Home / My courses / UGRD-ACTG6144A-2323T / MIDTERM EXAM / Midterm Exam

Started on Saturday, 2 March 2024, 11:34 PM

State Finished
Completed on Sunday, 3 March 2024, 12:55 AM
Time taken 1 hour 21 mins
Marks 38.00/50.00
Grade 76.00 out of 100.00

Question 1

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Process costing is most appropriate when manufacturing large batches of homogenous products

Select one:
True 

False

Question 2

Incorrect

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How many units must be

accounted for?

Select one:
a. 138,200 

b. 118,200

c. 130,000
d. 128,200
Question 3

Incorrect

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The FIFO method combines beginning inventory and current production to compute cost per unit of production

Select one:
True 

False

Question 4

Correct

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These are type of production spoilage that are not expected on a production process that is operating efficiently.

Select one:
a. Abnormal Spoilage

b. Normal Spoilage
c. Rework

d. Scrap

Question 5

Correct

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How many units were started

and completed in the period?

Select one:
a. 130,000

b. 120,000
c. 111,800

d. 121,800
Question 6

Correct

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The cost of normal discrete losses is absorbed by all units past the inspection point on an equivalent unit basis.

Select one:
True 

False

Question 7

Correct

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Assume 8,000 units were transferred to Decorating. Compute the number of equivalent units in Decorating for material.

Select one:
a. 7,390

b. 8,000

c. 8,450

d. 7,970

Your answer is correct.

Question 8

Correct

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The cost of normal discrete losses is absorbed by all units in ending inventory.

Select one:
True

False 

Question 9

Correct

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The amount incurred in this type of spoilage is treated as period costs.

Select one:
a. Scrap

b. Abnormal Spoilage
c. Normal Spoilage

d. Rework

Question 10

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The products which undergo common process and incur common costs are called joint products.

Select one:
True 

False

Question 11

Correct

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The difference between EUP calculated using FIFO and EUP calculated using weighted average is the equivalent units

Select one:
a. started and completed during the period.

b. residing in ending Work in Process Inventory.

c. uncompleted in Work in Process Inventory.

d. residing in beginning Work in Process Inventory.

Question 12

Incorrect

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If two or more products share a common process before they are separated, the joint costs should be assigned in a manner that

Select one:
a. Maximizes total earnings 

b. Minimizes variations in unit production costs

c. Assigns a proportionate amount of the total cost to each product on a quantitative basis

d. Does not introduce an element of estimation into the process of accumulating costs form each product

Question 13

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A joint process is a manufacturing operation yielding two or more identifiable products from the resources employed in the process.
The two characteristics that identify a product generated from this type of process as a joint product are that

Movie Equipments Inc. has two joint products called, EX and Y's, and uses the net realizable value method of allocating joint costs.
The total joint costs for the year 2000 amounted to P300,000. During the year, additional processing costs after split-off were
P160,000 for EX and P240,000 for Y's. The company produced 16,000 units of EX and 8,000 units of Y's during the year. The selling
price for EX is P20 and for Y's is P50. The portion of joint costs allocated to Y's during the year is
{
= P150,000
~ P175,000
~ P225,000
~ P180,000
}

Select one:
a. It is identifiable as an individual product before the production process, and it has relatively significant sales volume when
compared with the other products.
b. It is identifiable as an individual product only upon reaching the split-off point, and it has relatively minor sales volume when
compared with the other products.
c. It has relatively significant sales volume when compared with the other products and it can be sold immediately without any
additional processing.
d. It is identifiable as an individual product only upon reaching the split-off point, and it has relatively significant sales 
volume when compared with the other products.
Question 14

Correct

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The cost of normal discrete losses is written off as a loss on an equivalent unit basis.

Select one:
True

False 

Question 15

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To compute equivalent units of production using the FIFO method of process costing, work for the current period must be stated in
units

Select one:
a. Started during the period and units transferred out during the period
b. Processed during the period and units completed during the period

c. Completed during the period and units in ending inventory

d. Completed from beginning inventory, units started and completed during the period, and units partially completed in 
ending inventory

Question 16

Correct

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If normal spoilage is detected at an inspection point within the process (rather than at the end), the cost of that spoilage should be
included with the cost of the units sold during the period.

Select one:
True

False 
Question 17

Correct

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Joint production processes are seldom found in

Select one:
a. Manufacturing firms

b. Service firms
c. Crude oil drilling

d. Meat industry

Question 18

Correct

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Assume 8,000 units were transferred to Decorating. Compute the number of equivalent units in Decorating for material.

Select one:
a. 7,970

b. 8,450

c. 8,000

d. 7,390

Your answer is correct.

Question 19

Correct

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Companies that use a process-cost accounting system would establish a separate Work-in-Process Inventory account for each
manufacturing department.

Select one:
True 

False

Question 20

Correct

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If normal losses are accounted for as specifically identified on a particular job, estimated amount of losses should be accounted as
an outright expense.

Select one:
True

False 
Question 21

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Camelin Inc. uses the weighted-average method in its process costing system. The following data concern the operations of the
company's first processing department for a recent month.

Using the weighted-average method, determine the equivalent units of production for materials and conversion costs

Select one:
a. Materials Conversion

$20,440 $20,200

b. Materials Conversion

$4,800 $4,800

c. Materials Conversion

$5,150 $5,080

d. Materials Conversion
$19,800 $19,800

Your answer is correct.

Question 22

Incorrect

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Regardless of the methods of presentation used in by-products, the company will generate the same amount of net income if
proceeds from sale of by-product will be accounted at the time it is produced.

Select one:
True 

False
Question 23

Incorrect

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The FIFO method of process costing will produce the same cost of goods transferred out amount as the weighted average method
when there is no beginning Work in Process Inventory

Select one:
True

False 

Question 24

Correct

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These are type of production spoilage that are inherent and inevitable, thus, expected in the production process even if the production
process is operating efficiently

Select one:
a. Scrap
b. Rework

c. Abnormal Spoilage

d. Normal Spoilage

Question 25

Correct

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If a company obtains two saleable products from the refining of one ore, the refining process should be accounted for a/an

Select one:
a. Reduction process
b. Extractive process

c. Joint process
d. Mixed cost process
Question 26

Correct

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Discrete production losses are assumed to occur at the end of a process.

Select one:
True 

False

Question 27

Correct

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What are equivalent units of production for conversion costs assuming weighted average is used?

Select one:
a. 114,775
b. 115,650

c. 114,400
d. 113,525

Question 28

Correct

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To compute equivalent units of production using the FIFO method of process costing, work for the current period must be stated in
units started during the period and units transferred out during the period.

Select one:
True

False 
Question 29

Correct

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Equivalent-unit calculations are necessary to allocate manufacturing costs between units sold and ending work in process.

Select one:
True

False 

Question 30

Correct

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The two methods used to determine the equivalent units of production are FIFO and specific identification.

Select one:
True

False 

Question 31

Incorrect

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In comparing the FIFO and weighted average methods for calculating equivalent units

Select one:
a. The two methods will give similar results even if physical inventory levels and production costs (material and conversion
costs) fluctuate greatly from period to period
b. The FIFO method is better than the weighted average method for judging the performance in a period independently form 
performance in preceding periods.
c. The FIFO method tends to smooth costs out more over time than the weighted average method
d. The weighted average method is more precise than the FIFO method because the weighted average method is based only on
the work completed in the current period
Question 32

Correct

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When the cost of lost units must be assigned, and those same units must be included in an equivalent unit schedule, these units are
considered

Select one:
a. normal and discrete.

b. normal and continuous.

c. abnormal and discrete.

d. abnormal and continuous

Your answer is correct.

Question 33

Correct

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What are equivalent units of production for conversion costs, assuming FIFO?

Select one:
a. P10,625

b. P9,375

c. P0
d. P12,500
Question 34

Correct

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The FIFO method separates beginning inventory and current production to compute cost per unit of production

Select one:
True 

False

Question 35

Incorrect

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Under the discrete production type, components of finished goods placed to production cannot be counted on a per piece basis

Select one:
True 

False

Question 36

Correct

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The weighted average costing method assumes that units in beginning inventory are the first units transferred

Select one:
True

False 

Question 37

Correct

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Assume the material cost per EUP is P8.00 and the conversion cost per EUP is P15 in Decorating. What is the cost of completing the
units in beginning inventory?

Select one:
a. P11,940
b. P 1,860

c. P 960
d. P 1,380
Question 38

Incorrect

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Material is added at the beginning of a process in a process costing system. The beginning Work in Process Inventory for the process
was 30 percent complete as to conversion costs. Using the FIFO method of costing, the number of equivalent units of material for the
process during this period is equal to the

Select one:
a. units started this period in the process plus the beginning Work in Process Inventory.
b. units started and completed this period in the process. 

c. beginning inventory this period for the process.

d. units started and completed this period plus the units in ending Work in Process Inventory

Question 39

Correct

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To compute equivalent units of production using the FIFO method of process costing, work for the current period must be stated in
units completed from beginning inventory, units started and completed during the period, and units partially completed in ending
inventory.

Select one:
True 

False

Question 40

Incorrect

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Selling point is the point where jointly manufactured products are being separated either for further processing or transferring as
completed and saleable goods.

Select one:
True 

False
Question 41

Correct

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Proper cost allocation for inventory costing and cost of goods sold computations are important because

Select one:
a. The government have laws requiring proper balance sheet preparation and recommended allocation methods

b. Inventory costing is essential for proper balance sheet preparation

c. Both B and D

d. Cost of goods sold is an important component in the determination of net income

Question 42

Correct

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____________________ are products with substantial value which are produced simultaneously by the same process up to a split-off
point

Select one:
a. By-products.

b. Minor products

c. Joint products.
d. Both a and b

Question 43

Correct

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Normal continuous losses are absorbed by all units in ending inventory and transferred out on a EUP basis.

Select one:
True 

False
Question 44

Correct

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The amount incurred in this type of spoilage is treated as part of product costs.

Select one:
a. Rework

b. Normal Spoilage
c. Abnormal Spoilage

d. Scrap

Question 45

Incorrect

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What was the cost transferred out of Forming during the month?

Select one:
a. P8,330 

b. P5,341

c. P6,419

d. P8,245

Your answer is incorrect.

Question 46

Correct

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All material is added at the start of the process and all finished products are transferred out.

How many units were transferred out in August?

Select one:
a. 18,000

b. 21,500

c. 15,500

d. 24,000

Your answer is correct.

Question 47

Correct

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The FIFO costing method assumes that units in beginning inventory are the first units transferred.

Select one:
True 

False
Question 48

Correct

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Continuous production losses are assumed to occur uniformly throughout the process.

Select one:
True 

False

Question 49

Incorrect

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Under discrete production, losses are assumed to occur

Select one:
a. at the end of process only 

b. during the production only

c. either at the beginning of the process, during the production or even at the end of process.

d. at quality inspection point.

Question 50

Incorrect

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"Total costs to be accounted for" does not include which of the following costs?

Select one:
a. Ending work-in process balance

b. Prior department costs transferred in

c. Beginning work-in process balance 

d. Direct materials requisitioned for the department

◄ Prelim Exam

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