Cost Accounting Systems (A. Traditional Cost Accounting)
C. s#ou"' s#ou"' e cost e((ecti! e((ecti!ee in 'esign an' an' se"ection se"ection D. a"" t#e aao!e o!e ans5e ans5e%s %s a%e co%%e co%%ect ct
Co$$itte' !s. Disc%etiona%* Disc%etiona%* (i8e' costs Co$$ite' (i8e' costs 9. 1#ic# 1#ic# o( t#e (o""o5ing (o""o5ing is an e8a$p"e e8a$p"e o( a co$$itte' co$$itte' (i8e' (i8e' costs costs A. 'i%ect $ate%ia"s C. supe%!iso%3s sa"a%* B. 'ep% 'ep%ecia eciation tion on on a (acto%* (acto%* ui"'i ui"'ing ng D. insu%anc insu%ancee on a ui"' ui"'ing ing
Cost Accounting . Cost accounting accounting in!o"!es in!o"!es t#e $easu%ing& %eco%'ing& an' %epo%ting %epo%ting o( A. p%o'uct costs costs C. (utu (utu%e %e cost costss B. $anu(actu%ing p%ocess D. $anage%ia" accounting 'ecisions
7. An e8a$p"e o( o( a co$$itte' (i8e' cost is: is: A. a t%aining p%og%a$ p%og%a$ (o% sa"espe%sons. sa"espe%sons. B. e8ecuti! e8ecuti!ee t%a!e" t%a!e" e8penses e8penses.. C. p%op p%ope%t* e%t* ta8es ta8es on t#e t#e (acto%* (acto%* ui"'ing. 'ing. D. ne5 p%o'uct p%o'uct %esea%c %esea%c## an' 'e!e"op$ 'e!e"op$ent. ent.
Cost $anage$ent ). T#e cost cost $anage$en $anage$entt (unction on is usua""* usua""* un'e% un'e% A. t#e c#ie( in(o%$ation in(o%$ation o((ice%. C. pu%c#asing $anage%. $anage%. B. t%ea t%easu su%e %e%. %. D. co cont nt%o %o""""e% e%.. +. T#e cost cost $anage$ent $anage$ent in(o%$ation s*ste$ p%o!i'es in(o%$ation A. t#at t#e accountant accountant nee's to p%epa%e p%epa%e t#e (inancia" state$ents. state$ents. B. t#at t#e $anage% $anage% nee's nee's to e((ecti! e((ecti!e"* e"* $anage $anage t#e (i%$. C. t#at t#e $anage% $anage% nee's to e((ecti!e"* $anage not,(o%,p%o(it not,(o%,p%o(it o%gani-ation. o%gani-ation. D. an ' c.
Disc%etiona%* (i8e' cost ;. 1#ic# o( t#e (o""o5ing is an e8a$p"e o( 'isc%etiona%* 'isc%etiona%* (i8e' cost A. 'i%ect "ao% C. p%ope%t* ta8es on a (acto%* ui"'ing ui"'ing B. ins insu%a u%ance nce on on a ui"'i ui"'ing ng D. 'ep%ecia 'ep%eciation tion on a (acto%* (acto%* ui"'ing "'ing Cont%o""a"e costs <. Cont%o""a Cont%o""a"e "e costs a%e: a%e: A. Costs t#at $anage$ent 'eci'es to incu% in t#e cu%%ent pe%io' to ena"e t#e co$pan* to ac#ie!e ope%ating o=ecti!es o=ecti!es ot#e% t#an t#e (i""ing o( o%'e%s p"ace' * custo$e%s. B. Costs Costs t#at a%e go!e%ne' go!e%ne' $ain"* * past 'ecision 'ecisionss t#at esta"is#e' s#e' t#e p%esent p%esent "e!e"s o( ope%ating an' o%gani-ationa" capacit* an' t#at on"* c#ange s"o5"* in %esponse to s$a"" c#anges in capacit*. C. Costs t#at t#at 5i"" una((ecte' una((ecte' * cu%%ent $anage%ia" 'ecisions. D. Costs t#at a%e "i2e"* to %espon' %espon' to t#e a$ount o( attention attention 'e!ote' to t#e$ t#e$ * a speci(ie' speci(ie' $anage%.
/. T#e $ain (ocus o( o( cost $anage$ $anage$ent ent in(o%$at in(o%$ation ion $ust $ust e A. use(u"ness an' an' accu%ac*. accu%ac*. C. use( use(u"nes u"nesss an' an' ti$e"iness $e"iness.. B. ti$e"iness an' accu%ac*. D. %e"e!ance an' goo' (o%$at. 0. 1it# %ega%' %ega%' to t#e tas2 o( $anage$e $anage$ent3s nt3s 'ecision sion $a2ing& $a2ing& cost $anage$e $anage$ent nt in(o%$ation in(o%$ation is nee'e' to A. $a2e soun' st%ategic st%ategic 'ecisions 'ecisions %ega%'ing c#oice c#oice o( p%o'ucts& p%o'ucts& $et#o's& an' tec#ni4ues. tec#ni4ues. B. suppo%t %ecu%%ing %ecu%%ing 'ecisions 'ecisions %ega%'ing %ep"ace$ent %ep"ace$ent o( e4uip$ent& p$ent& $anaging cas# cas# ("o5& etc. C. p%o!i'e a (ai% an' e((ecti!e e((ecti!e asis (o% i'enti(*ing ine((icient ope%ations. ope%ations. D. p%o!i'e accu%ate accu%ate accounting accounting (o% in!ento%*& in!ento%*& %ecei!a"es& %ecei!a"es& an' ot#e% assets. assets.
. Cont%o""a"e costs (o% %esponsii"it* %esponsii"it* accounting accounting pu%poses a%e a%e 'i%ect"* in("uence' on"* * A. A gi!en $anage% $anage% 5it#in a gi!en gi!en pe%io'. B. A c#ang c#angee in acti acti!it !it*. *. C. 6%o'uc 6%o'uctio tionn !o"u$ !o"u$e. e. D. Sa"e Sa"ess !o"u !o"u$e $e..
7. 6%o'uct 6%o'uct costing costing s*ste$ s*ste$ 'esign 'esign o% se"ec se"ection: tion: A. %e4ui%es an un'e%stan'ing un'e%stan'ing o( o( t#e natu%e o( t#e usiness usiness B. s#ou"' p%o!i'e p%o!i'e use(u" cost cost in(o%$ation in(o%$ation (o% st%ategic an' ope%ationa" ope%ationa" 'ecision nee's
227
Cost Accounting Systems (A. Traditional Cost Accounting)
/9. Di%ect p%o'uct e8penses A. a%e incu%%e' (o% t#e ene(it o( t#e usiness as a 5#o"e B. cannot e i'enti(ie' %ea'i"* 5it# a gi!en p%o'uct C. can e assigne' to p%o'uct on"* * a p%ocess o( a""ocation D. 5ou"' not e incu%%e' i( t#e p%o'uct 'i' not e8ist
I$pute' costs +. An i$pute' cost is A. T#e 'i((e%ence in tota" costs 5#ic# %esu"ts (%o$ se"ecting one c#oice instea' o( anot#e%. B. A cost t#at 'oes not entai" an* cas# out"a* ut 5#ic# is %e"e!ant to t#e 'ecision,$a2ing p%ocess. C. A cost t#at $a* e s#i(te' to t#e (utu%e 5it# "itt"e o% no e((ect on cu%%ent ope%ations. D. A cost t#at continues to e incu%%e' e!en t#oug# t#e%e is no acti!it*.
?. T#e 'istinction et5een 'i%ect an' in'i%ect costs 'epen's on 5#et#e% a cost A. is cont%o""a"e o% non,cont%o""a"e. B. is !a%ia "e o% (i8e'. C. can e con!enient"* an' p#*sica""* t%ace' to a cost o=ect un'e% consi'e%ation. D. 5i"" inc%ease 5it# c#anges in "e!e"s o( acti!it*.
Cost Acco%'ing to Be#a!io% Se$i,!a%ia."e costs /. Se$i,!a%ia"e costs A. pe% unit %e$ain t#e sa$e %ega%'"ess o( tota" output B. %e$ain t#e sa$e 5it#in t#e %e"e!ant %ange o( output C. inc%ease in steps as t#e a$ount o( t#e cost '%i!e% !o"u$e inc%eases D. #a!e ot# (i8e' an' !a%ia"e co$ponents in t#e$
?. O( $ost %e"e!ance in 'eci'ing #o5 in'i%ect costs s#ou"' e assigne' to p%o'ucts is t#e 'eg%ee o( A. Linea%it*. C. A!oi'ai"it*. B. Causa"it*. D. Cont%o""ai"it*.
Step cost 0. A step cost is A. t#e sa$e as se$i,(i8e' cost B. t#e sa$e as $i8e' cost C. a cost t#at inc%eases in steps as t#e a$ount o( cost,'%i!e% !o"u$e inc%eases D. a an' c on"*.
Co$p%e#ensi!e ). A"$os& Inc. $a2es s2i,oa%'s in Da!ao. I'enti(* t#e co%%ect $atc#ing o( te%$s. A. @ie%g"ass is (acto%* o!e%#ea' B. 6"ant %ea" estate ta8es a%e a pe%io' cost C. Dep%eciation on 'e"i!e%* t%uc2s is a p%o'uct cost D. 6a*%o"" ta8es (o% 5o%2e%s in t#e 6ac2aging Dept. a%e 'i%ect "ao%
6%o'uct Cost !s. 6e%io' Cost 6e%io' cost ;. 1#ic# o( t#e (o""o5ing 5ou"' NOT e a pe%io' cost (o% a $anu(actu%ing (i%$ A. Se""ing e8penses B. Sa"a%* pai' to t#e CEO o( t#e co$pan* C. Repai%s to t#e Receptionist>s co$pute% D. Uti"ities in $anu(actu%ing p"ant
+;. An accounting s*ste$ t#at (ocuses on t%ansactions is A. an acti!it*,ase' accounting s*ste$. C. a t%a'itiona" accounting s*ste$. B. a p%o'uct "i(e c*c"e costing s*ste$. D. a"" o( t#e ao!e. +?. T%a'itiona""*& $anage%s #a!e (ocuse' cost %e'uction e((o%ts on A. acti!ities. C. 'epa%t$ents. B. p%ocesses. D. co st s.
Di%ect !s. in'i%ect costs 9. 1#at 2in' o( costs can e con!enient"* an' econo$ica""* t%ace' to a cost o=ect o% poo" A. In'i%ect Costs. C. Di%ect Costs. B. Re"e!ant Costs. D. O!e%#ea' Costs.
)). 1#ic# o( t#e (o""o5ing is a t%ait o( a t%a'itiona" cost $anage$ent s*ste$ A. unit,ase' '%i!e%s C. t%acing is intensi!e B. 'et ai"e' acti!it* in(o%$ation D. (ocus on $anaging act i!ities
228
Cost Accounting Systems (A. Traditional Cost Accounting)
Cost Accounting Systems (A. Traditional Cost Accounting)
/9. Di%ect p%o'uct e8penses A. a%e incu%%e' (o% t#e ene(it o( t#e usiness as a 5#o"e B. cannot e i'enti(ie' %ea'i"* 5it# a gi!en p%o'uct C. can e assigne' to p%o'uct on"* * a p%ocess o( a""ocation D. 5ou"' not e incu%%e' i( t#e p%o'uct 'i' not e8ist
I$pute' costs +. An i$pute' cost is A. T#e 'i((e%ence in tota" costs 5#ic# %esu"ts (%o$ se"ecting one c#oice instea' o( anot#e%. B. A cost t#at 'oes not entai" an* cas# out"a* ut 5#ic# is %e"e!ant to t#e 'ecision,$a2ing p%ocess. C. A cost t#at $a* e s#i(te' to t#e (utu%e 5it# "itt"e o% no e((ect on cu%%ent ope%ations. D. A cost t#at continues to e incu%%e' e!en t#oug# t#e%e is no acti!it*.
?. T#e 'istinction et5een 'i%ect an' in'i%ect costs 'epen's on 5#et#e% a cost A. is cont%o""a"e o% non,cont%o""a"e. B. is !a%ia "e o% (i8e'. C. can e con!enient"* an' p#*sica""* t%ace' to a cost o=ect un'e% consi'e%ation. D. 5i"" inc%ease 5it# c#anges in "e!e"s o( acti!it*.
Cost Acco%'ing to Be#a!io% Se$i,!a%ia."e costs /. Se$i,!a%ia"e costs A. pe% unit %e$ain t#e sa$e %ega%'"ess o( tota" output B. %e$ain t#e sa$e 5it#in t#e %e"e!ant %ange o( output C. inc%ease in steps as t#e a$ount o( t#e cost '%i!e% !o"u$e inc%eases D. #a!e ot# (i8e' an' !a%ia"e co$ponents in t#e$
?. O( $ost %e"e!ance in 'eci'ing #o5 in'i%ect costs s#ou"' e assigne' to p%o'ucts is t#e 'eg%ee o( A. Linea%it*. C. A!oi'ai"it*. B. Causa"it*. D. Cont%o""ai"it*.
Step cost 0. A step cost is A. t#e sa$e as se$i,(i8e' cost B. t#e sa$e as $i8e' cost C. a cost t#at inc%eases in steps as t#e a$ount o( cost,'%i!e% !o"u$e inc%eases D. a an' c on"*.
Co$p%e#ensi!e ). A"$os& Inc. $a2es s2i,oa%'s in Da!ao. I'enti(* t#e co%%ect $atc#ing o( te%$s. A. @ie%g"ass is (acto%* o!e%#ea' B. 6"ant %ea" estate ta8es a%e a pe%io' cost C. Dep%eciation on 'e"i!e%* t%uc2s is a p%o'uct cost D. 6a*%o"" ta8es (o% 5o%2e%s in t#e 6ac2aging Dept. a%e 'i%ect "ao%
6%o'uct Cost !s. 6e%io' Cost 6e%io' cost ;. 1#ic# o( t#e (o""o5ing 5ou"' NOT e a pe%io' cost (o% a $anu(actu%ing (i%$ A. Se""ing e8penses B. Sa"a%* pai' to t#e CEO o( t#e co$pan* C. Repai%s to t#e Receptionist>s co$pute% D. Uti"ities in $anu(actu%ing p"ant
+;. An accounting s*ste$ t#at (ocuses on t%ansactions is A. an acti!it*,ase' accounting s*ste$. C. a t%a'itiona" accounting s*ste$. B. a p%o'uct "i(e c*c"e costing s*ste$. D. a"" o( t#e ao!e. +?. T%a'itiona""*& $anage%s #a!e (ocuse' cost %e'uction e((o%ts on A. acti!ities. C. 'epa%t$ents. B. p%ocesses. D. co st s.
Di%ect !s. in'i%ect costs 9. 1#at 2in' o( costs can e con!enient"* an' econo$ica""* t%ace' to a cost o=ect o% poo" A. In'i%ect Costs. C. Di%ect Costs. B. Re"e!ant Costs. D. O!e%#ea' Costs.
)). 1#ic# o( t#e (o""o5ing is a t%ait o( a t%a'itiona" cost $anage$ent s*ste$ A. unit,ase' '%i!e%s C. t%acing is intensi!e B. 'et ai"e' acti!it* in(o%$ation D. (ocus on $anaging act i!ities
228
Cost Accounting Systems (A. Traditional Cost Accounting)
+). 1#ic# o( t#e (o""o5ing is t*pica""* %ega%'e' as a cost '%i!e% in t%a'itiona" accounting p%actices A. nu$e% o( pu%c#ase o%'e%s p%ocesse' C. nu$e% o( t%ansactions p%ocesse' B. nu$e% o( custo$e%s se%!e' D. nu$e% o( 'i%ect "ao% #ou%s 5o%2e'
)+. 6%o'uct costs can e 'isto%te' i( a unit,ase' cost '%i!e% is use' an' A. nonunit,ase' o!e%#ea' costs a%e a signi(icant p%opo%tion o( tota" o!e%#ea' B. t#e consu$ption %atios 'i((e% et5een unit,ase' an' nonunit,ase' input catego%ies C. ot# a an' D. neit#e% a no%
+. 1#ic# o( t#e (o""o5ing is not a t%ait o( a t%a'itiona" cost $anage$ent s*ste$ A. unit,ase' '%i!e%s C. (ocus on $anaging acti!ities B. a""ocating intensi!e D. na%%o5 an' %igi' p%o'uct costing +/. 1#ic# o( t#e (o""o5ing is not t*pica" o( t%a'itiona" costing s*ste$s A. Use o( a sing"e p%e'ete%$ine' o!e%#ea' %ate. B. Use o( 'i%ect "ao% #ou%s o% 'i%ect "ao% cost to assign o!e%#ea'. C. Assu$ption o( co%%e"ation et5een 'i%ect "ao% an incu%%ence o( o!e%#ea' cost. D. Use o( $u"tip"e cost '%i!e%s to a""ocate o!e%#ea'.
/<. 1#ic# o( t#e (o""o5ing ite$s is not a c#a%acte%istic o( a p%ocess cost s*ste$ A. Once p%o'uction egins& it continues unti" t#e (inis#e' p%o'uct e$e%ges B. T#e p%o'ucts p%o'uce' a%e #ete%ogeneous in natu%e C. T#e (ocus is on continua""* p%o'ucing #o$ogeneous p%o'ucts D. 1#en t#e (inis#e' p%o'uct e$e%ges& a"" units #a!e p%ecise"* t#e sa$e a$ount o( $ate%ia"s& "ao%& an' o!e%#ea'
O!e%#ea' a""ocation )0. Con!entiona" p%o'uct costing uses 5#ic# o( t#e (o""o5ing p%oce'u%es A. O!e%#ea' costs a%e t%ace' to 'epa%t$ents& t#en costs a%e t%ace' to p%o'ucts. B. O!e%#ea' costs a%e t%ace' to acti!ities& t#en costs a%e t%ace' to p%o'ucts. C. O!e%#ea' costs a%e t%ace' 'i%ect"* to p%o'uct. D. A"" o!e%#ea' costs a%e e8pense' as incu%%e'.
6%e'ete%$ine' o!e%#ea' %ate )?. T#e (o%$u"a (o% co$puting t#e p%e'ete%$ine' $anu(actu%ing o!e%#ea' %ate is esti$ate' annua" o!e%#ea' costs 'i!i'e' * an e8pecte' annua" ope%ating acti!it*& e8p%esse' as A. 'i%ect "ao% cost C. 'i%ect "ao% #ou%s B. $ac#ine #ou%s D. an* o( t#ese
)7. T#e o!e%#ea' %ates o( t#e t%a'itiona" app%oac# to p%o'uct costing use A. nonunit,ase' cost '%i!e%s C. unit,ase' cost '%i!e%s B. p%ocess costing D. =o,o%'e% costing
)9. T#e t5o $ain a'!antages o( using p%e'ete%$ine' (acto%* o!e%#ea' %ates a%e to p%o!i'e $o%e accu%ate unit cost in(o%$ation an' to: A. si$p"i(* t#e accounting p%ocess B. p%o!i'e cost in(o%$ation on a ti$e"* asis C. insu%e t%ans$ission o( co%%ect 'ata D. a'=ust (o% !a%iances in 'ata sou%ces
E((ect o( T%a'itiona" o!e%#ea' a""ocation ++. T#e use o( unit,ase' acti!it* '%i!e%s to assign costs ten's to A. o!e%cost "o5,!o"u$e p%o'ucts. C. o!e%cost a"" p%o'ucts. B. o!e%cost #ig#,!o"u$e p%o'ucts. D. un'e%cost a"" p%o'ucts.
)/. T#e e((ect o( uni(o%$ p%o'uction "e!e"s on p%o'uction cost pe% unit can e ac#ie!e' A. * using a (acto%* o!e%#ea' %ate ase' on 'i((e%ent p%o'uction "e!e"s (o% eac# *ea% B. * using a (acto%* o!e%#ea' %ate ase' on se""ing p%ice C. * c"osing t#e (acto%* o!e%#ea' at t#e en' o( t#e accounting pe%io' D. * using a (acto%* o!e%#ea' %ate ase' on "ong,%un no%$a" p%o'uction acti!it* "e!e"
)<. T%a'itiona" o!e%#ea' a""ocations %esu"t in 5#ic# o( t#e (o""o5ing situations A. O!e%#ea' costs a%e assigne' as pe%io' costs to $anu(actu%ing ope%ations. B. Hig#,!o"u$e p%o'ucts a%e assigne' too $uc# o!e%#ea'& an' "o5,!o"u$e p%o'ucts a%e assigne' too "itt"e o!e%#ea'. C. Lo5,!o"u$e p%o'ucts a%e assigne' too $uc#& an' #ig#,!o"u$e p%o'ucts a%e assigne' too "itt"e o!e%#ea'. D. T#e %esu"ting a""ocations cannot e use' (o% (inancia" %epo%ts.
);. No $atte% 5#ic# $et#o' is use'& un'e%app"ie' o% o!e%app"ie' o!e%#ea' usua""* is a'=uste' on"*:
229
Cost Accounting Systems (A. Traditional Cost Accounting)
Cost Accounting Systems (A. Traditional Cost Accounting)
+). 1#ic# o( t#e (o""o5ing is t*pica""* %ega%'e' as a cost '%i!e% in t%a'itiona" accounting p%actices A. nu$e% o( pu%c#ase o%'e%s p%ocesse' C. nu$e% o( t%ansactions p%ocesse' B. nu$e% o( custo$e%s se%!e' D. nu$e% o( 'i%ect "ao% #ou%s 5o%2e'
)+. 6%o'uct costs can e 'isto%te' i( a unit,ase' cost '%i!e% is use' an' A. nonunit,ase' o!e%#ea' costs a%e a signi(icant p%opo%tion o( tota" o!e%#ea' B. t#e consu$ption %atios 'i((e% et5een unit,ase' an' nonunit,ase' input catego%ies C. ot# a an' D. neit#e% a no%
+. 1#ic# o( t#e (o""o5ing is not a t%ait o( a t%a'itiona" cost $anage$ent s*ste$ A. unit,ase' '%i!e%s C. (ocus on $anaging acti!ities B. a""ocating intensi!e D. na%%o5 an' %igi' p%o'uct costing +/. 1#ic# o( t#e (o""o5ing is not t*pica" o( t%a'itiona" costing s*ste$s A. Use o( a sing"e p%e'ete%$ine' o!e%#ea' %ate. B. Use o( 'i%ect "ao% #ou%s o% 'i%ect "ao% cost to assign o!e%#ea'. C. Assu$ption o( co%%e"ation et5een 'i%ect "ao% an incu%%ence o( o!e%#ea' cost. D. Use o( $u"tip"e cost '%i!e%s to a""ocate o!e%#ea'.
/<. 1#ic# o( t#e (o""o5ing ite$s is not a c#a%acte%istic o( a p%ocess cost s*ste$ A. Once p%o'uction egins& it continues unti" t#e (inis#e' p%o'uct e$e%ges B. T#e p%o'ucts p%o'uce' a%e #ete%ogeneous in natu%e C. T#e (ocus is on continua""* p%o'ucing #o$ogeneous p%o'ucts D. 1#en t#e (inis#e' p%o'uct e$e%ges& a"" units #a!e p%ecise"* t#e sa$e a$ount o( $ate%ia"s& "ao%& an' o!e%#ea'
O!e%#ea' a""ocation )0. Con!entiona" p%o'uct costing uses 5#ic# o( t#e (o""o5ing p%oce'u%es A. O!e%#ea' costs a%e t%ace' to 'epa%t$ents& t#en costs a%e t%ace' to p%o'ucts. B. O!e%#ea' costs a%e t%ace' to acti!ities& t#en costs a%e t%ace' to p%o'ucts. C. O!e%#ea' costs a%e t%ace' 'i%ect"* to p%o'uct. D. A"" o!e%#ea' costs a%e e8pense' as incu%%e'.
6%e'ete%$ine' o!e%#ea' %ate )?. T#e (o%$u"a (o% co$puting t#e p%e'ete%$ine' $anu(actu%ing o!e%#ea' %ate is esti$ate' annua" o!e%#ea' costs 'i!i'e' * an e8pecte' annua" ope%ating acti!it*& e8p%esse' as A. 'i%ect "ao% cost C. 'i%ect "ao% #ou%s B. $ac#ine #ou%s D. an* o( t#ese
)7. T#e o!e%#ea' %ates o( t#e t%a'itiona" app%oac# to p%o'uct costing use A. nonunit,ase' cost '%i!e%s C. unit,ase' cost '%i!e%s B. p%ocess costing D. =o,o%'e% costing
)9. T#e t5o $ain a'!antages o( using p%e'ete%$ine' (acto%* o!e%#ea' %ates a%e to p%o!i'e $o%e accu%ate unit cost in(o%$ation an' to: A. si$p"i(* t#e accounting p%ocess B. p%o!i'e cost in(o%$ation on a ti$e"* asis C. insu%e t%ans$ission o( co%%ect 'ata D. a'=ust (o% !a%iances in 'ata sou%ces
E((ect o( T%a'itiona" o!e%#ea' a""ocation ++. T#e use o( unit,ase' acti!it* '%i!e%s to assign costs ten's to A. o!e%cost "o5,!o"u$e p%o'ucts. C. o!e%cost a"" p%o'ucts. B. o!e%cost #ig#,!o"u$e p%o'ucts. D. un'e%cost a"" p%o'ucts.
)/. T#e e((ect o( uni(o%$ p%o'uction "e!e"s on p%o'uction cost pe% unit can e ac#ie!e' A. * using a (acto%* o!e%#ea' %ate ase' on 'i((e%ent p%o'uction "e!e"s (o% eac# *ea% B. * using a (acto%* o!e%#ea' %ate ase' on se""ing p%ice C. * c"osing t#e (acto%* o!e%#ea' at t#e en' o( t#e accounting pe%io' D. * using a (acto%* o!e%#ea' %ate ase' on "ong,%un no%$a" p%o'uction acti!it* "e!e"
)<. T%a'itiona" o!e%#ea' a""ocations %esu"t in 5#ic# o( t#e (o""o5ing situations A. O!e%#ea' costs a%e assigne' as pe%io' costs to $anu(actu%ing ope%ations. B. Hig#,!o"u$e p%o'ucts a%e assigne' too $uc# o!e%#ea'& an' "o5,!o"u$e p%o'ucts a%e assigne' too "itt"e o!e%#ea'. C. Lo5,!o"u$e p%o'ucts a%e assigne' too $uc#& an' #ig#,!o"u$e p%o'ucts a%e assigne' too "itt"e o!e%#ea'. D. T#e %esu"ting a""ocations cannot e use' (o% (inancia" %epo%ts.
);. No $atte% 5#ic# $et#o' is use'& un'e%app"ie' o% o!e%app"ie' o!e%#ea' usua""* is a'=uste' on"*:
229
Cost Accounting Systems (A. Traditional Cost Accounting)
A. B. C. D.
at t#e en' o( a *ea%. $ont#"* 'u%ing t#e *ea% i( t#e 'i((e%ence e8cee's 6&<<< o% one pe%cent o( tota" o!e%#ea'. 5#en t#e co$pan*>s p%o(it p%o=ections %e4ui%e an a'=ust$ent
C. "a%ge !o"u$es o( p%o'uction occu% D. Bot# a an' a%e co%%ect.
+0. An acti!it* t#at #as a 'i%ect cause,e((ect %e"ations#ip 5it# t#e %esou%ces consu$e' is an A. cost '%i!e%. C. cost poo". B. o!e%#ea' %ate. D. p%o'uct acti!it*.
Actua" Costing /). Disa'!antages o( actua" costing inc"u'e A. actua" cost s*ste$s cannot p%o!i'e accu%ate unit cost in(o%$ation on a ti$e"* asis B. actua" cost s*ste$s p%o'uce unit costs t#at ("uctuate (%o$ pe%io' to pe%io' C. esti$ates $ust e use' 5#en ca"cu"ating t#e actua" o!e%#ea' %ate D. a an'
+9. T#e te%$ cost '%i!e% %e(e% to: A. an* acti!it* t#at can e use' to p%e'ict cost c#anges. B. t#e atte$pt to cont%o" e8pen'itu%es at a %easona"e "e!e". C. t#e pe%son 5#o gat#e%s an' t%ans(e%s cost 'ata to t#e $anage$ent accountant. D. an* acti!it* t#at causes costs to e incu%%e'.
No%$a" Costing /+. T#e p%incipa" 'i((icu"t* 5it# no%$a" costing is t#at A. t#e unit cost in(o%$ation is not %ecei!e' on a ti$e"* asis B. it can %esu"t in ("uctuating pe%,unit o!e%#ea' costs C. esti$ate' o!e%#ea' an' esti$ate' acti!it* a%e "i2e"* to 'i((e% (%o$ actua" o!e%#ea' an' actua" costs& %esu"ting in un'e%app"ie' o% o!e%app"ie' o!e%#ea' D. t#e%e is no 'i((icu"t* associate' 5it# using no%$a" costing
+7. Eac# g%oup o( o!e%#ea' costs s#ou"' e app"ie' ase' on A. 'i%ect "ao% #ou%s o% cost. B. units p%o'uce'. C. 5#ate!e% acti!it* '%i!es t#ose speci(ic o!e%#ea' costs. D. $ac#ine ti$e.
/7. No%$a" costing an' stan'a%' costing 'i((e% in t#at A. t#e t5o s*ste$s can s#o5 'i((e%ent o!e%#ea' u'get !a%iances. B. on"* no%$a" costing can e use' 5it# aso%ption costing. C. t#e t5o s*ste$s s#o5 'i((e%ent !o"u$e !a%iances i( stan'a%' #ou%s 'o not e4ua" actua" #ou%s. D. no%$a" costing is "ess app%op%iate (o% $u"tip%o'uct (i%$s.
). 1#ic# o( t#e (o""o5ing state$ents is t%ue A. T#e t%a'itiona" app%oac# to costing uses $an* 'i((e%ent cost '%i!e%s. B. Costs t#at a%e in'i%ect to p%o'ucts a%e * 'e(inition t%acea"e to 'i%ect"* to p%o'ucts. C. Costs t#at a%e in'i%ect to p%o'ucts a%e t%acea"e to so$e acti!it*. D. A"" o( t#e ao!e state$ents a%e t%ue. /. 1#* is it ette% to use sepa%ate o!e%#ea' %ates A. So$e 'epa%t$ents a%e "ao%,intensi!e& so$e a%e $ac#ine,intensi!e. B. Lao% %ates !a%* consi'e%a"* a$ong 'epa%t$ents. C. T#e %esu"ting o!e%#ea' %ates a%e a"" aout t#e sa$e. D. A"" =os %e4ui%e aout t#e sa$e pe%centage o( ti$e in a"" 'epa%t$ents.
Stan'a%' Costing +<. T#e p%o'uct cost 5#ic# is 'ete%$ine' in a con!entiona" stan'a%' cost accounting s*ste$ is aan A. oint cost. C. E8pecte' cost. B. @i8e' cost. D. Di%ect cost.
/0. I( co$pan* A #as a #ig#e% 'eg%ee o( ope%ating "e!e%age t#an co$pan* B& t#en: A. t#e co$pan* A #as #ig#e% !a%ia"e e8penses. B. t#e co$pan* A>s p%o(its a%e $o%e sensiti!e to pe%centage c#anges in sa"es. C. t#e co$pan* A is $o%e p%o(ita"e.
//. o"u$e,ase' p"ant,5i'e %ates p%o'uce inaccu%ate p%o'uct cost 5#en: A. a "a%ge s#a%e o( (acto%* o!e%#ea' cost is not !o"u$e,ase' B. (i%$s p%o'uce a 'i!e%se $i8 o( p%o'uct
230
Cost Accounting Systems (A. Traditional Cost Accounting)
Cost Accounting Systems (A. Traditional Cost Accounting)
A. B. C. D.
at t#e en' o( a *ea%. $ont#"* 'u%ing t#e *ea% i( t#e 'i((e%ence e8cee's 6&<<< o% one pe%cent o( tota" o!e%#ea'. 5#en t#e co$pan*>s p%o(it p%o=ections %e4ui%e an a'=ust$ent
C. "a%ge !o"u$es o( p%o'uction occu% D. Bot# a an' a%e co%%ect.
+0. An acti!it* t#at #as a 'i%ect cause,e((ect %e"ations#ip 5it# t#e %esou%ces consu$e' is an A. cost '%i!e%. C. cost poo". B. o!e%#ea' %ate. D. p%o'uct acti!it*.
Actua" Costing /). Disa'!antages o( actua" costing inc"u'e A. actua" cost s*ste$s cannot p%o!i'e accu%ate unit cost in(o%$ation on a ti$e"* asis B. actua" cost s*ste$s p%o'uce unit costs t#at ("uctuate (%o$ pe%io' to pe%io' C. esti$ates $ust e use' 5#en ca"cu"ating t#e actua" o!e%#ea' %ate D. a an'
+9. T#e te%$ cost '%i!e% %e(e% to: A. an* acti!it* t#at can e use' to p%e'ict cost c#anges. B. t#e atte$pt to cont%o" e8pen'itu%es at a %easona"e "e!e". C. t#e pe%son 5#o gat#e%s an' t%ans(e%s cost 'ata to t#e $anage$ent accountant. D. an* acti!it* t#at causes costs to e incu%%e'.
No%$a" Costing /+. T#e p%incipa" 'i((icu"t* 5it# no%$a" costing is t#at A. t#e unit cost in(o%$ation is not %ecei!e' on a ti$e"* asis B. it can %esu"t in ("uctuating pe%,unit o!e%#ea' costs C. esti$ate' o!e%#ea' an' esti$ate' acti!it* a%e "i2e"* to 'i((e% (%o$ actua" o!e%#ea' an' actua" costs& %esu"ting in un'e%app"ie' o% o!e%app"ie' o!e%#ea' D. t#e%e is no 'i((icu"t* associate' 5it# using no%$a" costing
+7. Eac# g%oup o( o!e%#ea' costs s#ou"' e app"ie' ase' on A. 'i%ect "ao% #ou%s o% cost. B. units p%o'uce'. C. 5#ate!e% acti!it* '%i!es t#ose speci(ic o!e%#ea' costs. D. $ac#ine ti$e.
/7. No%$a" costing an' stan'a%' costing 'i((e% in t#at A. t#e t5o s*ste$s can s#o5 'i((e%ent o!e%#ea' u'get !a%iances. B. on"* no%$a" costing can e use' 5it# aso%ption costing. C. t#e t5o s*ste$s s#o5 'i((e%ent !o"u$e !a%iances i( stan'a%' #ou%s 'o not e4ua" actua" #ou%s. D. no%$a" costing is "ess app%op%iate (o% $u"tip%o'uct (i%$s.
). 1#ic# o( t#e (o""o5ing state$ents is t%ue A. T#e t%a'itiona" app%oac# to costing uses $an* 'i((e%ent cost '%i!e%s. B. Costs t#at a%e in'i%ect to p%o'ucts a%e * 'e(inition t%acea"e to 'i%ect"* to p%o'ucts. C. Costs t#at a%e in'i%ect to p%o'ucts a%e t%acea"e to so$e acti!it*. D. A"" o( t#e ao!e state$ents a%e t%ue. /. 1#* is it ette% to use sepa%ate o!e%#ea' %ates A. So$e 'epa%t$ents a%e "ao%,intensi!e& so$e a%e $ac#ine,intensi!e. B. Lao% %ates !a%* consi'e%a"* a$ong 'epa%t$ents. C. T#e %esu"ting o!e%#ea' %ates a%e a"" aout t#e sa$e. D. A"" =os %e4ui%e aout t#e sa$e pe%centage o( ti$e in a"" 'epa%t$ents.
Stan'a%' Costing +<. T#e p%o'uct cost 5#ic# is 'ete%$ine' in a con!entiona" stan'a%' cost accounting s*ste$ is aan A. oint cost. C. E8pecte' cost. B. @i8e' cost. D. Di%ect cost.
/0. I( co$pan* A #as a #ig#e% 'eg%ee o( ope%ating "e!e%age t#an co$pan* B& t#en: A. t#e co$pan* A #as #ig#e% !a%ia"e e8penses. B. t#e co$pan* A>s p%o(its a%e $o%e sensiti!e to pe%centage c#anges in sa"es. C. t#e co$pan* A is $o%e p%o(ita"e.
//. o"u$e,ase' p"ant,5i'e %ates p%o'uce inaccu%ate p%o'uct cost 5#en: A. a "a%ge s#a%e o( (acto%* o!e%#ea' cost is not !o"u$e,ase' B. (i%$s p%o'uce a 'i!e%se $i8 o( p%o'uct
230
Cost Accounting Systems (A. Traditional Cost Accounting)
D. t#e co$pan* A is "ess %is2*.
.
Di%ect $ate%ia"s an' 'i%ect "ao% costs tota" 6+<&<<<& con!e%sion costs tota" 6<<&<<<& an' (acto%* o!e%#ea' costs tota" 6/<< pe% $ac#ine #ou%. I( 0< $ac#ine #ou%s 5e%e use' (o% o F+<& 5#at is t#e tota" $anu(actu%ing cost (o% o F+< A. +<&<<< C. ;<& <<< B. 7<&<<< D. +;<&<<<
Bu'gete' o!e%#ea' + . Mac#ine #ou%s use' to set t#e p%e'ete%$ine' o!e%#ea' %ate 5e%e +0&<<<& actua" #ou%s 5e%e +/&<<<& an' o!e%#ea' app"ie' 5as 67<&<<<. Bu'gete' o!e%#ea' (o% t#e *ea% 5as A. 609&7<<. C. 67<&<<<. B. 60?&<<<. D. 67+&0<<. O!e%#ea' pe% unit ) . ABC Co$pan* #a' a tota" o!e%#ea' o( 6)7<&<<< an' se""ing an' a'$inist%ati!e e8pense o( 6/<&<<< (o% t#e *ea%. &<<< units o( A an' )&<<< units o( B 5e%e p%o'uce'. A %e4ui%es ) $ac#ine #ou%s an' B %e4ui%es one $ac#ine #ou% pe% unit. 1#at is o!e%#ea' c#a%gea"e pe% unit o( A A. 6 7< C. 6+< B. 6 ?< D. 6;< /
ABC Co$pan* #a' a tota" o!e%#ea' o( 6)7<&<<< an' se""ing an' a'$inist%ation e8pense o( 6/<&<<< (o% t#e *ea%. &<<< units o( A an' )&<<< units o( B 5e%e p%o'uce'. A %e4ui%es ) an' B %e4ui%es one $ac#ine #ou%s pe% unit. A %e4ui%es 7 'i%ect "ao% #ou%s an' B %e4ui%es / 'i%ect "ao% #ou%s pe% unit. /< o( o!e%#ea' is %e"ate' to "ao% an' t#e a"ance to $ac#ines. Lao%, %e"ate' o!e%#ea' pe% #ou% a$ounts to A. 6 ; C. 6; B. 6+ D. 6+/
0
ABC Co$pan* #a' a tota" o!e%#ea' o( 6)7<&<<< an' se""ing an' a'$inist%ation e8pense o( 6/<&<<< (o% t#e *ea%. &<<< units o( A an' )&<<< units o( B 5e%e p%o'uce'. A %e4ui%es ) an' B %e4ui%es one $ac#ine #ou%s pe% unit. A %e4ui%es 7 'i%ect "ao% #ou%s an' B %e4ui%es / 'i%ect "ao% #ou%s pe% unit. /< o( o!e%#ea' is %e"ate' to "ao% an' t#e a"ance to $ac#ines. T#e o!e%#ea' pe% unit o( B a$ounts to A. 6 7< C. 607
.
.
231
Cost Accounting Systems (A. Traditional Cost Accounting)
Cost Accounting Systems (A. Traditional Cost Accounting)
D. t#e co$pan* A is "ess %is2*.
.
Di%ect $ate%ia"s an' 'i%ect "ao% costs tota" 6+<&<<<& con!e%sion costs tota" 6<<&<<<& an' (acto%* o!e%#ea' costs tota" 6/<< pe% $ac#ine #ou%. I( 0< $ac#ine #ou%s 5e%e use' (o% o F+<& 5#at is t#e tota" $anu(actu%ing cost (o% o F+< A. +<&<<< C. ;<& <<< B. 7<&<<< D. +;<&<<<
Bu'gete' o!e%#ea' + . Mac#ine #ou%s use' to set t#e p%e'ete%$ine' o!e%#ea' %ate 5e%e +0&<<<& actua" #ou%s 5e%e +/&<<<& an' o!e%#ea' app"ie' 5as 67<&<<<. Bu'gete' o!e%#ea' (o% t#e *ea% 5as A. 609&7<<. C. 67<&<<<. B. 60?&<<<. D. 67+&0<<. O!e%#ea' pe% unit ) . ABC Co$pan* #a' a tota" o!e%#ea' o( 6)7<&<<< an' se""ing an' a'$inist%ati!e e8pense o( 6/<&<<< (o% t#e *ea%. &<<< units o( A an' )&<<< units o( B 5e%e p%o'uce'. A %e4ui%es ) $ac#ine #ou%s an' B %e4ui%es one $ac#ine #ou% pe% unit. 1#at is o!e%#ea' c#a%gea"e pe% unit o( A A. 6 7< C. 6+< B. 6 ?< D. 6;< /
ABC Co$pan* #a' a tota" o!e%#ea' o( 6)7<&<<< an' se""ing an' a'$inist%ation e8pense o( 6/<&<<< (o% t#e *ea%. &<<< units o( A an' )&<<< units o( B 5e%e p%o'uce'. A %e4ui%es ) an' B %e4ui%es one $ac#ine #ou%s pe% unit. A %e4ui%es 7 'i%ect "ao% #ou%s an' B %e4ui%es / 'i%ect "ao% #ou%s pe% unit. /< o( o!e%#ea' is %e"ate' to "ao% an' t#e a"ance to $ac#ines. Lao%, %e"ate' o!e%#ea' pe% #ou% a$ounts to A. 6 ; C. 6; B. 6+ D. 6+/
0
ABC Co$pan* #a' a tota" o!e%#ea' o( 6)7<&<<< an' se""ing an' a'$inist%ation e8pense o( 6/<&<<< (o% t#e *ea%. &<<< units o( A an' )&<<< units o( B 5e%e p%o'uce'. A %e4ui%es ) an' B %e4ui%es one $ac#ine #ou%s pe% unit. A %e4ui%es 7 'i%ect "ao% #ou%s an' B %e4ui%es / 'i%ect "ao% #ou%s pe% unit. /< o( o!e%#ea' is %e"ate' to "ao% an' t#e a"ance to $ac#ines. T#e o!e%#ea' pe% unit o( B a$ounts to A. 6 7< C. 607
.
.
231
Cost Accounting Systems (A. Traditional Cost Accounting)
B. 6 7;
D. 6;<
7
ABC Co$pan* #a' a tota" o!e%#ea' o( 6)7<&<<< an' se""ing an' a'$inist%ation e8pense o( 6/<&<<< (o% t#e *ea%. &<<< units o( A an' )&<<< units o( B 5e%e p%o'uce'. Assu$ing t#at +< o( a"" o!e%#ea' a%e atc#,%e"ate' (o% &<<< atc#es& /< o( 5#ic# 5as (o% p%o'ucing p%o'uct A& atc#,%e"ate' o!e%#ea' (o% p%o'uct A pe% unit a$ounts to A. 6+< C. 67< B. 6/< D. 6;<
9
ABC Co$pan* #a' a tota" o!e%#ea' o( 6)7<&<<< an' se""ing an' a'$inist%ation e8pense o( 6/<&<<< (o% t#e *ea%. &<<< units o( A an' )&<<< units o( B 5e%e p%o'uce'. Assu$ing t#at )< o( o!e%#ea' is p%o'uct %e"ate' o!e%#ea' , +< o( 5#ic# is %e"ate' to p%o'uct A& p%o'uct, %e"ate' o!e%#ea' pe% unit o( A a$ounts to A. 6)< C. 60< B. 6/< D. 67<
.
.
Se""ing p%ice pe% unit 6< 6< Di%ect $ate%ia"s an' 'i%ect "ao% pe% unit 6 0 6 0 T#e co$pan* assu$es t#at t#e "ong,%un p%o'uction "e!e" is +<&<<< 'i%ect "ao% #ou%s pe% *ea%. T#e actua" (acto%* o!e%#ea' cost (o% t#e en' o( +<<7 an' +<<9 5as 67<&<<<. Assu$e t#at it ta2es one 'i%ect "ao% #ou% to $a2e one (inis#e' unit. 1#en t#e annua" esti$ate' (acto%* o!e%#ea' %ate is use'& t#e g%oss p%o(its (o% +<<7 an' +<<9& %especti!e"*& a%e A. 6 90&<<< an' 6 90&<<< C. 6+0&<<< an' 6+0&<<< B. 6 90&<<< an' 6 00&<<< D. 6 90&<<< an' 6 0<&<<<
1o%2 in p%ocess . B%itne* Co$pan* #as unit costs o( 6< (o% $ate%ia"s an' 6)< (o% con!e%sion costs. I( t#e%e a%e +&0<< units in en'ing 5o%2 in p%ocess& /< co$p"ete as to con!e%sion costs& an' (u""* co$p"ete as to $ate%ia"s cost& t#e tota" cost assigna"e to t#e en'ing 5o%2 in p%ocess in!ento%* is A. 6 /0&<<< C. 6 90&<<< B . 6 0 0& <<< D. 6<<&<<<
Tota" o!e%#ea' !a%iance ; . Coo2e Co$pan* uses t#e e4uatio n 6/0<&<<< 6.0< pe% 'i%ect "ao% #ou% to u'get $anu(actu%ing o!e%#ea'. Coo2e #as u'gete' 0<&<<< 'i%ect "ao% #ou%s (o% t#e *ea%. Actua" %esu"ts 5e%e 07&<<< 'i%ect "ao% #ou%s an' 67?9&0<< tota" $anu(actu%ing o!e%#ea'. T#e tota" o!e%#ea' !a%iance (o% t#e *ea% is A. 6/&0<< (a!o%a"e. C. 6/&0<< un(a!o%a"e. B. 6;&<<< (a!o%a"e. D. 6;&<<< un(a!o%a"e.
O!e%#ea' co$ponent + . In t#e Sta% Co$pan*& t#e p%e'ete%$ine' o!e%#ea' %ate is ;< o( 'i%ect "ao% cost. Du%ing t#e $ont#& 6+<&<<< o( (acto%* "ao% costs a%e incu%%e'& o( 5#ic# 6;<&<<< is 'i%ect "ao% an' 6)<&<<< is in'i%ect "ao%. Actua" o!e%#ea' incu%%e' 5as 6+<<&<<<. T#e a$ount o( o!e%#ea' 'eite' to 1o%2 in 6%ocess In!ento%* s#ou"' e A. 6+<&<<< C. 67;&<<< B. 6//&<<< D. 67<&<<<
O!e%un'e%,app"ie' o!e%#ea' ? . I( esti$ate' annua" (acto%* o!e%#ea' is 6;<<&<<<& esti$ate' annua" 'i%ect "ao% #ou%s a%e /<<&<<<& actua" une (acto%* o!e%#ea' is 6;+&<<<& an' actua" une 'i%ect "ao% #ou%s a%e );&<<<& t#en o!e%#ea' is: A. 67&<<< o!e%app"ie' C. 6&;<< un'e%app"ie' B. 6&;<< o!e%app"ie' D. 67&<<< un'e%app"ie'
E4ui!a"ent unit o( p%o'uction ) . T#e Asse$"ing Depa%t$ent3s output 'u%ing t#e pe%io' consists o( +<&<<< units co$p"ete' an' t%ans(e%%e' out& an' 0&<<< units in en'ing 5o%2 in p%ocess 7< co$p"ete as to $ate%ia"s an' con!e%sion costs. Beginning in!ento%* is &<<< units& /< co$p"ete as to $ate%ia"s an' con!e%sion costs. T#e e4ui!a"ent units o( p%o'uction a%e A. ++&7<< C. +/&<<< B. +)& <<< D. + 0& <<<
<
. BY Co$pan* p%e'icte' t#at (acto%* o!e%#ea' (o% +<<7 an' +<<9 5ou"' e 67<&<<< (o% eac# *ea%. T#e p%e'icte' an' actua" acti!it* (o% +<<7 an' +<<9 5e%e )<&<<< an' +<&<<< 'i%ect "ao% #ou%s& %especti!e"*. +<<7 +<<9 Sa"es in units +0&<<< +0&<<<
/
. T#e A$o% Co$pan* #as +&<<< units in eginning 5o%2 in p%ocess& +< co$p"ete as to con!e%sion costs& +)&<<< units t%ans(e%%e' out to (inis#e' goo's& an' )&<<< units in en'ing
232
Cost Accounting Systems (A. Traditional Cost Accounting)
Cost Accounting Systems (A. Traditional Cost Accounting)
B. 6 7;
D. 6;<
7
ABC Co$pan* #a' a tota" o!e%#ea' o( 6)7<&<<< an' se""ing an' a'$inist%ation e8pense o( 6/<&<<< (o% t#e *ea%. &<<< units o( A an' )&<<< units o( B 5e%e p%o'uce'. Assu$ing t#at +< o( a"" o!e%#ea' a%e atc#,%e"ate' (o% &<<< atc#es& /< o( 5#ic# 5as (o% p%o'ucing p%o'uct A& atc#,%e"ate' o!e%#ea' (o% p%o'uct A pe% unit a$ounts to A. 6+< C. 67< B. 6/< D. 6;<
9
ABC Co$pan* #a' a tota" o!e%#ea' o( 6)7<&<<< an' se""ing an' a'$inist%ation e8pense o( 6/<&<<< (o% t#e *ea%. &<<< units o( A an' )&<<< units o( B 5e%e p%o'uce'. Assu$ing t#at )< o( o!e%#ea' is p%o'uct %e"ate' o!e%#ea' , +< o( 5#ic# is %e"ate' to p%o'uct A& p%o'uct, %e"ate' o!e%#ea' pe% unit o( A a$ounts to A. 6)< C. 60< B. 6/< D. 67<
.
.
Se""ing p%ice pe% unit 6< 6< Di%ect $ate%ia"s an' 'i%ect "ao% pe% unit 6 0 6 0 T#e co$pan* assu$es t#at t#e "ong,%un p%o'uction "e!e" is +<&<<< 'i%ect "ao% #ou%s pe% *ea%. T#e actua" (acto%* o!e%#ea' cost (o% t#e en' o( +<<7 an' +<<9 5as 67<&<<<. Assu$e t#at it ta2es one 'i%ect "ao% #ou% to $a2e one (inis#e' unit. 1#en t#e annua" esti$ate' (acto%* o!e%#ea' %ate is use'& t#e g%oss p%o(its (o% +<<7 an' +<<9& %especti!e"*& a%e A. 6 90&<<< an' 6 90&<<< C. 6+0&<<< an' 6+0&<<< B. 6 90&<<< an' 6 00&<<< D. 6 90&<<< an' 6 0<&<<<
1o%2 in p%ocess . B%itne* Co$pan* #as unit costs o( 6< (o% $ate%ia"s an' 6)< (o% con!e%sion costs. I( t#e%e a%e +&0<< units in en'ing 5o%2 in p%ocess& /< co$p"ete as to con!e%sion costs& an' (u""* co$p"ete as to $ate%ia"s cost& t#e tota" cost assigna"e to t#e en'ing 5o%2 in p%ocess in!ento%* is A. 6 /0&<<< C. 6 90&<<< B . 6 0 0& <<< D. 6<<&<<<
Tota" o!e%#ea' !a%iance ; . Coo2e Co$pan* uses t#e e4uatio n 6/0<&<<< 6.0< pe% 'i%ect "ao% #ou% to u'get $anu(actu%ing o!e%#ea'. Coo2e #as u'gete' 0<&<<< 'i%ect "ao% #ou%s (o% t#e *ea%. Actua" %esu"ts 5e%e 07&<<< 'i%ect "ao% #ou%s an' 67?9&0<< tota" $anu(actu%ing o!e%#ea'. T#e tota" o!e%#ea' !a%iance (o% t#e *ea% is A. 6/&0<< (a!o%a"e. C. 6/&0<< un(a!o%a"e. B. 6;&<<< (a!o%a"e. D. 6;&<<< un(a!o%a"e.
O!e%#ea' co$ponent + . In t#e Sta% Co$pan*& t#e p%e'ete%$ine' o!e%#ea' %ate is ;< o( 'i%ect "ao% cost. Du%ing t#e $ont#& 6+<&<<< o( (acto%* "ao% costs a%e incu%%e'& o( 5#ic# 6;<&<<< is 'i%ect "ao% an' 6)<&<<< is in'i%ect "ao%. Actua" o!e%#ea' incu%%e' 5as 6+<<&<<<. T#e a$ount o( o!e%#ea' 'eite' to 1o%2 in 6%ocess In!ento%* s#ou"' e A. 6+<&<<< C. 67;&<<< B. 6//&<<< D. 67<&<<<
O!e%un'e%,app"ie' o!e%#ea' ? . I( esti$ate' annua" (acto%* o!e%#ea' is 6;<<&<<<& esti$ate' annua" 'i%ect "ao% #ou%s a%e /<<&<<<& actua" une (acto%* o!e%#ea' is 6;+&<<<& an' actua" une 'i%ect "ao% #ou%s a%e );&<<<& t#en o!e%#ea' is: A. 67&<<< o!e%app"ie' C. 6&;<< un'e%app"ie' B. 6&;<< o!e%app"ie' D. 67&<<< un'e%app"ie'
E4ui!a"ent unit o( p%o'uction ) . T#e Asse$"ing Depa%t$ent3s output 'u%ing t#e pe%io' consists o( +<&<<< units co$p"ete' an' t%ans(e%%e' out& an' 0&<<< units in en'ing 5o%2 in p%ocess 7< co$p"ete as to $ate%ia"s an' con!e%sion costs. Beginning in!ento%* is &<<< units& /< co$p"ete as to $ate%ia"s an' con!e%sion costs. T#e e4ui!a"ent units o( p%o'uction a%e A. ++&7<< C. +/&<<< B. +)& <<< D. + 0& <<<
<
. BY Co$pan* p%e'icte' t#at (acto%* o!e%#ea' (o% +<<7 an' +<<9 5ou"' e 67<&<<< (o% eac# *ea%. T#e p%e'icte' an' actua" acti!it* (o% +<<7 an' +<<9 5e%e )<&<<< an' +<&<<< 'i%ect "ao% #ou%s& %especti!e"*. +<<7 +<<9 Sa"es in units +0&<<< +0&<<<
/
. T#e A$o% Co$pan* #as +&<<< units in eginning 5o%2 in p%ocess& +< co$p"ete as to con!e%sion costs& +)&<<< units t%ans(e%%e' out to (inis#e' goo's& an' )&<<< units in en'ing
232
Cost Accounting Systems (A. Traditional Cost Accounting)
5o%2 in p%ocess one,t#i%' co$p"ete as to con!e%sion costs. T#e eginning an' en'ing in!ento%* is (u""* co$p"ete as to $ate%ia"s costs. E4ui!a"ent units (o% $ate%ia"s an' con!e%sion costs a%e A. ++&<<< an' +/&<<< C. +/&<<< an' +7&<<< B. +7&<<< an' +/&<<< D. +7&<<< an' +7&<<<
$ate%ia"s an' con!e%sion costs 1o%2 in p%ocess& Ap%i" )<& +<<)& )< co$p"ete' as to $ate%ia"s an' con!e%sion costs E4ui!a"ent units o( p%o'uction (o% Ap%i" +<<) Units sta%te' an' co$p"ete' in Ap%i" Ho5 $an* units 5e%e in t#e eginning 5o%2,in,p%ocess A. 7&;<< C. 9& <<< B. &))) D. +/&<<<
0
. Dodge Company has a mixing department and a refining department. Its process-costing system in the mixing department has two direct materials cost categories (material J and material P) and one conversion costs pool. The company ses !irst-in" !irst ot cost flow method. The following data pertain to the mixing department for #ovem$er %&&' Units 1o%2 in p%ocess& No!e$e% : 0< pe%cent co$p"ete' 0&<<< 1o%2 in p%ocess& No!e$e% )<& 9< pe%cent co$p"ete' +0&<<< Units sta%te' 7<&<<< Co$p"ete' an' t%ans(e%%e' 0<&<<< Costs 1o%2,in,p%ocess& No!e$e% 6+;&<<< Mate%ia" 9+<&<<< Mate%ia" 6 90<&<<< Con!e%sion Costs )<<&<<< Mate%ia" is int%o'uce' at t#e sta%t o( ope%ations in t#e Mi8ing 'epa%t$ent& an' Mate%ia" 6 is a''e' 5#en t#e p%o'uct is t#%ee,(ou%t#s co$p"ete' in t#e $i8ing 'epa%t$ent. Con!e%sion costs a%e a''e' uni(o%$"* 'u%ing t#e p%ocess. T#e %especti!e e4ui!a"ent units (o% Mate%ia" an' Mate%ia" 6 in t#e $i8ing 'epa%t$ent (o% No!e$e% +<<7& a%e A. Bot# 0<&<<< units C. 90&<<< units an' 7<&<<< units B. 7<&<<< units an' 0<&<<< units D. 7<&<<< units an' 90&<<< units
. Ha' t#e co$pan* use' t#e 5eig#te',a!e%age $et#o' o( accounting (o% its p%o'uction& t#e e4ui!a"ent units s#ou"' e A. 9/&+<< C. ; & <<< B. 09&+<< D. 0)&;<<
Units to e accounte' (o% ? . In t#e Ne5$an Co$pan*& t#e%e a%e -e%o units in eginning 5o%2 in p%ocess& 9&<<< units sta%te' into p%o'uction& an' 0<< units in en'ing 5o%2 in p%ocess +< co$p"ete'. T#e p#*sica" units to e accounte' (o% a%e A. 9&<<< C. 9&7<< B. 9&)7< D. 9&)/< Cost o( @inis#e' Goo's T%ans(e%%e' +< . @o% t#e $ont# o( Ma*& t#e 6%o'uction Cont%o" Depa%t$ent o( La Mesa& Inc. %epo%te' t#e (o""o5ing p%o'uction 'ata (o% @inis#ing Depa%t$ent secon' 'epa%t$ent: T%ans(e%%e',in (%o$ Asse$"* Depa%t$ent 90&<<< T%ans(e%%e',out to 6ac2aging Depa%t$ent 0?&+0< In,p%ocess en' o( Ma* 5it# J) "ao% an' (acto%* o!e%#ea' 0&90< A"" $ate%ia"s 5e%e put into p%ocess in Asse$"* Depa%t$ent. T#e Cost Accounting Depa%t$ent co""ecte' t#ese (igu%es (o% @inis#ing Depa%t$ent. Uni t cost ( o% u ni t t %an s( e% %e ', in ( %o$ Asse$ " * D epa %t $en t 6 + 9< Lao% cost in @inis#ing Depa%t$ent /&+;<.<< App"ie' (acto%* o!e%#ea' +.0 o( "ao% cost Ho5 $uc# 5as t#e cost o( @inis#e' goo's t%ans(e%%e' out to t#e 6ac2aging Depa%t$ent A& 6+/<&000 C. 6+7<&0;< B. 6 ;<&0;< D. 60?&?90
. T#e cost o( goo's co$p"ete' an' t%ans(e%%e' out to t#e Re(ining 'epa%t$ent 5as A. 6&?)<&90< C. 6&7<<&0<< B. 6&)0<&<<< D. 6&00<&0<< .
+/&<<< units 7/&<<< 0<&<<<
;
7
9
units
The mor Companys acconting records reflected the following data for pril %&&*. The company acconts its prodction sing !irst-in" !irst-ot cost flow method+
Co$p%e#ensi!e
1o%2 in p%ocess& Ma%c# )&+<<)& 7< co$p"ete' as to 233
Cost Accounting Systems (A. Traditional Cost Accounting)
Cost Accounting Systems (A. Traditional Cost Accounting)
5o%2 in p%ocess one,t#i%' co$p"ete as to con!e%sion costs. T#e eginning an' en'ing in!ento%* is (u""* co$p"ete as to $ate%ia"s costs. E4ui!a"ent units (o% $ate%ia"s an' con!e%sion costs a%e A. ++&<<< an' +/&<<< C. +/&<<< an' +7&<<< B. +7&<<< an' +/&<<< D. +7&<<< an' +7&<<<
$ate%ia"s an' con!e%sion costs 1o%2 in p%ocess& Ap%i" )<& +<<)& )< co$p"ete' as to $ate%ia"s an' con!e%sion costs E4ui!a"ent units o( p%o'uction (o% Ap%i" +<<) Units sta%te' an' co$p"ete' in Ap%i" Ho5 $an* units 5e%e in t#e eginning 5o%2,in,p%ocess A. 7&;<< C. 9& <<< B. &))) D. +/&<<<
0
. Dodge Company has a mixing department and a refining department. Its process-costing system in the mixing department has two direct materials cost categories (material J and material P) and one conversion costs pool. The company ses !irst-in" !irst ot cost flow method. The following data pertain to the mixing department for #ovem$er %&&' Units 1o%2 in p%ocess& No!e$e% : 0< pe%cent co$p"ete' 0&<<< 1o%2 in p%ocess& No!e$e% )<& 9< pe%cent co$p"ete' +0&<<< Units sta%te' 7<&<<< Co$p"ete' an' t%ans(e%%e' 0<&<<< Costs 1o%2,in,p%ocess& No!e$e% 6+;&<<< Mate%ia" 9+<&<<< Mate%ia" 6 90<&<<< Con!e%sion Costs )<<&<<< Mate%ia" is int%o'uce' at t#e sta%t o( ope%ations in t#e Mi8ing 'epa%t$ent& an' Mate%ia" 6 is a''e' 5#en t#e p%o'uct is t#%ee,(ou%t#s co$p"ete' in t#e $i8ing 'epa%t$ent. Con!e%sion costs a%e a''e' uni(o%$"* 'u%ing t#e p%ocess. T#e %especti!e e4ui!a"ent units (o% Mate%ia" an' Mate%ia" 6 in t#e $i8ing 'epa%t$ent (o% No!e$e% +<<7& a%e A. Bot# 0<&<<< units C. 90&<<< units an' 7<&<<< units B. 7<&<<< units an' 0<&<<< units D. 7<&<<< units an' 90&<<< units
. Ha' t#e co$pan* use' t#e 5eig#te',a!e%age $et#o' o( accounting (o% its p%o'uction& t#e e4ui!a"ent units s#ou"' e A. 9/&+<< C. ; & <<< B. 09&+<< D. 0)&;<<
Units to e accounte' (o% ? . In t#e Ne5$an Co$pan*& t#e%e a%e -e%o units in eginning 5o%2 in p%ocess& 9&<<< units sta%te' into p%o'uction& an' 0<< units in en'ing 5o%2 in p%ocess +< co$p"ete'. T#e p#*sica" units to e accounte' (o% a%e A. 9&<<< C. 9&7<< B. 9&)7< D. 9&)/< Cost o( @inis#e' Goo's T%ans(e%%e' +< . @o% t#e $ont# o( Ma*& t#e 6%o'uction Cont%o" Depa%t$ent o( La Mesa& Inc. %epo%te' t#e (o""o5ing p%o'uction 'ata (o% @inis#ing Depa%t$ent secon' 'epa%t$ent: T%ans(e%%e',in (%o$ Asse$"* Depa%t$ent 90&<<< T%ans(e%%e',out to 6ac2aging Depa%t$ent 0?&+0< In,p%ocess en' o( Ma* 5it# J) "ao% an' (acto%* o!e%#ea' 0&90< A"" $ate%ia"s 5e%e put into p%ocess in Asse$"* Depa%t$ent. T#e Cost Accounting Depa%t$ent co""ecte' t#ese (igu%es (o% @inis#ing Depa%t$ent. Uni t cost ( o% u ni t t %an s( e% %e ', in ( %o$ Asse$ " * D epa %t $en t 6 + 9< Lao% cost in @inis#ing Depa%t$ent /&+;<.<< App"ie' (acto%* o!e%#ea' +.0 o( "ao% cost Ho5 $uc# 5as t#e cost o( @inis#e' goo's t%ans(e%%e' out to t#e 6ac2aging Depa%t$ent A& 6+/<&000 C. 6+7<&0;< B. 6 ;<&0;< D. 60?&?90
. T#e cost o( goo's co$p"ete' an' t%ans(e%%e' out to t#e Re(ining 'epa%t$ent 5as A. 6&?)<&90< C. 6&7<<&0<< B. 6&)0<&<<< D. 6&00<&0<< .
+/&<<< units 7/&<<< 0<&<<<
;
7
9
units
The mor Companys acconting records reflected the following data for pril %&&*. The company acconts its prodction sing !irst-in" !irst-ot cost flow method+
Co$p%e#ensi!e
1o%2 in p%ocess& Ma%c# )&+<<)& 7< co$p"ete' as to 233
Cost Accounting Systems (A. Traditional Cost Accounting)
Use t#e (o""o5ing 'ata to ans5e% 4uestion Nos. ; t#%oug# +<. Me%g* Co$pan* uses p%ocess costing in accounting (o% its p%o'uction 'epa%t$ent& 5#ic# uses t5o %a5 $ate%ia"s. Mate%ia" A"p#a is p"ace' at t#e eginning o( t#e p%ocess. Inspection is at t#e ;0 co$p"etion stage. Mate%ia" B%a!o is t#en a''e' to t#e goo' units. No%$a" spoi"age units a$ount to 0 o( goo' output. T#e co$pan* %eco%'s contain t#e (o""o5ing in(o%$ation (o% Ap%i": Sta%te' 'u%ing t#e pe%io' Mate%ia" A"p#a Mate%ia" Beta Di%ect "ao% cost @acto%* o!e%#ea' T%ans(e%%e' to (inis#e' goo's 1o%2 in p%ocess ?0 co$p"ete& Ap%i" )<
A. 60.<< B. 67.<<
C. 60. /0 D. 60.)0
+0
. Lapi' Co$pan* uses p%ocess costing. A"" $ate%ia"s a%e a''e' at t#e eginning o( t#e p%ocess. T#e p%o'uct is inspecte' 5#en it is ?< pe%cent con!e%te'& an' spoi"age is i'enti(ie' on"* at t#at point. No%$a" spoi"age is e8pecte' to e 0 o( goo' output. T#e (o""o5ing a%e e8t%acte' (%o$ t#e p%o'uction %eco%'s o( Lapi' Co$pan* (o% Ma* +<<): Units put into p%ocess +&<<< Units t%ans(e%%e' to (inis#e' goo's /&<<< In,p%ocess& Ma* )& 90 co$p"ete 7&<<< Ho5 $an* a%e consi'e%e' ano%$a" "ost units A. e%o C. 0 B. )<< D. ;0<
+<&<<< units 6+7&;<< 6++&0<< 690&7< 6?)&?0< /&<<< /&<<<
+
. Ho5 $uc# 5e%e Mate%ia" cost pe% e4ui!a"ent unit (o% A"p#a an' Beta& %especti!e"* A. 6./
Use t#e (o""o5ing in(o%$ation t#at pe%tains to eta $anu(actu%ing co$pan* to ans5e% 4uestions + t#%oug# +):
++
. T#e e4ui!a"ent units o( p%o'uction (o% Mate%ia" A"p#a an' Beta a%e A"p#a Beta A. ;&<<< /&<<< B. ;&<<< ;&<<< C. +<&<<< ;&<<< D. +<&<<< /&<<<
Beginning 'i%ect $ate%ia"s in!ento%* Beginning 1I6 in!ento%* Beginning (inis#e' goo's in!ento%* En'ing 'i%ect $ate%ia"s in!ento%* En'ing 1I6 in!ento%* En'ing (inis#e' goo's in!ento%* 6u%c#ases Di%ect "ao% @acto%* o!e%#ea'
+)
. T#e nu$e% o( no%$a" an' ano%$a" "ost units a%e: No%$a" Ano%$a" A. 9<< &/<< B. &/<< 9<< C. ?<< &<< D. &<< ?<<
6 +<&<<< +<&<<< /<&<<< <&<<< <<&<<< 0<&<<< /<&<<< 7<&<<< +<<&<<<
+7
. 1#at is t#e a$ount o( 'i%ect $ate%ia"s use' 'u%ing t#e pe%io' A. 6/<&<<< C. 6 7<&<<< B. 6)<&<<< D. 60<&<<<
+9
Unit $ate%ia" cost +/ . Cat%i'ge Co$pan* #as no eginning 5o%2 in p%ocessK ?&<<< units a%e t%ans(e%%e' out an' )&<<< units in en'ing 5o%2 in p%ocess a%e one,t#i%' (inis#e' as to con!e%sion costs an' (u""* co$p"ete as to $ate%ia"s cost. I( tota" $ate%ia"s cost is 67<&<<<& t#e unit $ate%ia"s cost is
. 1#at is t#e a$ount o( cost o( goo's $anu(actu%e' 'u%ing t#e pe%io' A. 6/)<&<<< C. 6/9<&<<< B. 6/+<&<<< D. 6 0<&<<<
234
Cost Accounting Systems (A. Traditional Cost Accounting)
Cost Accounting Systems (A. Traditional Cost Accounting)
Use t#e (o""o5ing 'ata to ans5e% 4uestion Nos. ; t#%oug# +<. Me%g* Co$pan* uses p%ocess costing in accounting (o% its p%o'uction 'epa%t$ent& 5#ic# uses t5o %a5 $ate%ia"s. Mate%ia" A"p#a is p"ace' at t#e eginning o( t#e p%ocess. Inspection is at t#e ;0 co$p"etion stage. Mate%ia" B%a!o is t#en a''e' to t#e goo' units. No%$a" spoi"age units a$ount to 0 o( goo' output. T#e co$pan* %eco%'s contain t#e (o""o5ing in(o%$ation (o% Ap%i": Sta%te' 'u%ing t#e pe%io' Mate%ia" A"p#a Mate%ia" Beta Di%ect "ao% cost @acto%* o!e%#ea' T%ans(e%%e' to (inis#e' goo's 1o%2 in p%ocess ?0 co$p"ete& Ap%i" )<
A. 60.<< B. 67.<<
C. 60. /0 D. 60.)0
+0
. Lapi' Co$pan* uses p%ocess costing. A"" $ate%ia"s a%e a''e' at t#e eginning o( t#e p%ocess. T#e p%o'uct is inspecte' 5#en it is ?< pe%cent con!e%te'& an' spoi"age is i'enti(ie' on"* at t#at point. No%$a" spoi"age is e8pecte' to e 0 o( goo' output. T#e (o""o5ing a%e e8t%acte' (%o$ t#e p%o'uction %eco%'s o( Lapi' Co$pan* (o% Ma* +<<): Units put into p%ocess +&<<< Units t%ans(e%%e' to (inis#e' goo's /&<<< In,p%ocess& Ma* )& 90 co$p"ete 7&<<< Ho5 $an* a%e consi'e%e' ano%$a" "ost units A. e%o C. 0 B. )<< D. ;0<
+<&<<< units 6+7&;<< 6++&0<< 690&7< 6?)&?0< /&<<< /&<<<
+
. Ho5 $uc# 5e%e Mate%ia" cost pe% e4ui!a"ent unit (o% A"p#a an' Beta& %especti!e"* A. 6./
Use t#e (o""o5ing in(o%$ation t#at pe%tains to eta $anu(actu%ing co$pan* to ans5e% 4uestions + t#%oug# +):
++
. T#e e4ui!a"ent units o( p%o'uction (o% Mate%ia" A"p#a an' Beta a%e A"p#a Beta A. ;&<<< /&<<< B. ;&<<< ;&<<< C. +<&<<< ;&<<< D. +<&<<< /&<<<
Beginning 'i%ect $ate%ia"s in!ento%* Beginning 1I6 in!ento%* Beginning (inis#e' goo's in!ento%* En'ing 'i%ect $ate%ia"s in!ento%* En'ing 1I6 in!ento%* En'ing (inis#e' goo's in!ento%* 6u%c#ases Di%ect "ao% @acto%* o!e%#ea'
+)
. T#e nu$e% o( no%$a" an' ano%$a" "ost units a%e: No%$a" Ano%$a" A. 9<< &/<< B. &/<< 9<< C. ?<< &<< D. &<< ?<<
6 +<&<<< +<&<<< /<&<<< <&<<< <<&<<< 0<&<<< /<&<<< 7<&<<< +<<&<<<
+7
. 1#at is t#e a$ount o( 'i%ect $ate%ia"s use' 'u%ing t#e pe%io' A. 6/<&<<< C. 6 7<&<<< B. 6)<&<<< D. 60<&<<<
+9
Unit $ate%ia" cost +/ . Cat%i'ge Co$pan* #as no eginning 5o%2 in p%ocessK ?&<<< units a%e t%ans(e%%e' out an' )&<<< units in en'ing 5o%2 in p%ocess a%e one,t#i%' (inis#e' as to con!e%sion costs an' (u""* co$p"ete as to $ate%ia"s cost. I( tota" $ate%ia"s cost is 67<&<<<& t#e unit $ate%ia"s cost is
. 1#at is t#e a$ount o( cost o( goo's $anu(actu%e' 'u%ing t#e pe%io' A. 6/)<&<<< C. 6/9<&<<< B. 6/+<&<<< D. 6 0<&<<<
234
Cost Accounting Systems (A. Traditional Cost Accounting) +;
. 1#at is t#e a$ount o( cost o( goo's so"' 'u%ing t#e pe%io' A. 6/)<&<<< C. 6/9<&<<< B. 6/+<&<<< D. 60<&<<<
235
Cost Accounting Systems (A. Traditional Cost Accounting) +;
. 1#at is t#e a$ount o( cost o( goo's so"' 'u%ing t#e pe%io' A. 6/)<&<<< C. 6/9<&<<< B. 6/+<&<<< D. 60<&<<<
235
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%
*
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Ans5e%: C Di%ect $ate%ia"s an' 'i%ect "ao% @acto%* o!e%#ea' 6/<< 8 0< Tota" $anu(actu%ing cost Ans5e%: D O!e%#ea' %ate pe% #ou% Bu'gete' o!e%#ea'
67<&<<< +/&<<< +0&<<< 8 6+.0<
Ans5e%: D Tota" nu$e% o( #ou%s: &<<< 8 ) )&<<< 8 O!e%#ea' cost pe% #ou% 6)7<&<<< 7&<<< O!e%#ea' c#a%ge' pe% unit o( p%o'uct A: ) #%s. 8 67<
6+<&<<< 7<&<<< 6;<&<<<
6+.0< 67+&0<<
7&<<< 6 7< 6;<
Ans5e%: A Lao%,%e"ate' o!e%#ea': 6)7<&<<< 8 <./< Tota" nu$e% o( "ao% #ou%s: &<<< 8 7 )&<<< 8 / Lao%,%e"ate' o!e%#ea' pe% DLH: 6//&<<< ;&<<<
6//&<<< ;&<<< 6 ;
Ans5e%: B Mac#ine,%e"ate' o!e%#ea': 6)7<&<<< 8 <.7 Tota" nu$e% o( $ac#ine #ou%s &<<< 8 ) )&<<< Mac#ine,%e"ate' OH pe% MH: 6+7&<<< 7&<<<
6+7&<<< 7&<<< 6)7
O!e%#ea' app"ie' pe% unit o( 6%o'uct B: Lao%,%e"ate' / #ou%s 8 6; Mac#ine,%e"ate' 8 6)7 O # ' it
6)+ )7 67;
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%
*
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Ans5e%: C Di%ect $ate%ia"s an' 'i%ect "ao% @acto%* o!e%#ea' 6/<< 8 0< Tota" $anu(actu%ing cost Ans5e%: D O!e%#ea' %ate pe% #ou% Bu'gete' o!e%#ea'
67<&<<< +/&<<< +0&<<< 8 6+.0<
Ans5e%: D Tota" nu$e% o( #ou%s: &<<< 8 ) )&<<< 8 O!e%#ea' cost pe% #ou% 6)7<&<<< 7&<<< O!e%#ea' c#a%ge' pe% unit o( p%o'uct A: ) #%s. 8 67<
6+<&<<< 7<&<<< 6;<&<<<
6+.0< 67+&0<<
7&<<< 6 7< 6;<
Ans5e%: A Lao%,%e"ate' o!e%#ea': 6)7<&<<< 8 <./< Tota" nu$e% o( "ao% #ou%s: &<<< 8 7 )&<<< 8 / Lao%,%e"ate' o!e%#ea' pe% DLH: 6//&<<< ;&<<<
6//&<<< ;&<<< 6 ;
Ans5e%: B Mac#ine,%e"ate' o!e%#ea': 6)7<&<<< 8 <.7 Tota" nu$e% o( $ac#ine #ou%s &<<< 8 ) )&<<< Mac#ine,%e"ate' OH pe% MH: 6+7&<<< 7&<<<
6+7&<<< 7&<<< 6)7
O!e%#ea' app"ie' pe% unit o( 6%o'uct B: Lao%,%e"ate' / #ou%s 8 6; Mac#ine,%e"ate' 8 6)7 O!e%#ea' pe% unit
6)+ )7 67;
T#e o!e%#ea' is %o2en 'o5n into t5o !o"u$e,ase' cost poo"s. T#is is a $o%e $o'i(ie' e8a$p"e o( t%a'itiona" costing '
/
0
.
Ans5e%: B Batc# %e"ate' costs: )7<&<<< /<&<<< +< 6<<&<<< Batc# %e"ate' costs& 6%o'uct A: <<&<<< /< /<&<<< Batc#,%e"ate' o!e%#ea' pe% unit o( 6%o'uct A: /<&<<< J &<<< 6 /< In ABC costing& t#e%e is no nee' to $a2e a 'istinction et5een $anu(actu%ing an' non,$anu(actu%ing costs in co$puting t#e %e"e!ant p%o'uct costs Ans5e%: A 6%o'uct,%e"ate' o!e%#ea' cost )7<&<<< /<&<<< )< 6%o'uct,%e"ate' o!e%#ea' cost& 6%o'uct A: 0<&<<< +< 6%o'uct,%e"ate' o!e%#ea' cost pe% unit& 6%o'uct A: )<&<<< J &<<< 6 )< .
Ans5e%: A a%ia"e o!e%#ea' 6%e'ete%$ine' (i8e' o!e%#ea' 6/0<&<<< 0<&<<< Tota" o!e%#ea' %ate Actua" o!e%#ea' App"ie' o!e%#ea' 07&<<< #ou%s 8 6/.0< Tota" o!e%#ea' !a%iance& (a!o%a"e
60<&<<< 6 )<&<<<
6.0< ).<< 6/.0< 67?9&0<< 9<+&<<< 6 /&0<<
1
.
Ans5e%: D App"ie' o!e%#ea' Actua" o!e%#ea' Un'e%app"ie' o!e%#ea'
O!e%#ea' %ate pe% 'i%ect "ao% #ou% ,&
.
);&<<< 8 6+
697&<<< ;+&<<< 67&<<<
6;<<&<<< /<<&<<<
6+.<<
Ans5e%: B G%oss 6%o(it: +<<7: +0&<<< 8 < , 90&<<< 690&<<< +<<9: +0&<<< 8 < , ?0&<<< 600&<<< O!e%#ea' app"ication %ates: +<<7: 7<&<<
Costs o( goo's so"': +<<7: +0&<<< 8 69 690&<<< +<<9: 0&<<< 8 69 +<&<<< 8 6; 6?0&<<< Note: In +<<9 t#e co$pan* #as a eginning in!ento%* o( 0&<<< units at unit cost o( 69. ,,
.
Ans5e%: B Mate%ia"s cost +&0<< 8 6< Con!e%sion cost +&0<< 8 <./ 8 6)< Tota" costs o( 1o%2 in 6%ocess
6+0&<<< )<&<<< 600&<<<
,%
.
Ans5e%: B T#e a$ount o( o!e%#ea' app"ie' to p%o'uction s#ou"' e ;< pe%cent o( 'i%ect "ao% cost 6;<&<<< 8 <.;< 6//&<<<
,*
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Ans5e%: B Co$p"ete' units 1o%2 in p%ocess& En' 0&<<< 8 <.7 Tota" e4ui!a"ent units& a!e%age
,
.
Ans5e%: B Units co$p"ete' an' t%ans(e%%e' out 1o%2 in 6%ocess& En'
+<&<<< )&<<< +)&<<<
+)&<<< )&<<<
Mate%ia"sCon!e%sion Costs o( Co$p"etionEU6 o( Co$p"etionEU6Co$p"ete' units<<+)&<<<<<.<<+)&<<<1I6 , En'<< )&<<<)).)) &<<<1eig#te',A!e%age EU6+7&<<<+/&<<< , . Ans5e%: B Co$putation o( e4ui!a"ent units Mate%ia" Mate%ia" 61o%2,in,p%ocess& No!. ,0&<<
/;<&0<
. Ans5e%: A T#e nu$e% o( units to e accounte' s#ou"' e t#e su$ o( t#e units in eginning 5o%2 in p%ocess an' t#e nu$e% o( units t#at #a!e een sta%te' 'u%ing t#e pe%io'
%&
.
%,
%%
%*
%
%
Ans5e%: A EU6: T%ans(e%%e' out to 6ac2aging Dept. In p%ocess& en' 0&90< 8 J) Tota" Unit Cost: T%ans(e%%e' in Lao% an' o!e%#ea' ;9&9+
Ans5e%: D E4ui!a"ent units A"p#aBeta ?<<< Ano%$a" "ost unit &<< A"p#a 6+7&;<< +<&<<< 6.)/ Beta 6++&0<< ;&<<< 6.+0
0?&+0< 0&+0< 7/&0<< +.9< .)7 /.<7 6+/<&000
.
T%ans(e%%e' to @.G./&<<</&<<< < Tota"+<&<<<;&<<
En' 6%ocess /&<<< /&<<<
No%$a" "ost units
. Ans5e%: C E4ui!a"ent unitsA"p#aBetaT%ans(e%%e' to @.G./&<<</&<<
.
Ans5e%: A Co$p"ete' an' t%ans(e%%e' out Units in 5o%2,in,p%ocess& En' )&<<< 8 << E4ui!a"ents units o( p%o'uction , Mate%ia"s Mate%ia"s cost pe% EU6 67<&<<< +&<<< Ans5e%: B Tota" "ost units +&<<< P +<&<<< Less no%$a" "ost units 0 o( /&<<< Ano%$a" "ost unit
?&<<< )&<<< +&<<< 60.<<
&<<< 9<< )<<
%'
%/
%0
.
.
.
Ans5e%: D Beginning $ate%ia"s in!ento%* A'' Mate%ia"s 6u%c#ase' Tota" cost o( $ate%ia"s a!ai"a"e (o% use De'uct Mate%ia"s in!ento%*& En' Cost o( $ate%ia"s use' Ans5e%: A Di%ect $ate%ia"s use' Di%ect "ao% O!e%#ea' Tota" $anu(actu%ing costs A'' 1o%2 in p%ocess& eginning Tota" costs p"ace' in p%ocess De'uct 1o%2 in p%ocess& en' Cost o( goo's $anu(actu%e' Ans5e%: B Cost o( goo's $anu(actu%e' A'' (inis#e' goo's in!ento%*& eginning Tota" cost o( goo's a!ai"a"e (o% sa"e De'uct (inis#e' goo's in!ento%*& en' Cost o( goo's so"'
6 +<&<<< /<&<<< 7<&<<< <&<<< 60<&<<<
60<&<<< 7<&<<< +<<&<<< 0<&<<< +<&<<< 0)<&<<< <<&<<< 6/)<&<<<
6/)<&<<< /<&<<< /9<&<<< 0<&<<< 6/+<&<<<
