ESSAY

MID-TERM EXAMINATION

AKUNTANSI BIAYA / COST ACCOUNTING

AKT 103 – AKT32-W-

Session: Semester 3 – AY 2021/2022 Date: 28 Oktober 2021

Faculty: Economics and Social Sciences Duration: 10:15 – 12:45 (150 minutes)

Study Program: Accounting Permitted Materials: Open Book

Level of Study: Undergraduate (S1)

INSTRUCTIONS TO CANDIDATES:
1. Check the following exam paper information:
Exam paper:
 Total number of pages: 3 (including this page)
 Attached materials: ---
 Total number of sections: 4
 Total number of questions: 18
Instructions:
You are required to answer all questions. The total number of marks
you can be awarded is 100 marks. For specific instructions, please refer
to the appropriate sections.

2. Please write your name and student ID on the exam paper and answer sheets.
Student Name ……………………………………………..
Student ID ……………………………………………..

3. Candidates may use this exam paper to write notes as necessary but should not remove
it from the examination venue for any reason.

4. Any form of cheating or attempt to cheat is a serious offence leading to dismissal.

MID - Term Examination – Semester 3/ AY 2021/2022

Problem 1 (25%)
Baba Black Sheep Corporation manufacturing costing system uses a three-part classification
of direct materials, direct manufacturing labor, and manufacturing overhead costs. The
following items pertain to Baba Black Sheep Corporation:
Revenues $ 18,000,000
Marketing, distribution, and customer-service costs 1,860,000
General and administrative costs 1,020,000
Plant insurance 60,000
Plant utilities 360,000
Repairs and maintenance—plant 240,000
Equipment leasing costs 960,000
Depreciation—plant, building, and equipment 630,000
Direct materials purchased 3,840,000
Direct manufacturing labor 3,180,000
Indirect manufacturing labor 1,440,000
Indirect materials 420,000
Direct materials inventory, Jan. 1, 2020 1,950,000
Direct materials inventory, Dec. 31, 2020 1,020,000
Finished goods inventory, Jan. 1, 2020 3,690,000
Finished goods inventory, Dec. 31, 2020 3,060,000
Work-in-process inventory, Jan. 1, 2020 2,490,000
Work-in-process inventory, Dec. 31, 2020 2,160,000

Required:
1. Prepare a schedule for the cost of goods manufactured for 2020. (10%)
2. Prepare the income statement for 2020. (5%)
3. Compute the prime cost and conversion cost to production. (5%)
4. Would the sales manager’s salary (included in marketing, distribution, and customer-
service costs) be accounted for any difference if the Baba Black Sheep Corporation were
a merchandising-sector company instead of a manufacturing-sector company (5%)

Problem 2 (25%)
Black Pink Company prints custom training material for corporations. The business was
started January 1, 2020. The company uses a normal-costing system. It has two direct cost
pools: materials and labor, and one indirect cost pool: overhead. Overhead is charged to
printing jobs on the basis of direct labor cost. There were two jobs in process on December
31, 2020: Job 101 and Job 102. The information is available for 2020: Budgeted direct labor
costs $450,000; Budgeted overhead costs $540,000; Costs of actual material used
$379,500; Actual direct labor costs $446,250; and Actual overhead costs $528,000. Black
Widow Company has no finished goods inventories because all printing jobs are transferred
to cost of goods sold when completed. Costs added to each job as of December 31, 2020
are as follows:
Job 101 Job 102
Direct material costs $10,860 $20,490
Direct labor costs $13,500 $21,750
Required:
1. Compute the overhead allocation rate. (5%)
2. Calculate the balance in ending work in process and cost of goods sold before any
adjustments for under-allocated or over-allocated overhead. (5%)
3. Calculate under-allocated or over-allocated overhead. (5%)
4. Calculate the ending balances in work in process and cost of goods sold if the under-
allocated or over-allocated overhead amount is as prorated based on overhead
allocation in 2020 (before proration). (10%)

Cost Accounting Page 2 of 3

MID - Term Examination – Semester 3/ AY 2021/2022

Problem 3 (30%)
Byford Company manufactures car seats in its San Fransisco plant. Each car seat passes
through the assembly department and the testing department. This problem focuses on the
testing department. Direct materials are added when the testing department process is 90%
complete. Conversion costs are added evenly during the testing department’s process. As work
in assembly is completed, each unit is immediately transferred to testing. As each unit is
completed in testing, it is immediately transferred to Finished Goods. Comfort Company uses
the weighted-average method of process costing. Data for the testing department for October
2021 are as follows:
Physical Transferred- Direct Conversion
Units In Costs Materials Costs
a
Work in process, October 1 2,500 $ 977,500 $ 0 $ 278,490
Transferred in during October 2021 7,500
Completed during October 2021 8,800
Work in process, October 31b 1,200
Total costs added during October 2021 $2,572,500 $3,234,900 $ 1,318,600
a
Degree of completion: transferred-in costs, 100%; direct materials, 0%; conversion costs, 70%
b
Degree of completion: transferred-in costs, 100%; direct materials, 0%; conversion costs, 60%

Requires
1. Summarize the flow of physical units of output (step 1). 5%
2. Compute the equivalent units for direct material and conversion cost (step 2). 5%
3. Summarize the total costs to account for direct material and conversion costs (step 3). 5%
4. Compute the cost per equivalent unit for direct material and conversion cost (step 4). 5%
5. Assign costs to the units completed and units ending work-in-process inventory for direct
material and conversion costs (step 5). 5%
6. Prepare journal entries for October, transfers from the assembly department to the testing
department and from the testing department to Finished Goods. (5%)

Problem 4 (20%)
Mediterranean Furniture is a manufacturer of furniture products for Asian customers. The
plant manager of Mediterranean Furniture, Willy Joo, obtains the following information for
Job #007 in September 2021. Fifty-five units were started, and five spoiled units were
detected and rejected at final inspection, yielding 50 good units. The spoiled units were
considered to be normal spoilage. Costs assigned before the inspection point are $5,500 per
unit. The current disposal price of the spoiled units is $220 per unit. When the spoilage is
detected, the spoiled goods are inventoried at $220 per unit. Assume that the five spoiled
units of Mediterranean Furniture’s Job #007 can be reworked for a total cost of $7,500. A
total cost of $25,000 associated with these units has already been assigned to Job #007
before the rework. Assume that Job #007 of Mediterranean Furniture generates normal
scrap with a total sales value of $500 (it is assumed that the scrap returned to the storeroom
is sold quickly).

Required:
1. Compute the normal spoilage rate? (5%)
2. Prepare the journal entries to record the normal spoilage if the spoilage is related to a
common all jobs. (5%)
3. Prepare the journal entries for the rework if the rework is considered to be a specific job.
(5%)
4. Prepare the journal entries if the value of scrap is material, and scrap is recognized as
inventory at the time of production and is recorded at its net realizable value. (5%)

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Cost Accounting Page 3 of 3