Acctg-201 Assignment-2 PDF

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ACCOUNTING 201 COST ACCOUNTINGACCOUNTING 201 COST ACCOUNTING PRELIMINARY EXAMPRELIMINARY EXAM1. It is a part of tIt is a part of the accounting system that measureshe accounting system that measures costs for decisi costs for decision-making and financial reportingon-making and financial reportingpu...

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ACCOUNTING 201 COST ACCOUNTING PRELIMINARY EXAM

1.

It is a part of the the accounting accounting system systemthat that measures measures costs costsfor for decision-making decision-making and andfinancial financialr purposes. a. Financial Financial accounting

c. Responsibility Responsibilityaccounting accounting

b. Cost accounting

d. Segment accounting

2. Traditional Traditionalcost costaccounting accountingmay maybest bestbe bedescribed describedby by a. All All of of the the journals, journals, ledgers, ledgers, records records and andfinancial financialstatements statementsused usedby byan anentity entityto torecord record summarize, summarize,and andreport report the the economic economicevents events of ofsuch entity. b. The Theentire entiregeneral general and andsubsidiary subsidiaryledgers ledgersof ofaamerchandising merchandising firm. Thegeneral generalledger ledgerand andsubsidiary subsidiaryaccounts accountsand andrelated relatedrecords records used used by by an an entity entity to to acc acc c. The the the costs costs of of goods goods or or services services that it it provides. d. The Thesubsidiary subsidiaryledgers ledgersused usedto torecord recordthe theeconomic economicactivities activitiesof the firm. 3. AAcost costaccounting accountingsystem system has hasinternal internaland andexternal external reporting reportingobjectives. objectives. Such Suchobjectives objectivesinc inc following, following, except: except: a. Income determination b. Product Productcosting costingand andinventory inventoryvaluation valuation c. Planning, Planning,evaluation evaluationand andcontrolling controllingoperations operations d. Determination Determination of of sales sales commissions commissions 4. Which Whichof of the thefollowing following statements statementsisis correct? correct? a. The Theaccounting accountingsystem systemisispart partof ofcost costaccounting accountingthat thatmeasures measures cost costfor for decision-makin decision-makin financial financial reporting reporting purposes. purposes. b. Cost Costaccumulation accumulationinvolves involvescollecting collectingcosts costsby bynatural naturalclassification, classification,such suchas asmaterials materialsor o c. Cost Costallocation allocationor orcost costassignment assignmentinvolves involvestracing tracingand andassigning assigningcosts coststo tocost costdrivers, su direct direct labor laborhours hours or ornumber number of ofunits. units. d. Cost Costand andmanagerial managerialaccounting accountingare aregoods goodsin inthe theeconomic economic sense sense and, and, as as such, such, their their cos exceed their benefits. 5. Cost Cost is is the the monetary monetary measure measure of ofthe theamount amountof ofresources resourcesgiven givenup upininobtaining obtaininggoods goodsand ands Costs Costsmay maybe beclassified classifiedas asunexpired unexpiredor orexpired. expired. Which Which of ofthe thefollowing followingcosts costsisisnot notalways always considered considered to to be beexpired expired upon upon being beingrecognized? recognized? a. Salesmen’s commission commission b. Depreciation Depreciation expense expense for for factory factoryequipment equipment c. Cost Cost of of goods goods sold sold d. Salary Salary of of the the company company president president 6. ItItrefers refersto toanything anything(a (aproduct, product,product productline, line,aa business business segment) segment)for forwhich whichcost costisiscompute compute a. Cost object

c. Cost control

b. Cost driver

d. Cost variance

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8. Which Whichof ofthe the following followingstatements statements isis correct? correct? a. AAcost costdriver driverisisan anaccounting accountingtechnique techniqueused usedto tocontrol costs. b. A A cost driver driver is is aa measure measure of of activity, activity,such suchas asdirect directlabor laborhours, hours,machine machinehours, hours,beds bedsoc computer computertime, time,etc. etc.that thatisisaacausal causalfactor factorin inthe theincurrence incurrenceof ofcosts. costs. c. AA cost costdriver driver is isan an accounting accountingmeasurement measurementused used to to evaluate evaluate whether whether or or not not performa proceeding proceeding according according to to plan. plan. d. A cost driver driver is a mechanical mechanical basis basisused usedto toassign assigncosts coststo toactivities. activities.

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9.

Product Product costs costs or or inventoriable inventoriable costs costs a. are charged to expense when when products products become become part part of of the thefinished finished goods goods inventory. inventory. b. include includeonly onlythe theprime primecosts costsof ofproducing producingproduct. product. c. are are treated treated as as assets assets before before the the products products are are sold. sold. d. include includeonly onlythe theconversion conversioncosts costsof ofproducing producingthe theproducts. products.

10. Which Whichof ofthe thefollowing followingisisnot notaaproduct productcost? cost? a. Wages paid to workers workers for for rework rework on defective defective products. products. b. Wages Wages paid paid to to truck truck loaders loaders who who load loadfinished finishedgoods goodsonto ontooutgoing outgoingdelivery deliverytrucks. trucks. c. Fringe Fringe benefits benefits paid paid to to factory factory workers. workers. d. Wages Wages paid paid to to workers workers for for idle idle time timedue dueto tomachine machine breakdown breakdownin inaaproduction productiondepart depart 11. Product costs a. are are always expensed expensed in in the same same period period in in which which they they are are incurred. incurred. b. are inventoriable costs.

c. vary vary directly directly with with changes changes in in the thecost cost driver. d. are always charged to an asset asset account account in inthe the same same period period in inwhich which they are incurred. 12. Manufacturing Manufacturing costs costs do donot notinclude include a. Prime costs b. Conversion costs c. Indirect materials d. Salary Salaryof ofthe thecompany companypresident, president,under underwhom whomisisthe thevice vice president president for for production production 13. Direct labor is a a. prime cost

c. product cost

b. conversion cost

d. all of the above.

14. For Forproduct productcosting costingpurposes, purposes,an anindirect indirectfactory factorycost a. Is Is not not directly directly chargeable chargeable to to the the company. company. b. Is chargeable to prime costs. c. Is Is chargeable chargeable to to conversion conversion costs. costs. d. IsIsnever neverincluded includedin inthe thecomputation computationof ofproduct productcost. cost.

15. A A fixed fixed cost cost that that would would be be considered considered a direct cost is a salary salary of of the the sales sales manager manager when when the the cost cost object object is is the the sales sales department department

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16. Indirect Indirect materials materials and and indirect indirect labor labor are are a. b. c. d.

Prime Cost Yes No No Yes

Conversion Cost Yes No Yes No

Manufacturing Cost Yes Yes Yes No

17. Which Whichof ofthe thefollowing followingisisaadirect directproduct product cost? a. Wood Wood in in aa furniture furniture factory factory b. Salary Salaryof ofthe theforeman foremanininthe theassembly assemblydivision divisionof ofan anautomobile automobilecompany company c. Depreciation Depreciation of ofthe the factory factory equipment equipment d. Salesman’s commission commission 18. Differential costs a. are variable costs b. are are anticipated anticipatedfuture future costs costs that thatwill will differ differamong among various various alternatives. alternatives. c. are arethe thedifferences differencesin incosts costsbetween betweentwo twoalternative alternativecourses coursesof ofaction. action. d. are are costs costs that that differ differ under under alternatives. alternatives. 19. Sunk costs a. are relevant costs. b. can can be changed changed by by a decision decision made made now nowor or to tobe be made madein in the the future. c. are irrelevant for decision-making decision-making purposes. purposes. d. are are decreases in costs costs from from one one alternative to another. 20. When Whenproduction production(in (inunits) units)decreases, decreases,the theaverage averagecost costper per unit unit of ofproduct product increases. increases. This This ii in in average average cost cost per per unit unit is is due due to to the the a. increase increase in in variable variable cost cost per per unit. unit.

c. increase increase in in total total variable variable costs cost

b. increase increase in in fixed fixed cost cost per per unit.

d. increase increase in in total total fixed fixed costs. costs.

21. These These costs costs are are long-term long-term in in nature natureand and cannot cannot be be eliminated eliminated ever ever for forshort short periods periods of of time time affecting affectingthe theprofitability profitabilityof oflong-term long-termgoals goalsof ofthe thefirm. firm. a. Avoidable Avoidable costs

c. Variable costs

b. Committed Committed fixed fixed costs costs

d. Controllable costs

22. Mixed Mixed costs costs are are costs costs that that have have a. variable variable and fixed fixed costs costs components. b. manufacturing manufacturingand andadministrative administrativecosts costscomponents. components. c. selling sellingand andadministrative administrativecosts costscomponents. components. d. direct direct and and indirect indirect costs costs components. components. 23. The Themethod methodof ofaveraging averagingcosts costsand andproviding providingmanagement managementwith withunit unitcost costdata data by by companie companie

depend dependon onthe thetype typeof ofproducts productsbeing beingproduced produced whether whether homogeneous homogeneous or or heterogeneous heterogeneou products. products.The Theappropriate appropriatecosting costingmethods methodsfor forsuch suchtypes typesof ofproducts productsare are H P d t H t P d t

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24. Within Withinthe theaccounting accountingsystem, system,cost costaccounting accounting a. isisaacombination combinationofofmanagerial managerialaccounting accountingand andfinancial financialaccounting accountingsince sinceits itspurpose purposecan ca provide provideinternal internalreports reportsfor foruse useininmanagement managementplanning, planning,control controland anddecision-making, decision-making because becauseits itsproduct productcosting costingfunction functionsatisfies satisfiesexternal externalreporting reportingrequirements. requirements. b. isisconcerned concernedonly onlywith withinternal internalreporting reportingthat thataids aidsmanagement managementin indecision-making. c. can can best best be be defined defined as as external externalreporting reportingto togovernment, government,stockholders, stockholders,and andother otherintere inter parties. d. is isaa combination combination of of managerial managerialaccounting accountingand andresponsibility responsibilityaccounting. accounting. 25. Which Whichof ofthe thefollowing followingalternatives alternativesdoes doesnot notcorrectly correctlyclassify classifythe thebusiness business application application to to th th appropriate appropriate costing costing system? system? a. b. c. d.

Process Costing System Car repair shop Softdrinks manufacturer Wallpaper manufacturer Pen manufacturer

Job-order Costing System Paint manufacturer Public accounting firm Print shop Renovation job contractors

26. The The accounting accounting records records for for 2019 2019 of of EGGS EGGSManufacturing ManufacturingCompany Companyshowed showedthe thefollowing following information: information: Increase in raw materials inventory Decrease in Finished goods inventory Increase in Work-in-Process inventory Raw materials purchased Direct labor payroll Factory overhead Freight out

P45,000 150,000 60,000 1,290,000 1,290,000 600,000 900,000 135,000

The The cost cost of of raw raw materials materials used used for for the the period period amounted amounted to: to: a. P1,245,000 P1,245,000

c. P1,335,000 P1,335,000

b. P1,290,000 P1,290,000

d. P1,380,000 P1,380,000

27. The Thefollowing followinginformation informationpertains pertainsto toAlma AlmaCo., Co.,manufacturing manufacturingprocess process 2019 March 1 March 31 Inventories Direct materials

P36,000

Work in process 18,000 Finished goods 54,000 Additional Additionalinformation informationfor forthe themonth monthof ofMarch: March: Direct materials purchased Direct labor payroll Direct labor rate per hour Factory overhead rate per direct labor hour

P30,000 12,000 72,000 84,000 60,000 7.50 10.00

How How much much must must be be the the prime prime cost, cost, conversion conversioncost, cost,and andcost costof ofgoods goodsmanufactured manufacturedfor forthe th C t f d d

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For For numbers numbers 28 28 and and 29: 29: Adams AdamsCompany Companyuses usesaajob joborder ordercosting costingsystem systemand andthe thefollowing followinginformation informationisisavailable availablefrom from records. records. The The company company has has33 jobs jobsin in process: process: 501, 501, 502 502 and and 503. 503. Raw materials used Direct labor per hour Overhead applied based on direct labor cost

P120,000 P8.50 120%

Direct materials wererequisitioned requisitionedas asfollows followsfor foreach eachjob, job,respectively: respectively:30%, 30%,25% 25%and and25%, 25%, the ofofthe therequisitions requisitionswere wereconsidered consideredindirect. indirect.Direct Directlabor laborhours hoursper perjob job2,500, 2,500,3,100, 3,100,and and4,200, 4,200 respectively. respectively. Indirect Indirect labor labor is is P33,000. P33,000. Other Otheractual actual overhead overhead costs costs totaled totaled P36,000. P36,000. 28. What What is is the the total total amount amount of of actual actual factory factory overhead? overhead? a. P36,000

c. P93,000

b. P69,000

d. P99,960

29. IfIf Job Job503 503 isiscompleted completed and and transferred, transferred,how how much much is is the the total total cost cost transferred transferred to to Finished Finished G G Inventory? a. P96,700

c. P108,540

b. P99,020

d. P139,540

30. Miracle MiracleCompany Companyprovides providesyou youwith withthe thefollowing followinginformation information Jan. 1, 2019

Jan. 31, 2019

Inventories: Materials P? P50,000 Work in process 80,000 95,000 Finished goods 60,000 78,000 January transactions: Purchases Purchases of of materials, materials, P46,000 P46,000 Factory Factoryoverhead overhead(75% (75%of ofdirect directlabor laborcost) cost)P63,000 P63,000 Selling Sellingand andadministrative administrativeexpenses expenses(12.5% (12.5%of ofsales, sales,P25,000) P25,000) Factory Factory overhead overhead control, control, P62,800 P62,800 Net Net income income for for January, January, P25,200 P25,200 Indirect Indirect materials materials used, used, P1,000 P1,000 Compute Computefor formaterials materialsinventory, inventory,Jan. Jan.1, 1,cost costof ofgoods goodsmanufactured manufacturedand andcost costof ofgoods goodssold sold (normal) (normal)for forthe the month monthof ofJanuary, January,2019. 2019. Materials Inventory a. b. c. d.

P40,000 40,200 40,800 41,000

Cost of goods goods d P168,200 168,000 167,800 168,000

Cost of goods goods P150,200 150,000 149,800 150,000

31. Job JobNo. No.41 41(consisting (consistingof of5,000 5,000units) units)was wasstarted startedin in September, September, 2019 2019 and and itit is special in natu

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For For numbers numbers 32 32 to to 33: 33: Work Workin inprocess processof ofAlonzo AlonzoCorporation Corporationon onJuly July1, 1,2019 (per general ledger) is is P22,800.

Direct materials Direct labor

Job 101 P6,000 3,000 3,000

Job 102 P8,000 2,500 2,500

Amount Amountcharged chargedto toWork Workin inprocess processfor forJuly, July,2019 2019 Direct materials Direct labor

Job 101 P3,000 1,000 1,000

Job 102 P2,000 1,500 1,500

Job 103 P6,000 2,600

Job 104 P4,500 2,000

Factory Factoryoverhead overheadisisapplied appliedto toproduction productionbased basedon ondirect directlabor labor cost. cost. Job Job 101 101 and and 103 103 are are comp during during the the month. 32. Cost Costof ofgoods goodsput putinto intoprocess processmust mustbe: be: a. P42,100

c. P45,400

b. P26,860

d. P49,660

33. The Thecost costof ofgoods goodsmanufactured manufacturedfor forthe themonth monthof ofJuly is a. P21,600

c. P25,560

b. P15,400

d. P31,800

34. Marco Marco Corporation Corporation has has aa job job order order cost cost system. system.The Thefollowing followingdebits debits(credits) (credits)appeared appearedin intt general generalledger ledgeraccount accountwork-in-process work-in-processfor forthe themonth monthof ofSeptember, September,2019: 2019: September 1 Balance September 30, direct materials September 30, direct labor September 30, factory overhead September 30, to finished goods

P12,000 40,000 30,000 27,000 (100,000)

Marco Marcoapplies appliesoverhead overheadto toproduction productionat ataapredetermined predeterminedrate rate of of 90% 90% based based on on direct direct labo Job Jobno. no.232, 232,the theonly onlyjob jobstill stillininprocess processatatthe theend endofofSeptember, September,2019, 2019,has hasbeen beencharged chargedww factory factory overhead overhead of of P2,250. P2,250. What Whatwas wasthe theamount amountof ofdirect directmaterials materialscharged chargedto toJob Job232 232as asatatthe theend endof ofSeptember, September,20 2 a. P2,250 b. P2,500

c. P4,250 d. P9,000

35. Justine JustineCompany Companybudgeted budgetedtotal totalvariable variableoverhead overheadcosts costsat atP180,000 P180,000for for the current current period addition additionthey theybudgeted budgetedcosts costsfor forfactory factoryrent rentat atP215,000, P215,000,costs costsfor fordepreciation depreciationon onoffice office equipment equipmentatatP12,500, P12,500,cost costfor foroffice officerent rentatatP92,000, P92,000,and andcosts costsfor fordepreciation depreciationofoffactory factory equipment equipment at at P38,000. P38,000. All Allthese these costs costswere were based basedupon uponestimated estimatedmachine machinehours hoursof of80,000 80,000...