University of San Jose – Recoletos

School of Business and Management (Accountancy and Finance Department)

Accounting 201: Cost Accounting and Control Strategic Cost Management
Ms. Nathallie Cabaluna, CPA, CTT

FAMILY NAME: _______________ GIVEN NAME: _______________ SCHED: ________

MOCK FINAL EXAMINATION

Multiple Choice. Write the letter of your choice in CAPITAL letters.

Questions 1 to 4 are based on the problem below:

Joint products A, B and C are produced by JNT Corporation for the current month,
these are available:
A B C
Units produced 8,500 9,700 6,900
Cost after split-off P10,200 P19,400 P6,900
Ultimate unit selling price P 6.00 P 5.00 P4.00
Ending inventories 100 0 500

No beginning inventories
Joint cost for the period amounted to P49,830

1. Using the market value method, joint cost apportioned to each product will be:
Product A Product B Product C
a. 22,652 13,843 13,335
b. 19,995 19,014 10,821
c. 22,440 16,005 11,385
d. 24,357 14,885 10,588

2. Total production cost for each product will be:

Product A Product B Product C
a. 32,852 33,243 20,235
b. 32,640 35,405 18,285
c. 30,195 38,414 17,721
d. 34,557 34,285 17,488

3. Cost of sales for each product will be:

Product A Product B Product C
a. 32,256 35,405 16,960
b. 29,840 38,414 16,437
c. 31,872 35,405 15,635
d. 34,173 34,285 16,163

4. Assuming the average unit cost method is used in apportioning the joint cost:
a. P2.033 c. P2.045
b. P1.985 d. P2.106

5. The element of manufacturing cost that supports depreciation schedule is:

a. Materials c. Factory Overhead
b. Labor d. All of the above

6. The industry most likely to use process costing in accounting for costs is:
a. road builder c. airlines
b. electrical contractor d. automobile repair shop
Questions 7 to 13 are based on The Incredibles Company Problem
The Incredibles Company processes unprocessed goat milk up to the splitoff point
where two products, condensed goat milk and skim goat milk result. The following
information was collected for the month of October:

Direct Materials processed: 65,000 gallons (shrinkage was 10%)

Production: condensed goat milk 26,100 gallons

Skim goat milk 32,400 gallons

Sales: condensed goat milk P3.50 per gallon

Skim goat milk P2.50 per gallon

The costs of purchasing the 65,000 gallons of unprocessed goat milk and processing
it up to the splitoff point to yield a total of 58,500 gallons of salable product
was P72,240. There were no inventory balances of either product. Condensed goat
milk may be processed further to yield 19,500 gallons (the remainder is shrinkage)
of a medicinal milk product, Elastic, for an additional processing cost of P3 per
usable gallon. Elastic can be sold for P18 per gallon.

Skim goat milk can be processed further to yield 28,100 gallons of skim goat ice
cream, for an additional processing cost per usable gallon of P2.50. the product
can be sold for P9 per gallon

There are no beginning and ending inventory balances.

7. What is the estimated net realizable value of Elastic at the splitoff point?
a. P186,650 c. P292,500
b. P252,900 d. P351,000

8. What is the estimated net realizable value of the skim goat ice cream at splioff?
a. P182,650 c. P110,200
b. P252,900 d. P85,450

9. Using estimated net realizable value, what amount of the P72,240 of joint costs
would be allocated to Elastic and the skim goat ice cream?
a. P41,971 and P30,269 c. P32,796 and P39,444
b. P44,471 and P27,769 d. P36,120 and P36,120

10. Using the sales value at splitoff method, what is the gross-margin percentage
for condensed goat milk at the splitoff point?
a. 21.1% b. 55.1% c. 58.1% d. 38.2%

11. Using the sales value at splitoff method, what is the gross-margin percentage
for skim goat milk at the splitoff point?
a. 21.1% b. 55.1% c. 58.1% d. 38.2%

12.How much (if any) extra income would Incredibles earn if it produced and sold
all of the Elastic from the condensed goat milk? Allocate joint processing costs
based jupon relative sales value on the splitoff. (Extra income means income in
excess of what Incredibles ould have earned from selling condensed goat milk)
a. P53,063 b. P254,213 c. P201,150 d. P96,787

13.How much (if any) extra income would Incredibles earn if it produced and sold
skim milk ice cream from goats rather than goat skim milk? Allocate joint
processing costs based upon the relative sales value at the splitoff point.
a. P47,047 b. P117,297 c. P101,650 d. P70,250
14.The cost accounting system noted for its lack of detailed tracking of work in
process during the accounting period is:
a. Process costing c. Actual costing
b. Standard costing d. Backflush costing

15.Ziffel Company had the following account balances and results from operations
for the month of July: direct materials consumed, P10,400; direct labor, P8,000;
factory overhead, P8,800; July 1, work in process inventory, P2,400; July 31,
work in process inventory, P1,800; finished goods inventory, July 1, P1,200;
finished goods inventory, July 31, P1,000. The total manufacturing cost for the
month of July was:
a. P27,800 b. P28,000 c. P18,400 d. P27,200

16.At its present level of operations, a small manufacturing firm has total variable
costs equal to 75% of sales and total fixed costs equal to 15% of sales. Based
on variable costing, if sales change by P1.00, income will change by
a. P0.25 b. P0.10 c. P0.75 d. Undeterminable

The following information should be used to answer question nos. 17 to 20.

Simple Corp. produces a single product. The following cost structure applied to
their first year of operations, 2022:
Variable costs:
SG & A P2.00 per unit
Production 4.00 per unit
Fixed Costs (total costs incurred for the year)
SG & A P14,000
Production P20,000

17.Assume for this question only, that during 2022, Simple Corp. manufactured 5,000
units and sold 3,800. There was no beginning or ending work-in-process inventory.
How much larger or smaller would Simple Corp.’s income be if it uses absorption
rather than variable costing?
a. The absorption costing income would be P6,000 larger
b. The absorption costing income would be P6,000 smaller
c. The absorption costing income would be P4,800 larger
d. The absorption costing income would be P4,000 smaller

18.Assume for this question only, that Simple Corp. manufactured and sold 5,000
units in 2022. At this level of activity they had an income of P30,000 using
variable costing. What was the sales price per unit?
a. P16.00 b. P18.80 c. P12.80 d. P14.80

19.Assume for this question only that Simple Corp. produced 5,000 units and sold
4,500 units in 2022. If Simple uses absorption costing, it would deduct period
costs of
a. P24,000 b. P34,000 c. P27,000 d. P23,000

20.Assume for this question only that Simple Corp. manufactured 5,000 units and
sold 4,000 in 2022. If Simple employs a costing system based on variable costs,
the company would end 2022 with a finished goods inventory of
a. P4,000 b. P8,000 c. P6,000 d. P5,000

21.Cost of Goods Sold is an

a. Unexpired product cost c. Unexpired Period Cost
b. Expired Product Cost d. Expired Period Cost
Questions 22 to 27 will be based on the information below.
Lafayette Savings and Loan had the following activities, traceable costs, and
physical flow of driver units:

Traceable Physical flow of

Activities Costs Driver Units

Open new accounts P50,000 1,000 accounts

Process deposits 36,000 400,000 deposits
Process withdrawals 15,000 200,000 withdrawals
Process loan applications 27,000 900 applications

The above activities are used by the Jennings branch and the Crowley branch:

Jennings Crowley

New accounts 200 400

Deposits 40,000 20,000
Withdrawals 15,000 18,000
Loan applications 100 160

22.What is the cost per driver unit for new account activity?
a. P0.09 b. P0.075 c. P30.00 d. P50.00

23.What is the cost per driver unit for the deposit activity?
a. P0.09 b. P0.075 c. P30.00 d. P50.00

24.What is the cost per driver unit for the withdrawal activity?
a. P0.09 b. P0.075 c. P30.00 d. P50.00

25.What is the cost per driver unit for the loan application activity?
a. P0.09 b. P0.075 c. P30.00 d. P50.00

26.How much of the loan application cost will be assigned to the Jennings branch?
a. P3,000 b. P4,800 c. P7,800 d. P27,000

27.How much of the deposit cost will be assigned to the Crowley branch?
a. P1,800 b. P3,600 c. P5,400 d. P36,000

28.Which of the following is most likely to make the implementation of ABC/ABM slow
and difficult?
a. The inability of all employees to understand the computations involved in ABC.
b. A lack of involvement by or support from upper management.
c. The need for dual costing systems.
d. An inability to eliminate all business-value-added activities.

Questions 29 to 31 are based on the information below:

Alpha Co. uses a job order costing system. At the beginning of January, the company
had two jobs in process with the following costs:

Direct Material Direct Labor Overhead

Job #456 $3,400 $510 $255
Job #461 1,100 289 ?

Alpha pays its workers $8.50 per hour and applies overhead on a DL hour basis.
29.What is the overhead application rate per direct labor hour?
a. P0.50 b. P2.00 c. P4.25 d. P30.00
30.How much overhead was included in the cost of Job #461 at the beginning of
January?
a. P144.50 b. P153.00 c. P1,228.25 d. P2,456.50

31.During January, Alpha’s employees worked on Job #649. At the end of the month,
$714 of overhead had been applied to this job. Total Work in Process at the end
of the month was $6,800 and all other jobs had a total cost of $3,981. What amount
of direct material is included in Job #649?
a. P677.00 b. P1,391.00 c. P2,142.00 d. P4,658.00

32.Products at Redd Manufacturing are sent through two production departments:

Fabricating and Finishing. Overhead is applied to products in the Fabricating
Department based on 150 percent of direct labor cost and $18 per machine hour in
Finishing. The following information is available about Job #297:

Fabricating Finishing
Direct material $1,590 $580
Direct labor cost ? 48
Direct labor hours 22 6
Machine hours 5 15
Overhead applied 429 ?

What is the total cost of Job #297?

a. P2,647 b. P3,005 c. P3,093 d. P3,203

33.Virginia Company applies overhead to jobs at the rate of 40 percent of direct

labor cost. Direct material of $1,250 and direct labor of $1,400 were expended
on Job #145 during June. On May 31, the balance of Job #145 was $2,800. The
balance on June 30 is:
a. P3,210 b. P4,760 c. P5,450 d. P6,010

Questions 34 to 38 are based on the following information:

Jackson Company uses a job order costing system and the following information is
available from its records. The company has three jobs in process: #6, #9, and #13.
Raw material used $120,000
Direct labor per hour $8.50
Overhead applied based on direct labor cost 120%

Direct material was requisitioned as follows for each job respectively: 30 percent,
25 percent, and 25 percent; the balance of the requisitions was considered indirect.
Direct labor hours per job are 2,500; 3,100; and 4,200; respectively. Indirect
labor is $33,000. Other actual overhead costs totaled $36,000.

34.What is the prime cost of Job #6?

a. P42,250 b. P57,250 c. P73,250 d. P82,750

35.What is the total amount of actual overhead?

a. P36,000 b. P69,000 c. P93,000 d. P99,960

36.How much overhead is applied to Work in Process?

a. P69,000 b. P99,960 c. P132,960 d. P144,000

37.If Job #13 is completed and transferred, what is the balance in Work in Process
Inventory at the end of the period if overhead is applied at the end of the
period?
a. P96,700 b. P99,020 c. P139,540 d. P170,720
38.Assume the balance in Work in Process Inventory was $18,500 on June 1 and $25,297
on June 30. The balance on June 30 represents one job that contains direct
material of $11,250. How many direct labor hours have been worked on this job
(rounded to the nearest hour)?
a. 751 b. 1,324 c. 1,653 d. 2,976

39.Long Company transferred 5,500 units to Finished Goods Inventory during

September. On September 1, the company had 300 units on hand (40 percent complete
as to both material and conversion costs). On June 30, the company had 800 units
(10 percent complete as to material and 20 percent complete as to conversion
costs). The number of units started and completed during September was:
a. 5,200 b. 5,380 c. 5,500 d. 6,300

40.Bush Company had beginning Work in Process Inventory of 5,000 units that were
40 percent complete as to conversion costs. X started and completed 42,000 units
this period and had ending Work in Process Inventory of 12,000 units. How many
units were started this period?
a. 42,000 b. 47,000 c. 54,000 d. 59,000

41.Taylor Company uses a weighted average process costing system and started 30,000
units this month. Taylor had 12,000 units that were 20 percent complete as to
conversion costs in beginning Work in Process Inventory and 3,000 units that were
40 percent complete as to conversion costs in ending Work in Process Inventory.
What are equivalent units for conversion costs?
a. 37,800 b. 40,200 c. 40,800 d. 42,000

Ryan Company adds material at the start to its production process and has the
following information available for March:

Beginning Work in Process Inventory

(40% complete as to conversion) 7,000 units
Started this period 32,000 units
Ending Work in Process Inventory
(25% complete as to conversion) 2,500 units
Transferred out ?

42.Compute the number of units started and completed in March

a. 29,500 b. 34,500 c. 36,500 d. 39,000

43.Calculate equivalent units of production for material using FIFO

a. 32,000 b. 36,800 c. 37,125 d. 39,000

44.Calculate equivalent units of production for conversion using weighted average.

a. 34,325 b. 37,125 c. 38,375 d. 39,925

The following information is available for Talmidge Company for the current year:
Beginning Work in Process Costs of Beginning Work in Process:
(75% complete) 14,500 units Material $25,100
Started 75,000 units Conversion 50,000
Ending Work in Process Current Costs:
(60% complete) 16,000 units Material $120,000
Abnormal spoilage 2,500 units Conversion 300,000
Normal spoilage 5,000 units
(continuous)
Transferred out 66,000 units
All materials are added at the start of production.
45.What is the cost per equivalent unit for conversion costs using weighted average?
a. P4.62 b. P4.21 c. P4.48 d. P4.34

46.What is the cost assigned to normal spoilage using weighted average?

a. P31,000 b. P15,500 c. P30,850 d. None

47.Assume that the FIFO EUP cost for material and conversion are $1.50 and $4.75,
respectively. Using FIFO what is the total cost assigned to the units transferred
out?
a. P414,194 b. P339,094 c. P445,444 d. P396,975

48.Cheeta Company has materials cost in the June 1 Raw and In Process of $10,000,
materials received during June of $205,000 and materials cost in the June 30 Raw
and In Process of $12,500. The amount to be backflushed from Raw and In Process
to Finished Goods at the end of June would be:
a. P215,000 b. P202,500 c. P207,500 d. P217,500

49.In backflush costing, if the conversion cost in Raw and In Process was $1,000
on March 1 and $400 on March 31, the account to be credited for the $600 decrease
would be:
a. Raw and In Process c. Raw Materials
b. Finished Goods d. Cost of Goods Sold

50.Under a JIT approach to purchasing, the ideal number of vendors for each material
is:
a. Two c. one
b. Less than six d. as many as can supply quality goods

51.Of the following, the only activity that adds value to a product is:
a. Processing time b. Moving time c. Waiting time d. Inspection time

52.Which of the following costing methods provide(s) the added benefit of usefulness
for external reporting purposes?
I. Variable
II. Absorption

a. I only b. II only c. Both I and II d. Neither

The following data apply to questions 53 and 54.

Troy Instruments uses ten units of Part number S123 each month in the production
of scientific equipment. The unit cost to manufacturing one unit of S123 Is presented
below.
Direct materials P4,000
Materials handling (10% of direct materials) 400
Direct manufacturing labor 6,000
Indirect manufacturing (200% of direct labor) 12,000
Total manufacturing cost P22,400

Materials handling represents the direct variable costs of the Receiving Department
that are applied to direct materials and purchased components on the basis of their
cost. This is a separate charge in addition to indirect manufacturing cost. Troy’s
annual indirect manufacturing cost budget is one-fourth variable and three-fourths
fixed. Duncan Supply, one of Troy’s reliable vendors, has offered to supply Part
Number S123 at a unit price of P17,000.
53.If Troy purchases the S123 units from Duncan, the capacity Troy used to
manufacture these parts would be idle. Should Troy decide to purchase the parts
from Duncan, the unit cost of S123 would
a. Decrease by P3,700 c. Increase by P3,600
b. Decrease by P5,600 d. Increase by P5,300

54.Assume that Troy Instruments does not wish to commit to a rental agreement to
rent all idle capacity but could use idle capacity to manufacture another product
that would contribute P60,000 per month. If Troy elects to manufacture S123 in
order to maintain quality control, Troy’s opportunity costs
a. P(53,000) b. P7,000 c. P(24,000) d. P36,000

The following data apply to questions 55 and 56.

Each month, Liyue Company has P275,000 total manufacturing costs (20% fixed) and
P125,000 distribution and marketing costs (36% fixed). Haddon’s monthly sales are
P500,000

55.The markup percentage on full cost to arrive at the target (existing) selling
price is
a. 25% b. 75% c. 80% d. 20%

56.The markup percentage on variable costs to arrive at the existing (target)

selling price is
a. 20% b. 40% c. 80% d. 66.67%

57.The ff. standard costs pertain to a component part manufactured by Hu Tao Co:
Direct materials P 4
Direct labor 10
Factory overhead 40
Standard cost per unit P54

Factory overhead is applied at P1 per standard machine hour. Fixed capacity cost
ids 60 percent of applied factory overhead and is not affected y any “make or
buy” decision. It would cost P49 per unit to buy the prat from an outside
supplier. In the decision to “make or buy”, what is the total relevant unit
manufacturing cost?
a. P54 b. P38 c. P30 d. P5

58.An unfavorable price variance for direct materials might indicate:

a. that the purchasing manager purchased in smaller quantities due to a change
to just-in-time inventory methods
b. congestions due to scheduling problems
c. that the purchasing manager skillfully negotiated a better purchase price
d. that the market had an unexpected oversupply of those materials

59.A favorable efficiency variance for direct materials might indicate:

a. that lower-quality materials were purchased
b. an overskilled workforce
c. poor design of products or processes
d. a lower-priced supplier was used

60.The variable overhead efficiency variance is computed __________ and interpreted

__________ the direct-cost efficiency variance
a. the same as; the same as
b. the same as; differently than
c. differently than; the same as
d. differently than; differently than
Numbers 61 through 66 are based on the following:
Kamisato Arts Company manufactures the Mitsplitter Reforged weapon. The company
employs both skilled and unskilled workers. To produce one 55-kilogram blade
requires Materials A and B as well as skilled labor and unskilled labor. The
standard and actual material and labor information is presented below:

Standard:
Material A: 30.25 kilograms @ P1.25 per kilogram
Material B: 24.75 kilograms @ P2.00 per kilogram

Skilled Labor: 4 hours @ P12 per hour

Unskilled Labor: 2 hours @ P7 per hour

Actual:
Material A: 10,716 kilograms purchased and used @ P1.50 per kilogram
Material B: 17,484 kilograms purchased and used @ P1.90 per kilogram

Skilled Labor hours: 1,950 @ P11.90 per hour

Unskilled Labor hours: 1,300 @ P7.15 per hour
During the current month, Kamisato Arts Company manufactured 500 55-kilogram blades.

Round all answers to the nearest whole peso.

61.What is the total material price variance?

a. P877F b. P877U c. P931U d. P931F
62.What is the total material mix variance?
a. P3,596F b. P3,596U c. P4,864F d. P4,864U
63.What is the total material yield variance?
a. P1,111U b. P1,111F c. P2,670U d. P2,670F
64.What is the labor rate variance?
a. P0 b. P1,083U c. P2,583U d. P1,083F
65.What is the labor mix variance?
a. P1,083U b. P2,588U c. P1,083F d. P2,588F
66.What is the labor yield variance?
a. P2,583U b. P2,583F c. P1,138F d. P1,138U

67.Traditionally, managers have focused cost reduction efforts on

a. activities b. processes c. departments d. costs

68.Which of the following costs should not be included in products costs for
internal management reports that are used for decision-making?
a. costs of unit-level activities
b. costs of batch-level activities
c. costs of product-level activities
d. costs of organization-sustaining activities

69.The standard cost of one unit of product includes 2 hours of DL at P15 per hour.
The company’s labor rate variance was P275, favorable. The efficiency variance
was P105, unfavorable. Three-hundred and eighty units were produced. What were
the actual labor hours?
a. 774 b. 760 c. 753 d. 767

70.An example of a nonvolume-related overhead base would be:

a. direct materials cost c. direct labor cost
b. machine hours d. number of setups

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