Beginning Inv in units 0 b.

370
Units produced 4800 c. 70
units sold 4000 d. 430
sales 400000
material cost 96000 The amount of direct materials issued to production is
variable conversion cost used 48000 found by
facility level or fixed manu cost 72000
indirect operating costs 80000 a. subtracting ending work in process from total work
in process during the period
The difference between the variable inventory cost b. adding delivered cost of materials, labor, and moh
and the absorption ending inventory cost is: c. subtracting ending direct materials from direct
materials available for production.
a. 800 units times 20 per unit variable conversion cost d. subtracting purchases discounts and purchases
plus 15 per unit indirect manufacturing cost returns and allowances from purchases of direct
b. 800 units time 10 per unit material cost material plus freight-in.
c. 800 units time 15 per unit indirect manufacturing e. adding beginning direct materials inventory and the
cost delivered cost of direct materials
d. 800 units times 20 per unit variable conversion cost
plus 15 indirect manufacturing cost plus 16.67 per unit Cheboygan Company has the following unit costs:
indirect operating costs.
Variable MOH 25
A product cost is deducted from revenue when: DM 20
DL 19
a. the production process is completed Fixed MOH 12
b. the finished goods are transferred to the Finished Variable M&A 7
Goods Inventory.
c. the finished goods are sold. Cheboygan produced and sold 10,000 units. If the
d. the expenditure is incurred. product sells for $100, what is the contribution
e. the production process takes place margin?

a. 290000
In the standard regression equation of y = a + bx, the
b. 240000
letter y is best described as the:
c. 360000
d. 170000
a. independent variable
b. dependent variable.
The coefficient of correlation is:
c. intercept of the equation.
d. slope of the equation.
a. the relative degree that changes in one variable
can be used to estimate changes in another variable.
Laner Company has the following data for the
b. the measure of variability of the actual observations
production and sale of 2,000 units.
from the predicting (forcasting) equation line.
c. the proportion of the total variance in the dependent
Sales price per unit 800
variable explained by the independent variable.
Fixed:
d. the range of values over which the probability may
Marketing 400000
be estimated based upon the regression equation
MOH 200000
results.
Variable:
Marketing 50 per unit
A disadvantage of the high-low method of cost
MOH 80
analysis is that it:
Direct Labor 100
Direct materials 200
a. typically results in a totally inaccurate cost formula.
b. relies totally on the judgement of the person
What is the contribution margin per unit?
performing the cost analysis.
a. 320
c. uses only two data point, which may not be
representative of normal conditions. Using the high-low method to develop a cost
d. is too time consuming to apply. estimating equation, the estimate of needed
manufacturing supplies for July would be:
The difference between variable costs and fixed costs
is: a. 749180
b. 752060
a. Unit variable costs are fixed over the relevant range c. 688750
and unit fixed costs are variable. d. 759310
b. Unit variable costs fluctuate and unit fixed costs e. 681500
remain constant.
c. Unit variable costs change in varying increments,
while unit fixed costs change in equal increments. Waupun Company has the following unit costs:
d. Total variable costs are constant over the relevant
range, while fixed costs change in the long-term. Variable MOH 13
e. Total variable costs are variable over the relevant DM 12
range, but fixed in the long-term, while fixed costs DL 17
never change. Fixed MOH 10
Variable M&A 8
A company had beginning inventories as follows:
Direct Materials, $300; Work-In-Process, $500; What cost per unit would be used for product costing
Finished Goods, $700. It had ending inventories as under variable costing?
follows: Direct Materials, $400; Work-In-Process,
$600; Finished Goods, $800. Material Purchases (net a. 42
including freight) were $1,400, Direct Labor $1,500, b. 52
and Manufacturing Overhead $1,600. What is the c. 29
Costs of Goods Sold for the period? d. 60

a. 4300 During the year, a manufacturing

b. 4100
c. 4400
company had the following operating
d. 4200 results:

Which of the following statements is (are) true Beg wip inv 45000
regarding cost behaviors? beg fg inv 190000
DM used 308000
(A) In general, accounting records accumulate cost DL 475000
information according to its behavior. MOH 250000
(B) Cost behaviors are the most important Ending wip 67000
consideration in managerial decision making. Ending fg 89000

a. Neither A nor B is true. What is the cost of goods manufactured for the year?
b. Both A and B are true.
c. Only B is true. a. 1,134,000
d. Only A is true. b. 1,033,000
c. 1,011,000
Controller of Joy Co requested a quick estimate. d. 1,112,000
Expected 470000 units to meet ending inv and sales Thul company is interested....
of 475000 units. Last three months:
Based on the results of the regression analysis, the
March - 450000 - 723060 estimate of electricity costs in a month with 2,200
April - 540000 - 853560 machine hours would be:
May - 480000 - 766560
a. 3727
b. 22825
c. 16421 Given the following data:
d. 15180
Per Unit, Total
Sales - 15 - 45000
Which cost estimation method does not use the Less variable expenses - 9 - 27000
company's cost information as its primary source of Contribution Margin - 6 - 18000
information about the relationship between total costs Less fixed expenses - - 12000
and activity levels? Net Income - - 6000

a. Engineering estimates If sales decrease by 500 units, by what percent would

b. High-low fixed costs have to be reduced by to maintain current
c. Scattergraph net income?
d. Regression analysis
e. Account analysis a. 50%
b. 33.3%
Which of the following best distinguishes an c. 16.7%
opportunity cost from an outlay cost? d. 25%

a. Outlay costs are speculative in nature, whereas

opportunity costs are easily traceable to products. The following pertains to Clove Co. for the year
b. Opportunity costs have very little utility in practical ending Dec. 31, 2012:
applications, whereas outlay costs are always
relevant. Budgeted Sales 1000000
c. Opportunity costs are sacrifices from foregone Break-even Sales 700000
alternative uses of resources, whereas outlay costs Budgeted CM 600000
are cash outflows. Cashflow Break-even 200000
d. Opportunity costs are recorded, whereas outlay
costs are not. Colve's margin of safety is:

Darth Company sells three product. a. 800000

b. 300000
Product X, Y, Z c. 500000
Sales in Dollars - 20000 - 40000 - 100000 d. 400000
CMR - 45% - 40% - 15%

Given these data, the contribution margin ratio for the Which of the following accounts would be a period
company as a whole would be: cost rather than a product cost?

a. 75% a. Direct labor

b. 25% b. Depreciation on manufacturing machinery
c. 33.3% c. Maintenance on factory machines
d. Cannot determine d. Freight out
e. Production manager's salary

How would property taxes paid on a factory building Barnes Corporation manufactures skateboards
be classified in a manufacturing company?
Sales - 1500000
a. Variable, product cost Cost of Sales:
b. Fixed, period cost DM 250000
c. Fixed, product cost DL 150000
d. Variable, period cost Variable OH 75000
Fixed OH 100000
Gross Profit 925000 c. direct material, direct labor and variable factory
Selling and G&A overhead
Variable 200000 d. direct labor and factory overhead
Fixed 250000 e. direct material, direct labor and factory overhead
Operating Income 475000
A decrease in the margin of safety would be caused
The break-even point for Barnes Corporation for the by a(n):
current year is:
a. increase in the total fixed costs
a. 636364 b. decrease in the break-even point
b. 181818 c. decrease in the variable cost per unit
c. 729730 d. increase in total revenue (sales)
d. 146341
e. 658537 The following information pertains to Syl Co.:

Sales - 800000
Which of the following costs is both a prime cost and Variable Costs - 160000
a conversion cost? Fixed Costs - 40000

a. marketing costs What is Syl's break-even point in sales dollars?

b. direct labor
c. manufacturing overhead a. 160000
d. direct materials b. 40000
c. 200000
The term "relevant range" as used in cost accounting d. 50000
means the range over which:

In the cost equation TC = F + VX, X is best described

a. costs relationships are valid
as the:
b. relevant costs are incurred
c. costs may fluctuate
a. costs that do not vary with changes in the activity
d. cost data is available
level
b. total cost estimate at a particular activity level
Seller Company has the following information:
c. activity level used to estimate the total cost
d. costs that do vary with changes in the activity level
WIP, FG, Materials
Beg Inv - 300 - 400 - 500
Ending Inv 700 - 900 - 1500
Hagler's Toupees has the following machine hours
Purchase 7700
and production costs for the last six months of last
COGS 15600
year:
MOH 4300

Mont - Machine Hours - Production Cost

What was the direct labor for the period?
July - 15000 - 12075
a. 5500
August - 13500 - 10800
b. 6800
September - 11500 - 9580
c. 7500
October - 15500 - 12080
d. 6300
November - 14800 - 11692
e. 5800
December - 12100 - 9922
XYZ company manufactures a single product. The
If Hagler expects to incur 14,000 machine hours in
product's prime costs consist of
January, what will be the estimated total production
cost using the high-low method?
a. direct material and direct labor
b. direct material and factory overhead
a. 22,400
b. 11,142.50
c. 10,889.10 e. cost of goods manufactured was higher than cost
d. 8,750 of goods sold.

Which of the following would be considered an actual

Classifying a cost as either direct or indirect depends cost of a current​period?
upon
A.The average of historical material cost data for a
a. whether an expenditure is unavoidable because it chair manufactured in several past accounting periods
cannot be changed regardless of any action taken. B. The expected cost of materials for a chair as a
b. the behavior of the cost in response to volume result of engineering specifications
changes. C. The​$22 of direct material cost per unit assumed in
c. the cost object to which the cost is being related. the actual budget of a manufacturer of chairs
d. whether the cost is expensed in the period in which D. The​$25 of materials in a manufactured chair that
it is incurred. is ready to be shipped to the customer

Kator Inc. manufactures industrial components. The collection of cost data in an organized​way, such
as in various categories such as​materials, labor, and
Per Unit manufacturing​overhead, is​called:
Selling Price 150
DM 20 A.cost accumulation
DL 15 B. cost reporting
VMOH 12 C. cost application
FMOH 30 D. cost assignment
Variable selling 3
Fixed S&A 10 Budgeted costs are​________.
Total Costs 90
Operating Margin 60 A.planned or expected costs
B.the costs incurred last year
During the next year, sales of KB-96 are expected to C.​competitor's costs
be 10,000 units. All costs will remain the same except D.the costs incurred this year
for fixed manufacturing overhead, which will increase
by 20%, and material, which will increase by 10%. Cost assignment​________.
The selling price per unit for next year will be $160. A.includes future and arbitrary costs
Based on these data, Kator Inc.'s total contribution B.is the same as cost accumulation
margin for next year will be: C.is the difference between budgeted and actual
costs
a. 882000 D.associates accumulated costs with certain cost
b. 972000 objects
c. 1,080,000
d. 980000 When costs can be traced to a particular cost object
in an economically feasible​way, the cost is​a:
The Work-in-Process Inventory of the Rapid A.direct cost
Fabricating Corp. was $3,000 higher on December B.indirect cost
31, 2012 than it was on January 1, 2012. This implies C.allocated cost
that in 2012 D.budgeted cost

a. cost of goods manufactured was less than total Which of the following statements about the​
manufacturing costs. direct/indirect cost classification is​true?
b. cost of goods manufactured was less than cost of A.The design of sales target affects the​direct/indirect
goods sold. classification.
c. manufacturing costs were less than cost of goods B.Indirect costs are always allocated.
manufactured C.The​direct/indirect classification depends on the
d. manufacturing costs were higher than cost of cost control measures.
goods sold. D.Indirect costs are always traced.
Cost tracing is​________. Cost of goods sold is
A.the process of tracking both direct and indirect a. An expense
costs associated with a cost object b. A period cost
c. Is an asset
B.the process of determining the actual cost of the d. None of the above
cost object
C.a function of cost allocation
D.the assignment of direct costs to the chosen cost If the amount of “Cost of goods manufactured” during
object a period exceeds the amount of the
“Total manufacturing costs” for the period, then
a. Ending work in process inventory is greater than or
equal to the amount of the
Indirect manufacturing costs​________. beginning work in process inventory
A.can be easily identified with the cost object b. Ending work in process is greater than the amount
B. generally include the cost of material and the cost of the beginning work in process
of labor inventory
c. Ending work in process is equal to the cost of
C.may include both variable and fixed costs goods manufactured
D.can be traced to the product that created the costs d. Ending work in process is less than the amount of
the beginning work in process
inventory
Which of the following statements is​true?
A.All direct costs are variable costs. Product Undercosting
B.All fixed costs are indirect costs. -​ A product consumes a high level of
C.A direct cost of one cost object will always be a resources but is reported to have a low cost
direct cost of another cost object. per unit.
D.Because of a cost−benefit ​tradeoff, some direct
costs may be treated as indirect costs. Product Overcosting
-​ A product consumes a low level of resources
but is reported to have a high cost per unit.
Variable costs​________.
A.are always indirect costs Product-Cost Cross-Subsidization
B.increase in total when the actual level of activity -​ If a company undercosts one of its products,
increases it will overcost atleast one of its other
C.include most personnel costs and depreciation on products. If a company over costs one of its
machinery products, it will undercost atleast one of its
D.are never considered a part of prime cost other products.

Which of the following is true if the volume of sales Refined Costing System
increases​(within a relevant​range)? -​ Reduces the use of broad averages for
A.total variable cost increases assigning the cost of resources to cost
B.total variable cost decreases objects (such as jobs, products, and
C.total fixed cost decreases services) and provides better measurement
D.total fixed cost increases of the costs of indirect resources used by
different cost objects - no matter how
differently various cost objects use indirect
resources.
The balance sheet of a service−sector companies Activity-Based Costing (ABC)
would show​________. -​ Refines a costing system by identifying
A.work−in−process individual activities as the fundamental cost
​inventory, and finished goods inventory accounts objects.
B.direct materials​inventory, work−in−process
​inventory, and finished goods inventory accounts If production output doubles, variable cost per unit
C.only finished goods inventory will:
D.no inventory accounts
 a.​ Reduce by half b.​ It is too time consuming to
b.​ Double apply
c.​ Remain constant c.​ It uses two extreme data
d.​ None of these points, which may not be
representative of normal
If production output halves, fixed cost per unit will: conditions
d.​ It relies to totally on the
a.​ Reduce by half
judgement of the person
b.​ Double
performing the cost analysis
c.​ Remain constant
d.​ None of these
The least squares method takes all data into
A cost that behaves in the following way is a: account when calculating the cost formula

a.​ True
b.​ False

Digibox Ltd sells a single type of set-top digital

conversion box. Estimated unit data for the
a.​ Fixed cost year is as follows:
b.​ Variable cost
c.​ Mixed cost
d.​ Step cost

In describing the cost equation, Y = a + bX, ‘a’

is:

a.​ The dependent variable, cost

b.​ The independent variable, level of Total fixed costs are estimated at £65,000 for
activity administration and £50,000 for selling and
c.​ The total fixed cost distribution. Estimated sales for the year are
d.​ The variable cost per unit of the 6,000 boxes.
activity The total contribution is:

Jay PLC made 500 units of product Y in April a.​ 145000

with a total cost of £10,000, and 800 units in b.​ 160000
May with a total cost of £13,000 Using the c.​ 210000
high/low method of analysing costs, what will d.​ 95000
be their total cost in June, if they make 700
units?

a.​ 12000
b.​ 14000
c.​ 11375
d.​ 12500 Carr Company reports the following data for
A disadvantage of the high-low method of cost the first six months of the year: Reference:
analysis is that [Carr Company]

a.​ It cannot be used when there

are a very large number of
observations
 Solution: P400,000 + P400,000 = P800,000
P800,000/10,000 units = P80 per unit

Using the data in No. 1, what is the predetermined

overhead rate based on material cost?
a. 200%
b. 150%
c. 250%
d. 300%

Using the data in No. 1, what is the predetermined

overhead rate based on direct labor cost?
Using the least-squares regression method, the a. 133%
b. 153%
estimated variable electrical cost per machine c. 166%
hour is closest to: d. 113%
Answer: a. 133%
Solution: P800,000/600,000 = 133%
a.​ 0.91
b.​ 0.10
Using the data in No. 1, what is the predetermined
c.​ 0.20 overhead rate based on direct labor hours?
d.​ 0.25 a. P32 per direct labor hour
b. P35 per direct labor hour
c. P40 per direct labor hour
When determining whether a measurable d. P45 per direct labor hour
learning effect is present, it’s important to
exclude all non-labour related costs. Selected data for the Palawan Manufacturing
Company for the year 2014 follow:

a.​ True Budgeted for Year Actual for Year

b.​ false Direct labor hours
260,000 248,300
Manufacturing Overhead
Fixed
P 585,000 P 578,400
What is the high-low method used to estimate? Variable
1,092,000 1,039,940
variable costs and production capacity Total
P 1,677,000 P1,618,340
Overhead is applied on the basis of direct labor hours.
What is the over or under applied overhead for the
total costs and recommended sales price year?
a. P16,805 over applied
b. P16,805 under applied
cost per unit produced and total fixed costs c. P15,800 over applied
d. P15,800 under applied
Answer: b. P16,805 under applied
management salaries and estimated production time Solution: 248,300 X 6.45 = 1,601,535
P1,618,340 – P1,601,535 = P16,805
Rolex Corporation estimates that its production for the
coming year will be 10,000 units with the
following unit costs:
Materials P40
Direct labor 60
Direct labor is paid at the rate of P24 per hour. The
machine should be run for 20 minutes to
produce one unit. Total estimated overhead is
expected to consist of P400,000 for variable
overhead and P400,000 for fixed overhead.
What is the predetermined overhead rate based on
units of production?
a. P80 per unit For the fiscal year 2014, the San Miguel Corporation
b. P75 per unit accumulated the following data:
c. P65 per unit Sales
d. P85 per unit P 790,670
Answer: a. P80 per unit
Finished goods, July 1, 2013 Using the data in No. 9, what is the over or under
33,500 applied manufacturing overhead?
Finished goods, June 30, 2014
83,000
Cost of goods manufactured
450,700 a. P13,098 over applied
Over applied or under applied overhead
4,200 (Debit Balance)
Operating expenses
157,500 b. P13,098 under applied
What is the net income before provision of income tax
for the year ended June 30, 2014?
a. P227,770
b. P236,170 c. P 861 under applied
c. P240,370
d. P182,470

Answer: b. P236,170 d. P 861 over applied

Solution: Sales P790,670
Cost of goods sold:
Finished Goods- July 1, 2013 P33,500
Cost of Goods Manufactured 450,700 papasa tayo!!!
Total available 484,200
Finished Goods-June 30, 2014 83,000
Cost of Goods Sold 401,200
Under Applied (4,200)
Total 397,000
Gross Profit 393,670
Operating Expenses ( P157,500)
Net Income P236,170

Nena Company is expected to produce 4,000 units for

the coming year. The budget shows fixed
manufacturing overhead of P1,440 and an estimated
variable manufacturing overhead rate of
P2.10 per unit. Actual output was 4,100 units, with a
total manufacturing overhead of P9,000.
What is the applied manufacturing overhead?

a. P10,086
b. P15,086
c. P 8,733
d. P 7,833

Using the data in No. 7, what is the over or under

applied manufacturing overhead?

a. P1,086 under applied

b. P1,086 over applied
c. P 267 under applied
d. P267 over applied

Maria Company is expected to utilize 3,000 machine

hours with fixed manufacturing overhead
budgeted at P1,410 and an estimated variable
manufacturing overhead rate of P2.10 per hour.
Actual production required 2,700 machine hours, with
a total overhead of P7,800.
What is the applied manufacturing overhead?
a. P20,898
b. P19,290
c. P6,939
d. P9,639
Answer: c. P6,939
Solution: P1,410/3,000 = 0.47 + 2.10 = 2.57
2,700 X 2.57 = P6,939