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BSA 21
ADVANCED COST ACCOUNTING
MIDTERM EXAMINATION
1. When materials are added in the subsequent department and the volume of
units increased, the transferred in unit costs are:
a. Increased
b. Unchanged
c. Decreased
d. Not applicable
2. When FIFO costing method is used, the costs of the beginning work in process
are:
a. Added to current costs
b. Subtracted from the current month
c. Averaged with other costs to arrive at total cost
d. None of the above
What is the equivalent unit for conversion costs using the FIFO costing
method?
a. 14,400
b. 12,900
c. 13,900
d. 13,400
4. Using the above data, what is the equivalent unit for conversion costs under
the average method?
a. 15,900
b. 14,400
c. 16,400
d. 20,000
5. If the spoilage is normal using the FIFO costing method, the number of
equivalent unit that production costs should be charged to would be based
upon:
a. Spoiled units
b. Units transferred out and spoiled units
c. Units transferred out, beginning work in process, and units in ending work
in process
d. Units transferred out, beginning work in process, spoiled units, and units
in ending work in process
Cost Data:
Work in Process Beginning
Materials P10,400
Conversion costs 13,800
Cost added this month:
Materials P120,000
Conversion costs 320,400
Production Data:
Work in process beginning (40% 7,500
complete) units
Started in production current month 80,000
units
Transferred out 72,500
units
Work in process ending (70% 13,000
complete) units
Normal lost units 1,100
units
Abnormal lost units 900 units
All materials are added at the start of the process and the inspection point is at 75%
completion.
6. Under the FIFO method, what are the equivalent units for materials and
conversion costs?
Materials Conversion costs
a. 80,000 80,100
b. 78,000 78,600
c. 80,000 78,600
d. 78,000 80,100
7. Under the FIFO method, what is the cost assigned to units transferred out and
units in ending work in process inventory?
Transferred out Work in Process Ending
a. P403,825 P56,725
b. P404,650 P55,900
c. P403,825 P55,900
d. P404,650 P55,725
8. Under the FIFO method, what is the cost assigned to abnormal lost units?
a. P4,050
b. P2,700
c. P1,350
d. P5,050
9. Under the average method, what are the equivalent units for materials and
conversion costs?
Materials Conversion costs
a. 87,500 83,100
b. 85,500 83,100
c. 87,500 81,600
d. 85,500 81,600
10.Under the average method, what is the cost assigned to units transferred out
and units in ending work in process inventory?
Transferred out Work in Process Ending
e. P403,819 P56,725
f. P399,616 P56,725
g. P404,573 P55,971
h. P399,616 P19,374
11.Under the average method, what is the cost of abnormal lost units?
a. P2,715
b. P4,056
c. P5,500
d. P4,560
Conversion costs are incurred evenly during the process. Direct materials costs are
incurred when production is 90% complete. The inspection point is at 80% stage of
production. Normal spoilage is 10% of all good units that pass inspection.
12.What are the equivalent units of production for direct materials and
conversion costs?
Direct Materials Conversion costs
a. 70,000 77,000
b. 50,000 69,000
c. 60,000 77,000
d. 70,000 75,000
17.The FIFO method will produce the same cost of goods manufactured amount
as the average cost method when:
a. Beginning and ending inventory are each 50% complete
b. Beginning and ending inventory are each 100% complete
c. There is no beginning inventory
d. There is no ending inventory
18.In process 2, material G is added when a batch is 60% complete. Ending work
in process unit, which are 50% complete, would be included in the
computation of equivalent units for:
Conversion costs Material G
a. Yes No
b. No Yes
c. No No
d. Yes Yes
22.What is the average unit cost per gallon of all goods completed during April?
a. P10.25
b. P10.26
c. P10.36
d. P10.64
Quantity:
Work in Process, June 1 150 units
Transferred in during June 450 units
Completed during June 525 units
Work in process, June 30 75 units
Stage of completion
Beginning WIP Ending WIP
Transferred in costs 100% 100%
Direct materials 0% 0%
Conversion costs 70% 60%
Cost Data:
Work in process
June 1 June 30
Transferred in costs P245,015 P796,500
Direct materials 0 971,250
Conversion costs 82,950 395,250
24.What is the cost per equivalent unit of materials and conversion cost?
Materials Conversion cost
a. P525 P525
b. P500 P465
c. P600 P500
d. P525 P465
27.What is the total cost of completed units from beginning work in process?
a. P643,715
b. P640,715
c. P743,000
d. P643,000
28.What is the total cost of the units transferred out to finished goods?
a. P2,319,965
b. P2,319,000
c. P2,300,000
d. P2,450,000
30.If a company reports two different unit costs for goods transferred to the next
department, it is reasonable to assume that:
a. A FIFO method is used
b. An average method is used
c. Errors must have occurred in the recording costs
d. A LIFO method is used
31.You have been hired as the cost accountant for Marikina Micro, manufacturer
of leather cases for cell phones. This position has been vacant for one month.
The manager of the company made some incomplete computations. Your
examination reveals that materials are added at the beginning of production
and overhead is applied to each product at the rate of 70 percent of direct
labor cost. There was no finished goods inventory at the beginning of June. A
further review of the companys inventory cost records provides you with the
following data:
Quantities
Work in process, June 1, 2016
(70% complete as to labor and overhead) 5,000
Units started during June 65,000
Work in process, June 30, 2016
(40% complete as to labor and overhead) 20,000
Cost Data Direct materials Direct
labor
Work in process, June 1 P 187,500 P53,750
Costs added in June 1,212,500 816,250
What is the total units of production costs using the average costing?
a. P45.00
b. P54.50
c. P45.50
d. P54.00
33.Assuming that there was no beginning work in process inventory and the
ending work in process inventory is 50% complete as to conversion costs, the
number of equivalent units as to conversion costs would be:
a. Less than the units completed
b. More than the units completed
c. Less than the units placed in process
d. The same as the units placed in process
35.A company uses a process costing system in which all materials are added at
the beginning of the process. Conversion costs are added evenly throughout
the process. During the past month, 10,000 units were started in production
and 8,000 were completed and transferred to the next department. There
were no beginning inventories. The ending inventories were 70% complete at
the end of the month. The company uses the average costing method for
inventory valuation.
36.Using the data in number 35, what is the cost of the ending work in process
inventory in the first department?
a. P6,720
b. P8,000
c. P3,720
d. P6,640
42.What is the equivalent unit of production for transferred in costs from prior
department for the month?
a. 17,350
b. 18,250
c. 17,500
d. 18,000
43.What is the cost per equivalent unit for transferred in costs from prior
department?
a. P31.00
b. P30.50
c. P30.00
d. P34.00
Questions 44 through 46 are based on the following data:
On March 1, 2016, the beginning work in process inventory for the Laminating
Department of the Best Company was 100 units. The transferred in costs from prior
department for these units were P19,350. During the month, 4,800 units with
transferred in costs from prior department of P124,800 were transferred into the
Laminating Department and 4,600 units were completed and transferred to the next
department. The ending work in process was 205 units, and 95 units were lost in the
production.
The company uses the average method of process costing. Lost units are ignored by
the company in equivalent production computations.
44.What is the equivalent unit of production for transferred in costs from prior
department?
a. 4,905
b. 4,800
c. 4,807
d. 4,805
45.What is the cost per equivalent unit for transferred in costs from prior
department?
a. P29.50
b. P31.50
c. P30.00
d. P27.50
48.The average and FIFO process costing methods differ in that the average
method:
a. Can be used under any cost flow assumption
b. Does not consider the degree of completion of beginning work in process
inventory when computing equivalent units of production.
c. Is much more difficult to apply than the FIFO method
d. Considers the ending work in process inventory only partially complete
49.The analysis of the activity in department or cost center for a period is called
a:
a. Quantity report
b. Cost of production report
c. Cost of goods manufactured
d. Equivalent production
50.Purchased materials are added in the second department of a three-
department process; this does not increase the number of units produced in
the second department and would:
a. Not changed the peso amount transferred to the next department
b. Decrease total work in process inventory
c. Increase the factory overhead portion of the ending work in process
inventory
d. Increase total unit cost
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