Bsma 2103 - Acc 204 - Midterm Examination (Part 1 - Theories)

11/9/2020 BSMA 2103 - ACC 204 - MIDTERM EXAMINATION (PART 1 - THEORIES)
BSMA 2103 - ACC 204 - MIDTERM

EXAMINATION (PART 1 - THEORIES)
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PART I. Theories
Choose the best answer.
Two basic accounting systems for assigning costs to products or services 1 point
are job order and process costing. These two costing systems are usually
viewed as being on opposite ends of a spectrum. The fundamental
criterion employed to determine whether job costing or process costing
should be employed is *
Type of bases used in allocating the indirect cost pool to the product or service
Proportion of direct (traceable) costs expended to produce the product or service
Number of cost pools employed to allocate the indirect costs to the product or
service
The nature and amount of the product or service brought to the market place for
customer consumption
https://docs.google.com/forms/d/e/1FAIpQLSd6doF81rwxj5vDLbX88EQhsEzT28h1kI2Xp7wbwGHJW6kOmA/formResponse 1/18
Which of the following could not be used in job order costing? * 1 point
an average cost per unit for all jobs
overhead allocation based on the job's direct labor hours
Standards
normal costing
Wages of the security guard for a small plant would be an example of I. 1 point
Indirect labor II. Fixed factory overhead *
Neither I nor II
Both I and II
I only
II only
What is the common component of prime costs and conversion costs? * 1 point
Factory overhead
Indirect labor
Direct labor
Direct material
Indirect materials are * 1 point
Fixed cost
Factory overhead cost
Irrelevant cost
Prime cost
When the amount of overapplied factory overhead is significant, the entry 1 point
to close overapplied factory overhead will most likely require *
Credits to cost of goods sold, finished goods inventory, and work in process inventory
A credit to cost of goods sold
Debits to cost of goods sold, finished goods inventory, and work in process inventory
START A debit to cost of goods sold
A target in balanced scorecard framework is * 1 point
A statement of what the strategy must achieve and what is critical to its success
A key action program required to achieve strategic objectives
A diagram of the cause-and-effect relationships between strategic objectives
The level of performance or rate of improvement needed in the performance measure
Wages earned by machine operators in producing the firm’s product 1 point

should be categorized as I. Direct labor II. Controllable by the machine
operator’s foreman *
Both I and II
I only
II only
Neither I nor II
If a firm produces more units than it sells, absorption costing relative to 1 point
variable costing, will result in *
Higher income but lower assets
Lower income and assets
Lower income but higher assets
Higher income and assets
The process of establishing objectives or goals for the firm and 1 point
determining the means by which they will be met is: *
assigning responsibility.
controlling.
planning.
analyzing profitability.
Arnold Malibiran is the supervisor of the Machining Department of Bennett 1 point

Corporation. He has control over and is responsible for manufacturing
costs traced to the department. The Machining Department is an example
of a(n): *
inventory center.
cost center.
worker’s center.
supervised work center.
The following information regarding fixed production costs from a 1 point

manufacturing firm is available for the current year: Fixed Costs in the
beginning inventory = Php 16,000 Fixed Costs incurred in this period = Php
100,000 Which of the following statements is not true? *
If this firm produced substantially more units than it sold in the current year, variable
costing will probably yield a lower income than absorption costing
The maximum amount of fixed production costs that this firm could deduct using
absorption costs in the current year is Php 116,000
The maximum difference between tis firms the current year income based on
absorption costing and its income based on variable costing is Php 16,000
Using variable costing, tis firm will deduct no more than Php 16,000 for fixed
production costs
Which of the following costs exhibit both decreasing and increasing 1 point
marginal costs over a specific range of activity? *
Step-variable cost
Semivariable cost
Curvilinear cost
Step-fixed cost
In a traditional job order cost system, the issuance of supplies to a 1 point

production department increases *
Factory Overhead Control
Work in process control
Factory Overhead Applied
Stores control
An example of a direct labor is wages paid to: I. Factory machine operator 1 point
II. Supervisor in a factory *
Neither I nor II
II only
Both I and II
I only
Which of the following is an advantage of using variable costing? * 1 point
Variable costing is most relevant to long-run pricing strategies
Variable costing complies with the National Internal Revenue Code
Variable costing makes cost-volume-profit relationships more easily apparent
Variable costing complies with Generally Accepted Accounting Principles
Absorption costing differs from variable costing in all of the following 1 point
except *
Arrangement of the income statement
Treatment of fixed manufacturing overhead
Treatment of variable production costs
Acceptability for external reporting
What are prime costs? * 1 point
Direct materials and factory overhead
Indirect labor and indirect materials
Direct labor and Factory overhead
Direct materials and direct labor
Factory supplies for a manufacturing plant are generally * 1 point
Period cost
Variable cost
Excluded from product cost
Prime cost
Unit cost information is important for making all of the following marketing 1 point
decisions except: *
Bidding on contracts.
Determining the amount of advertising needed to promote the product.
Determining the selling price of a product.
Determining the amount of profit that each product earns.
In a job order cost system, the use of direct materials previously purchased 1 point
usually recorded as an increase in *
Work in process control
Factory Overhead Applied
Factory Overhead Control
Stores control
Direct materials are: I. Prime Cost II. Conversion cost III. Manufacturing cost 1 point
*
I, II and III
I and II only
I and III only
II and III only
Total manufacturing costs for the year plus beginning Work in Process 1 point
Inventory cost equals *
cost of goods manufactured in the year.
total manufacturing costs to account for.
cost of goods available for sale.
ending Work in Process Inventory.
There are several alternative denominator measures for applying overhead. 1 point
Which is not commonly used? *
Sales value of product produced
Direct Labor Cost
Direct Labor Hours
Machine Hours
What are conversion costs? * 1 point
Direct materials and direct labor
Direct materials and factory overhead
Direct labor and Factory overhead
Indirect labor and indirect materials
Supervisory salaries for a manufacturing plant would be an example of 1 point

which of the following cost? I. Prime cost II. Conversion cost *
I only
II only
Both I and II
Neither I nor II
Which of the following statements best describes a characteristic of a 1 point
performance report prepared for use by a production line department

head? *
It is more important that the report be precise than timely.
The report should include information on all costs chargeable to the department,
regardless of their origin or control.
The costs in the report should include only those controllable by the department head.
The report should be stated in peso rather than in physical units so the department
head knows the financial magnitude of any variances.
Supplies needed for use in the factory are issued on the basis of: * 1 point
Job cost sheets
Material requisitions
Factory overhead analysis sheets
Time tickets
Wages paid to a timekeeper in a factory are I. Prime cost II. Conversion 1 point
cost *
Neither I nor II
II only
I only
Both I and II
The fixed portion of the semivariable cost of electricity for a 1 point

manufacturing plant is I. Product cost II. Conversion cost *
Neither I nor II
II only
I only
Both I and II
Which of the following items of cost would be least likely to appear on a 1 point
performance report based on responsibility accounting for the supervisor
of an assembly line in a large manufacturing situation? *
Repairs and maintenance
Direct labor
Indirect materials
Selling expenses
What is the most important purpose of a balanced scorecard? * 1 point
Set priorities
Develop strategy
Measure performance
Develop cause-and-effect linkages
A direct labor overtime premium should be charged to a specific job when 1 point
the overtime is caused by the *
Management’s failure to include the job in the production schedule
Increased overall level of activity
Management’s requirement that the job be completed before the annual factory
vacation closure
Customer’s requirement for early completion of the job
Responsibility accounting would most likely hold a manager of a 1 point

manufacturing unit responsible for: *
the number of units ordered.
amount of taxes incurred.
cost of raw materials.
quantity of raw materials used.
A credit to Work in Process Inventory represents * 1 point
the transfer of completed items to Finished Goods Inventory.
work still in process.
raw material put into production.
the application of overhead to production.
In a manufacturing environment, the job order costing system and process 1 point
cost system differ in the way *
Product profitability is determined and compared with planned costs
Orders are taken and the number of units in the orders
Processes can be accomplished and the number of production runs that may be
performed in a year
Costs are assigned to production runs and the number of units for which costs are
averaged
Property taxes on a manufacturing plant are an element of I. Conversion 1 point
cost II. Period cost *
I only
II only
Both I and II
Neither I nor II
Hakdog Distribution Company operates 400 hotdog stands in Manila. 1 point

Depreciation expense for the 400 carts amounts to Php 160,000 a year, or
Php 400 per cart. Depreciation with regard to number of hotdog stands
should be considered as *
Mixed cost
Fixed cost
Variable cost
Discretionary cost
Under job order cost accumulation, the factory overhead control account 1 point
controls: *
Factory overhead analysis sheets
Material inventories
Cost reports by processes
Job order cost sheets
Normal spoilage is properly classified as * 1 point
Deferred Charge
Product Cost
Extraordinary item
Period Cost
If a firm’s net income (loss) does not change as its volume changes, the 1 point
firm(‘s) *
Must have no fixed costs
Sales price must equal its variable costs
Sales price must equal Php 0
Must be in the service industry
The cost of the insurance for a manufacturing plant is generally * 1 point
Semivariable cost
Conversion cost
Nonmanufacturing cost
Period cost
A basic tenet of variable costing is that the period costs should be 1 point
currently expensed. What is the rationale behind this procedure? *
Allocation of period costs is arbitrary at best and could lead to erroneous decision by
management
Period costs are uncontrollable and should not be charged to a specific product
Period costs are generally immaterial in amount and the cost of assigning the
amounts to specific products would outweigh the benefits
Because period costs will occur whether production occurs it is improper to allocate
these costs to production and defer a current cost of doing business
Factory overhead includes * 1 point
All manufacturing costs which may be variable or fixed, except direct material and
direct labor
All manufacturing costs
Indirect labor but not indirect materials
Indirect materials but not indirect labor
In job order costing, when materials are returned to the storekeeper that 1 point
were previously issued to the factory for cleaning supplies, the journal
entry should be made to *
DR Purchase Returns; CR Work in Process
DR Materials; CR Work in Process
DR Materials; CR Factory Overhead
DR Factory Overhead; CR Work in Process
In job order cost system, payroll taxes paid by the employer for factory 1 point
employees are usually accounted for as *
Indirect Labor
Administrative Costs
Direct labor
Factory Overhead
Under a job order cost system, the peso amount of the general ledger 1 point
entry involved in the transfer of inventory from work in process to finished
goods is the sum of costs charged to all jobs *
Started in process during the period
In process during the period
Completed and sold during the period
Completed during the period
Generally, individual department rates rather than a plantwide rate for 1 point
applying overhead would be used if *
A company’s manufacturing operations are all highly automated
A company wants to adopt a standard cost system
The manufactured products differ in the resources consumed from the individual
departments in the plant
Manufacturing overhead is the largest cost component of its product cost
The business entity that purchases finished goods for resale is a: * 1 point
For-profit service business.
Service business.
Merchandiser.
Manufacturer.
Indirect labor is a * 1 point
Period cost
Prime cost
Nonmanufacturing cost
Conversion cost
A copy of your responses will be emailed to vanessa.tormo@g.batstate-u.edu.ph.
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11/9/2020 BSMA 2103 - ACC 204 - MIDTERM EXAMINATION (PART 1 - THEORIES)

BSMA 2103 - ACC 204 - MIDTERM

Choose the best answer.

Proportion of direct (traceable) costs expended to produce the product or service

an average cost per unit for all jobs

overhead allocation based on the job's direct labor hours

Indirect materials are * 1 point

Factory overhead cost

A credit to cost of goods sold

START A debit to cost of goods sold

A target in balanced scorecard framework is * 1 point

A key action program required to achieve strategic objectives

A diagram of the cause-and-effect relationships between strategic objectives

The level of performance or rate of improvement needed in the performance measure

Wages earned by machine operators in producing the firm’s product 1 point

variable costing, will result in *

Higher income but lower assets

Lower income and assets

Lower income but higher assets

Higher income and assets

Arnold Malibiran is the supervisor of the Machining Department of Bennett 1 point

supervised work center.

The following information regarding fixed production costs from a 1 point

marginal costs over a specific range of activity? *

In a traditional job order cost system, the issuance of supplies to a 1 point

Factory Overhead Control

Work in process control

Factory Overhead Applied

Which of the following is an advantage of using variable costing? * 1 point

Variable costing is most relevant to long-run pricing strategies

Variable costing complies with the National Internal Revenue Code

Variable costing makes cost-volume-profit relationships more easily apparent

Variable costing complies with Generally Accepted Accounting Principles

Arrangement of the income statement

Treatment of fixed manufacturing overhead

Treatment of variable production costs

Acceptability for external reporting

What are prime costs? * 1 point

Direct materials and factory overhead

Indirect labor and indirect materials

Direct labor and Factory overhead

Direct materials and direct labor

Factory supplies for a manufacturing plant are generally * 1 point

Excluded from product cost

Determining the amount of advertising needed to promote the product.

Determining the selling price of a product.

Determining the amount of profit that each product earns.

usually recorded as an increase in *

Work in process control

Factory Overhead Applied

Factory Overhead Control

I and III only

II and III only

cost of goods manufactured in the year.

total manufacturing costs to account for.

cost of goods available for sale.

ending Work in Process Inventory.