Solution 2024/2025
Pepper
Cost Accounting Exam 1, AC642 Exam 1, Cost
Acct Practice Exam Questions And Answers
Latest Update
Which of the following would be considered a line function? ANS✔✔
Production
The standards of ethical conduct for management accountants include
ANS✔✔ Competence, confidentiality, integrity, and credibility
Altering dates of shipping documents of next January's sales to record them
as sales in the current year would be a violation of which standard of ethical
conduct for management accountants? ANS✔✔ All of these (competence,
integrity, credibility)
Which of the following is an example of a loss? ANS✔✔ The write-off of an
obsolete inventory
Which cost assignment method would likely assign the cost of an assembly-
line supervisor when the assembly line is the cost object? ANS✔✔ Direct
tracing
Which of the following costs would NOT be included in operating product
costs? ANS✔✔ Research and Development
Which of the following costs is a period cost for a manufacturing company?
ANS✔✔ Controller's salary
, Solution 2024/2025
Pepper
Information from the records of Cain Corporation for August, 20xx, was as
follows:
Sales $1,230,000
Selling and Admin $210,000
Direct Materials $264,000
Direct Labor $300,000
Factory overhead ($205,000 variable, $200,000 fixed)
What are the total variable product costs? ANS✔✔ $769,000
($264,000 + $300,000 + $205,000)
What is the total prime cost? ANS✔✔ Direct Materials + Direct Labor =
Prime Cost
If beginning work in process inventory is $120,000, ending work in process
inventory is $160,000, cost of goods manufactured is $400,000, and direct
materials used are $100,000, what are the conversion costs? ANS✔✔
$340,000
(Cost of goods manufactured = beginning work-in-process inventory +
direct materials used + conversion costs - ending work-in-process
inventory)
$400000 = $120000 + $100000 + conversion costs - $160000
so, Conversion costs = $340,000
, Solution 2024/2025
Pepper
Income for the month of December is ANS✔✔ $62,000
The following information has been provided:
COGM $83,000
Work in progress:
Beginning $12,000
Ending $29,000
Direct Labor $40,000
Materials in production $25,000
Overhead ??
What is the amount of overhead? ANS✔✔ $35,000
($83,000-$40,000-$25000+($29,000-$12,000))
An appliance repair shop purchased materials costing $12,000 in May. The
beginning inventory of material parts was $4,500 and the ending inventory
of material parts was $4,300. Payments for direct labor for May totaled
$27,000, secretarial costs were $2,000, and overhead of $6,000 was
incurred. In addition, $5,000 was spent on advertising and $2,000 for the
franchise name. Revenue for May was $67,000.
What is the cost of services sold for May? ANS✔✔ $45,200
($12,000 + $4,500 - $4,300 + $27,000 + $6,000 = $45,200)
, Solution 2024/2025
Pepper
If all the activity capacity is not used, this is an example of ANS✔✔ Unused
capacity
__________________________ result when organizations acquire many
multiperiod service capacities by paying cash up front or by entering into an
explicit contract that requires periodic cash payments ANS✔✔ Committed
fixed expenses
A coefficient of determination of 0.91 means ANS✔✔ That the independent
variable explains 91 percent of the variation in cost
Boss Company currently leases a delivery van from Check Enterprises for a
fee of $250 per month plus $0.40 per mile. Management is evaluating the
desirability of switching to a modern, fuel-efficient van, which can be leased
from David, Inc., for a fee of $600 per month plus $0.05 per mile. All
operating costs and fuel are included in the rental fees.
Boss calculated that Check Enterprises was the better choice if monthly
miles were below what milage? ANS✔✔ 1,000 miles
The following information is available for electrical costs for the last six
months of the year:
September- 3,200 units at $5,700
November - 1,200 units at $2,300
Using the high-low method, calculate the estimated electrical cost for a year
with 21,600 units.
