Cost Prelim MC

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.
Titan company has set various goals, and management is now taking appropriate action to ensure
that the firm achieves these goals. One such action is to reduce outlays for overhead, which have
exceeded budgeted amounts. Which of the following functions best describes this process?
Controlling
Coordinating
Decision Making
Planning
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
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
Which of the following is most likely to be an objective of a cost accounting system?

Department efficiency
Income determination
Product costing and inventory valuation
Sales commission determination
What kind of costs can be conveniently and economically traced to a cost object or pool?
Direct Costs
Indirect Costs
Overhead Costs
Relevant Costs
The distinction between direct and indirect costs depends on whether a cost:
can be conveniently and physically traced to a cost object under consideration.
is controllable or non-controllable.
is variable or fixed.
will increase with changes in levels of activity
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
Which of the following characteristics is inherent to management accounting?

Compliance to generally accepted accounting principles
Contribution approach income statement
External users of financial report
Reporting of historical information
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?
Refers to the use of cost data by management in decision making.
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.
None of the above
Refers to the accumulation of cost data by products, process or services to be able to arrive at a unit cost.
Which of the following would be classified as an external failure cost on a quality cost report?
Cost of field servicing and handling complaints.
Disposal of defective products.
Final product testing and inspection.
Supervision of testing & inspection activities
Product costs appear on the balance sheet:

If goods are partially completed at the end of the period.
If goods are partially completed or are unsold at the end of a period.
If goods are unsold at the end of a period.
Only in merchandising firms.
Which of the following statements about materials is false?

Acquisitions of materials are normally charged to the Purchases account.
The use of direct materials gives rise to a debit to Work-in-Process Inventory.
The use of indirect materials gives rise to a credit to Manufacturing Supplies Inventory.
The use of indirect materials gives rise to a debit to Manufacturing Overhead.
Which of the following manufacturers would most likely use job-order costing?
Chemical manufacturers
Custom-furniture manufacturers
Gasoline refiners
Microchip processors
The cost of statistical quality control in a product quality cost system is:
Appraisal cost
Internal failure cost
Prevention cost
Training cost
MC PROBLEMS
₱1.84
₱0.83
₱1.14
₱1.30
Clear selection
₱1.04
₱1.94
₱2.00
₱2.08
₱15,400
₱21,600
₱25,560
₱31,800
₱2,900
₱2,950
₱3,000
₱3,145
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:
Overapplied by ₱3,000
Overapplied by ₱15,000
Underapplied by ₱3,000
Underapplied by ₱15,000
₱24,000
₱22,000
₱ 3,000
₱ 2,000
₱901,925
₱877,200
₱926,650
₱909,400
₱300
₱350
₱395
₱420
₱4,091,500
₱4,109,500
₱4,901,500
₱4,910,500
₱75,000
₱80,000
₱77,000
₱78,000
₱470
₱407
₱440
₱400
₱21,000
₱21,875
₱24,000
₱25,000
₱26,860
₱42,100
₱45,400
₱49,660
11,900
12,000
12,500
15,200
₱1,245,000
₱1,290,000
₱1,335,000
₱1,380,000
PROBLEM SOLVING
PROBLEM 1
PROBLEM 2
542,000
PROBLEM 3
- 466.67
PROBLEM 4
PROBLEM 5
- 85,400
PROBLEM 6
PROBLEM 7
246 – unit cost of goods

PROBLEM 8
- 204.75
PROBLEM 9
PROBLEM 10

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As production takes place, all manufacturing costs are added to the:

Work-in-Process Inventory account.

The principal difficulty with normal costing is that:

Which of the following is most likely to be an objective of a cost accounting system?

Which of the following is least likely to be an objective of a cost accounting system?

Which of the following characteristics is inherent to management accounting?

Product costs appear on the balance sheet:

Which of the following statements about materials is false?

246 – unit cost of goods

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