Sheet1
Cost Accounting 2
HOLY TRINITY UNIVERSITY
Final Examinations
Name:
Write your answer on the the space provided.
1
A standard cost system may be used in
a. Job order costing but not process costing
b. Either job order costing or process costing
c. Process costing but not job order costing
d. Neither process costing nor job order costing
2
Which of the following is least likely to be involved in establishing standard
costs for evaluation purposes?
a. Budgetary accountants
b. Industrial engineers
c. Top management
d. Quality control personnel
3
The difference between the actual amounts and the flexible budget amounts
for the actual output achieved is the
a. Production volume variance
b. Flexible budget variance
c. Sales volume variance
d. Standard cost variance
4
The sales volume variance equals
a. A flexible budget amount minus a staticbudget
b.Actual operating income minus flexible budget operating income.
c. Actual unit price minus budgeted unit price, times the actual units
produced.
d. Budgeted unit price times the difference between actual inputs and
budgeted inputs for the actual activity level achieved.
5
An unfavorable price variance occurs because of
a. Price increases for raw materials.
b. Price decreases for raw materials.
c. Less than anticipated levels of waste in the manufacturing process.
d. More than anticipated levels of waste in the manufacturing process.
Page 1
Sheet1
6
Price variances and efficiency variances can be key to the performance
measurement within a company. In evaluating the performance within a
company, a materials efficiency variance can be caused by all of the
following except the
a. Performance of the workers using the material.
b. Actions of the purchasing department.
c. Design of the product.
d. Sales volume of the product
7
A debit balance in the direct labor efficiency variance account indicates that
a.Standard hours exceed actual hours
b. Actual hours exceed standard hours
c. Standard rate and standard hours exceed actual rate and actual hours.
d. Actual rate and actual hours exceed standard rate and standard hours.
8
Excess direct labor wages resulting from overtime premium will be disclosed
in which type of variance?
a. Yield
b. Quantity
c. Labor efficiency
d. Labor rate
9
The difference between the actual labor rate multiplied by the actual hours
worked and the standard labor rate multiplied by the standard labor hours is
the
a. Total labor variance
b. Labor rate variance
c. Labor usage variance
d. Labor efficiency variance
10 The difference between the actual and standard price of an input, multiplied
by the actual quantity equals
a. Price (rate) variance
b. Controllable variance
c. Spending variance
d. Quantity (usage) variance
Page 2
Sheet1
11
The fixed factory overhead application rate is a function of a predetermined
activity level. If standard hours allowed for good output equal this
predetermined activity level for a given period, the volume variance will be
a. Zero
b. Favorable
c. Unfavorable
d. Either favorable or unfavorable,depending on the budgeted overhead.
12 A spending variance for variable factory overhead based on direct labor
hours is the difference between actual variable factory overhead and the
variable factory overhaed that should have been incurred for the actual
hoursworked. This variance results from
a. Price and quantity differences for factory overhead costs.
b. Price differences for factory overhead costs
c. Quantity differences for factory overhead costs
d. Differences caused by variations in production volume.
13 Which of the following standard costing variances would be least controllable
by a production supervisor?
a. Overhead volume
b. Overhead efficiency
c. Labor efficiency
d. Materials usage
14 Under two-variance method for analyzing FOH, the difference between the
actual FOH and the FOH applied to production is
a. Controllable variance
b. Net overhead variance
c. Efficiency variance
d. Volume variance
15 Under three-variance method for analyzing FOH, the difference between the
actual FOH and the FOH applied to production is
a.Net FOH variance
b. Controllable variance
c. Efficiency variance
d.Spending variance
Page 3
Sheet1
16-19
Jordan Co manufactures product X with the ff standard costs of direct
materials and direct labor:
Direct Materials, 20 yards @ P13.50 per yard
Direct labor, 4 hours at P90.00 per hour
Php270.00
360.00
The ff information pertains to the month of May:
Direct materials purchased, 18,000 yards @ P13.80 per yard Php248,400.00
Direct labor, 2,100 hours at P91.50 per hour
192,150.00
Direct materials used, 9,500 yards
Production during May
500 units
16 What is the DM price variance (based on purchases)?
a. P5,400F
b. P5,400U
c. P6,750F
d. P6,750U
17 What is the material usage variance?
a. P5,400F
b. P5,400U
c. P6,750F
d. P6,750U
18 What is the direct labor rate variance?
a. P3,150F
b. P9,000F
c. P3,150U
d. P9,000U
19 What is the direct labor efficiency variance?
a. P3,150F
b. P9,000F
c. P3,150U
d. P9,000U
Page 4
Sheet1
The ff direct manufacturing labor information pertains to the manufacture of
20 product Glu:
Time required to make one unit
2 DHL
Number of direct workers
50
Number of productive hours per week, per worker
40
Weekly wages per worker
P500
20% of wages
Worker's benefits treated as direct manufacturing labor
costs
What is the standard direct manufacturing labor cost per unit of Glu?
a. 30
b. 24
c. 15
d. 12
21 Harper Co uses a standard cost system. Data relating to direct labor for the
month of August is as follows:
Direct labor (DL) efficiency variance-favorable
standard DL rate
Actual DL rate
Standard hours allowed for actual production
Php5,250.00
Php7.00
Php750.00
Php9,000.00
What are the actual hours worked for the month of August?
a. 9,750
b. 8,400
c. 8,300
d. 8,250
22 The ff information pertains to Bates Co's direct labor for March:
Standard direct labor hours
Actual DL hours
Favorable DL rate variance
Standard direct labor rate per hour
21,000
20,000
Php8,400
6.30
What was Bate's total actual direct labor cost for March?
a. 117,600
b. 118,000
c. 134,000
d. 134,400
23 The flexible budget for the month of May was for 9,000 units with direct
materials at P15 per unit.
Direct labor was budgeted at 45 minutes per unit for a total of P81,000.
Actual output for the month was 8,500 units with P127,500 in direct materials
and P77,775 in direct labor expense. The direct labor standard of 45 minutes
was maintained throughout the month. Variance analysis of the performance
for the month of May would show
Page 5
Direct labor was budgeted at 45 minutes per unit for a total of P81,000.
Actual output for the month was 8,500 units with P127,500 in direct materials
and P77,775 in direct labor expense.
The direct labor standard of 45 minutes
Sheet1
was maintained throughout the month. Variance analysis of the performance
for the month of May would show
a.7,500 favorable materials usage variance
b. 1,275 favorable DL efficiency variance
c. 1,275 unfavorable DL efficiency variance
d. 7,500 unfavorable material usage variance
e. 1,275 unfavorable DL price variance
24-25
Tiny tykes Co had the following activity relating to its fixed and variable OH
for the month of July:
Actual costs:
Fixed OH
120,000
Variable OH
80,000
Flexible budget:
(Std input allowed for actual output achieved x the budgeted rate)
Variable OH
90,000
Applied:
(Std input allowed for actual output achieved x the budgeted rate)
Fixed OH
125,000
Variable OH spending variance
Production volume variance
2,000F
5,000U
If the budgeted rate for applying variable OH was P20 per direct labor hour,
how efficient or inefficient was tiny tykes Co in terms of using DL hours as an
24 activity base?
a. 100 DL hours inefficient
b. 100 DL hours efficient
c. 400 direct labor hours inefficient
d. 400 DL hours efficient
e. 500 DL hours efficient
25 The fixed OH efficiency variance is
a. 3,000F
b. 3,000U
c. 5,000F
d. 10,000U
e. Not a meaningful variance
Page 6
Sheet1
The ff informtion is available for Oriental Corp for the month of October:
Beg WIP (75%)
Started
Ending WIP (60% complete)
Abnormal spoilage
Normal spoilage (Continuous)
Transferred out
14,500 units
75,000 units
16,000 units
2,500 units
5,000 units
66,000 units
Costs of Beg WIP:
Materials
Conversion costs
Php25,100.00
50,000.00
Costs this month:
Materials
Conversion costs
Php120,000.00
300,000.00
All materials are added at the start of the process.
26 Using weighted average, what are the equivalent units for materials?
a. 82,000
b. 89,500
c. 84,500
d. 70,000
27 Using weighted average, what are the equivalent units for conversion costs?
a. 80,600
b. 78,100
c. 83,100
d. 75,600
28 What is the cost per equivalent unit for materials using weighted average?
a. 1.72
b. 1.62
c.1.77
d. 2.07
29 What is the cost per equivalent unit for conversion costs using the weighted
average?
a. 4.62
b. 4.21
c. 4.48
d. 4.34
30 Using FIFO, what are the equivalent units for materials?
a. 75,000
b. 72,500
c. 84,500
d. 70,000
Page 7
Sheet1
31 Using FIFO, what are the equivalent units for conversion costs?
a. 72,225
b. 67,225
c. 69,725
d. 78,100
32 Using FIFO, what is the cost per equivalent unit for materials?
a. 1.42
b. 1.66
c. 1.71
d. 1.60
33 Using FIFO, what is the cost per equivalent unit for conversion costs?
a. 4.46
b. 4.15
c. 4.30
d. 3.84
34 Assume that the FIFO EUP cost for materials and conversion are P1.50 and
P4.75,respectively. Using FIFO, what is the total cost assigned to the units
transferred out?
a. 414,194
b. 339,094
35
c. 445,444
d. 396,975
Kode Co manufactures a major product that gives rise to by-product called
May. May's only separable cost is a P1 selling cost when a unit is sold for
P4. Kode accounts for May's sales by deducting the P3 net amount from
cost of goods sold of the major product. There are no inventories. If Kode
were to change its method of accounting for May from a by-product to a joint
product, what would be the effect on Kode's overall gross margin.
a. Gross margin increases by P1 for each unit of May sold.
b. Gross margin increases by P3 for each unit of May sold
c. Gross margin increases by P4 for each unit of May sold.
d. No effect
Page 8
Sheet1
36
From a particular joint process, Vangie Company produces three products:
X,Y and Z. Each product may be sold at the time point of split off or
processed further. Additional processing requires no special facilities, and
productionof further processing are entirely variable and traceable to the
product involved. In 2003, all three products were processed beyond splitoff. Joint production costs for the year were P60,000. Sales value and costs
needed to evaluate Vangie 2003 production policy follow:
Addt'l Costs & Sales Value if
process further
Units
Sales Value @
Product
Produced
Split-off
Sales value
Added Costs
X
6,000 Php25,000.00 Php12,000.00
Php9,000.00
Y
4,000
41,000.00
45,000.00
7,000.00
Z
2,000
24,000.00
32,000.00
8,000.00
Joint costs are allocated to the products in proportion to the relative physical
volume of output. For units of Z, the unit production cost most relevant to a
sell-or-process-further decision
a. P4
b. P5
c. P9
d. P12
37 The Cleaner's Manufacturing Corp uses Raw and In process (RIP) Inventory
account and expensed all conversion costs to the cost of goods sold
account.
At the end of each month, all inventories are counted, their conversion cost
components are estimated and inventory account balances are adjusted
accordingly. Raw material cost is backflushed form RIP to finished goods.
The following information is for May:
RIP, May 1
RIP, May 31
Raw materials purchased
Conversion costs incurred
Conversion costs allocated
Finished goods, May 1
Finished goods, May 31
38,700
41,900
680,000
4,800
5,300
12,000
10,000
What is the calculated material cost to be backflushed from RIP to COGS?
a. 718,700
c. 676,800
b. 688,800
d. 678,800
Page 9
Sheet1
China Manufacturing Corp produces three products from the same process
and incurs joint processing costs of P60,000. The following information is
available for the month:
Gallons
M
C
T
Further Processing
Cost
25,000
20,000
5,000
3.00
5.75
1.50
Final SP/Gal
SP/Gal @ split off
7.00
10.00
8.00
3.60
5.00
2.00
Disposal Cost/Gal
@split off
M
C
T
2.00
2.25
1.00
Process Further
1.00
2.00
0.50
38 What amount of the joint processing cost is allocated to the three products
using the sales value at split off?
M
C
T
a.
30,000
18,000
12,000
b.
20,000
20,000
20,000
c.
24,000
33,000
3,000
d.
27,000
30,000
3,000
39 What amount of the joint processing cost is allocated to the three products
using the net realizable value at split off?
M
C
T
a.
30,000
18,000
12,000
b.
20,000
20,000
20,000
c.
24,000
33,000
3,000
d.
27,000
30,000
3,000
40 The product flow format where certain portions of the work are done
simultaneously and then brought together for completion is called?
a. Applied
b. Parallel
c. Standard
d. Sequential
Page 10