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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 NO. ANSWER 1 2 3 4 5 6 7 8 9 10 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