Royal College Adama Campus

Department of Accounting and Finance

Cost and Management Accounting I Final Examination
Date: October 2022
Time Allowed: 1:30hrs
Name_____________________________________________________

ID________________________________________________________

Program___________________________________________________

Department________________________________________________

Entry_____________________________________________________

Instruction I Say true if the statement is correct and false if it is wrong and write your answer on the space provided
to you.
1. The equivalent units of production will be the same under the weighted-average and the FIFO method if
there is no beginning work in process inventory.
2. In a process costing system, units transferred to the next processing department are presumed to be 100%
complete with respect to the work performed by the transferring department.
3. Reworked goods are unacceptable units of production usually not capable of being repaired or converted
into a salable product.
4. It is normal for a production process to lack spoilage, rework, and scrap because of efficiency
improvements.
5. Rework is material left over from production with low sales value

Joint costs are incurred beyond the splitof

point and are assignable to individual prod
ucts.
Joint costs are incurred beyond the splitof
point and are assignable to individual prod
ucts.
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Joint costs are incurred beyond the splitof
point and are assignable to individual prod
ucts.
If the value of a joint product drops
significantly, it could also be viewed as a
byprodu
ct
What type of cost is the result of an event
that results in more than one product or ser
vice
6. In process costing system work in process beginning is part of units to be accounted for.
7. The cost of joint products can be allocated to byproduct
8. The cost of abnormal spoilage is reported as a loss arising from abnormal spoilage
9. A scrap can be treated as normal or abnormal
10. The decision for further processing or not depend on the value of joint cost
Instruction I Say true if the statement is correct and false if it is wrong and write your answer on the space provided
to you.
1. Which of the following costing method is not applicable in a process costing system?
A. Average B. LIFO C. FIFO D. All E. None
2. If a department starts 6,000 units, beginning work in process 2,000 units and completed and transferred
5,500 units how many units are in work in process ending?
A. 1,000 units B. 500 units C. 2,500 units D. 2,000 units E. None

3. Two different products are obtained by refining one ore. The refining process would be considered as:
A. Reduction process B. Extractive process C.  Joint process D. Mixed cost process
4. A by-product:
A. has a lower market value than the main product C. is produced from waste
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 B. normally generates a smaller amount of revenue than the main product
D. is produced along with main products but its sales value does not cover its production cost
5. The Ultimate market value of a product X is br. 20 per unit. The processing cost after split-off point is br.
5 per unit and marketing and administrative expenses are br. 1 per unit. If 10,000 units are produced during a
period, the hypothetical market value of product X would be:
A. Br. 150,000 B. Br. 140,000 C. Br. 160,000 D. Br. 30,000
6. A separable cost is the:
A. cost incurred after split-off point C. cost incurred on main product
B. cost incurred before split-off point D. cost incurred on by product
7. A method that uses measurement units such as tons, gallons, kilograms, pounds and feet to apportion joint
cost is known as:
A. market value method C. weighted average method
B. average unit cost method D. quantitative unit method
8. The Merhaba Company produces 5,000 units of product X and 4,000 units of product Y in a joint
production process. If a weight factor of 2 is assigned to each unit of product X and a weight factor of 4 is
assigned to each unit of product Y, the weighted number of units would be:
A. product X 10,000 units and Y 16,000 units   C. product X 2,500 units and Y 1,000 units
 B. product X 5,000 units and product Y 4,000 units D. none of the above
9. The partial or completed units of manufactured goods, that do not meet customer specifications and get
sold at reduced price or simply discarded, are called
A. spoilage B. rework C. scrap D. equivalence
10. In process and job costing system, the normal spoilage cost is considered as
A. conversion costs B. sunk costs C. inventoriable costs D. non inventoriable costs
11. An amount of spoilage that is not natural in a specific production process is categorized as
A. normal scrap B. normal spoilage C. abnormal spoilage D. weighted spoilage
12. The stage in production process, where the manufactured goods are checked; whether the units are
acceptable or not are classified as
A. rework point B. inspection point C. spoilage point D. scrap point
13. The aspects of accounting for scrap includes
A. physical tracking B. non-inventoriable costing C. inventory costing D. both A and C

S Company had the following department information about physical units and percentage of
completion:
Physical Units
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 Work in process, May 1 (60%) 36,000
Completed and transferred out 90,000
Work in process, May 31 (40%) 30,000
14. If materials are 100% complete at the beginning of the production process, what is the total
number of equivalent units for materials during May?
A. 66,000 B. 120,000 C. 156,000 D. 102,000
15. One characteristic of products that are mass-produced in a continuous production process is that
A. The products are identical or very similar in nature.
B. They are grouped in batches.
C. They are produced at the time an order is received. d) Their
D. costs are accumulated on job cost sheets
16. A production cost report
A. Used to record the costs chargeable to a specific job
B. Shows only cost data for a production department
C. Provides a basis for evaluating the productivity of a department
D. Combines process cost and job order costing systems costs
17. Journal entry that assigns raw materials costs in a process costing system includes
A. Debit to raw materials C. Debit to Accounts Payable
B. Credit to raw materials D. Credit to Work in Process
18. In a process costing system, manufacturing overhead is assigned to work in process by
A. Department based on actual overhead costs incurred
B. Department based on predetermined overhead rates
C. Job based on actual overhead costs incurred
D. Job based on predetermined overhead rates
On June 1, Department A had 3,000 units 50% complete with respect to direct labor and factory overhead;
materials are added at the beginning of the process. During June, 15,000 units were started into process in
Department A. At the end of June, the ending goods in process of 4,000 units were 80% complete with
respect to direct labor and factory overhead. There was no normal and/or abnormal loss of units in
Department A during the month of June.
19. The number of units transferred to Department B were
A. 16,700 units B. 13,300 units C. 14,000 units D. 15,500 units
20. In process costing system, when partially completed units are expressed in terms of fully completed
units they are known as:
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 A. Completed units B. Equivalent units C. Unfinished units D. Transferred units
Instruction III Work Out Question
The following data pertains to ABC Manufacturing Company for the month of July 2010 for its first
department “cutting department
Quantity Data
 Beginning work in process 4,000 units
 Started in a current month 10,000 units
 Completed and transferred 12,000 units
Cost Incurred
Beginning work in process
 Material Br. 40,000
 Conversion cost (CC) 30,000
Currently Added
 Material Br. 120,000
 Conversion cost (CC) 90,000
Method used: Average
Required
Prepare cost of production report

Royal College Adama Campus

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 Department of Accounting and Finance
Cost and Management Accounting I Final Examination
Date: October 2022
Time Allowed: 1:30hrs
Name_____________________________________________________

ID________________________________________________________

Program___________________________________________________

Department________________________________________________

Entry__________________________

Instruction I True or false

1__________ 2_________ 3_________ 4_________ 5__________

6__________ 7_________ 8_________ 9_________ 10__________

Instruction II Choose

1__________ 2_________ 3_________ 4_________ 5__________

6__________ 7_________ 8_________ 9_________ 10__________

11__________ 12_________ 13_________ 14_________ 15__________

16__________ 17_________ 18_________ 19_________ 20__________