Cebu Roosevelt Memorial Colleges

Cost Accounting and Control

SY 20201 – 2022

Instruction: All answers must be on the Google Form and solutions are to be submitted in the classroom.

1. Which of the following statements about cost accounting is not true?

a. Is the intersection between financial and management accounting
b. Information generated by cost accounting is used by both financial and managerial accounting.
c. Cost accounting provides product cost information to internal parties such as managers for planning and
controlling.
d. Cost accounting is not important to any company.

2. Financial accounting information is used for reporting to

a. External parties
b. Investors
c. Creditors
d. Managers

3. Management accounting information

a. Pertains to the entity as a whole and is highly aggregated
b. Pertains to subunits of the entity and may be very detailed
c. Is prepared only once a year
d. Is constrained by the requirements of IASB.

4. Internal reports must be communicated

a. Daily
b. Monthly
c. Annually
d. As needed

5. Management accountants would not

a. Assist in budget planning
b. Prepare reports primarily for external users
c. Determine cost behavior
d. Be concerned with the impact of cost and volume on profits

6. Which of the following is not an internal user?

a. Creditor
b. Department manager
c. Cost accountant
d. Controller

7. Financial statements for external users can be described as

a. User-specific
b. General purpose
c. Special purpose
d. Management reports

8. What is the best accumulation procedure to use when many batches, each differing as to product specification,
are produced?
a. Job order
b. Process
c. Actual
d. Standard

9. Which of the following production operations would be most likely to employ a job order system of cost
accounting?
a. Toy manufacturing
b. Shipbuilding
c. Crude oil refining
d. Candy manufacturing
 10. Which of the following does not occur with process costing?
a. Allocation of cost on a periodic basis
b. Allocation of cost upon completion of job
c. Allocation of cost with regards to stage of completion
d. Calculation of equivalent units

11. Indirect costs are also known as:

a. Differential costs
b. Common costs
c. Opportunity costs
d. Sunk costs

12. 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

13. Cost of goods sold is

a. An expense
b. A period cost
c. Is an asset
d. None of the above

14. For a manufacturing company, the cost of goods available for sale during a given accounting period is
a. The beginning inventory of finished goods
b. The cost of goods manufactured during the period
c. The sum of the a & b
d. The difference of b & a

15. 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 inventory is greater than or equal to the amount of beginning work in process
inventory.
b. Ending work in process inventory is greater than the amount of beginning work in process inventory.
c. Ending work in process is equal to the cost of goods manufactured.
d. Ending work in process is less than the amount of the beginning work in process inventory.

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.

17. Cost of goods manufactured in a manufacturing company is analogous to

a. Ending inventory in a merchandising company
b. Beginning inventory in a merchandising company
c. Cost of goods available for sale in a merchandising company
d. Cost of goods purchased in a merchandising company

18. In DingDong Company, the predetermined overhead rate is 80% of direct labor cost. During the month,
DingDong incurs P210,000 of factory labor costs, of which P200,000 is direct labor and P10,000 is indirect labor.
Actual overhead incurred was P200,000. The amount of overhead debited to Work in Process Inventory should
be
a. P200,000
b. P144,000
c. P168,000
d. P160,000

Alaska Company reported the following year-end information

Work in process inventory, January 1 180,000
Raw materials inventory, January 1 50,000
Work in process inventory, December 31 150,000
 Raw materials inventory, December 31 80,000
Raw materials purchased 160,000
Direct labor 150,000
Factory overhead applied 120,000
Factory overhead control 100,000
19. Cost of goods manufactured for the year is
a. P380,000
b. P410,000
c. P350,000
d. P430,000

Use the following information for the next four questions:

The financial statements of Brother Company included these items:

Marketing costs 160,000
Direct labor cost 245,000
Administrative costs 145,000
Direct materials used 285,000
Fixed factory overhead costs 175,000
Variable factory overhead costs 155,000
Compute:
20. Prime cost
21. Conversion cost
22. Total inventoriable/product cost
23. Total period cost

Use the following information for the next four questions:

Resting Company manufactures major appliances. Because of growing interest in its product, it has just had its most
successful year. In preparing the budget for next year, its controller compiled these data.
Month Volume in Machine Hours Electricity cost
July 6,000 60,000
August 5,000 53,000
September 4,500 49,500
October 4,000 46,000
November 3,500 42,500
December 3,000 39,000
Total 26,000 290,000
Using the high-low method compute:
24. The variable cost rate per machine hour
25. The monthly fixed electricity costs
26. The total electricity costs if 4,800 machine hours are projected to be used next month.
27. Use the method of least square to estimate the fixed portion of electricity costs based on machine hours.

Use the following information for the next three questions:

The following information is available for Lisa Company

 Raw materials inventory increased by P15,000
 Work in process inventory decreased by P8,500
 Finished goods inventory decreased by P5,000
 Materials purchased is P180,000
 Direct labor is P220,000
 Manufacturing overhead is P200,000
 Sales amounting to P980,000

Instructions:
28. Compute cost of goods sold
29. Cost per unit manufactured considering that there are 10,000 units manufactured.
30. Compute for the gross profit