The salary paid to the manager in-charged in the warehouse is a
variable cost.
5. Factory rent is included in manufacturing overhead, but the office
rent is a period cost.
6. When there is a decrease in volume, both the total sales and total
variable cost will decrease but contribution margin will remain the
same.
7. Relevant range refers to a band of activity within which sales and
expense relationships may be valid.
8. A 20% change in unit variable cost is will cause a 20% change in
total variable cost and total sales.
9. Using the high low method, the rate of variability is determined by
dividing the difference between the highest and the lowest activity
levels by the difference between the highest and lowest costs.
10. A 5% decrease in fixed cost will cause a 5% decrease in breakeven
point.

Test II. Multiple Choice.

Direction: Write the letter of the correct answer beside the number. 2
points each.

1. In job order costing, the indirect labor used is debited to

a. Work in Process
b. Finished goods
c. Factory overhead
d. Payroll
2. Which basic document accumulates product cost for job order?
a. Invoice
b. Purchase order and purchase requisition
c. Requisition sheet
d. Job cost sheet
3. Which of the following labor costs is debited to Work in Process?
a. SSS premiums employer’s share
b. Bonus
c. Shift premium
d. Overtime premium due to customer rush order
4. All of the following source documents are essential labor accounting,
except
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a. Time card
b. Daily time ticket
c. Weekly time report
d. Logbook
5. The segment for which you are estimating the cost is called the
a. activity driver
b. consumption ratio
c. cost object
d. sustaining activity
6. Which of the following is true regarding activity-based management?
a. ABM is using information about activities to manage portions of the
organization other than costs.
b. ABM is applying ABC to external financial reporting.
c. ABM requires the use of re-engineering principles.
d. All of the above are true.
7. Which company is LEAST likely to use job-order costing?
a. Furniture maker.
b. Printer.
c. Construction company.
d. Flour maker.
8. A cost pool is
a. all costs of a production department.
b. the material and labor cost used on a particular job.
c. overapplied or underapplied overhead costs.
d. a group of overhead costs driven by the same activity.
9. Each group of overhead costs should be applied based on
a. direct labor hours or cost.
b. units produced.
c. whatever activity drives those specific overhead costs.
d. machine time.
10. A POOR reason to use activity-based overhead rates is that
a. some departments are labor-intensive, some are machine-intensive.
b. significant amounts of overhead are driven by different factors.
c. rates calculated for some departments are much higher than for
other departments.
d. all jobs require about the same amounts of cost-driving activities.
11. The three inventory accounts in a manufacturing company are
a. Materials, Labor, and Manufacturing Overhead.
b. Materials, Labor, and Finished Goods.
c. Materials, Work in Process, and Finished Goods.
d. Materials, Finished Goods, and Inventory Sold.
12. A predetermined overhead rate is calculated using
a. budgeted overhead cost and budgeted activity.
b. actual overhead cost and actual activity.
c. budgeted overhead cost and budgeted direct labor hours.
d. budgeted overhead cost and budgeted direct labor cost.
13. A cost is variable if it varies with the
a. number of units manufactured.
b. number of units sold.
c. level of some activity.
d. selling price of the product.
14. Fixed costs that managers can change on short notice are
a. value-adding costs.
b. variable costs.
c. unavoidable costs.
d. discretionary costs.
15. Direct costs are
a. associated with a specific activity.
b. always variable.
c. usually committed.
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d. usually discretionary.

For questions 16-21 use the information below:

Pomelo Company has two service departments (1 and 2) and two operating
(producing ) departments (A and B). Data provided are as follows:

Service Operating
Departments Departments
1 2 A B
Direct Cost P150 P300 P5,000 P6,000
Services performed by Department 1 40% 40% 20%
Services performed by Department 2 20% 70% 10%

Assuming the direct method is used to allocate service department costs:

16. What is the service department cost allocated to Department B?
a. P50 b. P60 c. P87.50 d. P150
17. What is the total cost of Department A?
a. 5,000 b. 5, 295.83 c. 5, 362.50 d. 5, 270

Assuming the step-down method is used to allocate service department

cost:
18. What is the service department costs allocated to Department B?
a. P60 b. P100 c.P75 d. P66
19. What is the total cost of department A?
a. 5,375 b. P5,350 c. P5,075 d. P5,270
Assuming the algebraic method is used to allocate service department
cost:
20. What is the service department cost allocated to department
B(rounded)?
a. P60 b. P75 c. P84.78 d. P135
21. What is the total cost of Department A (rounded)?
a. 5,365 b. P5,087 c. P5,375 d. P5,085
Questions 22-29 are based on the following data:
Angel Company’s beginning and ending inventories for the month of November
are:
November 1 November 30
Direct materials 67,000 62,000
Work in Process 145,000 171,000
Finished Goods 85,000 78,0000

Production data for the month of November follows:

Direct Labor 200,000
Actual factory overhead 132,000
Direct materials purchased 163,000
Transportation in 4,000
Purchase returns and allowances 2,000

Angel uses one factory overhead control account and charges factory
overhead to production at 70% of direct labor cost. The company does not
formally recognize over/under applied overhead until year end.

22. Angel company’s prime cost for November is:

a. 370,000 b. 168,000 c. 363,000 d. 170,0000
23. Angel company’s cost of goods sold for November is:
a. 484,000 b. 491,000 c. 502,000 d. 476,00
24. Angel company’s net charge to factory overhead control for the month
of November
a. 8,000 debit,overapplied
b. 8,000 debit,underapplied
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c. 8,000 credit,overapplied
d. 8,000 credit,underapplied
25. Angel company’s conversion cost for November is:
a. 305,000 b. 310,000 c. 308,000 d. 300,000
26. Angel company’s Direct materials cost for November is:
a. 168,000 b. 170,000 c. 165,000 d. 160,000
27. Angel company’s Goods Put into process cost for November is:
a. 513,000 b. 615,000 c. 650,000 d. 655,000
28. Angel company’s Cost of goods manufactured cost for November is:
a. 484,000 b. 477,000 c. 485,000 d. 490,000
29. Angel company’s goods available for sale for November is:
a. 486,000 b. 569,000 c. 570,000 d. 575,000

Questions 30-31 are based on the following data:

Lyndon Company manufactures lifting equipment. One order from James
Corporation for 200 lifting equipment showed the following costs per
unit.
Materials P400
Labor 175
Factory overhead, 160% of direct
labor cost (150% in cases in
which defective costs are to be
charged to a specific order)
Final inspection revealed that 15 of the units were not properly
produced. Correction of each defective unit requires P50 for
materials, P80 for labor, and factory overhead at the appropriate.
30. Assuming cost of defective units are charged to all jobs, what is the
unit cost of finished goods?
a. P650 b. P640 c. P655 d. 550
31. Assuming cost of defective units is charged to the job order, what is
the unit cost of finished goods?
a. P674.85 b. P475.50 c. P656.25 d. 690.50
32. Digong Company is a manufacturing concern using perpetual inventory
system. The following materials inventory account data is provided:
Beginning balance 275,000
Other debits to the account 825,000
Excess of ending inventory over beginning inventory 55,000

How much is the cost of materials issued to production?

a. 770,000 b. 1,045,000 c. 1,100,000 d. 1,155,000

33. Dada Fitness Center employs a job order cost system. Its manufacturing
activities in July 2018, its first month of operation, are summarized as
follows;
Job Numbers
1 2 3 4
Direct materials P7,000 P5,800 P11,600 P5,000
Direct labor cost P6,600 P6,000 P8,400 P2,400
Direct labor hours 1,100 1,000 1,400 400
Unit produced 200 100 1,000 300

Manufacturing overhead is applied at a rate of P2 per direct labor hour to

variable overhead, P3 per hour for fixed overhead.
Jobs1, 2 and 3 were completed in July.
What is the cost of the completed jobs?
a. P62,900 b. 62,500 c. P72,900 c. 65,900s

34. John Company uses job order cost system and applies factory overhead
to production order on the basis of direct labor cost. The overhead
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rates for 2018 are 200% for Department A and 50% for Department B. Job
123, started and completed during 2018 was charged with the following
costs:
Department
A B
Direct materials P25,000 P5,000
Direct labor ? 30,000
Factory overhead 40,000 ?

The total manufacturing cost associated with job 123 should be

a. P135,000 b. P180,000 c. 195,000 d. 240,000

Use the following information for questions 35 through 37.

Estimated manufacturing overhead for year 1 P30,000+ (P5.00 x DLH)

Estimated direct labor hours for year 1 2,000 hours

Assume My Loves Manufacturing had worked on two jobs. A-01 and A-02 last
year. 1,200 hours of direct labor were spent on Job A-01. While 1,000 hours
of direct labor were spent on Job A-02. The actual manufacturing overhead
was P37,000.

35. The predetermined overhead rate for Boone Manufacturing is:

a. P 2.00 per unit C. P20.00 per DLH
b. P15.00 per DLH d. P30.00 per DLH
36. What is the expected manufacturing overhead for an actual level of
activity equal to 2,200 direct labor hours.
a. P30,000 b. P38,000 c. P40,000 d. P41,000
37. What was the amount of overhead applied to Job A-01?
a. P6,000 b. P16,000 c. P24,000 d. P44,000
The following information relates to Donna Corporation for the last year.
Donna uses direct labor hours as an overhead base.
Estimated direct labor hours 136,000 hours
Estimated manufacturing overhead costs P 108,000
Actual manufacturing overhead costs 108,480
Applied manufacturing overhead costs 110,000

38. What was the actual number of direct labor hours worked last year at
Donna Corporation?
a. 86,784 hours c. 135,600 hours
b. 88,320 hours d. 137,500 hours
39. Banaba Company provided inventory balances and manufacturing cost data
for the month of January.

Under Banaba’s cost system, any over-or underapplied overhead is

closed to the cost of goods sold account at the end of the calendar
year.

Inventories: January January 31

Direct materials P30,000 P40,000
Work-in-process 15,000 20,000
Finished goods 65,000 50,000

Month of January
Factory overhead applied P150,000
Cost of goods manufactured 515,000
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Direct materials used 190,900
Actual factory overhead 144,000
What is the cost of goods sold at actual costing?
a. P509,000 c. P530,000
b. P524,000 d. P536,000

Items 40 and 42 are based on the following data:

During March, Mj Company incurred the following costs on Job Order 111 for
manufacturing of 200 units:

Original cost accumulation:

Direct materials P 660
Direct labor 800
Factory overhead (150% of direct labor cost) 1,200
P2,660
Direct costs of reworking 10 units:
Direct materials P 100
Direct labor 160
P 260
40. The rework costs were attributable to the exacting
specifications of Job Order 111 and the full rework costs were charged
to this specific job. What is the cost per finished unit of Job Order
III?
a. P15.80 c. P14.00
b. P14.60 d. P13.30
41. Assuming the rework costs were attributable to internal failure,
what is the cost per finished unit of Job 109?
a. P15.80 c. P14.00
b. P14.60 d. P13.30
Almendras Manufacturing Co. has provided you with the following
information.
Raw materials purchased P 135,000
Beginning raw materials inventory 100,000
Ending raw materials inventory 175,000
Factory overhead (including P85,000 of indirect
labor and P20,000 of indirect materials) 227,500
Total manufacturing cost 960,000
42. Direct labor cost for the year amounted to
a. P677,500 c. P642,500
b. P382,500 d. P692,500
43. Spooner applies overhead based on direct labor cost. It had budgeted
manufacturing overhead of $50,000 and budgeted direct labor of $25,000.
Actual overhead was $52,500, actual labor cost was $27,000. Overhead was

a. overapplied by $1,500.
b. overapplied by $2,000.
c. overapplied by $2,500.
d. underapplied by $2,000.

44. Hayward applies overhead at $5 per machine hour. During March it

worked 10,000 hours and overapplied overhead by $3,000. Actual overhead
was
a. $53,000.
b. $50,000.
c. $47,000.
d. $50,000.
White Farm Supply’s records for the three months of its existence show
purchases of Commodity A as follows:
No. of Units cost

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August 5,500 P280,500
September 8,000 416,000
October 5,100 270,300
Total 18,600 P966,800
The inventory of Commodity A at the end of October using FIFO is
valued at P363,900.
45. Assuming that none of commodity A was sold during August and
September, what value would be shown at the end of October if average
cost was assumed?
a. P351,900 c. P358,662
b. P353,300 d. P365,700
46. A confectioner, a chain of candy stores, purchases its candy in bulk
from its suppliers. For a recent shipment, the company paid P3,000 and
received 8,500 pieces of candy that are allocated among three groups.
Group 1 consists of 2,500 pieces that are expected to sell for P0.25
each. Group 2 consists of 5,500 pieces that are expected to sell for
P0.60 each. Group 3 consists of 500 pieces that are expected to sell for
P1.20 each. Using the relative sales value method, what is the cost per
item in group 1?
a. P0.166 c. P0.250
b. P0.200 d. P0.375
47. The closing raw materials inventory of Castle Building Manufacturing
Company amounted to P450,000 at December 31, 2014. This total includes
an item of raw material (material zap) with a cost of P150,000 with a
replacement cost of P120,000. Immediately after the balance sheet date,
material Zap was applied to production and the cost of the finished
product where material Zap was applied revealed that its net selling
price is lower than the cost of producing the finished goods. As of
December 31, 2014, what amount of raw materials inventory should Castle
Building Manufacturing Company report?
a. P300,000 c. P420,000
b. P330,000 d. P450,000
48. DJH has an average unit cost of $20 at 20,000 units and $13.75 at
40,000 units. What is the total fixed cost?
a. $125,000
b. $250,000
c. $400,000
d. $350,000
49. Hoyt Company applies overhead at $4 per direct labor hour. In March
Hoyt incurred overhead of $96,000. Underapplied overhead was $4,000.
How many direct labor hours did Hoyt work?
a. 25,000
b. 24,000
c. 23,000
d. 22,000
50. Scooter Corp had no beginning inventories, finished 40,000 units, and
sold 36,000 units. There were no ending inventories of materials or
work in process. Materials purchased and used were $225,000; direct
labor and overhead were $170,000. Ending inventory would be valued at
a. $17,000.
b. $22,500.
c. $39,500.
d. some other number.

Test III. Comprehensive Problem:

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Direction: Answer the following requirements below. Write your answers on
the separate sheets of paper.

Department 1 Department 2
Units:
Started/received 30,000 25,000
Completed and 25,000 18,000
transferred
In process, end 5,000 7,000
Stage of completion 60% 80%
Costs:
Materials 142,500 156,250
Labor 98,000 94,400
Overhead 70,000 73,160
Additional information:
In department 1, materials are added as follows:
50% at the beginning of the process
20% when the units are 30% complete
30 At the end of the of the process
while in Department 2, materials are added at the start of the process.

Requirement:
Prepare the cost of production reports for Department 1 and Department
2. (30 points)

“smile bahalag nagpait” 

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