Cost Accounting DQ - Midterms - Answers

Colegio de Dagupan
School of Business and Accountancy

Arellano Street, Dagupan City
Cost Accounting
Departmental Quiz (Midterms)
1. A manager is trying to estimate the manufacturing costs of a new product. The company makes several
other products that utilize some of the same manufacturing procedures as the new product. Which cost
estimation method would be the best method to determine the total cost of manufacturing the new
product?
A. engineering estimates
B. regression analysis
C. account analysis
D. scattergraph
E. highlow
2. Engineering cost estimates are usually based on operating conditions that are considered:
A. optimal.
B. practical.
C. attainable.
D. historical.
E. realistic.
3. Which of the following costs would most likely be classified as variable assuming the account analysis
method is used to determine cost behaviors?
A. Indirect materials.
B. Supervisory salaries.
C. Equipment maintenance.
D. Annual Christmas party.
E. Building occupancy costs.
4. In the cost equation TC = F + VX, X is best described as the:

A. costs that do not vary with changes in the activity level.
B. costs that do vary with changes in the activity level.
C. total cost estimate at a particular activity level.
D. activity level used to estimate the total cost.
5. In the cost equation TC = F + VX, V is best described as the:

A. costs that do not vary with changes in the activity level.
B. intercept of the cost equation.
C. slope of the cost equation.
D. activity level used to estimate the dependent variable.
6. Which of the following cost estimation methods finds the fixed portion of a mixed cost before
calculating the variable portion?
A. Scattergraph.
B. High-low method.
C. Account analysis.
D. Linear regression.
E. Engineering approach.
7. The term "relevant range" as used in cost accounting means the range over which:
A. relevant costs are incurred.
B. costs may fluctuate.
C. cost relationships are valid.
D. cost data is available.
8. Which of the following cost estimation methods finds the variable portion of a mixed cost before
calculating the fixed portion?
A. Scattergraph.
B. High-low method.
C. Account analysis.
D. Linear regression.
E. Engineering approach.
“It does not matter how slowly you go so long as you do not stop.”
--Confucius
1
9. A disadvantage of the high-low method of cost analysis is that it
A. typically results in totally inaccurate cost formula.
B. is too time consuming to apply.
C. uses only two data points, which may not be representative of normal conditions.
D. relies totally on the judgment of the person performing the cost analysis.
10. In the standard regression equation of y = a + bx, the letter b is best described as the
A. independent variable.
B. dependent variable.
C. slope of the equation.
D. intercept of the equation.
11. ABC Company made the following journal entry.
Work in Process Inventory $200,000

Direct Labor $188,000
Direct Labor Rate Variance 12,000
From this entry we can tell that ABC uses
a. job-order costing.
b. process costing.
c. standard costing.
d. normal costing.
12. CDE Company made the following journal entry.
Finished Goods Inventory $250,000

Work in Process Inventory $250,000
From this entry we can tell that CDE uses
a. job-order costing.
b. process costing.
c. standard costing.
d. any of the above.
13. Which of the following is NOT relevant in determining weighted-average unit cost in process
costing?
a. Cost of beginning inventory

b. Equivalent unit production in beginning inventory.
c. Equivalent unit production in ending inventory.
d. Units completed.
14. Standard process costing does NOT require information about
a. units completed during the period.

b. equivalent unit production in ending inventory.
c. standard cost per unit.
d. actual unit cost for the period.
15. A company that uses job-order costing
a. cannot use standard costs.

b. accumulates costs by department.
c. probably makes a single product.
d. does not have to calculate equivalent production.
16. Which company is most likely to use job-order costing?
a. A brewery.
b. An automobile manufacturer.
c. A bridge builder.
d. A button manufacturer.
17. Which company is most likely to use process costing?
a. A processor of nuclear reactors.

b. A construction contractor.
c. A cannery.
--Confucius
2
d. A textbook publisher.
18. Fixed production costs are inventoriable only if a company
a. uses absorption costing.

b. uses standard costing.
c. produces a single product.
d. receives permission from the Internal Revenue Service.
19. Which cost accumulation method is most likely to be used by a company that mass produces similar
products?
a. Actual costing.
b. Normal costing.
c. Job-order costing.
d. Standard costing.
20. Standard costing can be used in
a. only job-order costing systems.

b. only process costing systems.
c. either job-order or process systems.
d. either manufacturing or retailing firms.
21. Which of the following is the same whether the company uses standard process costing or actual
process costing?
a. Equivalent production.
b. Cost of goods transferred from work in process to finished goods.
c. Net income for the period.
d. Cost per unit of ending inventory of work in process.
22. It is usually necessary to calculate equivalent unit production for
a. materials.
b. conversion costs.
c. materials and conversion costs.
d. materials, conversion costs, and overhead.
23. If a company uses actual process costing, the amount transferred from Work in Process Inventory to
Finished Goods Inventory is the cost of
a. actual equivalent unit production for the period.

b. units completed during the period.
c. units completed and sold during the period.
d. all units worked on during the period.
24. If a company uses standard process costing, the amount transferred from Work in Process Inventory
to Finished Goods Inventory is the
a. standard cost of equivalent unit production for the period.

b. standard cost of units completed during the period.
c. actual cost of units completed and sold during the period.
d. actual cost of all units worked on during the period.
25. Under standard costing, the amount of direct labor cost charged (debited) to Work in Process
Inventory is
a. standard labor hours at standard rates.

b. standard labor hours at actual rates.
c. actual labor hours at actual rates.
d. actual direct labor cost incurred.
26. A company that uses standard costing
a. must make only one product.

b. always has a volume variance unless normal capacity and practical capacity are the same.
c. shows higher incomes than it would if it used actual costing.
d. shows the same per-unit cost of inventory each month.
--Confucius
3
27. The numerator of weighted-average unit cost calculations is
a. current period cost.

b. cost of beginning inventory.
c. current period cost plus cost of beginning inventory.
d. cost of goods sold.
28. The numerator of the FIFO unit cost calculation is
a. current period cost.

b. cost of beginning inventory.
c. current period cost plus cost of beginning inventory.
d. cost of goods sold.
29. Which formula gives weighted-average equivalent unit production? (UC = units completed, BI =
equivalent units in beginning inventory, EI = equivalent units in ending inventory)
a. UC + BI + EI.
b. UC + BI – EI
c. UC + EI - BI.
d. UC + EI.
30. Which formula gives FIFO equivalent unit production? (UC = units completed, BI = equivalent units
in beginning inventory, EI = equivalent units in ending inventory)
a. UC + BI + EI.
b. UC + BI - EI.
c. UC + EI - BI.
d. UC + EI.
31. Scooter Corp had no beginning inventories, finished 40,000 units, and sold 36,000 units. There were
no ending inventories of materials or work in process. Materials purchased and used were
$225,000; direct labor and overhead were $170,000. Ending inventory would be valued at
$39,500.
32. Scooter Corp had no beginning inventories, finished 40,000 units, and sold 36,000 units. There were
no ending inventories of materials or work in process. Materials purchased and used were
$225,000; direct labor and overhead were $170,000. Cost of goods sold would be valued at
$355,500.
33. Dewey Company had a beginning inventory of 3,000 units 35% complete, and an ending inventory of
2,500 units 20% complete. If 17,500 units were completed, weighted-average EUP is
18,000.
34. Dewey Company had a beginning inventory of 3,000 units 35% complete, and an ending inventory of
2,500 units 20% complete. If 17,500 units were completed, FIFO EUP is
16,950.
35. Cheatem has a weighted-average EUP of 30,000 units. Beginning inventory was 4,000 units 40%
complete; ending inventory was 5,000 units 60% complete. The number of units completed is
27,000.
36. Cheatem has a weighted-average EUP of 30,000 units. Beginning inventory was 4,000 units 40%
complete; ending inventory was 5,000 units 60% complete. FIFO EUP is
28,400.
37. Howe has a FIFO EUP of 46,580 units. Beginning inventory of 6,500 units was 80% complete; the
ending inventory of 2,800 units was 60% complete. How many units were completed during the
period?
50,100
38. Howe has a FIFO EUP of 46,580 units. Beginning inventory of 6,500 units was 80% complete; the
--Confucius
4
ending inventory of 2,800 units was 60% complete. Weighted-average EUP is
51,780.
39. Sosa Inc. had $3,000 in beginning work in process and incurred an additional $28,500 during the
period. If weighted-average EUP was 10,000 units, unit cost would be
$3.15
40. Granger Co. had $3,000 in beginning work in process and incurred an additional $28,500 during the
period. If FIFO EUP was 10,000 units, unit cost would be
$2.85
41. Field Company had a beginning inventory of 2,000 units 40% complete, ending inventory of 1,500
units 70% complete, and transferred out 23,500 units. Weighted-average unit costs were $1.15 for
materials, $0.75 for conversion costs. All materials are added at the start of the process. The cost
of finished units transferred to finished goods is
$44,650
of ending inventory is
$5,025
43. Garden Co. had a beginning inventory of 3,000 units 60% complete, ending inventory of 3,000 units
80% complete, and transferred out 27,500 units. FIFO unit costs were $2.15 for materials, $1.25
for conversion costs. All materials are added at the start of the process. Beginning inventory cost
$9,400. The cost of finished units transferred out is
$92,900.
$9,400. The cost of ending inventory is
$9,450
45. Woods Run has a weighted-average EUP of 49,750 units. Beginning inventory of 4,500 units was
60% complete; the ending inventory of 4,800 units was 60% complete. The units completed
during the period is
46,870.
60% complete; the ending inventory of 4,800 units was 60% complete. Conversion costs in
beginning inventory were $1,960; conversion costs added during the period were $40,825.
Conversion costs per unit are
$0.86.
47. Grover Co. had a beginning inventory of 1,750 units 70% complete, ending inventory of 3,000 units
20% complete, and transferred out 24,500 units. Weighted-average unit costs were $2.15 for
$95,550.
$7,500
Fenrir Inc. has the following data for September:
--Confucius
5
Gallons in beginning inventory 8,000 gallons
Percentage complete:
Materials 100 %
Conversion costs 60 %
Gallons completed in September 72,500 gallons
Gallons in ending inventory 10,000 gallons
Materials 100 %
Costs Materials Conversion Costs

Beginning Inventory $109,730 $ 38,950
Incurred during September $968,500 $661,760
Fenrir uses the FIFO method of costing.
49-50. Compute the equivalent units of production for materials and for conversion costs for the
month of September. Materials: 74,500 Conversion: 75,200
51-52. Compute the unit costs for each cost factor. Materials: $13.00 Conversion: $ 8.80
53. Compute the cost of finished gallons for September. $1,582,940
54. Compute the cost of ending work in process. $196,000
Malphite Co. manufactures a silicone paste wax that goes through three processing departments: cracking,
blending, and packing. All raw materials are introduced at the start of work in the cracking department,
with conversion costs being incurred uniformly in each department. The Work-in-Process T-account for
the cracking department for July is:

The beginning balance inventory consists of $43,400 in materials cost. Brady uses the weighted-average
method to account for its operations.
(Note: use 4 decimal places for computations):
55. What would be the Cracking Department inventory balance on July 31? $84,000
56. What would be the cost transferred to the Blending Dept. in July? $567,000
Nami Inc. has the following data for July:
Gallons in beginning inventory 13,000 gallons

Gallons completed in July 52,500 gallons
Gallons in ending inventory 7,500 gallons
Materials 100 %
Costs Materials Conversion Costs

Beginning Inventory $ 56,300 $ 33,600
Incurred during July $321,700 $256,950
Molitor uses the weighted-average method of costing.
57-58 Compute the equivalent units of production for materials and for conversion costs for the month
of July. Materials: 60,000 Conversion: 55,875
--Confucius
6
59-60 Compute the unit costs for each cost factor. Materials: $6.30 Conversion: $5.20
61. Compute the cost of finished gallons for July. $603,750
62. Compute the cost of ending work in process. $64,800
The following data are available for 20X4 for Scottso, which uses weighted-average process costing.
Beginning inventory (40% complete) 3,000 units

Units started during 20X4 52,000 units
Units completed during 20X4 50,000 units
Ending inventory (70% complete) 5,000 units
Costs of inventory at beginning of 20X4 $2,750
Production costs incurred during 20X4 $83,920
63. Compute equivalent production for 20X4. 53,500
64. Compute the unit cost for 20X4 to the nearest cent. $1.62
65. Compute the cost of the ending inventory of work in process. $5,670
66. Compute the cost of goods completed and transferred to finished goods. $81,000
67. Scottso now uses FIFO. Compute ending inventory of work in process. $5,616
Debra's Pottery Studios uses weighted-average process costing. It had the following results in June.
Beginning inventory, 30% complete 12,000 units

Units completed 30,000 units
Units in ending inventory, 60% complete 9,000 units
Cost of beginning inventory $45,000
Current period production costs $379,800
68. Compute equivalent unit production for June. 35,400
69. Compute the unit cost for June. $12
70. Compute the ending inventory of work in process. $64,800
71. Compute the cost transferred to finished goods. $360,000
Viking Sports is a manufacturer of sportswear. Viking produces its products in two departments.
The information for the current month for Department #2 is as follows:

Beginning WIP was half complete as to conversion costs. Direct materials for Department #2 are added
at when the process is 25% complete. Factory overhead is applied at a rate equal to 50 percent of direct
manufacturing labor. Ending WIP was 60 percent complete. Viking Sports uses weighted average
--Confucius
7
costing.
Required: HINT: use 4 decimal places in your calculations
72-74. Compute the equivalent units of production for each input. EUP TI: 60,000; Mat: 60,000; Conv:
56,000
75-77. Compute the cost per unit. TI: $2.50; Mat: $1.20; Conv: $0.6214; Total $4.3214
78. Compute the cost transferred out to finished goods. $216,070
79. Compute the ending work in process inventory balance. $40,728
80. Granger Co. had $3,000 in beginning work in process and incurred an additional $28,500 during the
period. If FIFO EUP was 10,000 units, unit cost would be
$2.85
$44,650
$5,025
$9,400. The cost of finished units transferred out is
$92,900.
$9,400. The cost of ending inventory is
$9,450
60% complete; the ending inventory of 4,800 units was 60% complete. The units completed
during the period is
46,870.
60% complete; the ending inventory of 4,800 units was 60% complete. Conversion costs in
beginning inventory were $1,960; conversion costs added during the period were $40,825.
Conversion costs per unit are
$0.86.
$95,550.
--Confucius
8
$7,500
Xin Zhao , Inc. designs and builds basketball gymnasiums. Each gymnasium is custom-built to
individual customers’ specifications. Stutz uses job-order costing to keep track of its costs. In
February it worked on three jobs. Data for these jobs are as follows:
Job 175 Job 178 Job 179

Balance 2/1 $13,790 $ 0 $ 0
Direct Materials 16,200 8,500 30,500
Direct Labor Cost 23,300 7,600 45,000
Machine Hours 400 300 2,000
Overhead is applied to jobs at the rate of $25 per machine hour. By February 28, Job 178 is the
only one unfinished. The balance of Finished Goods on February 1 is $94,000 (consisting of Job
177). Jobs 177 and 179 are sold during February. Stutz sells its product at cost plus 40%.
89. Refer to Figure 5-6. Calculate the balance in Work-in-Process on February 28. $23,600
90. Refer to Figure 5-6. Calculate the balance of Finished Goods at February 28. $63,290
91. Refer to Figure 5-6. What is Cost of Goods Sold for February? $219,500
92. Refer to Figure 5-6. What is sales revenue for February? $307,300
Nidalee produces dairy equipment. Most of its jobs have a number of units per job. The company
has two different departments through which all jobs pass. Overhead is applied using a plantwide
rate of $13 per direct labor hour. Direct labor wages average $8 an hour. Data for Job #3 for the
year is:
Direct materials $40,000

Direct labor costs
Dept. A 60,000
Dept. B 12,000
Machine hours used
Dept. A 200
Dept. B 2,400
Units produced 20,000
93. Refer to Figure 5-7. Compute the total cost of Job #3. $229,000
94. Refer to Figure 5-7. Compute the cost per unit. $11.45
Fizz's Water Slides makes custom water slides for hotels. On September 1, there were three jobs
in process, Jobs 812, 813, and 814. Two more jobs were started during September, Jobs 815 and
816. By September 30, Jobs 812, 814, and 816 were finished. The following data has been
collected:
Job 812 Job 813 Job 814 Job 815 Job 816
9/1 Balance $615 $830 $ 945 --- ---
Direct materials 750 235 1,280 $200 $915
Direct labor 420 115 560 320 875
Overhead is applied at the rate of 120% of direct labor cost. Jobs are sold at cost plus 60%.
Selling and administrative expenses for September totaled $2,950. By September 30, Jobs 812
were 816 are sold, but the customer who ordered Job 814 decided he did not want the slide so it
is still in the warehouse.
--Confucius
9
95. Refer to Figure 5-8. Calculate the ending balance in Work-in-Process as of September 30.
$2,222
96. Refer to Figure 5-8. What is the ending balance of Finished Goods if the beginning
balance was $0? $3,457
97. Refer to Figure 5-8. What is the selling price of Job 816? $4,544
98. Refer to Figure 5-8. What is the cost of goods sold for September? $5,129
99. Refer to Figure 5-8. What is John's operating income for the month of September?
$127.40
100. Lunar Wraith Morgana Co. manufactured textiles. Among Morgana’s 1998 manufacturing
costs were the following:
Loom Operators P 120,000
Factory Foreman 45,000
Machine mechanics 30,000
Compute for the direct manufacturing labor: P 120,000
-End of Examination (^___^) -
--Confucius
10

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Colegio de Dagupan

School of Business and Accountancy

4. In the cost equation TC = F + VX, X is best described as the:

5. In the cost equation TC = F + VX, V is best described as the:

11. ABC Company made the following journal entry.

Work in Process Inventory $200,000

From this entry we can tell that ABC uses

12. CDE Company made the following journal entry.

Finished Goods Inventory $250,000

From this entry we can tell that CDE uses

a. Cost of beginning inventory

14. Standard process costing does NOT require information about

a. units completed during the period.

15. A company that uses job-order costing

a. cannot use standard costs.

16. Which company is most likely to use job-order costing?

17. Which company is most likely to use process costing?

a. A processor of nuclear reactors.

18. Fixed production costs are inventoriable only if a company

a. uses absorption costing.

20. Standard costing can be used in

a. only job-order costing systems.

22. It is usually necessary to calculate equivalent unit production for

a. actual equivalent unit production for the period.

a. standard cost of equivalent unit production for the period.

a. standard labor hours at standard rates.

26. A company that uses standard costing

a. must make only one product.

a. current period cost.

28. The numerator of the FIFO unit cost calculation is

a. current period cost.

Fenrir Inc. has the following data for September:

Costs Materials Conversion Costs

Fenrir uses the FIFO method of costing.

53. Compute the cost of finished gallons for September. $1,582,940

54. Compute the cost of ending work in process. $196,000

Nami Inc. has the following data for July:

Gallons in beginning inventory 13,000 gallons

Costs Materials Conversion Costs

Molitor uses the weighted-average method of costing.

61. Compute the cost of finished gallons for July. $603,750

62. Compute the cost of ending work in process. $64,800

Beginning inventory (40% complete) 3,000 units

63. Compute equivalent production for 20X4. 53,500

Beginning inventory, 30% complete 12,000 units

68. Compute equivalent unit production for June. 35,400

69. Compute the unit cost for June. $12

70. Compute the ending inventory of work in process. $64,800

71. Compute the cost transferred to finished goods. $360,000

78. Compute the cost transferred out to finished goods. $216,070

79. Compute the ending work in process inventory balance. $40,728

Job 175 Job 178 Job 179

Direct materials $40,000

-End of Examination (^___^) -

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