CITY COLLEGE OF FINAL

CALAMBA EXAMINATION
DEPARTMENT OF BUSINESS EDUCATION

COST ACCOUNTING
Eugenio S. Otic Jr.
Name:______________________ Date:_______________
Section:_____________________

Test I: MULTIPLE CHOICE

1. All of the following accounts would be acceptable ones to credit at the time scrap is sold except:
A. Scrap Sales
B. Cost of Goods Sold
C. Factory Overhead Control
D. Work in Process
E. all of the above would be acceptable
2. In a process cost system, the cost of spoilage due to an internal production failure should be recorded as:
A. dr. Work in Process; cr. Finished Goods
B. dr. Work in Process; cr. Factory Overhead Control
C. dr. Factory Overhead Control; cr. Work in Process
D. dr. Materials; cr. Factory Overhead
E. dr. Finished Goods; cr. Work in Process
3. Scrap includes all of the following except:
A. the trimmings remaining after processing materials
B. defective materials that cannot be used or returned to the vendor
C. partially or fully completed units that are in some way defective
D. broken parts resulting from employee or machine failures
E. all of the above
4. In a process cost system, the cost of rework usually is debited to:
A. Factory Overhead Control
B. Applied Factory Overhead
C. Spoiled Goods Inventory
D. Work in Process
E. none of the above
5. If spoilage occurs as a result of an internal failure in a process cost system, using fifo costing, the number
of equivalent units that production costs should be charged to would be based upon:
A. spoiled units
B. units transferred out and spoiled units
C. units transferred out, beginning inventory, and units in ending inventory
D. units transferred out, spoiled units, units in ending inventory, and units in beginning inventory
E. none of the above
6. If a company obtains two salable products from the refining of one ore, the refining process should be
accounted for as a(n)
A. mixed cost process.
B. joint process.
C. extractive process.
D. reduction process.
7. Joint costs are allocated to joint products to
A. obtain a cost per unit for financial statement purposes.
B. provide accurate management information on production costs of each type of product.
C. compute variances from expected costs for each joint product.
D. allow the use of high-low analysis by the company.
8. Joint cost allocation is useful for
A. decision making.
B. product costing.
C. control.
D. evaluating managers' performance.
9. Joint costs are useful for
A. setting the selling price of a product.
B. determining whether to continue producing an item.
C. evaluating management by means of a responsibility reporting system.
D. determining inventory cost for accounting purposes.

Checked by: _________________________ Noted by: _______________________

CLUSTER COORDINATOR PROGRAM DIRECTOR COORDINATOR
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 CITY COLLEGE OF FINAL
CALAMBA EXAMINATION
DEPARTMENT OF BUSINESS EDUCATION
10. Which of the following components of production are allocable as joint costs when a single manufacturing
process produces several salable products?
A. direct material, direct labor, and overhead
B. direct material and direct labor only
C. direct labor and overhead only
D. overhead and direct material only
11. Chicago Processing Co. uses the average costing method and reported a beginning inventory of 5,000 units
that were 20% complete with respect to materials in one department. During the month, 11,000 units
were started; 8,000 units were finished; ending inventory amounted to 8,000 units that were 60%
complete with respect to materials. Total materials cost during the period for work in process should be
spread over:
A. 7,200 units
B. 16,000 units
C. 11,200 units
D. 13,200 units
E. 12,800 units
12. Beginning work in process was 60% complete as to conversion costs, and ending work in process was 45%
complete as to conversion costs. The dollar amount of the conversion cost included in ending work in
process (using the average cost method) is determined by multiplying the average unit conversion costs
by what percentage of the total units in ending work in process?
A. 60%
B. 55%
C. 45%
D. 522%
E. 100%
13. Goode Manufacturing has three producing departments in its factory. The ending inventory in the Milling
Department consisted of 3,000 units. These units were 60% complete with respect to labor and factory
overhead. Materials are applied at the end of the milling process. Unit costs for the complete process in
the Milling Department are: materials, P1; labor, P2; and factory overhead, P3. The appropriate unit cost
for each unit in the ending inventory is:
A. P2
B. P5
C. P3
D. P6
E. P4
14. Gyro Products transferred 10,000 units to one department. An additional 3,000 units of materials were
added in the department. At the end of the month, 7,000 units were transferred to the next department.
There was no beginning inventory. The costs for units transferred in would be effectively allocated over:
A. 17,000 units
B. 3,000 units
C. 10,000 units
D. 7,000 units
E. 13,000 units
15. Read, Inc. instituted a new process in October. During October, 10,000 units were started in Department
A. Of the units started, 7,000 were transferred to Department B, and 3,000 remained in work in process at
October 31. The work in process at October 31 was 100% complete as to material costs and 50% complete
as to conversion costs. Materials costs of P27,000 and conversion costs of P39,950 were charged to
Department A in October. What were the total costs transferred to Department B?
A. P46,900
B. P53,600
C. P51,800
D. P57,120
E. none of the above
Ratcliff Company produces two products from a joint process: X and Z. Joint processing costs for this production
cycle are $8,000.
Disposal
Sales price cost per Further Final sale
per yard at yard at processing price per
Yards split-off split-off per yard yard
X 1,500 $6.00 $3.50 $1.00 $ 7.50
Z 2,200 9.00 5.00 3.00 11.25

If X and Z are processed further, no disposal costs will be incurred or such costs will be borne by the buyer.

Checked by: _________________________ Noted by: _______________________

CLUSTER COORDINATOR PROGRAM DIRECTOR COORDINATOR
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 CITY COLLEGE OF FINAL
CALAMBA EXAMINATION
DEPARTMENT OF BUSINESS EDUCATION
16. Refer to Ratcliff Company. Using a physical measure, what amount of joint processing cost is allocated to
X (round to the nearest dollar)?
A. $4,000
B. $4,757
C. $5,500
D. $3,243

17. Refer to Ratcliff Company. Using a physical measure, what amount of joint processing cost is allocated to
Z (round to the nearest dollar)?
A. $4,000
B. $3,243
C. $5,500
D. $4,757
18. Refer to Ratcliff Company. Using sales value at split-off, what amount of joint processing cost is allocated
to X (round to the nearest dollar)?
A. $5,500
B. $2,500
C. $4,000
D. $3,243
19. Refer to Ratcliff Company. Using sales value at split-off, what amount of joint processing cost is allocated
to Z (round to the nearest dollar)?
A. $5,500
B. $4,000
C. $2,500
D. $4,757
20. Refer to Ratcliff Company. Using net realizable value at split-off, what amount of joint processing cost is
allocated to X (round to the nearest dollar)?
A. $4,000
B. $5,610
C. $2,390
D. $5,500

Test II: PROBLEM

Lazada Manufacturing Company produces one product within two department, Cutting Department and
Assembly Department. Cutting Department incurred spoilage of 100 units at the start of the process. The following
data are found in the Assembly Department for the month of February 2019.
Quantity Flow: Units
Work in Process – Beginning 970
Transferred In – Current Month 9600
Transferred Out to Next Department 9470
Work in Process – Ending 1,100

Cost Schedule:
Cost Transferred from Cutting Department
Work in Process – Beginning P 24,250
Transferred in – Current Month 240,000
P264,250
Cost incurred in this department
Material Labor Overhead
Work in Process - Beginning P2,668.75 P5,562.50 P3,081.25
Added this month 20,000 70,000 75,000

Percentage of Completion:
Transferred In Cost Work in Process ending inventory:
Material 55%
Work in Process, End 100% Labor 55%
Overhead 55%

Required: Cost of Production Report.

Checked by: _________________________ Noted by: _______________________

CLUSTER COORDINATOR PROGRAM DIRECTOR COORDINATOR
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