Professional Elective 4 Final Examination Set A

PROFESSIONAL ELECTIVE 4
Final Examination
Set A
Theory: Multiple Choice. Choose the letter that corresponds to your answer.
1. The cost accounting system that is noted for its lack of detailed tracking of work in process during the
accounting period is:
A. process costing
B. job order costing
C. standard costing
D. backflush costing
2. The cost accounting system that would be most apt to use a single inventory account entitled Raw
and In Process (RIP) would be:
A. backflush costing
B. process costing
C. job order costing
D. historical costing
E. standard costing
3. To backflush materials cost from Raw and In Process (RIP) to Finished Goods, the calculation would
be:
A. materials in ending RIP inventory plus materials received during the period minus
materials in the beginning RIP inventory
B. materials in ending finished goods inventory plus materials cost transferred from RIP
minus materials in beginning finished goods inventory
C. materials in beginning finished goods inventory plus materials cost transferred from
RIP minus materials in ending finished goods inventory
D. materials in beginning RIP inventory plus materials received during the period minus
materials in ending RIP inventory
4. In backflush costing, if the conversion cost in the Raw and In Process was P500 on July 1 and P1,000
on July 31, the account to be credited at the end of July for the P500 increase would
be:
A. Raw and In Process
B. Finished Goods
C. Raw Materials
D. Cost of Goods Sold
5.In backflush costing, if the conversion cost in Raw and In Process was P1,000 on March 1 and P400 on
March 31, the account to be credited for the P600 decrease would be:
A. Raw and In Process
B. Finished Goods
C. Raw Materials
D. Cost of Goods Sold
6. Under a JIT approach to purchasing, the ideal number of vendors for each material is:
A. two
B. less than six
C. one
D. as many as can supply quality goods
E. none of the above
7. All of the following are obstacles to JIT purchasing, except:

A. the layout of the production process
B. the frequency of schedule changes
C. the attitudes of purchasing agents and suppliers
D. the distance from suppliers
E. all of the above are obstacle
8. The primary purpose of using a standard cost system is to:

A. Make things easier for managers in the production facility.
B. Provide a distinct measure of cost control.
C. Minimize the cost per unit of production.
D. Assure continuous production of goods.
9. The variance most useful in evaluating plant utilization is the:

A. Variable overhead spending variance
B. Fixed overhead spending variance
C. Variable overhead efficiency variance
D. Fixed overhead volume variance
10. The variance least significant for purposes of controlling costs is the:
A. Material usage variance
B. Variable overhead efficiency variance
C. Fixed overhead spending variance
D. Fixed overhead volume variance
11. Which of the following statements regarding standard cost systems is true?
a. Favorable variances are not necessarily good variances.
b. Managers will investigate all variances from standard.
c. The production supervisor is generally responsible for material price variances.
d. Standard costs cannot be used for planning purposes since costs normally change in the
future
12. Standard costs may be used for

a. product costing.
b. planning.
c. controlling.
d. all of the above.
13. Standard costs

a. are estimates of costs attainable only under the most ideal conditions.
b. are difficult to use with a process costing system.
c. can, if properly used, help motivate employees.
d. require that significant unfavorable variances be investigated, but do not require that
significant favorable variances be investigated.
14. The material price variance (computed at point of purchase) is

a. the difference between the actual cost of material purchased and the standard cost of
material purchased.
b. the difference between the actual cost of material purchased and the standard cost of
material used.
c. primarily the responsibility of the production manager.
d. both a and c.
15. A favorable fixed overhead volume variance occurs if

a. there is a favorable labor efficiency variance.
b. there is a favorable labor rate variance.
c. production is less than planned.
d. production is greater than planned.
Problem: Show supporting computation. No solution, no point
The following July information is for the Kingston Company:
Standards: Materials 3 feet per unit @ P4.20 per foot

Labor 2.5 hours per unit @ P7.50 per hour
Actual Production 2,750 units produced during the month
Materials 8,700 feet used;
9,000 feet purchased @ P4.50 per foot
Labor 7,000 direct labor hours @P7.90
1. What is the material purchase price variance?
2. What is the material quantity variance
Gulf Manufacturing Co uses a standard cost accounting system. During the year 33,000 units were
produced. Each unit took several pound of direct materials and 1 1/3 standard hours of direct labor at a
standard hourly rate of P12.00. Normal capacity was 42,000 direct labor hours. During the year, 130,000
pounds of raw materials were purchased at P.94 per pound. All pounds purchased were used during the
year. Labor efficiency variance is P9,600 unfavorable and Labor rate variance is P11,200 favorable.
3. If the labor efficiency variance is P9,600 unfavorable, what were the actual direct labor hours
worked?
4. If the labor rate variance is P11,200 favorable, what was the actual rate per hour?
The data below relate to the month of April 2020 for Marilyn inc. which uses a standard system.
Actual total direct labor P43,400
Actual hours used 14,000
Standard hours allowed for good output 15,000
Direct labor rate variance – debit P1,400
Actual total overhead 32,000
Budgeted fixed costs 9,000
Normal activity in hours 12,000
Total overhead application rate per standard direct labor hours P2.25
Marilyn uses a two way analysis of overhead variances: controllable and volume.
5. What was Marilyn’s controllable variance for April 2020?
6. What was Marilyn’s volume variance for April , 2020?
The Clifton Manufacturing Company has a cycle time of 1.5 days, uses a Raw and In Process (RIP) account,
and charges all conversion costs to Cost of Goods Sold. At the end of each month, all inventories are
counted, their conversion cost components are estimated, and inventory account balances are adjusted.
Raw material cost is backflushed from RIP to Finished Goods.
The following information is for May:
Beginning balance of RIP account, including 600 of conversion cost ............................................... P 5,500
Beginning balance of finished goods account,
including P2,000 of conversion cost................................................................................................ 6,000
Raw materials received on credit ..................................................................................................... 170,000
Ending RIP inventory per physical count,
including P850 conversion cost estimate....................................................................................... 6,200
Ending finished goods inventory per physical count,
including P1,550 conversion cost estimate ........................................................................................ 4,900
Required: Prepare all the journal entries that involve the RIP account and/or the finished goods account.

Professional Elective 4 Final Examination Set A

Uploaded by

Copyright:

Available Formats

Professional Elective 4 Final Examination Set A

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Professional Elective 4 Final Examination Set A

Uploaded by

Copyright:

Available Formats

PROFESSIONAL ELECTIVE 4

7. All of the following are obstacles to JIT purchasing, except:

8. The primary purpose of using a standard cost system is to:

9. The variance most useful in evaluating plant utilization is the:

12. Standard costs may be used for

13. Standard costs

14. The material price variance (computed at point of purchase) is

15. A favorable fixed overhead volume variance occurs if

Problem: Show supporting computation. No solution, no point

The following July information is for the Kingston Company:

Standards: Materials 3 feet per unit @ P4.20 per foot

1. What is the material purchase price variance?

2. What is the material quantity variance

5. What was Marilyn’s controllable variance for April 2020?

6. What was Marilyn’s volume variance for April , 2020?

You might also like