COST ACCOUNTING AND CONTROL

Bachelor of Science in Accountancy 2-A

LAGUNA STATE POLYTECHNIC UNIVERSITY (LSPU) – SINILOAN CAMPUS
Quiz No. 1

Name: __________________________________________ Score: __________________

Date: ______________________ Year and Section: __________________________

INSTRUCTIONS: Choose the correct answer. For computations, please write the correct answer on the line provided.

1. Financial accounting as compared to cost accounting is used for reporting to

a. External parties c. Creditors
b. Investors d. Managers

2. Prime cost composes of

a. The first costs incurred in a job.
b. Indespensable as distinguished from avoidable costs.
c. Direct materials and direct labor.
d. Costs incurred on joint products before the split off point.

3. Factory rent is
a. A prime cost and an inventoriable cost.
b. A prime cost and a period cost.
c. A conversion cost and a product cost.
d. A conversion cost and a period cost.

4. Among the costs AES Company incurred during the month of August were the following:
I. 15,000 for coolant used in the headquarters office air conditioning system.
II. 5,000 for property taxes on the factory building.
III. 10,000 for depreciation on trucks used to deliver products to customers.
IV. 2,000 salary paid to a factory quality control inspector.

The total period cost from the list above is ___________.

5. All costs related to the manufacturing function in a company are

a. Prime cost c. Product cost
b. Direct cost d. Conversion cost

6. Internal reports must be communicated

a. Daily c. Annually
b. Monthly d. As much as needed

7. Malaya Co., a manufacturer of heating units, summarized the following information for the year 2023:
I. Materials cost of 270,000 includes indirect materials and supplies of 75,000.
II. Labor cost of 360,000 includes direct labor of 240,000.
III. Factory overhead of 120,000 represents power and light.
IV. Selling and administrative overhead total 180,000.

Conversion costs for 2023 amounted to ___________.

8. Which of the following is the primary reason for a company to implement a cost accounting system?
a. To provide the structure for bonuses to management.
b. To provide the structure for merit raises for efficient workers.
c. To provide the internal control over materials.
d. To allow the manager to plan and control the cost of resources needed to create the product and deliver it to
the customer.

9. The salary of the Chief Financial Officer (CFO) would be considered a/an
a. Manufacturing cost c. Administrative cost
b. Product cost d. Selling expense

10. Within the relevant range

a. Both total variable cost and total fixed cost will remain constant.
b. Both total variable cost and total fixed cost will fluctuate.
c. Fixed cost per unit will remain constant and variable cost per unit will fluctuate.
d. Variable cost per unit will remain constant and fixed cost per unit will fluctuate.

11. This term refers to the product brought to completion, whether they were started before or during the current
accounting period.
a. Cost of goods sold c. Cost of goods manufactured

b. Cost to make and sell d. Factory overhead

12. XYZ Co. consumed 450,000 of direct materials during October, 2023. At the end of the month, XYZ’s direct
materials inventory was 25,000 lower than the October 1 inventory level. How much was the cost of direct
materials procured by XYZ during October, 2023? __________.

Given the following facts, complete the requirements below.

Sales price P 200 per unit

Fixed costs:
Manufacturing and administrative P 24,000 per period
Manufacturing overhead P 30,000 per period
Variable costs:
Manufacturing and administrative P 6 per unit
Manufacturing overhead P 9 per unit
Direct labor P 30 per unit
Direct materials P 60 per unit
Units produced and sold 1,200 per period

Compute for the following:

13. Variable manufacturing cost per unit _______________.
14. Total variable cost per unit ______________.
15. Full manufacturing per unit ______________.
16. Full cost to make and sell _______________.

17. Financial statements for external users can be described as

a. User specific c. Special purpose
b. General purpose d. Management report
 Tsismis Co. produced 5,600 outdoor chairs for Job Order # 610. Total material cost was 51,700, inclusive of
11,700 indirect materials. Each chair required 2.3 hours of direct labor at P 8.80 per hour. Total labor cost was
113,344.
Total variable selling and administrative costs was 12,500, 20% of the total manufacturing overhead traced to Job
Order # 610.

18. What is the prime cost per unit? ______________.

19. What is the conversion cost per unit? ______________.
20. What is the total cost per unit? _______________.

Issue Pa More, Inc. produces and sells milk flavored bubble gum. Over the last five months, Issue Pa More, Inc.
had the following production costs and production value:

Month Cost Volume (in cases)

March 6,000 12
April 6,659 14
May 8,370 18
June 8,800 19
July 8,050 17

21. Using the high-low method, what is the fixed cost per month for the bubble gum production? ______________.
22. The variable cost per case is ______________.

23. Examples of factory overhead costs are

a. Lubricants for factory machinery.
b. Depreciation of factory machinery.
c. Both of the above.
d. None of the above.

24. Expenditures that will benefit current period only and is recorded as an expense are
a. Capital expenditures
b. Revenue expenditures
c. Period expenditures
d. Current expenditures

25. A cost for which an outlay has already been made and it cannot be changed by present or future decision is
a. Relevant cost
b. Sunk cost
c. Differential cost
d. Opportunity cost

26. Costs that vary inversely with changes in volume include

a. Total variable costs.
b. Total variable costs divided by volume.
c. Total fixed costs.
d. Total fixed costs divided by volume.
27. All of the following are examples of product costs except
a. Depreciation on the company’s retail outlets.
b. Salary of the plant manager.
c. Insurance on the factory equipment.
d. Rental costs of the factory facility.

28. Following are costs incurred by Tamad Manufacturing Corporation during the current month:

Direct materials 100,000

Indirect materials (sand papers, lubricants, nails, rivets, paint and 5,000
similar items)
Direct labor 50,000
Indirect labor (salary of plant supervisor and similar items) 10,000
Factory light, heat, water and electricity 4,000
Advertising and selling costs 6,000
Sales commissions of agents 5,000
Depreciation on administration building 3,000
Salaries of administrative personnel 20,000
Depreciation on delivery equipment 3,000
Depreciation of plant equipment 2,000
Insurance on administration building 2,500
Depreciation of plant buildings 15,000
Property taxes on plant buildings 4,000
Insurance on plant buildings 2,500

Compute for the following:

29. Total product costs. _______________

30. Total period costs. _______________
31. Total conversion costs. _______________

Tanga and Bida Bida Manufacturing currently produces 1,000 axles per month, though its plant has a capacity of
2,000 axles per month. The following per unit data apply for sales to regular customers:

Direct materials 200.00

Direct manufacturing labor 30.00
Variable manufacturing overhead 60.00
Fixed manufacturing overhead 40.00

32-34. What is the total cost of producing 1,000 axles, 1,500 axles and 2,000 axles respectively?
__________________, __________________, ___________________.

35-37. What is the per unit cost when producing 1,000 axles, 1,500 axles and 2,000 axles respectively?
__________________, __________________, ___________________.

38. Indirect costs are also known as

a. Differential costs c. Opportunity costs
 b. Common costs d. Sunk costs

39. Variable cost

a. Increases on a per unit basis as the number of units produced increases.
b. Is constant if expressed on a per unit basis.
c. Remains the same in total as production increases.
d. Is not affected by changes in activity from period to period.

40. Costs that are related to a cost object and can be economically and effectively be traced to such cost object are
a. Common costs c. Direct costs
b. Join costs d. Product costs

“Silence is golden, especially when sparing words that are not worth their weight in positivity.”

Prepared by: Alexis E. Sosing, CPA

Subject Instructor