UNIVERSITY OF LAGOS

FACULTY OF MANAGEMENT SCIENCES

DEPARTMENT OF ACCOUNTING
ACC 121: Introduction to Cost Accounting

2nd Semester Continuous Assessment (2021/2022 Session) Time allowed: 1 Hour (23/May/2023)

Department: ………………….…………………. Matric. No.: ………………….…………………

(1) At EOQ level, total ordering cost is equal to………………………………………………………………………………………………

(2) One of these is not a method of material pricing. (A) First In First Out (B) Weighted Average (C) Last In Last Out (D) Last In First Out

(3) BUSINESS EDU Ventures incurred ₦40,000 to ship 19,000 pounds and ₦34,000 to ship 16,000 pounds. If the company ships 18,000
pounds, its expected shipping expense is closest to: (A) ₦38,000 (B) ₦37,895 (C) ₦38,500 (D) ₦38,250

(4) Techniques for separation of mixed costs include the following EXCEPT
(A) Elimination method (B) Engineering method (C) Account analysis method (D) Scatter graph method

(5) A firm bought 300 units of materials in January 2023 at ₦100 per unit, 200 units in February at ₦250 per unit and 400 units in April at
₦300 per unit. If the firm sold 500 units at ₦450 per unit in May, the cost of goods sold using the LIFO method is ………………………

(6) On the 1st of January, the books of Hope Ltd. reveal 1,875 units of certain material valued at ₦175 per unit. On the 20th of January and
15th of February, the company bought 1,250 units and 1,875 units of the same material at ₦185 and ₦198 per unit respectively. Only
3,500 units were issued to production during the period. Using the FIFO method, what is the cost of 3,500 units issued in the period?
(A) ₦668,125 (B) ₦636,325 (C) ₦633,625 (D) ₦636,625

(7) The EOQ of JCIL Ltd. is 400 units and cost per order is ₦20. If the cost of holding one inventory is ₦2, the annual demand is………….…

(8) A cost per unit that remains unchanged irrespective of changes in activity level is known as……………………………………………

(9) A detailed document used to record both the quantity of material received and the price value is known as……………………………

(10) A place, department, location, or unit where cost is collected, accumulated and further analysed is known as……………………….

(11) The re-order level of TRUE SCHOLAR is 600 units, EOQ is 2,000 units, and re-order period is 3 to 5 weeks. If its average usage is 100
units, the minimum stock level for TRUE SCHOLAR would be………………….………………………………………………

(12) The EOQ of GOOD-PEOPLE Enterprise is 1,000 units, re-order level is 400 units, and re-order period is 4 – 6 days. If its maximum
usage is 300 units and minimum usage is 150 units, the maximum stock level for GOOD-PEOPLE would be …………………………

(13) FAITHFUL STUDENTS Ltd. purchased 300 units of materials for ₦60 per unit on the 10th of May. The firm made another purchase
of 200 units for ₦80 per unit on the 19th of May. On May 24th the firm issued 150 units to production department. If the firm operates
the weighted average (WA) method, the total cost of material issued to production department would be………………………………….

(14) One of these is not a method of overhead apportionment.

(A) One-step apportionment (B) Cross allotment (C) Double step apportionment (D) Sequential apportionment

(15) Cost accounting information is governed by rules and standards, while financial accounting information is multidimensional and does
not need rules and standards, True or False? ……………………………….

(16) The difference between time booked as per time card and time booked as per job card is known as…………………………………..

(17) The benefit from one decision that is sacrificed for an alternative decision is known as ………………………………………

1
(18) ECONOMICS Manufacturing buys 20,000 units of material in a year. The annual holding cost per naira of stock is 40 kobo. If ordering
cost per order is ₦16 and unit purchase price is ₦10, the total material cost for the year is?
(A) ₦216,400 (B) ₦204,600 (C) ₦201,600 (D) ₦261,400

(19) The centre where costs are collected and revenues are generated is known as. ………………………………………………..

(20) INSURANCE Ltd. pays its workers ₦5,000 per hour in an 8-hour working day. If the firm pays for overtime hours at a time and a half,
the overtime premium rate would be ……………………………………..

(21) If an idle time is caused by time intervals between jobs, the idle time wage would be treated as……………………………………….

(22) The normal working day in a factory is 8 hours and workers are paid ₦48,000 per hour worked. If the standard time allowed to produce
2 units of its product is 5 minutes and Okechukwu produced 180 units in 6 hours, what is the time saved by Okechukwu?
(A) 2 hours (B) 1 hours (C) 0.5 hour (D) 1.5 hour

(23) The premium wage of overtime hours worked as a result of labour shortage would be treated as…………………………………

(24) An idle time wage which is caused by machine breakdown would be treated as………………………………………………………

(25) BUSINESS-EDU Ventures pays its workers ₦12,000 per hour in an 8-hour working day and a worker is expected to produce five units
of its products in 10 minutes. If Yemi produced 700 units, his wage under the piece rate method would be……………………………….

(26) The budgeted overhead of ACTUARIAL SCIENCE Ltd. is ₦80,000 and its budgeted activity is 40,000 direct labour hours. If the actual
overhead during the period is ₦84,000 and 45,000 direct labour hours are worked, the over/under absorption of overhead would be?

(A) ₦6,000 over absorption (B) ₦10,000 under absorption (C) ₦6,000 under absorption (D) ₦10,000 over absorption

(27) ER & HRM Enterprise has the following details: Budgeted overhead cost is ₦615,000; Actual consulting hours are 32,150 hours; Actual
overhead cost is ₦694,075. If overheads were over-recovered by ₦35,000, the budgeted overhead absorption rate per hour is……………

(28) ACCOUNTING LIMITED manufactures Baby Sandals in a hired facility, paying rent. The company has three departments: A, B and
C occupying 250 square feet, 450 square feet and 300 square feet respectively. Dept. B’s share of the annual rent is ₦5,400,000. How
much is the annual rent? (A) ₦12,000,000 (B) ₦4,800,000 (C) ₦3,000,000 (D) ₦3,600,000

(29) INSURANCE Enterprise has two service departments and two production departments. The information for each department for 2023
is as follows;
Service department Production department
Admin. Maintenance Molding Assembly
₦ ₦ ₦ ₦
Budget overheads 20,000 16,000 6,000 4,000
Direct labour hours 50 100 300 300
Machine hours 20 30 200 200
Number of employees 400 500 500 1000

If the administration costs are allocated based on machine hours and maintenance costs are allocated based on direct labour hours, the
total overhead cost for Molding department using the direct method (One-step apportionment) would be?

(A) ₦22,000 (B) ₦24,500 (C) ₦24,000 (D) ₦22,500

(30) Discuss the effect of over-absorption and under-absorption on profit.