MOUNTAIN VIEW COLLEGE

College Heights Mt. Nebo

8709 Valencia City, Bukidnon, Philippines
School of Business & Accountancy

COST ACCOUNTING
Final Examination

INSTRUCTIONS: Select the best answer for each of the following questions. Mark only one answer
for each item . Show solutions in good form if applicable.

1. Mount Company incurred a total cost of $8,600 to produce 400 units of pulp. Each unit of pulp required five
(5) direct labor hours to complete. What is the total fixed cost if the variable cost was $1.50 per direct
labor hour?
A) $1,700
B) $3,000
C) $5,600
D) $8,000
E) some other answer _______________.

2. Given the following information, compute the total number of units for the period.

Direct labor hours 12,000

Direct labor cost $2.70 per hour
Direct materials cost $75 per unit
Total manufacturing cost $132,600
Fixed overhead cost $36,000
Variable overhead cost 50% of total labor cost

A) 360
B) 432
C) 640
D) 840
E) some other answer _______________

3. The Shapely Company uses the high-low method to determine its cost equation. The following information
was gathered for 2008:

Machine Hours Direct Labor Costs

Busiest month (June) 14,000 $200,000
Slowest month (December) 6,000 $120,000

What are the direct labor costs per machine hour?

A) $20.00
B) $16.00
C) $14.29
D) $10.00
E) some other answer _______________.

4. The Shapely Company uses the high-low method to determine its cost equation. The following
information was gathered for 2008:

Machine Hours Direct Labor Costs

Busiest month (June) 14,000 $200,000
Slowest month (December) 6,000 $120,000

If Shapely expects to use 10,000 machine hours next month, what are the estimated direct labor costs?
A) $160,000
B) $180,000
C) $175,000
D) $150,000
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 E) some other answer _______________.

5. Hagler's Toupees has the following machine hours and production costs for the last six months of last year:

Month Machine Production

Hours Cost
July 15,000 12,075
August 13,500 10,800
September 11,500 9,580
October 15,500 12,080
November 14,800 11,692
December 12,100 9,922

If Hagler expects to incur 14,000 machine hours in January, what will be the estimated total production
cost using the high-low method?
A) $ 8,750.00
B) $11,142.50
C) $22,400.00
D) $31,220.00
E) Some other answer ____________.

6. The controller of Joy Co has requested a quick estimate of the manufacturing supplies needed for the Morton
Plant for the month of July when production is expected to be 470,000 units to meet the ending
inventory requirements and sales of 475,000 units. Joy Co's budget analyst has the following actual
data for the last three months.

Month Production Manufacturing

In Units Supplies
March 450,000 $723,060
April 540,000 853,560
May 480,000 766,560

Using the high-low method to develop a cost estimating equation, the estimate of needed manufacturing
supplies for July would be (CMA adapted)
A) $681,500.
B) $688,750.
C) $749,180.
D) $752,060.
E) $759,310.

7. The Chambers Manufacturing Company recorded overhead costs of $14,182 at an activity level of 4,200
machine hours and $8,748 at 2,300 machine hours. The records also indicated that overhead of $9,730
was incurred at 2,600 machine hours. What is the variable cost per machine hour using the high-low
method to estimate the cost equation?
A) $2,78
B) $2.86
C) $3.10
D) $3.38
E) some other answer _________________.

8. The Wiscow Manufacturing Company recorded overhead costs of $14,182 at an activity level of 4,200
machine hours and $8,748 at 2,300 machine hours. The records also indicated that overhead of $9,730
was incurred at 2,600 machine hours. What is the total estimated cost for 2,600 machine hours using the
high-low method to estimate the cost equation?
A) $9,730
B) $9,606
C) $9,106
D) $8,788
E) some other answer _______________

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9. The journal entry to record the completion of a job in a job order cost system is

A) Work-in-Process Inventory xxx

Materials Inventory xxx
B) Materials Inventory xxx
Purchases xxx
C) Cost of Goods Sold xxx
Finished Goods Inventory xxx
D) Finished goods inventory xxx
Work-in-Process inventory xxx
E) Purchases xxx
Cost of Goods Sold xxx

10. The journal entry to record requisitions of material for new jobs started during the period is

A) Work-in-Process Inventory xxx

Materials Inventory xxx
B) Materials Inventory xxx
Purchases xxx
C) Cost of Goods Sold xxx
Finished Goods Inventory xxx
D) Finished goods inventory xxx
Work-in-Process inventory xxx
E) Purchases xxx
Cost of Goods Sold xxx

11. Which of the following documents is used as the basis for posting to the direct materials section of the job
cost sheet?
A) Purchase requisition.
B) Materials requisition.
C) Receiving report.
D) Purchase order.
E) Time card.

12. Which of the following documents is used as the basis for posting to the direct labor section of the job cost
sheet?
A) Purchase requisition.
B) Materials requisition.
C) Receiving report.
D) Purchase order.
E) Time card.

13. Which of the following accounts is used to accumulate the actual manufacturing overhead costs incurred
during a period?
A) Applied Manufacturing Overhead
B) Work-in-Process Inventory
C) Manufacturing Overhead Control
D) Cost of Goods Sold
E) Finished Goods Inventory

14. The journal entry to record the actual manufacturing overhead costs for indirect material is
A) Manufacturing Overhead Control xxx
Materials Inventory xxx
B) Materials Inventory xxx
Applied Manufacturing Overhead xxx
C) Manufacturing Overhead Control xxx
Finished Goods Inventory xxx
D) Work-in-Process Inventory xxx
Applied Manufacturing Overhead xxx
E) Materials Inventory xxx
Accounts Payable xxx

15. What are the transfers-out from the Finished Goods Inventory called?
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 A) Cost of Goods Manufactured
B) Cost of Goods Available
C) Cost of Goods Completed
D) Cost of Goods Sold

16. Manufacturing overhead applied on the basis of direct labor hours was $120,000, while actual
manufacturing overhead incurred was $124,000 for the month of April. Which of the following is always true
given the statement above?
A) Overhead was overapplied by $4,000.
B) Overhead was underapplied by $4,000.
C) Actual direct labor hours exceeded budgeted direct labor hours.
D) Actual direct labor hours were less than budgeted direct labor hours.

17. The predetermined overhead rate for manufacturing overhead for 2008 is $4.00 per direct labor hour.
Employees are expected to earn $5.00 per hour and the company is planning on paying its employees
$100,000 during the year. However, only 75% of the employees are classified as "direct labor." What
was the estimated manufacturing overhead for 2008?
A) $60,000
B) $75,000
C) $80,000
D) $93,750
E) some other answer _______________.

18. Before prorating the manufacturing overhead costs at the end of 2008, the Cost of Goods Sold and Finished
Goods Inventory had applied overhead costs of $57,500 and $20,000 in them, respectively. There was
no Work-in-Process at the beginning or end of 2008. During the year, manufacturing overhead costs of
$74,000 were actually incurred. The balance in the Applied Manufacturing Overhead was $77,500 at
the end of 2008. If the under or overapplied overhead is prorated between Cost of Goods Sold and the
inventory accounts, how much will be allocated to the Finished Goods Inventory?
A) $ 903
B) $1,217
C) $1,283
D) $2,597
E) some other answer _______________

19. Before prorating the manufacturing overhead costs at the end of 2008, the Cost of Goods Sold and Finished
Goods Inventory had applied overhead costs of $57,500 and $20,000 in them, respectively. There was
no work in process at the beginning or end of 2008. During the year, manufacturing overhead costs of
$74,000 were actually incurred. The balance in the Applied Manufacturing Overhead was $77,500 at
the end of 2008. If the under- or overapplied overhead is prorated between Cost of Goods Sold and the
inventory accounts, how much will be the Cost of Goods Sold after the proration?
A) $58,403
B) $56,597
C) $60,197
D) $54,903
E) some other answer _______________

20. The Work-in-Process Inventory account of a manufacturing firm has a balance of $2,400 at the end of an
accounting period. The job cost sheets of two uncompleted jobs show charges of $400 and $200 for
materials used, and charges of $300 and $500 for direct labor used. From this information, it appears
that the company is using a predetermined rate, as a percentage of direct labor costs, of
A) 41.7%.
B) 80.0%.
C) 125.0%.
D) 240.0%.
E) Some other answer __________.

21. The general journal entry to record the issuance of the materials represented by the following materials
requisitions for the month includes:

Requisition No. Description Amount

372 Job No. 179 $5,250
373 Job No. 184 $3,700
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 374 Job No. 180 $4,525
375 General factory use $ 725
376 Job No. 182 $2,470

A) a debit to Materials Inventory, $15,945.

B) a debit to Materials Inventory, $16,670.
C) a debit to Work in Process Inventory, $15,945.
D) a credit to Work in Process Inventory, $15,945
E) a credit to Factory Overhead, $725.

22. ABC Company has a beginning Work-in-Process Inventory of 25,000 units (40% complete).
During the period, 110,000 units were started and the ending Work-in-Process Inventory consisted of
20,000 units (80%). What are the equivalent units for conversion costs using weighted-average
process costing?
A) 110,000
B) 115,000
C) 121,000
D) 131,000
E) some other answer _______________.

23. The Wisco Company has a process cost system. All materials are placed in process when the process is first
begun. At the beginning of September, there were no units of product in process. During September
50,000 units were started; 5,000 of these were still in process at the end of September and were 3/5
finished. The equivalent units of material in September were
A) 40,000
B) 45,000
C) 48,000
D) 50,000
E) Some other answer _______________.

24. The Wisco Company has a process cost system. All materials are placed in process when the process is first
begun. At the beginning of September, there were no units of product in process. During September
50,000 units were started; 5,000 of these were still in process at the end of September and were 3/5
finished. The equivalent units for the conversion costs in September were
A) 40,000
B) 45,000
C) 48,000
D) 50,000
E) Some other answer _______________.

25. Department B had a beginning inventory of 400 units, 1/4 completed; an ending inventory of 300 units, 2/3
completed, and received 900 units during the period from Department A. What was the equivalent unit
production of Department B, assuming weighted-average process costing?
A) 800 units.
B) 900 units.
C) 1,100 units.
D) 1,200 units.
E) 1,400 units.

26. Sussex Corporation's production cycle starts in the Mixing Department. The following information is
available for April:

Units
Work-in-process, April 30 (60% complete) 25,000
Total units in process during April 280,000
Work-in-process, April 1 (25% complete) 40,000

Materials are added at the beginning of the process in the Mixing Department. What are the equivalent
units of production for the month of April, assuming Sussex uses the weighted average method?
Materials Conversion Costs
A) 240,000 260,000
B) 255,000 235,000

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 C) 280,000 270,000
D) 315,000 285,000
E) 320,000 295,000

27. Department A had no Work-in-Process at the beginning of the period, 1,000 units were completed during
the period, 200 units were 50% completed at the end of the period, and the following manufacturing
costs were debited to the departmental Work-in-Process account during the period

Direct materials (1,200 at $10) $12,000

Direct labor 5,500
Factory overhead 4,400

Assuming that all direct materials are placed in process at the beginning of production and Department
A uses weighted-average process costing, what is the total cost of the departmental Work-in-Process
Inventory at the end of the period?
A) $3,650
B) $2,900
C) $2,000
D) $1,825
E) Some other answer _______________.

28. Read, Inc. instituted a new process in October 2008. During October, 10,000 units were started in
Department A. Of the units started, 8,000 were transferred to Department B, and 2,000 remained in
Work-in-Process at October 31, 2008. The Work-in-Process at October 31, 2008, was 100% complete as
to material costs and 50% complete as to conversion costs. Material costs of $27,000 and conversion
costs of $36,000 were charged to Department A in October. What were the total costs transferred to
Department B assuming Department A uses weighted-average process costing?
A) $46,900
B) $53,600
C) $56,000
D) $57,120
E) Some other answer _______________.

29. The Viva Company had 20,000 units in process on December 31, 2008 which was 80% complete as to
materials but only 40% complete as to conversion costs. The company's records show 40,000 units
were transferred to the Finished Goods Inventory during January 2009. On January 31, 2009, 15,000
units were on hand which were 30% complete as to conversion costs and 60% complete as to materials.
What are the equivalent units of production for the conversion costs in January, assuming Viva uses
first-in, first-out (FIFO)?
A) 34,000
B) 35,000
C) 36,500
D) 41,500
E) some other answer _______________.

30. RST Company incurred $126,000 in material costs during July. Additionally, the 12,000 units in the Work-
in-Process Inventory on July 01 had materials assigned to them of $32,000, even though they were only
5% complete as to materials. No additional units were started during July, and there were no
incomplete units on hand on July 31. What is the material cost per unit for July, assuming RST uses
weighted-average process costing?
A) $10.50
B) $11.59
C) $13.17
D) $15.49
E) some other answer _______________.

31. Beattie Company completed and transferred out 2,300 units in May 2008. There were 200 units in the
Work-in-Process Inventory on May 31, 2008, 30% complete as to conversion costs and 100% complete as to
materials. The month's charges for conversion costs and material costs were $9,440 and $6,250, respectively.
There was no beginning inventory on May 01, 2008. What is the cost of the work transferred-out during May?
A) $ 8,510
B) $14,950
C) $15,690
D) $16,250
E) some other answer _______________.

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32. Sussex Corporation's production cycle starts in the Mixing Department. The following information is
available for April:

Units
Work-in-process, April 30 (60% complete) 25,000
Total units in process during April 280,000
Work-in-process, April 1 (25% complete) 40,000

Materials are added at the beginning of the process in the Mixing Department. What are the equivalent
units of production for the month of April, assuming Sussex uses first-in, first-out (FIFO), process
costing.

Materials Conversion Costs

A) 240,000 235,000
B) 240,000 260,000
C) 280,000 270,000
D) 315,000 285,000
E) 320,000 295,000

Use the following to answer questions 33-38:

The WISCO Company uses a weighted-average process costing system. The following data are available:

Beginning inventory -0-

Units started in production 20,000
Units finished during period 16,000
Units in process at end of the period
(complete as to materials; 1/4 complete as to labor and overhead) 4,000
Cost of materials used $35,200
Labor and overhead costs $37,400

33. Equivalent units of production for material are

A) 16,000.
B) 17,000.
C) 19,000.
D) 20,000.
E) Some other answer ______.

34. Equivalent units of production for labor and overhead are

A) 16,000.
B) 17,000.
C) 19,000.
D) 20,000.
E) Some other answer _________.

35. Unit cost of material is

A) $2.20.
B) $2.07.
C) $1.85.
D) $1.76.
E) Some other answer _________.

36. Unit cost of labor and overhead is

A) $2.34.
B) $2.20.
C) $1.97.
D) $1.87.
E) Some other answer __________.

37. Total cost of the 16,000 units finished is

A) $63,360.
B) $67,320.
C) $72,640.
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 D) $65,120.
E) Some other answer __________.

38. Total cost of the 4,000 units of the ending inventory

A) $15,840.
B) $14,520.
C) $ 9,240.
D) $ 8,910.
E) Some other answer ________.

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