SUHUM SENIOR HIGH TECHNICAL SCHOOL ND 2 MOCK EXAMINATION MAY ,2025 COST ACCOUNTING SHS 3 TIME: 3HOURS 1. 2. 3. 4. OBJECTIVES Which of the following has ascertainment of cost as its objective? a. budgetary control b. Cost accounting c. financial accounting d. management accounting Which of the following is true of cost accounting information? a. it is directed as internal users b. it is directed as external users c. It is available after audit is completed d. it reports to bankers The process of grouping cost according to their common characteristics is a. Ascertainment b. classification c. Identification d. separation Which of the following is a classification of cost according to element? a. Direct cost and indirect cost 5. 6. 7. 8. 9. b. fixed cost and variable cost c. material cost, labour cost and expenses d. variable and fixed cost which of the following is a direct production cost? a. Royalties paid b. Factory rent c. depreciation d. Supervisors salary The process of distributing overheads to service and production cost center is a. Apportionment b. Allocation c. Absorption d. Allotment The process of counting physical stock yearly or twice a year is called a. Periodic stock taking b. Continuous stock taking c. Two bin system d. Tally card The stock level at which replenishment is necessary is the a. Minimum stock level b. Maximum stock level c. Economic order quantity d. Re order level Which of the following is an overhead? a. indirect material b. Direct materials c. Direct labour d. Prime cost 10. Which of the following is not an objective of cost accounting? a. To determine the cost of a product b. To serve as guide to price fixing c. To reveal profitable and unprofitable activities d. To guide potential investors 11. Which of the following is not a component of prime cost? a. cost of special design b. lubricating oil c. Cost of raw materials d. royalty paid 12. The period where workers are paid for not working due to machine breakdown is a. idle time b. lead time c. overtime d. time rate 13. If work-in-progress of 500units is 60% complete, the equivalent of this in complete units are a. 500units b. 300units c. 225units d. 60units 14. When a customer returns goods to a supplier, the supplier issues a a. Credit note b. Debit note c. Sales invoice d. Sales receipt 15. Cost which can be easily traced to a particular Cost Centre or cost unit is called a. indirect cost b. period cost c. direct cost d. Fixed cost 16. Which of the following is not a document used for stores records? a. bin card b. Time sheet c. stores ledger card d. stock verification card 17. The documents used to find the value of closing stock is called a. Stock Record Card b. Stores Ledger c. Bin Card d. Tally Card 18. Which of the following is predetermined cost? a. Product cost b. marginal cost c. job cost d. standard cost 19. Which of the following is not a component of prime cost? a. cost of special design b. lubricating oil c. Cost of raw materials d. royalty paid 20. The following are methods used in the valuation of closing stocks except a. FIFO b. LIFO c. Simple Average d. Double Average 21. The document used when a user department request for materials from stores is called………. a. Material requisition b. Purchases order c. Quotation d. Letter of enquiry 22. Which department places order for purchases a. Stores department b. Purchases department c. Administration d. Selling and distribution department 23. Salary of supervisor in production department is classified as a. indirect wages b. indirect expenses c. direct wages d. cost Centre 24. The amount of money paid to workers for work done is called a. Remuneration b. Fees c. Labour Turnover d. Indirect labour 25. To ascertain net profit a. Cost of sales should be deducted from sales b. Sales should be deducted from cost of sales c. Purchases should be added to opening stock d. Operating expenses should be subtracted from gross profit 26. Cost of sales can be ascertained by adding the values of a. Purchases b. Issues c. Receipts d. Sales values 27. The stock level where stock is not allowed to fall under normal working condition is called a. Maximum stock level b. Minimum stock level c. Re order level d. Danger level 28. A cost written off in the year in which it is incurred is called a. Period cost b. Relevant cost c. Irrelevant cost d. Continues cost 29. A cost that cannot be affected by the decision of management is called a. Period cost b. Relevant coast c. Irrelevant cost d. Continues cost 30. Rent is a a. Direct cost b. Indirect cost c. Continues cost d. Labour cost 31.Which of the following costs would be classified as a variable cost? a. Rent expense b. Depreciation expense c. Direct labour cost 32.Which costing method assigns the actual cost of direct materials, direct labour, and overhead to products or services? a. Absorption costing b. Variable costing c. Job costing d. Process costing 33.In cost-volume-profit analysis, the contribution margin is calculated as: a. Selling price minus variable costs b. Total revenue minus fixed costs c. Gross profit minus operating expenses d. Net income divided by sales revenue 34.What is the formula to calculate the predetermined overhead rate in a job-order costing system? a. Estimated total manufacturing overhead / Estimated total direct labor cost b. Actual total manufacturing overhead / Actual total direct labor cost c. Actual total manufacturing overhead / Estimated total direct labor cost d. Estimated total manufacturing overhead / Actual total direct labor cost 34.The break-even point is the point at which: a. Total revenue equals total variable costs b. Total revenue equals total costs c. Total revenue equals total fixed costs d. Total revenue equals total profit 35.Standard costing is a technique used to: a. Determine the actual costs incurred for products or services b. Establish target sales prices for products or services c. Measure and analyze variances between actual and expected costs d. Calculate the break-even point for a business 36.The variance between actual direct materials cost and the standard direct materials cost is known as: a. Direct materials efficiency variance b. Direct materials price variance c. Direct labour efficiency variance d. Direct labour rate variance 37.Which of the following is true about standard costing? a. It is only applicable in manufacturing industries b. It is used to determine the selling price of products c. It is a static budgeting technique d. It provides a benchmark for evaluating performance 38.Which of the following variances is associated with the difference between the actual hours worked and the standard hours allowed for production? a. Direct labour rate variance b. Direct labour efficiency variance c. Direct materials price variance d. Direct materials usage variance 39.The process of recording and controlling the acquisition, usage, and disposition of materials in an organization is known as: a. Cost accounting b. Inventory management c. Materials control d. Financial accounting 40.The document used to request the purchase of materials from a supplier is called a: a. Sales invoice b. Purchase order c. Delivery note d. Goods received note 41.The cost of materials used in production is recorded in which account? a. Raw materials inventory b. Work-in-progress inventory c. Finished goods inventory d. Cost of goods sold 42.the process of physically counting and verifying the quantity of materials on hand in the inventory is known as: a. Receiving materials b. Material requisition c. Material inspection d. Physical inventory 44. Service costing is a costing technique used to determine the cost of providing: a. Goods to customers b. Manufacturing products c. Services to customers d. Inventory to suppliers 45. The formula to calculate the cost per unit of service in service costing is: a. Total service cost / Number of service units b. Total service cost - Number of service units c. Total service cost × Number of service units d. Total service cost + Number of service units 46. Contract costing is a costing technique used to determine the cost of: a. Manufacturing products b. Providing services c. Construction or engineering projects d. Inventory management 47. In contract costing, the direct costs associated with a contract include: a. Labor costs and overhead costs b. Material costs and labor costs c. Direct material costs and overhead costs d. Direct labor costs and direct material costs 48. Which of the following is a challenge specific to contract costing compared to other costing methods? a. Difficulty in identifying direct costs b. Complexity of manufacturing processes c. Variability in service demand d. Uncertainty in contract scope and duration 49. Process costing is a costing method used to determine the cost of: a. Manufacturing products b. Providing services c. Construction or engineering projects d. Inventory management 50. In process costing, the costs are accumulated by: a. Jobs b. Orders c. Processes or departments d. Activities THEORY ANSWER ONLY TWO QUESTIONS FROM THIS SECTION 1. Define stock taking b. Explain the following I. continuous stock taking II. periodic stock taking III. labour remuneration C. Explain the following and identify the sources of each I. Material requisition II. Purchases requisition III. Purchases order 2. a. State five benefits of cost accounting. b. Explain five qualities of good cost accounting information. 3. a. Explain the purpose of retention in contract costing. 3mks b. Distinguish between joint product and by-product. 4marks c. List four characteristics of job order costing. 12 marks 4. Explain the following terms as used in processing costing: i. Normal loss ii. By-product. iii. Abnormal loss. iv. Abnormal gain. b. Mention three organizations that use process costing in their operations and their cost unit. PRACTICALS ANSWER ONLTY THREE QUESTIONS FROM THIS SECTION 1 The following information relates to Oyinmo Ventures July 1 ,2018 opening stock 500units @ ₵20 July 4 Purchases 400units @₵21 July 6 sales 600units @ ₵25 July 8 Purchases 800units @₵24 July 9 Sales 500units@₵30 July 24 Purchases 500units@₵25 July 13 Sales 300units@₵30 July 28 Purchases 400units@₵15 Selling, distribution and administration expenses amounted to ₵400 You are required to prepare a stores ledger account using the a. i. First In First Out Method ii. Weighted Average Method 2. Pioneer contractors was awarded a road contract valued at Le 950,000 on January ,2011. The contract is supposed to be completed in 2018. The architect’s certificate agreed 10% retention to be released a year after completion. The following information relates to the contract Le Materials purchased 9,000 Direct wages 55,000 Materials issued from store 25,000 Hiring cost of equipment 45,500 Absorbed overhead 13,500 Materials on site as at 31-12-2011 20,00 Contract expenses 8,000 Cash received as payment 225,000 Value of work certified 250,000 Work uncertified 31/12/2011 32,500 Prepayments carried down 5,000 Lighting and heating owing 8,000 You are required to prepare the a. Contract account and, b. Contractee’s account for the year ended 31-12-11 15 marks 3. Adenta manufacturing company has the following information in its books for the year ended 31st December,2016 Sales 20,000@ GH₵300 Fixed factory overhead GH₵ 150,000 Administration costs GH₵ 50,000 Variable selling and distribution overhead GH₵ 100,000 Direct labour GH₵ 60 per unit Direct materials GH₵ 60 per unit Production unit GH₵ 2,500 Variable factory overhead GH₵ 20 per unit You are required to prepare a statement showing the profit or loss for the company using a. Marginal costing techniques b. Absorption costing technique. 15 marks QUESTION4 BIG UP Enterprise manufactures two products KK and BF using common methods and tools KK BF Number of outputs in kg 5000 6000 Labour Hours per unit 3 7 Machines hours per unit 9 10 Set-up in a period 35 45 Orders handled in a period 15 25 Overheads for the period; GH₵ Relating to machine activity 74,000 Relating to order handling 50,000 Relating to production set-up 180,000 Required: Calculate the overhead to be absorbed per unit of each product based on ABC approach using suitable cost drivers. 5. The following relates to the earnings of five employees of a firm Name of employees Hours worked Rate per hour(GHC) Kwesi 300 40 Kojo 150 30 Kwabena 350 20 Kwaw 125 50 Kofi 400 20 You are given the following additional in formation a. Nontaxable rent allowance enjoyed by all employees is 10% of basic earnings b. All employees contribute 5% of basic earnings to Social Security fund c. Health insurance is GHC 20 for all employees this is not subject to tax d. Kwabena and kwaw contribute GHC10 each to social club as dues e. Income tax is 10% You are required to prepare payroll for the month.
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