Cost accounting and Control PDF

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F F __________2. The by-laws of a company expresses what an organization wants to accomplish and how its products and services can uniquely meet its targeted customers’ needs. T __________3. Strategy is the plan that indicates how an organization will fulfil its goals and objectives by deploying its resources to create value for customers and shareholders. F __________4. Financial accounting comprises financial and nonfinancial information intended to meet internal users’ needs. F __________5. Cost leadership refers to a company’s ability to offer superior quality products or more unique services than competitors. T __________6. Competence means that individuals will develop and maintain the skills needed to practice their profession. F __________7. Factory Overhead are direct costs. F __________8. The determination of the Cost of Goods Sold is a preliminary step in the preparation of the Cost of Goods Manufactured schedule. T __________9. The disposition of the over/underapplied Factory Overhead should be allocated between Work in Process, Finished Goods and Cost of Goods Sold, when material in amount. T __________10. The least squares regression analysis is a statistical technique that analyzes the relationship between dependent and independent variables.

Part II. Multiple Choice Theories. Write on the space provided, the letter of your answer. (1.5 points each) C __________11.

Factory rent is A. A prime cost and an inventoriable cost. B. A prime cost and a period cost. C. A conversion cost and an inventoriable cost. D. A conversion cost and a period cost.

B __________12.

Indirect labor is a A. Prime cost B. Product cost

C. D.

Period cost Non-manufacturing cost

__________13. B

For a manufacturing company, which of the following is an example of a period rather a product cost? A. Depreciation of factory equipment B. Wages of salesperson. C. Wages of machine operators D. Insurance on factory equipment

B __________14.

When a unit of a product is the cost object, factory overhead generally is: A. A direct manufacturing cost B. An indirect manufacturing cost C. Both of the above D. None of the above

B __________15.

As current technology changes manufacturing processes, it is likely that direct A. labor will increase B. labor will decrease C. materials will increase

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D.

materials will decrease

C __________16.

For inventoriable costs to become expenses under the matching principle, A. The product must be finished and in stock. B. The product must be expensed based on its percentage of completion. C. The product to which they attach must be sold. D. All accounts payable must be settled.

A __________17.

If the amount of “Cost of Goods Manufactured” during a period exceeds the amount of “Total manufacturing costs” for the period, then A. Ending Work in process is less than the amount of the beginning work in process inventory. B. Ending Work in process is equal to cost of goods manufactured. C. Ending Work in process is greater than the amount of the beginning work in process inventory. D. Ending Work in process inventory is greater than or equal to the amount of the beginning work in process inventory.

D __________18.

Immaterial amounts of over/applied Factory Overhead is disposed in the following accounts: A. Raw Materials C. Finished Goods B. Work in Process D. Cost of Goods Sold

D __________19.

The following are factors in the computation of the High-Low Method to get the variable cost per unit except: A. Highest Cost C. Lowest Cost B. Activity related to Lowest Cost D. Average Cost

A __________20.

Predetermined factory overhead is used in this kind of costing: A. Normal C. Actual B. Both of the choices D. None of the choices

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Part III.

Applications (2.5 points each) Supply the answer of the following problems and transfer them to the answer sheet

A.

Josiah Inc. has provided the following information for 20x5: a. Purchased raw materials on account for P120,000. b. Issued P115,000 in raw materials to production (P22,000 were not traceable to specific jobs). c. Incurred P115,000 in direct labor costs (14,375 hours) and P62,500 in supervision costs (paid in cash). d. Incurred the following additional manufacturing overhead costs: factory lease P24,000 (paid in cash); depreciation on equipment P20,000; custodial supplies P7,500 (paid in cash). e. Incurred the following nonmanufacturing costs, both paid in cash: advertising P75,000; sales commissions P88,000. f. Applied manufacturing overhead to jobs in process at a rate of P10 per direct labor hour. g. Completed jobs costing a total of P345,000. h. Sold jobs for P425,000 on account. The cost of the jobs was P342,000. i. Closed the Manufacturing Overhead account balance. Compute for the following: 1. What is the Ending Balance of the Work In Process? ___________ 2. What are the Total Manufacturing Costs? __________ 3. What is the Cost of Goods Sold? (after adjustment of over/under applied Factory Overhead, assumed to be immaterial) __________ 4. What is the over/underapplied Factory Overhead? (indicate whether over or under applied) _________ 5. What is the Gross Profit? __________

B.

The following were from the books of Sun Company for March 2015: Inventories March 1, 2015 Raw Materials P ? Work in process 90,000 Finished Goods 120,000 Raw materials purchased Factory overhead, 75% of direct labor cost Selling and Administrative expense, 10% of sales Net income for March, 2015

March 31, 2015 P 20,000 100,000 180,000 100,000 126,000 50,000 50,000

Required: 6. Cost of goods sold for March __________ 7. Cost of goods manufactured for March __________ 8. inventory of raw materials as of March 1. __________ C. Beach Inc. had produced 10,000 units of corral necklaces during the year. To produce the 10,000 units, the following costs were incurred during the year: Factory rent 120,000 Direct labor 80,000 Indirect labor 65,000 Utilities 12,000 (60% is variable) Other factory

Direct materials Indirect materials Depreciation expense Repairs (30% is fixed) Electricity Page 3 of 5

60,000 10,000 20,000 40,000 70,000...