Midterm Exam Review: Cost Accounting & PSU Vision 2024
School
Palawan National School**We aren't endorsed by this school
Course
BIOLOGY 124A
Subject
Accounting
Date
Dec 11, 2024
Pages
11
Uploaded by MagistrateScience11708
N S R — . - 5659 SSUI PUE Jyoud aleys A puw A - 18U DAINAINGINIIN 11D 1 QBT ‘QQAI NIt st sl mese 538 amim =077 T PALAWAN STATE UNIVERSITY College of Rysiness and Accountancy Department ot Accountancy and Management Accounting MIDTERM EXAMINATION AE22 INSTRUCTIONS: This is a 70 — items multiple choice questions covering the topics discussed during the first half of the semester. Read the questions carefully and shade with a point black ink the corresponding letter of your answer on the answer sheet provided. =======================================================++++++++++++======= PSU VISION AND MISSION 1. What is the vision of Palawan State University this AY 2024-2025? a. An internationally recognize University that provides relevant and innovative education and research for lifelong learning and sustainable development. b. A premier state University in South East Asia that provides excellent and relevant higher education for sustainable development ¢ . None of the above d. The PSU vision is still in the process of crafting. 2. Which is the vision of Palawan State University? a. A globally recognized institution of higher learning that develops competent and morally upright citizens who are active participants in nation building and responsive to the challenges of the 21° century.. - b. An internationally recognize University that provides relevant and innovative education and research for lifelong learning and sustainable development. c.. A premier state University in South East Asia that provides excellent and relevant higher education for sustainable development d. Aleading university in the Philippines recognized for its proactive contribution to sustainable development through equitable and inclusive program and services by 2030 3. Which is the mission of Palawan State University? a. committed to upgrade people’s quality of life b. to develop innovative leaders and empowered communities c. committed to developing productive citizens d. to nurture an academic environment 4. How does Palawan State University achieve its mission? a. by providing education opportunities through excellent instruction, research and innovation,, extension, production services, and transnational collaboration. b. by collaborating with other institutions and communities through responsive , relevant and research based extension services. c. through smart infrastructure and innovative services. d. Dby delivering transformative instruction, research, extension and production through change drivers and responsive policies.
COST ACCOUNTING AND COST CONCEPTS Definition MULTIPLE CHOICE ] A B C D 5. cost that varies with the volume of Period cost | Fixed cost Variable | Cost activity cost 6. sacrifice of resources Fixed cost | Sunk cost | Outlay | Cost cost 7. Cost charged against revenue in a Period cost | Fixed costs | Variable | expense particular accounting period cost 8. cost that is part of inventory Period cost | Full Product | Cost absorption | cost cost 9. lost benefit from the best foregone Sunk cost | Opportunity | Outlay expense alternative cost cost 10. cost that cannot be directly related to a | Sunk cost | Indirect Direct Cost cost object cost cost 11. sum of direct materials and direct labor | Direct cost | Product Prime Fixed cost cost cost 12. refers to the marketing cost and Period cost | Fixed cost [ Variable | Sunk administrative cost ; cost cost 13. sum of direct labor and manufacturing | Conversion | Product Prime Direct cost cost cost cost cost JOB ORDER COSTING, MATERIALS, LABOR, FACTORY OVERHEAD For items 14-16, use the following data to compute for the requirements. The Silver Wing Corporation uses a job order costing system. The following information was recorded in December.: Cost added during Job December | December Number | 1 Direct Direct Materials Labor 101 5,500 1,650 1,100 102 7,700 1,375 . 1,650 103 2,750 8,250 825 104 4,125 22,000 2,200 The direct labor wage rate is P10 per hour. Factory overhead applied at the rate of PS per direct labor hour. Jobs #101, 102, and 103 have been completed and transferred to finished goods. Job 102 has been delivered to customers. Requirements: Multiple Choice A B C D 14. The total cost of goods 332,587.50 P 62,012.50 | P 41,937.50 | P59,125.00 manufactured is 15. The total cost of goods sold is | P 11,550.00 | P 3,850.00 | P 21,037.50 | P 32,587.50 16. Total amount of work in ’ rocess, end is P 41,662.50 | P 28,325.00 | P 23,787.50 | P 29,425.00
For items 17-22, use the following data to compute tor the requirements Allen Corporation uses job order costing system and the following information is given. The company has three jobs in process: Job#1, Job#2, Job#3. Raw materials used Direct Labor per hour Factory overhead applied based on direct labor cost 840,000 8.50 120% Direct materials was requisitioned as follows for each job: 30%, 25%, and 25% respectively and the balance is for indirect materials. Direct labor hours per job are: P17,500; 21,700; and 29,400 respectively. Indirect labor incurred is P231,000. Other actual factory overhead costs incurred totalled P252,000. Requirements Multiple choice A C D 17. What are the total prime costs of job#1? P 512,750 P 579,250 P 295,750 P 400,750 18. What is the total factory overhead applied to Job#2 P 221,340 P 210,000 P 127,750 P 184,450 19. What is the total amount of actual factory overhead incurred? P 651,000 P 699,720 P 252,000 P 483,000 20. What is the amount of factory overhead applied to process? P 930,720 P 700,720 P 699,720 P 483,000 21.If job #3 is completed and transferred, what is the balance of work in process at the end of the period? P1,195,040 P 976,780 P 676,900 P 693,140 22. Assume the balance of work in process beginning was P129,500 and 177,079 work in process end. The balance of work in process end represents a job that contains materials of P78,750. How many direct labor hours were spent on this job? (rounded to the nearest hour) P 5,258 P 9,268 P 11,571 P 20,832 23. Work in process inventory on December 31, 2030, P273,000. Work in process inventory decreased by 40% during 2030. Total manufacturing cost incurred amount to P1,690,000. What is the cost of goods manufactured? a. P 1,872,000 b. P 1,953,000 c. P 1,508,000 d. P1,235,000 24, Last year there was no change in either the raw materials or work in process beginning and ending inventories. However, finished goods, which has a beginning balance of P25,000, increase by P15,000. If the manufacturing cost incurred totalled P 600,000 during the year, the cost of goods available for sale must have been: a. P610,000 b. P625,000 c. P585,000 d. P600,000 25. The cost of goods manufactured for March at Solaire Corporation was P907,000. The following changes occurred in Solaire Inventory accounts during March: Decrease in Raw materials inventory 24,000 Decrease in work in process inventory 17,000 Increase in finished goods inventory 38,000 How much was the cost of goods sold? b. P 869,000 c. P928,000 a. P945,000 d. P886,000
26. Irene uses the job order costing. Factory overhead is applied to production at a predetermineq rate of 150% of direct labor cost. Any over or under applied factory overhead is close to the cost of goods sold account at the end ot each month. Additional information is available as follows: Direct materials 20,000 - -Direct labor 10,000 Applied factory overhead 15,000 Job 102, 103, and 104 were started during December. Direct materials requisitions for the month of December totalled P130,000, direct labor costs amounted to P100,000 was incurred for February and the actual factory overhead amounted to P160,000. The only job still in process of December was job 104, with costs of P14,000 for direct materials and P9,000 for direct labor. Which of the following is incorrect? a. the total cost of goods manufactured was P388,500. b. the work in process ending inventory was P23,000 c. the under applied overhead was P10,000 and will be credited to cost of goods sold. d. the applied factory overhead was for the month of December was P150,000. 27. The over applied factory overhead would occur if: a. the plant was operated at less than normal capacity b. actual factory overhead costs incurred were less than estimated factory overhead costs. c. actual factory overhead costs incurred were less than factory overhead cost charged to production. d. actual factory overhead costs incurred were greater than factory overhead charged to production. 28. Under normal costing the direct material, direct labor and factory overhead costs are presented at, respectively: ' g g (1 a. actual cost, actual cost and actual cost b. predetermined cost, actual cost, and actual cost c. actual cost, actual cost, and predetermined cost d. predetermined cost, predetermined cost, and actual cost 29. Total manufacturing costs for the year plus beginning work in process inventory cost equals a. cost of goods manufactured in the year b. ending work in process inventory c. total cost of goods put into process d. cost of goods available for sale 30. Actual cost system differs from normal cost system because the actual cost system: a. does not use factory overhead account b. does not assign factory overhead at all c. assign factory overhead costs at the end of the process d. assigns factory overhead costs during the process 31. In a well controlled materials system, the Purchasing Agent performs the following activities except the: a. placing of purchase orders with suppliers b. receiving of purchase requisitions c. approving and checking of invoice d. preparation of purchase order 32: The factor that need not be considered when calculating an inventory economic order quantity (EOQ) is a. safety stock level c. annual sales of a product b. annual stock level d. order-placing costs
the following information for items 33 and 34: J Company determines that the manutacturing cost per order ot a raw material is P25.00 The company expects to use P50,000 of this materials in the coming year. Its carrying charge is 10% of inventory. A B c D 33. Determine the economic order quantity | P2,000 | P 5,000 | P20,000 | P25,000 in pesos 34. Determine the number of times the raw materials be ordered in the coming year. 2 - |3 5 10 35. D&R corporation consumes 300,000 units of spare part V per year. The average purchase lead- time is 20 working days while maximum is 27 working days. The company’s annual operations cover 240 days allowing for shutdowns for plant maintenance, holidays and Sundays. The company would like to keep safety stock or estra stock to guard against stock outs. How much is the safety stock? a. 25,000 units b. 1,250 units c. 33,750 units d. 8,750 units 36. The closing raw materials inventory of Castle Building Manufacturing Company amounted to P450,000 at December 31, 2023. This total includes an item of raw material (material Zap) with a cost of P150,000 with a replacement cost of P120,000. Immediately after the balance sheet data, material Zap was applied to production and the cost of the finished product where material Zap was applied revealed that its net selling price is lower than the cost of producing the finished goods. As of December 31, 2023, what amount of raw materials inventory should Castle Building Manufacturing Company report? a. P300,000 b. P330,000 c. P420,000 d. P450,000 37. Which of the following best described direct labor? a. a prime cost b. a period cost . c.aproduct cost d. both product cost . and prime cost 38. There are several alternative denominator measures for applylng overhead. Which is not commonly used? a. direct labor hours b. direct labor costs c. machine hours d. sales value of product produced 39. When the amount of overapplied factory overhead is significant, the entry to close overapplied - factory overhead will most likely require a. a debit to cost of goods sold b. debits to cost of goods sold, finished goods inventory, and work in process inventory c. a credit to cost of goods sold d.credits to cost of goods sold, finished goods mventory, and work in prooess inventory 40. Under job order cost accumulation, the factory overhead control account controls a. factory overhead analysis sheets b. job order cost sheets c. cost reports by processes d material inventories 41. Supplies needed for use in the factory are issued on the basis of: a. job cost sheets b. material requisition c. time tickets d. factory overhead analysis sheets
42. In job order costing, when materials are returned to the storekeeper that were previously issue, the factory for cleaning supplies, the journal entry should be: a. Matenals Factory overhead b, Materials Work in process c. Purchase returns Work in process d. Factory overhead Work in process 43. In a traditional job order cost system, the issuance of supplies to a production department increases a. stores control b. work in process control c. factory overhead control d. factory overhead applied 44. In a job order cost system, the use of direct materials previously purchased usually recorded as an increase in . a. work in process control b. factory overhead control c. factory overhead applied d. stores control 45_ In a job order cost system, direct labor costs usually are recorded initially as an increase in : a. factory overhead applied b. factory overhead control c. finished goods control d. work in process control 46. In a job order cost system, the application of factory overhead is usually reflected in the general ledger as an increase in a. factory overhead control b. finished goods control c. work in process control d. cost of goods sold 47. A direct labor overtime premium should be charged to a specific job when the overtime is caused by the a. increased overall level of activity b. customers’ requirement for early completion of the job c. management'’s failure to include the job in the production schedule d. management requirement that the job be completed before the annual factory vacation closure.
- ,.’7\ company experienced a machine breakdown on one of its production lines. As a consequence ' of the breakdown, manufacturing fell behind schedule and a decision was made to schedule overtime /' 1o return to manutacturing to schedule. Which one of the following methods is the proper way to account for the overtime paid to the direct labourers? a. the overtime hours times the sum of the straight-time wages and overtime premium would be charged entirely to manufacturing overhead. b. the overtime hours times the sum of the straight — time wages and overtime premium would be treated as direct labor, c. the overtime hours times the overtime premium would be charged to repairs and maintenance expense, and the overtime hours times the straight time wages would be treated as direct labor. d. the overtime hours times the overtime premium would be charged to manufacturing overhead and the overtime hours times the straight- time wages would be treated as direct labor. 49. Under a job order cost system, the peso amount of the general ledger entry involved in the transfer of inventory from work in process to finished goods is the sum of 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. 50. In job order cost system, payroll taxes paid by the employer for factory employees are usually accounted for as a. direct labor b. factory overhead c. indirect labor d. administrative cost 51. In job order cost system, factory (manufacturing) overhead is An indirect cost of | A necessary element of Jobs Production A No Yes B No No C Yes Yes D Yes No 52. The logical explanation for an entry that includes a debit to Overhead control and a credit to Prepaid Insurance is a. the insurance company sent the company a refund of its policy premium b. overhead for insurance was applied to production c. Insurance for production equipment expired d. insurance was paid on production equipment 53. Overapplied factory overhead would result if a. the plant were operated at less than normal capacity b. factory overhead costs incurred were less than costs charged to production c. factory overhead costs incurred were unreasonably large in relation to units produced. d. factory overhead costs incurred were greater than costs charged to production.
54. Which of the following organization would be most likely to use a job order costing system? a. the loans department of a bank . D. the check clearing department of a bank ¢. a manufacturer of processed cheese food d. a manufacturer of video cassette tapes. 5\5 In service business using job order costing, the hourly rate used to charge costs to a job usually includes a. both labor and overhead cost b. labor cost only c. overhead cost only ‘ d. labor, overhead and miscellaneous costs. 56. The Walters Co. estimated Department A's overhead at P255,000 for the period based on an estimated volume of 100,000 direct labor hours. At the end of the period, the factory overhead control account for Department A had a balance of P265,500, actual direct labor hours were P105,000. What was the over or under applied overhead for the period? a. 2250 b. (2,250) | c. 15,000 d. (15,000) 57. Cherochem company applies factory overhead on the basis of direct labor hours. Budget and actual data for direct labor and overhead for the year are as follows: Budget | Actual Direct labor hours 600,000 650,000 Factory overhead costs P 720,000 P 760,000 The factory overhead for Cherochem for the year is: a. over applied by P20,000 b. over applied by P40,000 c. Under applied by P20,000 d. under applied by P40,000 58. During the current accounting period, a manufacturing company purchased P70,000 of raw materials, of which P50,000 of direct materials, and P5,000 of indirect materials were used in production. The company also incurred P45,000 of total labor costs and P20,000 of other factory overhead costs. An analysis of the work in process control account revealed P40,000 of direct labor costs. Based upon the above information, what is the total amount accumulated in the factory overhead control account? a. 25,000 b. 30,000 “ - €. 45,000 d. 50,000 59. Worley Co. has under applied overhead of P45,000 for the year.Before disposition of under applied overhead, selected year-end balances from Worley's accounting records were: Sales 1,200,000 Cost of goods sold 720,000 Direct materials inventory 36,000 - Work in process inventory 54,000 Finished goods inventory 90,000 Under Worley’s cost accounting system, over or under applied over_head is assigned to a:)ptror:‘);i::e inventories and cost of goods sold based on year-end balances. In its year-end income state ) ort cost of goods sold of: \;Yoggz’ggguld i b. 684,000 c. 757,500 d. 765,000
J. The following information was taken from Kay Co.s accounting records for the year ended /December 31. / Increase in Raw matenals inventory Decrease in Finished goods inventory Raw Materials purchased Direct manufacturing labor payroll Factory overhead Freight out 156,000 35,000 430,000 200,000 300,000 45,000 There was no work in process inventory at the beginning or end of the year. Kay's cost of goods sold is : a. 950,000 c. 975,000 b. 965,000 d. 995,000 For Items 61-62. The following job order cost detail pertain to the three jobs that were in process at the Michelle Company during January. Job 66 Job 67 Job 68 Cost charged in prior period | P40,000 P15,000 P- Cost added in January Direct materials 35,000 45,000 55,000 Direct labor 45,000 40,000 35,000 Factory overhead (P50 per ‘ machine hour) ? ? ? January machine hours 720 640 560 used 61, Which journal entry is correct when recording the factory overhead applied to production for the period? a. Work in Process Inventory Factory overhead applied b. Work in process inventory Direct Materials inventory Direct Labor ' Factory overhead applied c. Factory overhead control Factory overhead applied d. Factory overhead applied Work in process inventory 96,000 351,000 96,000 96,000 96,000 135,000 120,000 96,000 96,000 96,000 62. Which is the correct entry to record the transfer of Job orders 66 and 67 to the finished goods storeroom? a. Finished goods inventory Work in process inventory b. Finished goods inventory Direct materials inventory Direct labor Factory overhead c. Finished good inventory Work in process inventory d. Finished goods inventory Work in process inventory 156,000 220,000 233,000 288,000 156,000 80,000 95,000 45.000 233,000 288,000
SPOILAGE, DEFECTIVE UNITS, REWORK, AND SCRAP 63. Unacceptable units of production that are subsequently repaired and sold as good units are: a. reworked units b. scrap c. waste d.spoilage ( 64. The cost of normal spoilage is accounted for as a. part of the cost of goods manufactured b. a separate line item in the income statement c. part of the cost of goods sold d. an asset in the balance sheet 65. Spoilage that should not arise under an efficient operating condition is: a. normal spoilage b. abnormal spoilage c. ordinary spoilage d. extra ordinary spoilage 66 The Framers Co. manufactures picture frames and uses a job order costing system. The following costs relate to the current production run: Estimated overhead (exclusive of spoilage) 160,000 Spoilage (estimated) 25,000 Sales value of spoiled frames 11,500 Labor hours 100,000 The actual cost of a spoiled frame is P7.00. During the period, 170 frames are spoiled. Each spoiled frame can be sold for P4.00. The spoilage si considered part of all jobs. What is the predetermined overhead rate per direct labor hour? . a. 1.85 b. 1.74 c. 1.60 d.1.15 Items 67-68 are based on the following information: Batch 445 called for the making of 7,000 units with these unit costs- Direct Materials — P19. 60; Direct labor, P17.20; Manufacturing overhead (includes a P1 allowance for spoiled work), P14.80. When the batch was completed , 350 rejected units were sold for reasons they are spoilage P15.60 each. A separate work in process account is used for each cost element. 67. The journal entry to record the spoilage loss if it is due to internal failure because of machine breakdown (round off all amounts to the nearest peso): a. Spoilage goods inventory 5,460 Factory overhead control 12,600 Work in process materials , 6,860 Work in process payroll ‘ 6,020 Work in process applied factory overehead 5,180 'b. Spoilage goods inventory 5,460 Work in process materials 2,114 Work in process payroll 1,856 } Work in process applied factory overhead 1,490 c. Factory overhead control 18,060 Work in process materials 6,860 Work in process payroll 6,020 Work in process applied factory overhead 5,180 d. Spoilage goods inventory 10,920 Work in process materials 4,228 Work in process payroll 3,712 Work in process applied factory overhead 2,980
~ 68 What is the journal entry to record the spoilage loss if charged to BATCH 445 (round off all amounts to the nearest peso) a. Factory overhead control 9.030 Work in process materials 3,430 Work in process payroll 4,010 Work in process applied factory overehead 2,590 b. Spoilage goods inventory 5,460 Work in process materials 2,114 Work in process payroll 1,856 Work in process applied factory overhead 1,490 c. Factory overhead control 18,060 Work in process materials 6,860 Work in process payroll 6,020 Work in process applied factory overhead 5,180 d. Spoilage goods inventory 10,920 Work in process materials 4,228 Work in process payroll 3,712 Work in process applied factory overhead 2,980 69. Under Heller Company’s job orde cost system, estimated costs of defective work (considered normal in the manufacturing process) are included in the predetermined factory overhead rate. During March, Job no. 210 for 2,000 hand saws was completed at the following cost per unit: Direct matenials. ...ocoeeeeeeneeeee s ...P5 Direct labor: 4 Factory overhead (applied at 150% of direct labor cost) 6 15 Final inspection disclosed 100 defective saws, which were reworked at a cost of P2 per unit for direct labor, plus overhead at the predetermined rate. The defective units fall within the normal range. What is the total rework cost and to what account should it be charged? a. P200 to work in process b. P200 to factory overhead control c. P500 to work in process d. P500 to factory overhead control 70. Condotti Co., job no. 205 for the manufacture of 6,600 coats was completed during August at the following unit costs: Direct materials............ccoeeeiiiiiiiie e 1,500 DIreC IADOT:, - . i s 5iiisris5555 0558 aibnihshitsiathe sidsness et ijsnidsdssss setngsne aersh 1,000 Factory overhead (includes allowance of P50 for spoiled work. ... 500 3,000 Final inspection of Job no. 205 disclosed 600 spoiled coats, which were sold to a jobber for P600,000. Assuming that spoilage lost is charged to all production, what would be the unit cost of the good coats produced on Job no. 205? a. 2,900 b. 2,950 c. 3,000 d. 3,050 GOOD ENDING - - -ANEW BEGINNING “Never let your sense of morals prevent you from doing what is right.” - Isaac Asimov