VIRGEN MILAGROSA UNIVERSITY FOUNDATION

COLLEGE OF BUSINESS ADMINISTRATION AND ACCOUNTANCY

COST ACCOUNTING AND MANAGEMENT
QUIZ 1

Name: __________________________________ Date: August 26, 2017 Score: _______/70 Equiv. _______

Part I. Identification. Write your answer on space provided.

1. __________________________A form/document used to record the costs chargeable to a specific job and to determine
the total and unit costs of the completed job.
2. __________________________ Refers to the resources given up or value sacrificed for goods and services that are
expected to bring a current or future benefit to the organization.
3. __________________________ Costs that are matched with the revenue of a specific time period and charged to
expense as incurred.
4. __________________________ Costs that are necessary and integral part of producing the finished product Also called
inventoriable costs or manufacturing cost.
5. __________________________ A process of converting a raw material to a finished product using labor and other
overhead costs.
6. __________________________ Involves measuring, recording and reporting product costs.
7. __________________________ A rate based on the relationship between estimated annual overhead costs and
expected annual operating activity, expressed in terms of a common activity base.
8. __________________________ The sum of direct materials, direct labor and manufacturing overhead in the current
period.
9. __________________________ Total cost of work in process less the cost of ending work in process inventory.
10. __________________________ A situation in which overhead assigned to work in process is greater than the actual
overhead incurred.
11. __________________________ A cost system in which costs are assigned to each unique job or batch. A subsidiary
record is needed to keep track of all unfinished and finished job.
12. __________________________ A cost system which is used when a company manufactures a large volume of similar
products that pass through a series of standardized process.

Part II. True or False. Write (O) if the statement is true and (X) if otherwise.
________1. Total fixed costs decrease with increase in the number of units produced and increase with decrease in output.
________2. Period costs are found in both merchandising and manufacturing firms.
________3. The three cost elements of manufactured goods are direct materials, direct labor and marketing costs.
________4. A Cost that is present under one alternative but absent in whole or in part under another alternative is known as
differential cost.
________5. Product costs are treated as expense in the period in which they are incurred.
________6. Indirect materials / factory supplies are classified as administrative expense.
________7. A fixed cost is constant (does not change) per unit of product.
________8. A decrease in production will ordinarily result in a decrease in variable cost per unit.
________9. As production increases, total variable cost also increases.
________10. Factory rent is included in manufacturing overhead, but office rent is a period cost.
________11. Variable cost per unit decreases as production decreases.
________12. Actual manufacturing overhead costs are charged directly to the Work in Process account as the cost are incurred.
________13. All of the raw materials purchased during the period are included in the cost of manufactured figure
________14. A job order cost system is most appropriate when a large volume of uniform products are produced.

Part III. Multiple Choice. Encircle your final answer. For questions requiring computation, present your solution on this test
paper. NO SOLUTION NO POINT. NO CONSIDERATION.

1. Indirect Labor is a
a. Prime cost c. Period cost
b. Conversion cost d. Non-manufacturing cost.
2. Cost that vary inversely with changes in volume of production include
a. Total variable cost c. Total fixed cost
b. Variable cost per unit d. Fixed cost per unit
3. The distinction between indirect and direct costs depend on
a. Whether a cost is controllable or non-controllable
b. Whether a cost is variable or fixed
c. Whether a cost is a product or a period cost
d. Whether a cost can be conveniently and physically traced to a unit under consideration.
4. The following costs relate to Antonio Industries for the last quarter:
Conversion Cost 435,000
Direct Materials 215,000
Manufacturing Overhead 190,000
Selling and Administrative Expense 185,000
What is Antonios prime cost for last quarter? (2points)
a. 460,000
b. 410,000
c. 405,000
d. 375,000

5. Antonios manufacturing cost is? (2points)

a. 460,000
b. 645,000
c. 650,000
d. 840,000

6. Antonios total period cost is (2points)

a. 185,000
b. 275,000
c. 400,000
d. 620,000

7. In Cromwell Compnay, the predetermined overhead rate is 80% of direct labor cost. During the month, Cromwell incurs
P210,000 of factory labor costs, of which 180,000 is direct labor and 30,000 is indirect labor. Actual overhead incurred
was P200,000. The amount of overhead debited to Work in Process Inventory should be (2points)
a. P200,000
b. P144,000
c. P168,000
d. P160,000

8. Calculate the manufacturing overhead incurred for F&B Co. (2points)

Direct labor cost incurred P250
Direct material used 110
Beginning work in process 50
Ending work in process 330
Finished goods completed 170
a. P60
b. P410
c. P560
d. P580

9. Arizona Manufacturing Company reported the following year-end information: (2points)

Work in process, Jan 1 P180,000
Raw Materials inventory, Jan 1 50,000
Work in process, Dec 31 150,000
Raw Materials inventory, Dec 31 80,000
Raw material purchased 160,000
Direct Labor 150,000
Factory Overhead applied 100,000
Factory Overhead actual/control 120,000
Cost of goods Manufactured for the year is
a. 380,000
b. 410,000
c. 350,000
d. 440,000

10. Alabana Corporation reported the following for the year. WP inventory, beg P90,000; cost of goods manufactured
P258,000; FG inventory, beg P126,000; WP inventory, end P110,000; FG inventory, end P132,000.
Cost of goods sold for Alabama Corporation during the year (2points)
a. 252,000
b. 264,000
c. 232,000
d. 126,000

11. Total manufacturing costs for Alabama Corporation (2points)

a. 278,000 c. 298,000
b. 368,000 d. 238,000
 12. In job-order costing, what journal entry should be made for the return to the stockroom of direct materials previously
issued to production for use on a particular job?
a. Debit Materials and credit Factory Overhead
b. Debit Materials and credit Work in Process
c. Debit Purchase Returns and credit Work in Process
d. Debit Work in Process and credit Materials

13. Using a job-order costing system, the peso amount of the entry involved in the transfer of inventory from work in
process to finished goods is the sum of the costs charged to all jobs:
a. Started in process during the period
b. In process during the period
c. Completed and sold during the period
d. Completed during the period

Part IV. Problems

1. Rocco Delivery Services reports the following costs and expenses in June of the current year
Direct materials 220,000
Factory rent 50,000
Direct labor 180,000
Factory utilities 8,500
Supervision in the factory 60,000
Depreciation factory equipment 20,000
Sales Commission 47,000
Adverising 10,000
Depreciaiton office equipment 10,000
Salary of the president 250,000
Required:
Classify each of the cost using the format given below: (3 points less number of incorrect total)
Product Cost Period Cost
COST Direct Materials Direct Labor Manufacturing Selling Expense Administrative
Overhead Expense
Direct materials
Factory rent
Direct labor
Factory utilities
Supervision in the
factory
Depreciation
factory equipment
Sales Commission
Adverising
Depreciaiton
office equipment
Salary of the
president
Total

2. Manufacturing costs for Nicole Company for selected months are a follows: Indicate the missing amount for each letter.
Assume that in all cases, manufacturing overhead is applied on ht basis of direct labor cost and the rate is the same. (12
points less number of incorrect answers)
May August November
Direct Materials used P (a) 166,000.00 126,300.00
Direct Labor 100,000.00 240,000.00 (l)
Factory Overhead applied 75,000.00 (f) (m)
Total Manufacturing cost 311,300.00 (g) 429,050.00
Beginning work in process (b) 31,000.00 36,000.00
Total cost of work in process 403,000.00 (h) (n)
Ending work in process (c) 23,600.00 (o)
Cost of goods manufactured 384,600.00 (i) 444,000.00
Beginning finished goods (d) 102,000.00 (p)
Cost of goods available for sale 510,000.00 (j) (q)
Ending finished goods 126,000.00 150,000.00 99,000.00
Cost of goods sold (e) (k) 429,000.00
3. Ram Company completed the following transactions for October 2016.
a. Purchased on account raw materials of P170,000
b. The factory labor costs were incurred. Total Wages payable P75,000 and Employee payroll tax payable amounted
to P 15,595.
c. Materials issued: direct materials: 120,000; indirect materials P10,000
d. Direct labor P56,000 and indirect labor P19,000 were assigned to the current job.
e. Other overhead charges incurred amounted to 24,900.
f. Factory overhead was charged to production at 120% of direct labor costs.
g. Goods completed with a total cost of P175,000 were transferred to finished goods
h. Goods costing P140,000 were sold for P220,000 on account.

Instruction: Prepare an entry for each manufacturing activity. (1 point each)