LAGUNA STATE POLYTECHNIC UNIVERSITY
LOS BAÑOS CAMPUS
2nd SEMESTER A.Y. 2016-2017
Name:
Comprehensive
Score:
Examination
Section:
Subject: Cost Accounting and Cost Management Date:
1. A manufacturer employs a job-order cost system. All jobs ordinarily pass through all three-
production departments and Job 101 and Job 102 were completed during the current month.
Production Direct Labor Manufacturing Overhead
Departments Rate Application Rates
Department 1 P12.00 150% direct materials cost
Department 2 P18.00 P8.00 per machine hour
Department 3 P15.00 200% of direct labor cost
Job 101 Job 102 Job 103
BWIP P25,500 P32,400 P0
DM:
Department 1 P40,000 P26,000 P58,000
Department 2 P3,000 P5,000 P14,000
Department 3 P0 P0 P0
DL: (Direct Labor Hours)
Department 1 500 400 300
Department 2 200 250 350
Department 3 1,500 1,800 2,500
MH: (Machine Hours)
Department 1 0 0 0
Department 2 1,200 1,500 2,700
Department 3 150 300 200
The cost of completed Job 101
a. P215,200
b. P131,500
c. P189,700
d. Correct answer not given
2. Cost accounting involves the measuring, recording, and reporting of
a. product costs
b. manufacturing process
c. future costs
d. managerial accounting decisions
3. A fixed cost is considered relevant if it is
a. A future cost
b. A product cost
c. Sunk cost
d. Avoidable
4. Which one of the following would not be considered a carrying cost associated with inventory?
a. Insurance costs
b. Cost of capital invested in inventory
c. Cost of obsolescence
d. Shipping costs
Use the following data to answer the next six questions:
Mars Industries has recently developed two new products, a cleaning unit for DVDs and a tape
duplicator for reproducing home movies taken with a video camera. However, Mars has only
enough plant capacity to introduce one of these products during the current year. The company
controller has gathered the following data to assist management in deciding which product should
be selected for production:
Tape Duplicator Cleaning Unit
Raw materials P44.00 P36.00
Machine @ P12/hr. P18.00 P15.00
Assembly @ P10/hr P30.00 P10.00
Variable overhead @ P8/hr P36.00 P18.00
, Mars’s fixed overhead includes rent and utilities equipment depreciation and supervisory salaries.
Selling and administrative expenses are not allocated to products.
5. For Mars tape duplicator, the unit costs for raw materials, machining, and assembly represent
a. Conversion costs
b. Separable costs
c. Committed costs
d. Prime costs
6. The difference between the P99.98 suggested selling price for Mars DVD cleaning unit and its total
unit cost of P88.00 represents the unit’s
a. Contribution margin ratio
b. Gross profit
c. Contribution
d. Gross profit margin ratio
7. The total overhead cost of P27.00 for Mars DVD cleaning unit is a
a. Carrying cost
b. Discretionary cost
c. Sunk cost
d. Mixed cost
8. Research and development costs for Mars two new products are
a. Conversion costs
b. Sunk costs
c. Relevant costs
d. Avoidable costs
9. The advertising and promotion costs for the product selected by Mars will be
a. Discretionary costs
b. Opportunity costs
c. Committed costs
d. Incremental costs
10. The costs included in Mars fixed overhead are
a. Joint costs
b. Committed costs
c. Opportunity costs
d. Prime costs
11. The main focus of cost management information must be
a. usefulness and accuracy.
b. timeliness and accuracy.
c. usefulness and timeliness.
d. relevance and good format.
12. Product costing system design or selection:
a. requires an understanding of the nature of the business
b. should provide useful cost information for strategic and operational decision needs
c. should be cost effective in design and selection
d. all the above answers are correct
13. Which of the following is an example of a committed fixed costs?
a. direct materials
b. depreciation on a factory building
c. supervisor’s salary
d. insurance on a building
14. Which of the following is an example of discretionary fixed cost?
a. direct labor
b. insurance on a building
c. property taxes on a factory building
d. depreciation on a factory building
15. Controllable costs are:
a. Costs that management decides to incur in the current period to enable the company to achieve
operating objectives other than the filling of orders placed by customers.
b. Costs that are governed mainly by past decisions that established the present levels of
operating and organizational capacity and that only change slowly in response to small changes
in capacity.
c. Costs that will unaffected by current managerial decisions.
d. Costs that are likely to respond to the amount of attention devoted to them by a specified
LOS BAÑOS CAMPUS
2nd SEMESTER A.Y. 2016-2017
Name:
Comprehensive
Score:
Examination
Section:
Subject: Cost Accounting and Cost Management Date:
1. A manufacturer employs a job-order cost system. All jobs ordinarily pass through all three-
production departments and Job 101 and Job 102 were completed during the current month.
Production Direct Labor Manufacturing Overhead
Departments Rate Application Rates
Department 1 P12.00 150% direct materials cost
Department 2 P18.00 P8.00 per machine hour
Department 3 P15.00 200% of direct labor cost
Job 101 Job 102 Job 103
BWIP P25,500 P32,400 P0
DM:
Department 1 P40,000 P26,000 P58,000
Department 2 P3,000 P5,000 P14,000
Department 3 P0 P0 P0
DL: (Direct Labor Hours)
Department 1 500 400 300
Department 2 200 250 350
Department 3 1,500 1,800 2,500
MH: (Machine Hours)
Department 1 0 0 0
Department 2 1,200 1,500 2,700
Department 3 150 300 200
The cost of completed Job 101
a. P215,200
b. P131,500
c. P189,700
d. Correct answer not given
2. Cost accounting involves the measuring, recording, and reporting of
a. product costs
b. manufacturing process
c. future costs
d. managerial accounting decisions
3. A fixed cost is considered relevant if it is
a. A future cost
b. A product cost
c. Sunk cost
d. Avoidable
4. Which one of the following would not be considered a carrying cost associated with inventory?
a. Insurance costs
b. Cost of capital invested in inventory
c. Cost of obsolescence
d. Shipping costs
Use the following data to answer the next six questions:
Mars Industries has recently developed two new products, a cleaning unit for DVDs and a tape
duplicator for reproducing home movies taken with a video camera. However, Mars has only
enough plant capacity to introduce one of these products during the current year. The company
controller has gathered the following data to assist management in deciding which product should
be selected for production:
Tape Duplicator Cleaning Unit
Raw materials P44.00 P36.00
Machine @ P12/hr. P18.00 P15.00
Assembly @ P10/hr P30.00 P10.00
Variable overhead @ P8/hr P36.00 P18.00
, Mars’s fixed overhead includes rent and utilities equipment depreciation and supervisory salaries.
Selling and administrative expenses are not allocated to products.
5. For Mars tape duplicator, the unit costs for raw materials, machining, and assembly represent
a. Conversion costs
b. Separable costs
c. Committed costs
d. Prime costs
6. The difference between the P99.98 suggested selling price for Mars DVD cleaning unit and its total
unit cost of P88.00 represents the unit’s
a. Contribution margin ratio
b. Gross profit
c. Contribution
d. Gross profit margin ratio
7. The total overhead cost of P27.00 for Mars DVD cleaning unit is a
a. Carrying cost
b. Discretionary cost
c. Sunk cost
d. Mixed cost
8. Research and development costs for Mars two new products are
a. Conversion costs
b. Sunk costs
c. Relevant costs
d. Avoidable costs
9. The advertising and promotion costs for the product selected by Mars will be
a. Discretionary costs
b. Opportunity costs
c. Committed costs
d. Incremental costs
10. The costs included in Mars fixed overhead are
a. Joint costs
b. Committed costs
c. Opportunity costs
d. Prime costs
11. The main focus of cost management information must be
a. usefulness and accuracy.
b. timeliness and accuracy.
c. usefulness and timeliness.
d. relevance and good format.
12. Product costing system design or selection:
a. requires an understanding of the nature of the business
b. should provide useful cost information for strategic and operational decision needs
c. should be cost effective in design and selection
d. all the above answers are correct
13. Which of the following is an example of a committed fixed costs?
a. direct materials
b. depreciation on a factory building
c. supervisor’s salary
d. insurance on a building
14. Which of the following is an example of discretionary fixed cost?
a. direct labor
b. insurance on a building
c. property taxes on a factory building
d. depreciation on a factory building
15. Controllable costs are:
a. Costs that management decides to incur in the current period to enable the company to achieve
operating objectives other than the filling of orders placed by customers.
b. Costs that are governed mainly by past decisions that established the present levels of
operating and organizational capacity and that only change slowly in response to small changes
in capacity.
c. Costs that will unaffected by current managerial decisions.
d. Costs that are likely to respond to the amount of attention devoted to them by a specified
