ARBAMINC UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF ACCOUNTING AND FINANCE
FINAL EXAMINATION

Course: Cost & Management Accounting I Weight: 50%

Course Code: ACFN 2091 Exam Time:@ 8:00-11:00 A.M
Instructor: Genanew A. Time Allowed: 3:00 hours
Target Group: Regular G2 Management Students
Exam date: June 21/06/2019

Name: ______________________________________ID.NO.____________Sec.__________

Admission: Regular Add

General instructions
 Check that the exam booklet has two parts and nine pages including cover page.
 Check that your exam paper contains both front and back pages.
 Ticks above you either are regular or add.
 Attempting to cheat is strictly forbidden and it makes your result null.
 Answer all parts on the ruled answer sheet attached with your exam.
 Neatly handwriting is encouraging for workout questions
 Switch off your cell phone
 Sharing calculator is not allowed

Do not turn this page until you are told to do so!!

 PARTE ONE: MULTIBLE CHOICES (30%)
Choose the correct answer from the following alternatives and write your answer on the
ruled paper provided (1 Pont’s each)
1. One of the following statements is true about cost accounting and management accounting
comparison.
A. Scope of cost accounting is not limited to providing cost information for managerial
uses.
B. Scope of cost accounting is narrower than that of management accounting.
C. Evolution of cost accounting is mainly due to the limitation of financial accounting.
D. The main emphasis of management accounting is not on planning and controlling.
E. A & B
2. Which one of the following is correct about Cost accounting?
A. provides information on the efficiency of factory labor
B. provides information on the cost of servicing commercial customers
C. provides information on the performance of an operating division
D. All of these answers are correct.
E. None of the above
3. Which one of the following is odd?

A. variable cost per unit varies with increase or decrease in the volume of output
B. conversion cost is equal to direct wages plus factory overhead
C. fixed cost per unit varies with increase or decrease in the volume of output
D. An item of cost that is direct for one business may be indirect for another
4. If DM represents direct materials; DL represents direct labor; PC represents prime cost FOH
stands for factory overhead; IM represents indirect materials; IL represents indirect labors;
CC represents conversation cost and MC represents manufacturing costs; which one is wrong
about the relationship of these operating costs?
A. PC + FOH = MC
B. DM + DL = MC- FOH
C. IM + IL = CC- DL
D. MC = IL+ IM + CC
5. In a job order cost accounting system, the entry to record the flow of direct materials into
production is:
 A. Debit Materials, credit Work in Process
B. Debit Factory Overhead, credit material
C. Debit Work in Process, credit Supplies
D. Debit Work in Process, credit material
6. Transferred in costs in a cost of production report are most similar to:
A. Conversion costs added during the process
B. Materials added at the beginning of the process
C. Costs transferred to the next process
D. Costs included in beginning inventory
E. All of the above
F. None of the above
7. In a process cost accounting, the costs of direct materials and direct labor are charged to:
A. Service departments
B. Customer accounts receivable
C. Processing departments
D. Job orders
E. All of the above
F. None of the above
8. In a process costing system, the journal entry used to record the transfer of units from
Department A, a processing department, to Department B, the next processing department,
includes a debit to:
A. Work in Process Department A and a credit to Work in Process Department B
B. Work in Process Department B and a credit to Materials
C. Finished Goods and a credit to Work in Process Department B
D. Work in Process Department B and a credit to Work in Process Department A
E. All of the above
F. None of the above
9. Which one of the flowing schedules exists in the Cost of Production Report under Process
Costing?
A. Physical Quantity Schedule
B. Equivalent Units Schedule
 C. Cost flow Schedule
D. Equivalent Unit Costs Schedule
E. All of the above
F. None of the above
10. Which one of the following characterizes Process costing?
A. High production volume and homogeneous products
B. High production volume and heterogeneous products
C. Low production volume and heterogeneous products
D. Low production volume and homogeneous products
E. All of the above
F. None of the above
11. Which of the following statements is true?
A. Costs are traced to departments and then allocated to units of product when job-order
costing is used
B. Companies that produce many different products or services are more likely to use job
order costing systems than process costing systems.
C. Job-order costing systems are used by service firms only and process costing systems are
used by manufacturing concern only
D. Companies that produce many different products or services are more likely to use
process-costing systems than Job order costing systems.
E. All of the above
F. None of the above
12. Under which of the following conditions will FIFO method of process costing yield the
same equivalent unit costs as the Weighted-Average Method?
A. When units produced are homogenous in nature.
B. When there is no ending inventory
C. When beginning and ending inventories are each 50% complete
D. When there is no beginning inventory
E. All of the above
F. None of the above
13. The difference between actual costing and normal costing is:
A. normal costing uses actual quantities of direct-costs
B. actual costing uses actual quantities of direct-costs
C. normal costing uses budgeted indirect-costs
D. actual costing uses actual quantities of cost-allocation bases

14. All costs incurred beyond the split off point that are assignable to one or more individual
products are called:

A. byproduct costs
B. joint costs
C. main costs
D. separable costs
15. In joint costing:
A. costs are assigned to individual products as assembly of the product occurs
B. costs are assigned to individual products as disassembly of the product occurs
C. a single production process yields two or more products
D. Both B and C are correct.

16.
 A. Step-down method
B. Reciprocal allocation method
C. Direct allocation method
D. Sequential allocation method
17.

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