Cost Accounting Systems (A. Traditional Cost Accounting)
COST ACCOUNTING SYSTEMS
C. should be cost cost effective in design and and selection D. all the abo above ve answers answers are correct
A. TRADITIONAL COST ACCOUNTING Cost concepts Committed vs. Discretionary Discretionary fixed costs Commited fixed costs 7. Which of the following is an example of a committed fixed costs? A. direct materials C. supervisor’s supervisor’s salary B. depreciation on a factory building D. insurance on a building
THEORIES: Basic concepts Cost Accounting 1. Cost accounting accounting involves involves the measuring, measuring, recording, recording, and reporting reporting of A. product costs C. future costs B. manufact uring process D. managerial accounting decisions
16. An example of a committed committed fixed cost is: A. a training program for for salespersons. salespersons. B. executive travel expenses. C. property taxes taxes on the factory building. D. new product product research research and development. development.
Cost management 3. The cost management function is usually under under A. the chief information officer. officer. C. purchasing manager. manager. B. treasurer. D. controller. 2.
The cost management information system system provides provides information information A. that the accountant needs needs to prepare the financial financial statements. statements. B. that the manager manager needs to effectively effectively manage manage the firm. C. that the manager needs needs to effectively manage manage not-for-profit organization. organization. D. b and c.
4.
The main focus of cost management management information information must be A. usefulness and accuracy. C. usefulness and timeliness. B. timeliness and accuracy. accuracy. D. relevance and good format.
Discretionary fixed cost 8. Which of the following is an example of discretionary discretionary fixed cost? cost? A. direct labor C. property taxes on a factory building building B. insurance on a building building D. depreciation on a factory building Controllable costs 10. Controllable costs costs are: A. Costs that management decides to incur in the current period to enable the company to achieve operating objectives other than the filling of orders placed by customers. B. Costs that are governed mainly nly by past decisions that established established the present levels of operating and organizational capacity and that only change slowly in response to small changes in capacity. C. Costs that will unaffected by current managerial managerial decisions. decisions. D. Costs that are likely to respond respond to the amount of attention devoted to them by a specified manager.
5. With regard to the task of management’s decision making, cost management information is needed to A. make sound strategic strategic decisions decisions regarding choice choice of products, products, methods, and techniques. techniques. B. support recurring decisions decisions regarding replacement replacement of equipment, managing cash cash flow, etc. C. provide a fair and effective effective basis for identifying identifying inefficient operations. operations. D. provide accurate accurate accounting for for inventory, receivables, receivables, and other other assets.
11. Controllable costs for responsibility responsibility accounting purposes purposes are directly influenced only by A. A given manager within within a given period. period. B. A change change in activity. C. Production volume. D. Sales volume.
Product costing 6. Product costing costing system system design design or selection: selection: A. requires an understanding understanding of the nature nature of the business business B. should provide useful useful cost information information for strategic and and operational decision decision needs 739
Cost Accounting Systems (A. Traditional Cost Accounting)
Imputed costs 12. An imputed cost is A. The difference in total costs which results from selecting one choice instead of another. B. A cost that does not entail any cash outlay but which is relevant to the decision-making process. C. A cost that may be shifted to the future with little or no effect on current operations. D. A cost that continues to be incurred even though there is no activity.
B. cannot be identified readily with a given product C. can be assigned to product only by a process of allocation D. would not be incurred if the product did not exist 9.
Cost According to Behavior Semi-variable costs 14. Semi-variable costs A. per unit remain the same regardless of total output B. remain the same within the relevant range of output C. increase in steps as the amount of the cost driver volume increases D. have both fixed and variable components in them
The distinction between direct and indirect costs depends on whether a cost A. is controllable or non-controllable. B. is variable or fixed. C. can be conveniently and physically traced to a cost object under consideration. D. will increase with changes in levels of activity.
19. Of most relevance in deciding how indirect costs should be assigned to products is the degree of A. Linearity. C. Avoidability. B. Causality. D. Controllability. Comprehensive 13. Almos, Inc. makes ski-boards in Davao. Identify the correct matching of terms. A. Fiberglass is factory overhead B. Plant real estate taxes are a period cost C. Depreciation on delivery trucks is a product cost D. Payroll taxes for workers in the Packaging Dept. are direct labor
Step cost 15. A step cost is A. the same as semi-fixed cost B. the same as mixed cost C. a cost that increases in steps as the amount of cost-driver volume increases D. a and c only.
Traditional Costing Accounting 28. An accounting system that focuses on transactions is A. an activity-based accounting system. C. a traditional accounting system. B. a product life cycle costing system. D. all of the above.
Product Cost vs. Period Cost Period cost 18. Which of the following would NOT be a period cost for a manufacturing firm? A. Selling expenses B. Salary paid to the CEO of the company C. Repairs to the Receptionist's computer D. Utilities in manufacturing plant
29. Traditionally, managers have focused cost reduction efforts on A. activities. C. departments. B. processes. D. costs.
Direct vs. indirect costs 17. What kind of costs can be conveniently and economically traced to a cost object or pool? A. Indirect Costs. C. Direct Costs. B. Relevant Costs. D. Overhead Costs.
33. Which of the following is a trait of a traditional cost management system? A. unit-based drivers C. tracing is intensive B. detailed activity information D. focus on managing activities 23. Which of the following is typically regarded as a cost driver in traditional accounting practices? A. number of purchase orders processed C. number of transactions processed B. number of customers served D. number of direct labor hours worked
47. Direct product expenses A. are incurred for the benefit of the business as a whole 740
Cost Accounting Systems (A. Traditional Cost Accounting)
C. both a and b D. neither a nor b
21. Which of the following is not a trait of a traditional cost management system? A. unit-based drivers C. focus on managing activities B. allocating intensive D. narrow and rigid product costing 24. Which of the following is not typical of traditional costing systems? A. Use of a single predetermined overhead rate. B. Use of direct labor hours or direct labor cost to assign overhead. C. Assumption of correlation between direct labor an incurrence of overhead cost. D. Use of multiple cost drivers to allocate overhead.
Process Costing 40. Which of the following items is not a characteristic of a process cost system? A. Once production begins, it continues until the finished product emerges B. The products produced are heterogeneous in nature C. The focus is on continually producing homogeneous products D. When the finished product emerges, all units have precisely the same amount of materials, labor, and overhead
Overhead allocation 35. Conventional product costing uses which of the following procedures? A. Overhead costs are traced to departments, then costs are traced to products. B. Overhead costs are traced to activities, then costs are traced to products. C. Overhead costs are traced directly to product. D. All overhead costs are expensed as incurred.
Actual Costing, Normal costing, & Standard Costing Predetermined overhead rate 39. The formula for computing the predetermined manufacturing overhead rate is estimated annual overhead costs divided by an expected annual operating activity, expressed as A. direct labor cost C. direct labor hours B. machine hours D. any of these
36. The overhead rates of the traditional approach to product costing use A. nonunit-based cost drivers C. unit-based cost drivers B. process costing D. job-order costing
37. The two main advantages of using predetermined factory overhead rates are to provide more accurate unit cost information and to: A. simplify the accounting process B. provide cost information on a timely basis C. insure transmission of correct data D. adjust for variances in data sources
Effect of Traditional overhead allocation 22. The use of unit-based activity drivers to assign costs tends to A. overcost low-volume products. C. overcost all products. B. overcost high-volume products. D. undercost all products.
34. The effect of uniform production levels on production cost per unit can be achieved A. by using a factory overhead rate based on different production levels for each year B. by using a factory overhead rate based on selling price C. by closing the factory overhead at the end of the accounting period D. by using a factory overhead rate based on long-run normal production activity level
30. Traditional overhead allocations result in which of the following situations? A. Overhead costs are assigned as period costs to manufacturing operations. B. High-volume products are assigned too much overhead, and low-volume products are assigned too little overhead. C. Low-volume products are assigned too much, and high-volum e products are assigned too little overhead. D. The resulting allocations cannot be used for financial reports.
38. No matter which method is used, underapplied or overapplied overhead usually is adjusted only: A. at the end of a year. B. monthly during the year C. if the difference exceeds P1,000 or one percent of total overhead. D. when the company's profit projections require an adjustment
32. Product costs can be distorted if a unit-based cost driver is used and A. nonunit-based overhead costs are a significant proportion of total overhead B. the consumption ratios differ between unit-based and nonunit-based input categories 741
Cost Accounting Systems (A. Traditional Cost Accounting)
Actual Costing 43. Disadvantages of actual costing include A. actual cost systems cannot provide accurate unit cost information on a timely basis B. actual cost systems produce unit costs that fluctuate from period to period C. estimates must be used when calculating the actual overhead rate D. a and b
B. overhead rate.
D. product activity.
27. The term cost driver refer to: A. any activity that can be used to predict cost changes. B. the attempt to control expenditures at a reasonable level. C. the person who gathers and transfers cost data to the management accountant. D. any activity that causes costs to be incurred.
Normal Costing 42. The principal difficulty with normal costing is that A. the unit cost information is not received on a timely basis B. it can result in fluctuating per-unit overhead costs C. estimated overhead and estimated activity are likely to differ from actual overhead and actual costs, resulting in underapplied or overapplied overhead D. there is no difficulty associated with using normal costing
26. 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. 31. Which of the following statements is true? A. The traditional approach to costing uses many different cost drivers. B. Costs that are indirect to products are by definition traceable to directly to products. C. Costs that are indirect to products are traceable to some activity. D. All of the above statements are true.
46. Normal costing and standard costing differ in that A. the two systems can show different overhead budget variances. B. only normal costing can be used with absorption costing. C. the two systems show different volume variances if standard hours do not equal actual hours. D. normal costing is less appropriate for multiproduct firms.
41. Why is it better to use separate overhead rates? A. Some departments are labor-intensive, some are machine-intensive. B. Labor rates vary considerably among departments. C. The resulting overhead rates are all about the same. D. All jobs require about the same percentage of time in all departments.
Standard Costing 20. The product cost which is determined in a conventional standard cost accounting system is a(an) A. Joint cost. C. Expected cost. B. Fixed cost. D. Direct cost.
Operating Leverage 45. If company A has a higher degree of operating leverage than company B, then: A. the company A has higher variable expenses. B. the company A's profits are more sensitive to percentage changes in sales. C. the company A is more profitable. D. the company A is less risky.
Plant-wide vs. Department-side Overhead Rates 44. Volume-based plant-wide rates produce inaccurate product cost when: A. a large share of factory overhead cost is not volume-based B. firms produce a diverse mix of product C. large volumes of production occur D. Both a and b are correct. Activity-based Costing 25. An activity that has a direct cause-effect relationship with the resources consumed is a(n) A. cost driver. C. cost pool. 742
Cost Accounting Systems (A. Traditional Cost Accounting)
PROBLEMS: Total manufacturing costs i. Direct materials and direct labor costs total P120,000, conversion costs total P100,000, and factory overhead costs total P400 per machine hour. If 150 machine hours were used for Job #201, what is the total manufacturing cost for Job #201? A. 120,000 C. 180,000 B. 160,000 D. 280,000
vi. ABC Company had a total overhead of P360,000 and selling and administration expense of P140,000 for the year. 1,000 units of A and 3,000 units of B were produced. Assuming that 20% of all overhead are batch-related for 1,000 batches, 40% of which was for producing product A, batch-related overhead for product A per unit amounts to A. P20 C. P60 B. P40 D. P80
Overhead Budgeted overhead ii. Machine hours used to set the predetermined overhead rate were 25,000, actual hours were 24,000, and overhead applied was P60,000. Budgeted overhead for the year was A. P57,600. C. P60,000. B. P59,000. D. P62,500.
vii. ABC Company had a total overhead of P360,000 and selling and administration expense of P140,000 for the year. 1,000 units of A and 3,000 units of B were produced. Assuming that 30% of overhead is product related overhead - 20% of which is related to product A, productrelated overhead per unit of A amounts to A. P30 C. P50 B. P40 D. P60
Overhead per unit iii. ABC Company had a total overhead of P360,000 and selling and administrative expense of P140,000 for the year. 1,000 units of A and 3,000 units of B were produced. A requires 3 machine hours and B requires one machine hour per unit. What is overhead chargeable per unit of A A. P 60 C. P120 B. P 90 D. P180
Total overhead variance viii. Cooke Company uses the equation P450,000 + P1.50 per direct labor hour to budget manufacturing overhead. Cooke has budgeted 150,000 direct labor hours for the year. Actual results were 156,000 direct labor hours and P697,500 total manufacturing overhead. The total overhead variance for the year is A. P4,500 favorable. C. P4,500 unfavorable. B. P18,000 favorable. D. P18,000 unfavorable.
iv. ABC Company had a total overhead of P360,000 and selling and administration expense of P140,000 for the year. 1,000 units of A and 3,000 units of B were produced. A requires 3 and B requires one machine hours per unit. A requires 6 direct labor hours and B requires 4 direct labor hours per unit. 40% of overhead is related to labor and the balance to machines. Laborrelated overhead per hour amounts to A. P 8 C. P18 B. P12 D. P24
Over(under)-applied overhead ix. If estimated annual factory overhead is P800,000, estimated annual direct labor hours are 400,000, actual June factory overhead is P82,000, and actual June direct labor hours are 38,000, then overhead is: A. P6,000 overapplied C. P1,800 underapplied B. P1,800 overapplied D. P6,000 underapplied
v.
Gross profit x. BKY Company predicted that factory overhead for 2006 and 2007 would be P60,000 for each year. The predicted and actual activity for 2006 and 2007 were 30,000 and 20,000 direct labor hours, respectively. 2006 2007 Sales in units 25,000 25,000 Selling price per unit P10 P10 Direct materials and direct labor per unit P 5 P 5
ABC Company had a total overhead of P360,000 and selling and administration expense of P140,000 for the year. 1,000 units of A and 3,000 units of B were produced. A requires 3 and B requires one machine hours per unit. A requires 6 direct labor hours and B requires 4 direct labor hours per unit. 40% of overhead is related to labor and the balance to machines. The overhead per unit of B amounts to A. P 60 C. P156 B. P 68 D. P180 743
Cost Accounting Systems (A. Traditional Cost Accounting)
The company assumes that the long-run production level is 20,000 direct labor hours per year. The actual factory overhead cost for the end of 2006 and 2007 was P60,000. Assume that it takes one direct labor hour to make one finished unit. When the annual estimated factory overhead rate is used, the gross profits f or 2006 and 2007, respectively, are A. P 75,000 and P 75,000 C. P125,000 and P125,000 B. P 75,000 and P 55,000 D. P 75,000 and P 50,000
A. 22,000 and 24,000 B. 26,000 and 24,000
C. 24,000 and 26,000 D. 26,000 and 26,000
xv. Dodge Company has a mixing department and a refining department. Its process-costing system in the mixing department has two direct materials cost categories (material J and material P) and one conversion costs pool. The company uses First-in, First out cost flow method. The following data pertain to the mixing department for November 2006 Units Work in process, November 1: 50 percent completed 15,000 Work in process, November 30, 70 percent completed 25,000 Units started 60,000 Completed and t ransferred 50,000 Costs Work-in-process, November 1 P218,000 Material J 720,000 Material P 750,000 Conversion Costs 300,000 Material J is introduced at the start of operations in the Mixing department, and Material P is added when the product is three-fourths completed in the mixing department. Conversion costs are added uniformly during the process. The respective equivalent units for Material J and Material P in the mixing department for November 2006, are A. Both 50,000 units C. 75,000 units and 60,000 units B. 60,000 units and 50,000 units D. 60,000 units and 75,000 units
Process costing Work in process xi. Britney Company has unit costs of P10 for materials and P30 for conversion costs. If there are 2,500 units in ending work in process, 40% complete as to conversion costs, and fully complete as to materials cost, the total cost assignable to the ending work in process inventory is A. P 45,000 C. P 75,000 B. P 55,000 D. P100,000 Overhead component xii. In the Star Company, the predetermined overhead rate is 80% of direct labor cost. During the month, P210,000 of factory labor costs are incurred, of which P180,000 is direct labor and P30,000 is indirect labor. Actual overhead incurred was P200,000. The amount of overhead debited to Work in Process Inventory should be A. P120,000 C. P168,000 B. P144,000 D. P160,000 Equivalent unit of production xiii. The Assembling Depar tment’s output during the period consists of 20,000 units completed and transferred out, and 5,000 units in ending work in process 60% complete as to materials and conversion costs. Beginning inventory is 1,000 units, 40% complete as to materials and conversion costs. The equivalent units of production are A. 22,600 C. 24,000 B. 23,000 D. 25,000
xvi. The cost of goods completed and transferred out to the Refining department was A. P1,930,750 C. P1,600,500 B. P1,350,000 D. P1,550,500 xvii. The Amor Company’s accounting records reflected the following data for April 2003. The company accounts its production using First-in, First-out cost flow method: Work in process, March 31,2003, 60% completed as to materials and conversion costs ? units Work in process, April 30, 2003, 30% completed as to materials and conversion costs 24,000 units Equivalent units of production for April 2003 64,000 Units started and completed in April 50,000
xiv. The Amor Company has 2,000 units in beginning work in process, 20% complete as to conversion costs, 23,000 units transferred out to finished goods, and 3,000 units in ending work in process one-third complete as to conversion costs. The beginning and ending inventory is fully complete as to materials costs. Equivalent units for materials and conversion costs are 744
Cost Accounting Systems (A. Traditional Cost Accounting)
How many units were in the beginning work-in-process? A. 6,800 C. 17,000 B. 11,333 D. 24,000
Started during the period Material Alpha Material Beta Direct labor cost Factory overhead Transferred to finished goods Work in process (95% complete), April 30
xviii. Had the company used the weighted-average method of accounting for its production, the equivalent units should be A. 74,200 C. 81,000 B. 57,200 D. 53,800
20,000 units P26,800 P22,500 P75,160 P93,950 14,000 4,000
xxi. How much were Material cost per equivalent unit for Alpha and Beta, respectively? A. P1.40; P1.36 C. P1.34; P1.06 B. P1.40; P1.06 D. P1.34; P1.25
Units to be accounted for xix. In the Newman Company, there are zero units in beginning work in process, 7,000 units started into production, and 500 units in ending work in process 20% completed. The physical units to be accounted for are A. 7,000 C. 7,600 B. 7,360 D. 7,340
xxii. The equivalent units of production for Material Alpha and Beta are Alpha Beta A. 18,000 14,000 B. 18,000 18,000 C. 20,000 18,000 D. 20,000 14,000
Cost of Finished Goods Transferred xx. For the month of May, the Production Control Department of La Mesa, Inc. reported the following production data for Finishing Department (second department): Transferred-in from Assembly Department 75,000 Transferred-out to Packaging Department 59,250 In-process end of May (with 1/3 labor and factory overhead) 15,750 All materials were put into process in Assembly Department. The Cost Accounting Department collected these figures for Finishing Department. Unit cost for unit transferred-in from Assembly Department P 2.70 Labor cost in Finishing Department 41,280.00 Applied factory overhead 112.5% of labor cost How much was the cost of Finished goods transferred out to the Packaging Department? A, P240,555 C. P260,580 B. P 80,580 D. P159,975
xxiii. The number of normal and abnormal lost units are: Normal Abnormal A. 700 1,400 B. 1,400 700 C. 900 1,100 D. 1,100 900 Material cost Unit material cost xxiv. Catridge Company has no beginning work in process; 9,000 units are transferred out and 3,000 units in ending work in process are one-third finished as to conversion costs and fully complete as to materials cost. If total materials cost is P60,000, the unit materials cost is A. P5.00 C. P5.45 B. P6.00 D. P5.35
Comprehensive Use the following data to answer question Nos. 18 through 20. Mergy Company uses process costing in accounting for its production department, which uses two raw materials. Material Alpha is placed at the beginning of the process. Inspection is at the 85% completion stage. Material Bravo is then added to the good units. Normal spoilage units amount to 5% of good output. The company records contain the following information for April:
Lost units xxv. Lapid Company uses process costing. All materials are added at the beginning of the process. The product is inspected when it is 90 percent converted, and spoilage is identified only at that point. Normal spoilage is expected to be 5% of good output. 745
Cost Accounting Systems (A. Traditional Cost Accounting)
The following are extracted from the production records of Lapid Company for May 2003: Units put into process 21,000 Units transferred to finished goods 14,000 In-process, May 31, 75% complete 6,000 How many are considered abnormal lost units? A. Zero C. 15 B. 300 D. 850
Total manufacturing cost ii.
iii.
Statement of Cost of Goods Manufactured & Sold Use the following information that pertains to beta manufacturing company to answer questions 21 through 23: Beginning direct materials inventory Beginning WIP inventory Beginning finished goods inventory Ending direct materials inventory Ending WIP inventory Ending finished goods inventory Purchases Direct labor Factory overhead
P 20,000 20,000 40,000 10,000 100,000 50,000 140,000 160,000 200,000
iv.
v.
xxvi. What is the amount of direct materials used during the period? A. P140,000 C. P 60,000 B. P130,000 D. P150,000
Answer: D Total number of hours: (1,000 x 3) + (3,000 x 1) Overhead cost per hour (P360,000 ÷ 6,000) Overhead charged per unit of product A: 3 hrs. x P60
P2.50 P62,500
6,000 P 60 P180
Answer: A Labor-related overhead: (P360,000 x 0.40) Total number of labor hours: (1,000 x 6) + (3,000 x 4) Labor-related overhead per DLH: (P144,000 ÷ 18,000)
P144,000 18,000 P 8
Answer: B Machine-related overhead: (P360,000 x 0.6) Total number of machine hours (1,000 x 3) + 3,000 Machine-related OH per MH: (P216,000 ÷ 6,000)
P216,000 6,000 P36
P32 36 P68
The overhead is broken down into two volume-based cost pools. This is a more modified example of traditional costing
xxviii. What is the amount of cost of goods sold during the period? A. P430,000 C. P470,000 B. P420,000 D. P510,000
Answer: C Direct materials and direct labor Factory overhead P400 x 150
(P60,000 ÷ 24,000) (25,000 x P2.50)
Overhead applied per unit of Product B: Labor-related (4 hours x P8) Machine-related (1 x P36) Overhead per unit
xxvii. What is the amount of cost of goods manufactured during the period? A. P430,000 C. P470,000 B. P420,000 D. P510,000
i.
Answer: D Overhead rate per hour Budgeted overhead
P180,000
P120,000 60,000 746
vi.
Answer: B Batch related costs: (360,000 + 140,000) × 20% P100,000 Batch related costs, Product A: 100,000 × 40% 40,000 Batch-related overhead per unit of Product A: 40,000 / 1,000 P 40 In ABC costing, there is no need to make a distinction between manufacturing and nonmanufacturing costs in computing the relevant product costs
vii
Answer: A
Cost Accounting Systems (A. Traditional Cost Accounting)
Product-related overhead cost (360,000 + 140,000) × 30% Product-related overhead cost, Product A: 150,000 × 20% Product-related overhead cost per unit, Product A: 30,000 / 1,000 P 30 A Variable overhead Predetermined fixed overhead (P450,000 ÷ 150,000) Total overhead rate Actual overhead Applied overhead (156,000 hours x P4.50) Total overhead variance, favorable
P150,000 P 30,000
xi.
P1.50 3.00 P4.50 P697,500 702,000 P 4,500
xii.
Answer: B Materials cost (2,500 x P10) Conversion cost (2,500 x 0.4 x P30) Total costs of Work in Process
P25,000 30,000 P55,000
viii. Answer:
ix.
Answer: D Applied overhead Actual overhead Underapplied overhead Overhead rate per direct labor hour
x.
38,000 x P2
(P800,000 ÷ 400,000)
Answer: B The amount of overhead applied to production should be 80 percent of direct labor cost (P180,000 x 0.80) = P144,000
xiii . Answer:
B Completed units Work in process, End (5,000 x 0.6) Total equivalent units, average
P76,000 82,000 P6,000
20,000 3,000 23,000
xiv. Answer:
B Units completed and transferred out Work in Process, End
23,000 3,000
P2.00
Answer: B Gross Profit: 2006: (25,000 x 10) - 175,000 = P75,000 2007: (25,000 x 10) - 195,000 = P55,000
Completed units WIP - End Weighted-Average EUP
Overhead application rates: 2006: 60,000/30,000 = P2.00 2007: 60,000/20,000 = P3.00
xv.
Materials % of Completion EUP 100 23,000 100 3,000 26,000
Answer: B Computation of equivalent units Work-in-process, Nov. 1 Units started and completed Work-in-proce ss, Nov. 30 EUP
Unit Costs: 2006: 5 + 2 = P7.00 2007: 5 + 3 = P8.00 Costs of goods sold: 2006: 25,000 x P7 P175,000 2007: (5,000 x P7) + (20,000 x P8) P195,000 Note: In 2007 the company has a beginning inventory of 5,000 units at unit cost of P7.
Conversion Costs % of Completion EUP 100.00 23,000 33.33 1,000 24,000
Answer: C Work in process-beginning Cost, Nov. 1 Cost, November
Material J 35,000 25,000 60,000
xvi.
747
P218,000
Material P 15,000 35,000 50,000
Cost Accounting Systems (A. Traditional Cost Accounting)
Material P (15,000 x P5) Conversion 7,500 x P5 Started, completed 35,000 P32
225,000 37,500
262, 500
Unit Cost: Transferred in Labor and overhead 87,720/64,500 Total Cost of finished goods transferred out 59,250 x 4.06
P 480,500 1,120,000
Cost of goods transferred out
2.70 1.36 4.06 P240,555
P1.600,500 Unit Costs Material J Material P Conversion costs Total xvii.
xviii.
xxi. Answer:
720,000/60,000 750,000/50,000 300,000/60 ,000
Answer: C Equivalent units for April Less: EU – started and completed during: April Work-in-process, end (24,000 x 3) Equivalent units - work-in-process end Mar 31 Number of units in process as of March 31 6,800 40 Answer: A Equivalent units – FIFO Add equivalent units in March 31 (17,000 x .6) Weighted Average EUP
P12 15 5 P32
Transferred to F.G. End Process Normal lost units Abnormal lost unit Total Unit cost Alpha P26,800 20,000 = P1.34 Beta P22,500 18,000 = P1.25
64,000 50,000 7,200
57,200 6,800
xxii .
17,000
64,000 10,200 74,200 xxiii .
xix. Answer:
A The number of units to be accounted should be the sum of the units in beginning work in process and the number of units that have been started during the period
xx.
Answer: A EUP: Transferred out to Packaging Dept. In process, end 15,750 x 1/3 Total
D Equivalent units
xxiv.
59,250 5,250 64,500 748
Answer: C Equivalent units Transferred to F.G. End Process Normal lost units Abnormal lost unit Total
Alpha 14,000 4,000 900 1,100 20,000
Beta 14,000 4,000 0 0 18,000
Alpha 14,000 4,000 900 1,100 20,000
Beta 14,000 4,000 ______ 18,000
Answer: C Total lost units (20,000 – 18,000) Total lost units 5% x 18,000 Abnormal lost units Answer: A Completed and transferred out Units in work-in-process, End (3,000 x 100%) Equivalents units of production - Materials Materials cost per EUP (P60,000 ÷ 12,000)
2,000 900 1,100
9,000 3,000 12,000 P5.00
Cost Accounting Systems (A. Traditional Cost Accounting)
xxv.
xxvi.
Answer: B Total lost units (21,000 – 20,000) Less normal lost units 5% of 14,000 Abnormal lost unit Answer: D Beginning materials inventory Add Materials Purchased Total cost of materials available for use Deduct Materials inventory, End Cost of materials used
xxvii.
Answer: A Direct materials used Direct labor Overhead Total manufacturing costs Add Work in process, beginning Total costs placed in process Deduct Work in process, end Cost of goods manufactured Answer: B Cost of goods manufactured Add finished goods inventory, beginning Total cost of goods available for sale Deduct finished goods inventory, end Cost of goods sold
1,000 700 300
P 20,000 140,000 160,000 10,000 P150,000
P150,000 160,000 200,000 510,000 20,000 530,000 100,000 P430,000
xxviii.
P430,000 40,000 470,000 50,000 P420,000
749