MIDTERM EXAMINATION

3rd Term SY 2019-2020

Course Code: Course Title: Professor:

ACC 103 COST ACCOUNTING & COST Concordio S. Quisaot
CONTROL

Name: GONZALES, Adolph Christian C. Date: 3/19/2020

2017131436
Student No: Score:

A. Multiple Choice

REF PARTICULARS

1 MATERIALS
2 LABOR
3 FACTORY OVERHEAD
3.1 Variable
3.2 Fixed
4. ADMINISTRATIVE
5. SELLING AND MARKETING
6. DISTRIBUTION COST

Based on the above, answer the following:

1. items 1, 2 and 3 (including 3.1 and 3.2) are called:

a. Period Cost b. Product Cost

c. Cost of Goods Sold d. Cost of Goods Manufactured and Sold

2. items 1, 2 and 3 (including 3.1 and 3.2) are cost elements in:

a. variable costing b. direct costing

c. period costing d. absorption costing

3. Items 4, 5 and 6 are called:

 a. Period Cost b. Product Cost
c. Cost of Goods Sold d. Cost of Goods Manufactured and Sold

4. Items 1, 2 and 3.1 are cost elements in:

a. variable costing b. direct costing

c. period costing d. absorption costing

5. items 1, 2 and 3 are cost elements in:

a. Period Cost b. Product Cost

c. Cost of Goods Sold d. Cost of Goods Manufactured and Sold

6. items 1, 2 and 3 are cost elements that may be found in:

a. Balance sheet only b. Income statement only

c. Balance sheet and Income statement d. None of the choices

7. Items 4, 5 and 6 are accounting elements that can be found in:

a. Balance sheet only b. Income statement only

c. Balance sheet and Income statement d. None of the choices

8. Indirect labor and Indirect Materials are cost elements that can be found in:

a. Factory overhead b. Labor and Materials on the finished goods

b. Administrative Expenses c. Selling and Marketing Expenses

9. Issuances of direct materials and charges of direct labor are charged to:

a. Work in process –Materials and Work in process-Labor, respectively

b. Factory Overhead
c. Cost of goods manufactured and sold
d. Finished Goods

10. Items 1,2,3,4,5, and 6 are common elements of:

a. Balance sheet accounts b. Income Statement accounts

c. Product cost accounts d. Period cost accounts

Part 2. Method of accumulating product cost

 Cost Elements 1. Actual 2. Normal 3. Standard Costing 4. ABC
system
Material Actual Actual Std Qty x Selling Price Actual
Labor Actual Actual Std. Hrs x Std Rate Actual
Overhead Actual Predetermined Predetermined Overhead
Overhead Rate x Overhead rate x Rate per
Actual level of standard level of activity x
Output output actual level
of output

Based on the above methods of accumulating product costt 1 to 4, give examples or scenario in terms of
financial transactions and make journal entries for each transaction. Transactions should be from
issuance of materials, charging of labor and overhead to work-in process up to its completion to finished
goods.

Make different products for each scenario and show your journal entries on a separate sheet of paper.

Scenario 1. Actual Costing

Shardz co. produces floor tiles and their transactions for the month of March are as follows:

 On March 1, purchased raw materials totaling to P200,000.

 Materials amounting to P190,000 are requisitioned and placed in production on March 2

 Used direct labor for designing plain tiles, amounted to 90,000. March 3

 Factory Burden in March 4 totaled, P100,000

 In March 5 works in process with a cost of P300,000 are completed and transferred to

finished goods warehouse.

 Products worth P200,000 are sold to customers. March 6.

Scenario 2. Normal Costing

The following were Reedman Glassworks transactions for the month of March

a. R.G purchased raw materials for P2,000,000

b. 1.5 Million of the direct materials were transferred for use in production in Works in process Dept. 2.

c. 500,000 of the direct materials were labeled as indirect materials.

d. Direct labor hours consumed by the job in Dept. 2 costed 1,000,000

e. The indirect labor hours for the job done costed 200,000

f. Some indirect costs are to be paid next month worth 2,000,000

g. Overhead amounting to 1,000,000 were assigned to a rendering job.

h. R.G’s direct labor hours and predetermined overhead rate is 120,000 and P10 respectively.

i. The works in process were finished and its costs are transferred into finished goods inventory. The
amount is 2,500,000

j. Revenue amounted to 3,250,000 (POHR of 1.3 multiplied by 2,500,000)

Scenario 3. Standard Costing

Makinilya company. produces money safes and their transactions for the month of March are as follows:

They have produced 40,000 safes

Standard Variable costs per unit (per safe)

Direct Materials; $1 per pound $1.00

Direct Labor; .10 hrs at $16 $ 1.60

Variable Manufacturing overhead .10 hrs at $4 $ .40

Fixed Manufacturing Overhead cost

Monthly budget for xxxx safes

Actual production costs

Direct Materials purchased 100,000 lbs at $1.20 120,000

Direct materials used – 90000 lbs at $1.20 108,000

Direct labor 6000 hours at $14 84,000

Factory overhead 111,000

Scenario 4. ABC Costing

The following are transactions of Mano-mano manufacturing Inc

a. Purchased materials on account worth 900,000

b. Transferred raw materials for production worth 520,000, with 30,000 being indirect
c. Incurred factory labor costing 400,000 with 100,000 being direct and 300,000 indirect
d. Recorded machine depreciation of 100,000
e. Other indirect costs for manufacturing amounted to 110,000
f. Control manufacturing overhead is 610,000
g. Production finished goods amounting to 1,500,000
h. Cost of sales is 900,000
i. Sales amounted to 1,300,000

Part 3. Prepare Balance Sheet, Income Statement and Cash Flows.

Instruction:

Add the journal entries you prepared above to our previous excel database. Use the month of
March for the date. Prepare closing entries and generate the three basic financial statements. Do screen
shots and paste them to a word document and submit together with your answers of this exam.

Actual Costing (Journal Entries)

Normal Costing (Journal Entries)

Standard Costing (Journal Entries)

ABC Costing (Journal Entries)

FINANCIAL STATEMENTS:
 Part 4. Complete the following diagram to illustrate the interrelationship of the 3 basic financial
statements.

Balance Sheet

1 2 3

Income Statement
4
5 6 7 8 9

10 11 12

Statement of Cash Flow

Fill in the correct answer from 1 to 12.

Answer

1. Assets 10. Operating

2. Liabilities 11. Investing
3. Capital 12. Financing
4. Accumulated Depreciation
5. Non-Current
6. Current
7. Non-Current
8. Revenue
9. Expense