AE 212 PRELIM DEPARTMENTAL EXAM

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MULTIPLE CHOICE- THEORETICAL

Choose the best answer from each of the following statements or questions.

1. Cost accounting is an area of accounting concerned with cost determination, cost

control and cost analysis. Which of the following is a description of cost control?
 None of the above
 Refers to the comparison of standards set for costs per unit and with the figures per actual
operations so that remedial measures may be adopted if needed.
 Refers to the use of cost data by management in decision making.
 Refers to the accumulation of cost data by products, process or services to be able to arrive
at a unit cost.
2. Which of the following is least likely to be an objective of a cost accounting system?
 Department efficiency
 Income determination
 Product costing and inventory valuation
 Sales commission determination
3. In describing the cost formula equation, Y = a + bX, which of the following is correct:
 “Y” is the independent variable.
 “a” is the variable cost per unit.
 “a” and “b” are valid for all levels of activity.
 in the high-low method, “b” equals the change in cost divided by the change in activity.
4. The principal difficulty with normal costing is that:
 estimated overhead and estimated activity are likely to differ from actual overhead and
actual costs, resulting in underapplied or overapplied overhead
 it can result in fluctuating per-unit overhead costs
 the unit cost information is not received on a timely basis
 there is no difficulty associated with using normal costing
5. The nonstatistical method of cost estimation that calls for the creation of a scatter
diagram is known as:
 High-low point method
 Least squares regression method
 Multiple regression method
 Visual fit method
6. In a normal costing system, a debit to Work in Process would not be made for
 actual overhead
 applied overhead
 actual direct material
 actual direct labor
7. As production takes place, all manufacturing costs are added to the:
 Work-in-Process Inventory account.
 Manufacturing-Overhead Inventory account.
 Cost-of-Goods-Sold account.
 Finished-Goods Inventory account.
8. The net cost of normal spoilage in a job order costing system in which spoilage is
common to all jobs should be
 assigned directly to the jobs that caused the spoilage
 charged to manufacturing overhead control during the period of spoilage
 charged to loss account during the period of spoilage
 allocated only to jobs that are completed during the period

9. Which of the following is not charged to the factory overhead control account?
 Overtime
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 Philhealth contribution of employee
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  Holiday pay of employee
 Vacation pay
10. Lathe operators at KF Manufacturing are hourly employees who are paid time and
a half for hours worked in excess of 40 hours per week. Lester is a lathe operator
who worked 45 hours during the current week and had no idle time. The correct
accounting for the amounts paid to Lester would be:
 charge the hourly wage earned plus the overtime premium earned to the overhead account.
 charge only the overtime premium earned to the overhead account.
 charge only the overtime premium earned to the direct labor cost for the project Lester was
working on when the overtime was incurred.
 charge the hourly wage earned plus the overtime premium earned to the direct labor cost
for the project Lester was working on when the overtime was incurred.

MULTIPLE CHOICE- COMPUTATIONAL

Choose the best answer from each of the following statements or questions. Solutions to each problem are not
required.

1.

 ₱ 2,000
 ₱24,000
 ₱ 3,000
 ₱22,000
2.

 ₱78,000
 ₱77,000
 ₱75,000
 ₱80,000
3. The best estimate of the total variable manufacturing cost per unit is:

 P89.50
 P18.40
 P71.10
 P30.90

4.
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  ₱1.30
 ₱1.84
 ₱0.83
 ₱1.14
5.

 Y = P107.45 + P5.89X
 Y = P0.00 + P10.67X
 Y = P111.92 + P5.69X
 Y = P120.81 + P3.56X
6.

 ₱1,245,000
 ₱1,290,000
 ₱1,335,000
 ₱1,380,000

7. Albuquerque Manufacturing Company uses a predetermined overhead rate based on

direct labor hours to apply manufacturing overhead to jobs. Last year, the company
worked 57,000 actual direct labor hours and incurred ₱345,000 of actual
manufacturing overhead cost. The Company had estimated that it would work
55,000 direct labor hours during the year and incur ₱330,000 of manufacturing
overhead cost. The company's manufacturing overhead cost for the year was:
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 Overapplied by ₱3,000

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  Overapplied by ₱15,000
 Underapplied by ₱3,000
 Underapplied by ₱15,000
8.

 ₱1.04
 ₱1.94
 ₱2.00
 ₱2.08
9.

 ₱26,860
 ₱42,100
 ₱45,400
 ₱49,660

10. Assume that the defective goods were charged to all jobs, what is the cost
transferred to finish goods at the end of the year?

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  342,000
 335,000
 349,740
 342,500

11.

 ₱300
 ₱350
 ₱395
 ₱420
12. During January, Triple A’s employees worked on Job 003. P714 of overhead had
been applied to this job. Total manufacturing cost was P6,800 including the total cost
of all other jobs in the amount of P3,981. What amount of direct material is included
in Job 003?

 677
 1,391
 2,142
 4,658
13. Assuming only Job# 2 and 3 were completed and sold, what is the cost of goods
sold at year end?

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  523,700
 468,075
 484,700
 394,700

14.

 ₱2,900
 ₱2,950
 ₱3,000
 ₱3,145
15. The regular working days in a factory are Monday to Friday. Joe and Pat (who are
being paid P25 and P27 per hour, respectively) worked on Jobs 31 and 32 for the
period August 4 to 10. The weekly time records and summary of the job tickets show
the following: Total number of hours time in: Joe = 45, Pat = 43; Overtime: Joe = 6,
Pat = 5; Expended on the jobs: No 31: Joe = 26, Pat = 17; No. 32: Joe = 20, Pat = 21.
Joe was authorized to work on overtime on job no. 31 because of its rush nature; Pat
had to work on overtime on job no. 32 to make up for a machine breakdown during
the week. Overtime premium is 25%. Factory overhead is 60% of direct labor cost
and materials cost comprises 80% of total production cost. What should be the
respective production costs of job nos. 31 and 32?
 P7,338 and P6,829
 P1,834 and P1,707
 P9,172 and P8,536
 Answer not given

PROBLEM SOLVING
Prepare a handwritten solutions and/or supporting computations to the problems in good accounting form. All
solutions shall be compiled into into one file and to be attached at the end of the activity. No credit shall be
given if your final answer does not agree with your solutions and/or supporting computations or if you have no
solutions and/or computations at all. If your answer is zero which does not entail any solution, write a short
explanation for your answer.

PROBLEM 1
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 PROBLEM 2

PROBLEM 3

PROBLEM 4 Express your answer using the cost function. ex: Y=1234+56.78X

PROBLEM 5

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 PROBLEM 6

PROBLEM 7

PROBLEM 8

PROBLEM 9

PROBLEM 10

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