` Wachemo University

College of business and Economics

Department of Accounting and Finance
Final Examination for the Course Cost and Management Accounting I
Date of Exam: Sept 15, 2024
Time allowed: 2:30 hours Total marks: 50

Name:____________________________ ID No: _______________

Section: ____________________ Signature: ___________

Instructions:
☞ Do not mark/ encircle your answers on the question paper, give all your answers in the
shaded area provided at the end of the this booklet
☞ Check whether the booklet contains three parts.
☞ Do not forget writing your name on both question paper and answer sheet

Part I: Write true if the statement is true and writes false if it is

false (1 point each)

1. Job order costing system uses several works in process inventory

accounts, one for each process, department or work cell.
2. The weighted average cost is the ratio of total of all costs entering the
work in process account and total equivalent units of work done to
date.
3. Job order costing system is appropriate for companies that make large
amount of similar products using a continuous production flow.
4. Costs transferred from a prior process to a subsequent process are referred to as cost of
finished goods.
5. Under job order costing system when products and jobs are completed,
the costs assigned to them are transferred to the finished goods
inventory account.
6. If actual overhead had been less than applied overhead, the difference
is called under applied overhead.
7. If the amount of under or over applied overhead is significant, it is
better to close it into cost of goods sold account.
8. Process costing with zero beginning and ending work in process unit
costs can be averaged by dividing total costs in a given accounting
period by total units produced in that period
9. Equivalent units of output are the completed units that could have been produced given
the total amount of productive effort made for a given period.

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 10. The work done on beginning work in process represents prior-period work/effort, and
the costs assigned to it are prior-period costs.
Part II Choose the best answer and write your answer on the space
provided at the end of this booklet (2 points)
1. Spoilage inherent in a particular production process that arises even
under efficient operating conditions.

a. Good Units of outputs c. Abnormal spoilage

b. Normal Spoilage d. None of the above

2. Residual material that results from manufacturing a product is:

a. Spoilage c. Reworking units
b. Scrap d. By products
3. The journal entry to record Normal Rework Attributable to a specific job
a. Work-in-process control account Debited
b. Manufacturing overhead control account Debited
c. Materials control, Manufacturing overhead allocated and Wages
Payable Control account Debit
d. All
4. Equivalent units of output are necessary for process costing when:
a.There are no beginning and ending work in process inventories.
b.There exist ending work in process inventories.
c.The FIFO method is used.
d.The weighted average method is used.
5.Weighted average and FIFO equivalent units would be the same in a period when:
a. No beginning inventory exists
b. No ending inventory exists.
c. Both a beginning and an ending inventory exist but are not necessarily equal.
d. Weighted average and FIFO equivalent units will never be the same.
For question number 6 & 7 use the following information.
Process X had 900 units in process at the beginning of the month, 100% complete with respect to
direct materials and 40% complete with respect to conversion costs. At the end of the month,
there were 400 units in process, 100% completed with respect to direct materials and 30%
complete with respect to conversion costs. If 8,000 units were started during the month.
6.What were the FIFO equivalent units of direct materials and conversion costs?
a.8,900 units and 8,260 units respectively c.8,500 units and 8,500 units respectively
b.8,000 units and 8,080 units respectively d.None of the above
7. What were the weighted average equivalent units?
a. 8,900 units and 8,620 units b. 8,000 units and 8,080 units
respectively respectively

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 c. 8,500 units and 8,500 units d. None of the above
respectively
8. The type of spoilage that might not raise under efficient operating environment is:
a. Normal spoilage c. Abnormal spoilage
b. All spoilage d. Normal reworking units

For Questions # 9-10 use the following information

AMORA Chemical operates a thermo assembly process as the second of three processes at its
plastics plants. Direct materials in thermo assembly are added at the end of the process. The
following data pertained to the thermo assembly department for October 2022.
i. Work-in-process beginning inventory 50, 000 units (Degree of completion: Transferred in
Cost 100%, Direct Material 0% and Conversion Costs 70%). The cost data of work in
process beginning is Birr 123,900 transferred in cost, Birr 0.00 direct material cost and birr
43,000 conversion cost.
ii. Transferred-in during current period are 200,000 units.
iii. Cost data of current period birr 172,000 transferred in cost, birr 91, 000 direct material cost
and birr 117,000 conversion cost.
iv. Completed and transferred out during current period are 210,000 units.
v. Work in- process ending 40, 000 units (Degree of completion: Transferred in Cost 100%,
Direct Material 0% and Conversion Costs 40%).
9. The equivalent units work done to date is:
Transferred-in Direct materials Conversion cost
a. 250,000 173,000 211,000
b. 250,000 210,000 226,000
c. 210,000 165,000 195,000

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 d. None of the above
10. What is the cost per equivalent units of work done to date?
Transferred-in cost Direct materials cost Conversion cost
a. Birr 0.688 Birr 0.562 Birr 0.555
b. Birr 1.409 Birr0.557 Birr 0.8210
c. Birr 1.184 Birr 0.433 Birr 0.708
d. None of the above
On January1 (beginning of the period), the company had Br.17, 000 in raw materials account. In
addition, during the month, the company purchased Br.160, 000 raw materials. During the month
company requisitioned Br. 167,000 raw materials from storeroom for use in production.
11. What is April 30 balance of raw material account in birr?
a. Br. 17,000 c. Br. 177,000
b. Br. 160,000 d. Br. 10,000
12. Assuming all materials purchased and used were direct materials, what is the balance of work
in process account?
a. Br. 177,000
b. Br. 167,000
c. Br. 143,000
d. Br. 17,000

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 Part III: Work Out (10 points)
1. The Boston Company is a food-processing company based in San Francisco. It operates
under the FIFO method of process costing and has two departments: cleaning and
packaging. For the cleaning department, conversion costs are added evenly during the
process, and direct materials are added at the beginning of the process. Spoiled units are
detected upon inspection at the end of the process and are disposed of at zero net disposal
value. All completed work is transferred to the packaging department. Summary data for
May follow:

The Boston company: cleaning department Physica Direct Conversion

l units materials costs
Work in process beginning inventory (may 1) 3000 $4500 $2700
Degree of completion of beginning inventory 100% 60%
Started during may 25000
Good units completed and transferred out during May 20,500
Work in process ending inventory (May 31) 4200
Degree of completion of ending work in process 100% 30%
Total cost added during May $46250 $37216
Normal spoilage as a percentage of good units 10%
Degree of completion of normal spoilage 100% 100%
Degree of completion of abnormal spoilage 100% 100%
Required: For the cleaning department

a. Determine Equivalent units of work done ( 2 points)

b. Calculate cost per equivalent units of work done (2 points)

c. Assign total costs to:

i. units completed and transferred out (including normal spoilage),(4 points)

ii. abnormal spoilage, and ending work in process.(2 points)

Carry unit-cost calculations to two decimal places when necessary and put final totals to the
nearest dollar.

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