OUR LADY OF FATIMA UNIVERSITY

QUEZON CITY CAMPUS

COLLEGE OF BUSINESS AND ACCOUNTANCY
ACCTG.122: COST ACCOUNTING and CONTROL
FINAL EXAMINATION
SECOND SEMESTER: A.Y.2018-2019
GENERAL INSTRUCTIONS:
1. Use no.2 pencil only.
2. Read each question carefully
3. CHOOSE THE CORRECT ANSWER
4. Write eligibly. (STRICTLY NO ERASURES)
5. Do not use your mobile while the exam is going on.
6. Sign the attendance sheet before you leave the examination room.

1. Consider the following data: were used in production, how much is the Materials
Standard Hours 10,000 Quantity Variance?
Actual Hours 10,500
Std. Factory OH Rate ₱23.00 a. 540 F
Actual Factory Overhead ₱233,500.00 b. 540 U
Variable Spending Variance ₱18,000.00 F c. 5400 F
Variable Efficiency Variance ₱26,500.00 U d. 5400 U
Volume Variance ₱15,000.00 U
6. GRU Company’s operations for April disclosed the
How much is the Fixed OH spending variance?
following data relating to direct labor:
a. 3,500.00 U Actual cost P10,000.00
b. 3,500.00 F Rate variance P1,000.00 U
c. 16,500.00 U Standard cost P10,500.00
d. 20,000.00 F Actual hours worked 2,000

GRU’s standard direct labor rate per hour in April was:

2. KEMEROT Company has a standard price of P5.50 per
pound for materials. Actual price of materials purchased a. P5.50
during the month was P5.45 per pound. July’s results b. P4.75
showed a material price variance of P44 and an c. P5.00
unfavorable quantity variance of P209. If 1,066 pounds d. P4.50
were used in production, what was the standard quantity
allowed for materials? 7. Using the data in number 6, how much is the labor
efficiency variance?
a. 1,104
b. 1,028 a. 1,500 U
c. 1,208 b. 1,500 F
d. 1,140 c. 1,000 U
d. 1,000 F
3. Using the data in number 2, what was the actual quantity
purchased? 8. The standard hourly rate was P4.10. Standard hours for
the level of production are 4,000. The actual rate was
a. 880 P4.27. The labor rate variance was P654.50, unfavorable.
b. 808 How much is the Labor Efficiency Variance
c. 8800
d. 8880 a. 3,850 U
b. 615 F
4. Information on CHERET Company’s direct material costs is c. 3,850 F
as follows: d. 615 U
Standard Price ₱3.60
Actual Qty Purchased 1,600 9. CHENEZ Company uses a standard costing system in the
Standard Quantity 1,450
manufacture of its single product. The 35,000 units of raw
Materials Price Variance ₱240.00 U
material in Pinventory
240 were purchased for P105,000, and
What was the actual purchase price per unit, rounded to the two units of raw material are required to produce one unit
nearest centavos? of final product. In November, the company produced
12,000 units of product. The standard allowed for material
a. P3.06 was P60,000, and there was an unfavorable quantity
b. P3.45 variance of P2,500. The materials price variance for the
c. P3.11
units used in November was
d. P3.75

5. Using the data in number 4, if all the materials purchased a. P2,500 U

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 b. P11,000 U 15. The variable-overhead spending variance is P1,080,
c. P12,500 U unfavorable. Variable overhead budgeted at 40,000
d. P3.500 F machine hours is P50,000. Actual machine hours were
36,000. What was the actual variable-overhead rate per
machine hour?
10. The standard usage for raw materials is 5 pounds at
P40.00 per pound. Cave Company spent P131,200 in a. 1.28
purchasing 3,200 pounds. Cave used 3,150 pounds to b. 1.25
produce 600 units of finished product. The material c. 1.39
quantity variance is: d. 1.52

16. Fixed manufacturing overhead was budgeted at P500,000

a. P6,000 U
and 25,000 direct labor hours were budgeted. If the fixed
b. P5,200 U overhead volume variance was P12,000 favorable and the
c. P3,200 U fixed overhead spending variance was P16,000
d. P2,000 U unfavorable, fixed manufacturing overhead applied must
be:
11. Hingis had a P750 unfavorable direct labor rate variance
and an P800 favorable efficiency variance. Hingis paid a. P516,000
b. P504,000
P7,150 for 800 hours of labor. What was the standard
c. P512,000
direct labor wage rate? d. P496,000

a. P8.94 For Number 17 to 25:

b. P7.94
c. P8.00 Last month, the following events took place at ADDAMS
d. P7.80 Company:

a. Produced 25,000 units

12. BEKLA Company’s operations for the month just ended
originally set up a 60,000 direct labor hour level, with b. Standard variable cost per unit:
budgeted direct labor of P960,000 and budgeted variable Direct Materials: 2 kgs at P2.00
overhead of P240,000. The actual results revealed that Direct Labor: 1 hour at P15.00
direct labor incurred amounted to P1,148,000 and that the Variable overhead: 1 hour at P5.00
unfavorable variable overhead variance was P40,000. c. Fixed overhead:
Labor trouble caused an unfavorable labor efficiency Monthly budget: P12,000.00 for 20,000 units or
variance of P120,000, and new employees hired at higher
12,000 hours
rates resulted in an actual average wage rate of P16.40 per
hour. The total number of standard direct labor hours d. Actual production costs:
allowed for the actual units produced is Direct materials purchased: 100,000 kgs at P1.98
Direct Materials used: 55,000 kgs
a. 52,500 Direct labor: 24,998 hours at P15.02
b. 77,500 Factory overhead: P149,000.00 (30% Fixed)
c. 62,500
d. 70,000
17. Materials Price Variance was:
13. Puma Company had an 25,000 unfavorable volume
a. 2,000 F
variance, a P18,000 unfavorable variable overhead
b. 2,000 U
spending variance, and P2,000 total under applied c. 1,100 F
overhead. The fixed overhead budget variance is d. 1,100 U

a. P41,000 F 18. Materials Quantity Variance was:

b. P41,000 U
a. 10,000 F
c. P45,000 F
b. 10,000 U
d. P45,000 U c. 1,000 F
14. Sana Birthday Ko Company has a standard fixed cost of d. 1,000 U
P6 per unit. At an actual production of 8,000 units, an
unfavorable volume variance of P12,000 resulted. What 19. Labor Rate Variance was:
were total budgeted fixed costs?
a. 500 F
a. P36,000 b. 500 U
b. P60,000 c. 499.96 U
c. P48,000 d. 499.96 F
d. P75,000
20. Labor Efficiency Variance was:

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 a. 300 F a. P25,000
b. 300 U b. P15,000
c. 30 F
c. P10,000
d. 30 U
d. P12,000
21. Controllable Variance was:
30. The Hard Company sells widgets. The company breaks
a. 12,000 F even at an annual sales volume of 80,000 units. At an
b. 12,000 U annual sales volume of 100,000 units the company reports
c. 13,000 F a profit of P220,000. The annual fixed costs for the Hard
d. 20,000 U
Company are:
22. Volume Variance was:
a. P880,000
a. 1,300 F b. P1,100,000
b. 1,300 U c. P800,000
c. 13,000 F d. P1,000,000
d. 13,000 U
31. An entity has fixed costs of P200,000 and variable costs
23. Spending Variance was:
per unit of P6. It plans on selling 40,000 units in the
a. 12,100 U coming year. If the entity pays income taxes on its income
b. 12,010 U at a rate of 40%, what sales price must the firm use to
c. 12,000 F obtain an after-tax profit of P24,000 on the 40,000 units?
d. 12,010 F
a. P11.60
24. Efficiency Variance was:
b. P11.36
a. 10 U c. P12.00
b. 100 F d. P12.50
c. 100 U
d. None of the above 32. Carribean Company produces a product that sells for P60.
The variable manufacturing costs are P30 per unit. The
25. Variable Spending Variance was:
fixed manufacturing cost is P10 per unit based on the
a. 20,690 F current level of activity, and fixed selling and administrative
b. 20,960 F costs are P8 per unit. A selling commission of 10% of the
c. 32,700 U selling price is paid on each unit sold.
d. 32,700 F The contribution margin per unit is:

26. Variable Efficiency Variance was: a. P24

b. P36
a. 10 F
b. 10 U c. P54
c. 10 FU d. P30
d. Kung FU
33. Galactica Company has fixed costs of P100,000 and
27. Fixed Spending Variance was: breakeven sales of P800,000. Based on this relationship,
what is its projected profit at P1,200,000 sales?
a. 37,200 U
b. 37,200 F a. P50,000
c. 32,700 U b. P200,000
d. 32,700 F c. P150,000
d. P400,000
28. Fixed Efficiency Variance was:
34. At a break-even point of 5,000 units sold, variable
a. 13,000 Memorable
expenses were P10,000 and fixed expenses were
b. 13,000 Favorable
c. 13,000 Unenforceable P50,000. The profit from the 5,001st unit would be?
d. 13,000 Unfavorable
a. P10
29. An organization's break-even point is 4,000 units at a sales b. P50
price of P50 per unit, variable cost of P30 per unit, and total c. P15
fixed costs of P80,000. If the company sells 500 additional d. P12
units, by how much will its profit increase?

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35. Marsman Company had a margin of safety ratio of 20%, 50% of units started are still in process and were 20%
variable costs of 60% of sales, fixed costs of P240,000, a completed.
break-even point of P600,000, and an operating income of If materials are added at the start of the production, what is
P60,000 for the current year. What are the current year's the EUP for materials using FIFO method?
sales?
a. 90,000
a. P500,000 b. 50,000
b. P600,000 c. 80,000
c. P750,000 d. 40,000
d. P900,000
41. Use the data in number 40. If Materials are added at the
36. Regal, Inc. sells Product M for P5 per unit. The fixed costs end of the process, what is the EUP for materials using
are P210,000 and the variable costs are 60% of the selling FIFO method?
price. What would be the amount of sales if Regal is to
realize a profit of 10% of sales? a. 90,000
b. 50,000
a. P700,000 c. 80,000
b. P472,500 d. 40,000
c. P525,000
d. P420,000 42. Use the data in number 40. If 50% of materials are added
at the start and the balance at 50% of the process, what is
37. Food Factory, Inc. sells loose biscuits for P5 per unit. The the EUP for materials using FIFO method?
fixed costs are P210,000 and the variable costs are 45% of
the selling price. What would be the amount of sales if a. 60,000
Food Factory, Inc. were to realize a profit of 15% of sales? b. 65,000
c. 80,000
a. P700,000 d. 90,000
b. P472,500
c. P525,000 For Number 43 to 45:
d. P420,000
Consider the following data:
Sales (100 units at P100) P10,000
38. At 40,000 units of sales, Benevolent Corporation had an Direct labor 1,500
operating loss of P3.00 per unit. When sales were 70,000 Direct materials 1,400
units, the company had a profit of P1.20 per unit. The Variable overhead 1,000
number of units to breakeven is Fixed overhead 500
Variable selling expenses 600
Fixed selling expenses 1,000
a. 35,000
Variable admin. expenses 500
b. 52,500 Fixed admin. expenses 1,000
c. 57,647
d. 45,000 43. How many units must be sold to reach break-even point?

39. Alexandra Co. provides two products, Velvet and Cotton. a. 50

Velvet accounts for 60 percent of total sales. The variable b. 58
costs as a percentage of selling prices are 60% for Velvet c. 68
and 85% for Cotton. Total fixed costs are P225,000. d. 75
If fixed costs will increase by 30 percent, what amount of
peso sales would be necessary to generate an operating 44. What would be the operating income if sales increased by
profit of P48,000? 25%?

a. P1,350,000 a. P3,125
b. P486,425 b. P3,750
c. P1,135,000 c. P4,000
d. P910,000 d. P5,000

40. Consider the following data: 45. What would be the sales in break-even point if fixed factory
In-process, beginning: 10,000 units, 3/8 to complete overhead increased by P1,700?
Completed: 50,000 units
a. P6,700

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 b. P8,400 Lost Units (Total) 30,000
c. P6,667 Started during production 260,000
d. P9,200 Transferred to Finishing 240,000

46. SPOOKY Company sells two products-W and G. The Raw materials were added at the beginning of the process.
company sells three W for every two G. W sells for P50 Work in process at the start of production was 90% complete
and has variable costs of P30. G sells for P40 and has and at the end of production was 20% to complete.
variable cost of P12. Fixed costs are P1,450,000. How Inspection took place in the assembly department when units
many units of W and G must be sold to reach break-even were 75% converted.
point?
a. 25,000 and 37,500, respectively The company NORMALLY experienced a 5% loss based on
b. 37,500 and 25,000, respectively the completed units. Cost data are as follows:
c. 25,000 and 62,500, respectively
d. 37,500 and 62,500, respectively Beginning work-in process:
Materials: P324,000
47. HOLY SHEESH Company has a degree of operating Conversion: 549,000
leverage factor of 5 when its profit before tax is P200,000. Cost Added:
If the company’s sales increased by 10%, what is the Materials: P1,116,000
company’s profit before tax? Conversion: 2,029,500

a. P100,000 50. Using average method, what is the EUP for materials?
b. P200,000 a. 270,000 c. 300,000
c. P300,000 b. 286,500 d. 268,500
d. P400,000
51. Using average method, what is the EUP for Conversion
48. KABAYO Company sells products X, Y and Z. KABAYO Costs?
sells three units of X for each unit of Z, and two units of Y a. 286,500 c. 268,500
for each units of X. Contribution margins per unit are b. 300,000 d. 270,000
P1.00, P1.50 and P3.00 for product X,Y and Z respectively.
Fixed costs are P600,000. 52. Using average method, what is the cost of units
How many units of X would KABAYO sell at the break-even transferred-out?
point? a. 3,720,266.24 c. 3,436,836.36
b. 3,735,234.64 d. 3,792,854.75
a. 40,000
b. 120,000 53. Using average method, what is the cost of units in the
c. 360,000 ending work-in process?
d. 400,000 a. 373,763.64 c. 298,233.76
b. 225,645.25 d. 283,265.36
49. Warfield is planning to sell 100,000 units of product T for
P12 a unit. The fixed costs amount to P280,000. What 54. In the equation Y = P4,000 + P3X; Y is the cost of workers'
would be the amount of variable cost in order for Warfield compensation insurance and X is direct labor hours.
to realize a profit of P200,000? According to this equation, a 100-hour change in total
direct labor hours will change the cost of workers’
a. 480,000 compensation insurance by
b. 720,000
c. 900,000 a. P4,000
d. 920,000 b. P300
c. P4,300
d. P3,700

For Number 50 to 53: 55. Irma Company manufactures office furniture. During the
most productive month of the year, 3,500 desks were
CHAROT Company employed process costing system. The manufactured at a total cost of P84,400. In its slowest
product passed 2 departments: Assembly and Finishing. month, the company made 1,100 desks at a cost of
Information pertaining to the assembly department was as P46,000. Using the high-low method of cost estimation,
follows: total fixed costs in August are:

Beginning Units 40,000 a. P56,000

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 b. P28,400 =============================================
c. P17,600 =============================================
d. P38,400 =============================================
=============================================
56. The equation(s) required for applying the least squares
method in the computation of fixed and variable production
costs could be expressed as

a. xy = ax + b x2
Prepared By:
b. y = a + bx2
Jay Rodante A. Nano
xy = na + b x
Faculty-CBA
c.  y = na + b x
d. xy = ax + b x2
y = na + bx

57. Given the cost formula Y = P17,500 + P4X, at what level of

activity will total cost be P42,500? Check and Reviewed By:
Joannamarie Uy, CPA, MBA
a. 10,625 units. Program Head-Accountancy
b. 4,375 units
c. 6,250 units.
d. 5,250 units.

58. Data to be used in applying the high-low method shows the

highest cost of P69,000 and the lowest cost of P52,000.
The data shows P148,000 as the highest level of sales and
"A successful man is one who can
P97,000 as the lowest level. What is the variable cost per
peso sales? lay a firm foundation with the bricks
that others throw at him."
a. P0.33.
b. P0.47.
c. P0.54.
d. P3.00

59. ANAK NG BUDHA is planning to sell 200,000 units of

product B. The fixed costs are P400,000 and variable costs
are 60% of the selling price. In order to realize a profit of
P100,000, selling price per unit would have to be

a. P3.75
b. P4.17
c. P5.00
d. P6.25

60. The Oliver Company plans to market a new product. Based

on its market studies, Oliver estimates that it can sell 5,500
units in 2018. The selling price will be P2.00 per unit.
Variable costs are estimated to be 40% of the selling price.
Fixed costs are estimated to be P6,000. What is the break-
even point in units?

a. 3,750
b. 5,000
c. 5,500
d. 7,500

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