Download Question 1: please choose the best answer for each of the following

Islamic university – Gaza
Faculty of commerce
Accounting department
COST ACCOUNTING
MID exam of cost accounting
( 1 hour )
Name :…………………………………………………………………………………………
Id : ………………………………………………. Class : ………………………………...
Question 1: please choose the best answer for each of the following statement :
1. The planning process and the control process are linked by
A - Predictions
B- Feedback
C - Budgets
D - Marketing
2.For strategic decisions and planning decisions, the role that is
most prominent is the
A - problem-solving role
B - attention-directing role
C - scorekeeping role
D - implementation role
3.When using normal costing, the indirect costs are allocated to the
job by which of the following
A - actual cost x actual input quantity
B - actual cost x budgeted input quantity
C - budgeted cost x actual input quantity
D - budgeted cost x budgeted input quantity
4. Measuring the quality of products, services, and activities against
the best levels of performance found in competing companies
would occur in which one of the key themes in management
decision making?
A - Customer focus
B - Key success factors
C - Continuous improvement and benchmarking
D - Value-chain and supply-chain analysis
5. If the proration approach to under/overallocated overhead is not
used, the account to which the under/overallocated overhead will
be allocated is
A - direct material inventory
B - cost of goods sold
C - finished goods inventory
D - work-in-process inventory
6. As activity changes, a cost that is variable will
A - vary per unit
B - remain the same per unit
C - vary inversely per unit
D - remain the same in total amount
7. Prime costs would include
A - direct material costs and direct labor costs
B - direct material costs and indirect manufacturing costs
C - direct labor costs and indirect manufacturing costs
D - direct material costs, direct labor costs, and indirect manufacturing costs
8. AL ASHI has the following information for the current year. Budgeted
indirect costs are $4,000, the budgeted allocation base is 2,000
hours. Actual indirect costs incurred were $4,200 and the actual
allocation base used was 2,050. If AL ASHI is using the normal costing
system, how much will be allocated to a job that used 75 hours?
A - $37.50
B - $146.25
C - $150.00
D - $153.75
9. ALASHI has the following information for the current year. Budgeted
indirect costs are $6,000, the budgeted allocation base is 3,000
hours. Actual indirect costs incurred were $6,304 and the actual
allocation base used was 3,075. If AL ASHI uses a normal job-costing
system, what is the under/overallocated overhead for the year?
A- $0
B - $154 overallocated
C - $154 underallocated
D - $304 underallocated
10. When a firm uses cost smoothing, it causes products to be
costed improperly, with some having too high costs and others
having too low costs. This is known as
A - product undercosting
B - product overcosting
C - product smoothing
D - product cost cross-subsidization
PLEASE POST YOURS ANSWER TO THE TABLE :
QUESTION
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ANSWER
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question 2:
Al ashi paint (AP) processes two kind of paints. Alcohol base and solvent base.
(AP) job order costing system has two pools of direct cost (direct material and direct
labor).and a single indirect – cost pool(support production). Support cost are allocated on
the basis of units produced.
the 2006 total actual cost for producing 1.000.000 units ( 900.000 for alcohol base and
100.000 for solvent base )are.
Direct material
Direct labor
Production support
150.000
300.000
900.000
( direct material cost and direct labor cost are distribution for each kind as a percentage of
quantity produced ).
At the end of 2006 (AP) unsuccessfully bid for a large institutional contract. Its bid was
reported to be 40% above the winning bid.
As a result of its review process of lost contract bid. (AP) decided to explore ways to refine its
costing system .
First, it identified that $ 200.000 of the $ 900.000 could be traced to individual
job($150.000 for alcohol base and $ 50.000 for solvent base). These cost will now be
classified as direct material.
Second, it used ABC to examine how the two product( alcohol base and solvent base) use
indirect support resources. The finding was that three activity areas could be:
1. handle activity area : (AP) uses 1.000.000 kg of raw material to produce two products (
alcohol base and solvent base) . the cost – allocation base is KG of raw material
handle( alcohol base 900.000 kg and solvent base 100.000 kg) . cost in the handle
activity are $ 120.000 .
2. mix activity area : the production line produced (a) 250 kg of alcohol base per mix hour
and (b) 400 kg of solvent base per mix hour . the cost- allocation base is mix hour on
the production line . cost in the mix activity area are $ 280.000
3. packing activity are : the packing line produced (a) 25 kg of alcohol base per packing
hour and(b) 100 kg of solvent base per packing hour . the cost- allocation base is
packing hour on the production line . cost in the packing activity area are $300.000 .
Required :
1. using job order costing system , what is the cost of unit for each product ?
2. using the ABC system what the cost of unit , for each product ?
Question 3 :
AL ASHI PLASTIC ,inc's selected data for the month of August 2004 are presented below (in
mi1lions).
Work-in-process inventory 1/8/2004
Direct materials inventory 1/8/2004
Direct materials purchased
Direct materials used
Variable manufacturing overhead
Total manufacturing overhead
Total manufacturing cost
Cost of goods manufactured
Cost of goods sold
Finished goods inventory 1/8/2004
$200
90
360
375
250
480
1.600
1.650
1.700
125
Required : calculate the following costs
1.
2.
3.
4.
5.
direct materials inventory 31/8/2004
fixed manufacturing overhead costs for august
direct manufacturing labor cost for august
work in process inventory 31/8/2004
goods available for sale in august
ANSWER :
1. direct materials inventory 31/8/2004
2. fixed manufacturing overhead costs for august
3. direct manufacturing labor cost for august
4. work in process inventory 31/8/2004
5. goods available for sale in august
WITH BEST WISHES
MOHAMMAD MARWAN AL ASHI