# Cost Accounting Proctored Final Exam (Part A)

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## Description

1. Factory overhead for the Praeger Company has been estimated as follows:

Budgeted direct labor hours 50,000

Production for the month was 75 percent of the budget and actual factory overhead totaled \$140,000

a. Calculate the predetermined factory overhead rate.
b. Calculate the under – or overapplied factory overhead.

2. Blaine Corporation uses a standard cost system and has established the following standards for one unit of product.

Standard Quantity Standard Price Standard Cost
Direct materials 10 pounds \$2.50 per pound \$ 25.00
Direct labor .25 hour \$10.00 per hour 2.50
\$ 27.50

During October, the company purchased 240,000 pounds of material at a.com/economics/short-and-long-run-cost-functions”>total costof \$588,000. The total factory wages for October were \$50,350. During October, 21,000 units of product were manufactured using 212,000 pounds of material and 5,300 direct labor hours.

a. Compute the material quantity and labor efficiency variances
b. Compute the material price and labor rate variances
c. Indicate whether each of the above variances is favorable or unfavorable

3. Information for the month of May concerning Department A, the first stage of the.com/economics/production”>productioncycle, is as follows:

Materials Conversion Costs
Beginning work in process \$ 7,200 \$ 6,000
Current costs 27,800 16,050
Material costs \$ 35,000 \$ 22,050
Equivalent units base on average cost method 10,000 9,800

Good completed 9,000 units
Ending work in process 1,000

Material costs are added at the beginning of the process. The ending work in process is 80 percent complete as to conversion costs. How would the total costs accounted for be distributed using the average cost method?

PART B

1. What is the primary difference between the term unit cost, as commonly used in a process cost system, and the term job cost, as commonly used in a job order cost system?
1. What is the primary difference between the term unit cost, as commonly used in a process cost system, and the term job cost, as commonly used in a job order cost system?
a. How much of her gross pay that week was direct labor?
b. How much was indirect labor?
3. A company has \$50,000 in fixed costs and sells one product with a selling price of \$15 per unit. If variable costs are \$5 per unit, what is this company’s break-even sales in units?
4. For a manufacturing firm, what is the difference between cost of goods manufactured and cost of goods sold?
5. What are factory overhead costs, and what distinguishes them from other manufacturing costs?
6. What are the advantages and disadvantages of a stable production policy for a company that has greatly fluctuating sales during the year?
7. When is it necessary to use separate equivalent production figures in computing the unit costs of materials, labor, and overhead?
8. How does a just-in-time inventory system differ from more traditional approaches to costing?
9. What factors should a service firm consider in deciding whether to use direct labor dollars or direct labor hours in charging overhead to jobs?
10. Is a favorable variance necessarily good? Explain.

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