Sample Questions - Cost Accounting
1. What is cost accounting?
2. What is the difference between job order costing and process costing?
3. What are the three main manufacturing costs?
4. What is meant by manufacturing overhead costs? Provide some examples of manufacturing overhead costs.
5. Briefly explain the steps in allocating overhead using activity based costing.
6. Which costing method is appropriate for a company that specializes in manufacturing mass products of the same kind of products?
Use the information of below to answer questions 7 and 8.
The internal financial records of PacoPico Industries had the following information for the last financial period:
| Direct materials cost | $60,000 |
| Direct labor costs | $80,000 |
| Fixed Overhead | $40,000 |
| Variable overhead | $70,000 |
7. Please calculate the following:
a. The prime costs incurred in the period?
b. The conversion costs for the period?
c. The total manufacturing costs for the period?
8. If PacoPico Industries made 5000 units in the year and managed to sell 4000 of the units at $100 a unit, calculate;
a. The cost of goods sold.
b. The cost of goods inventory.
c. The gross profit from the sales.
Use the following information to answer questions 9 and 10.
OpikiOpaka Manufacturing situated in the heart of the American Midwest manufactures legendry cowboy jackets. The following information was recorded on its financial transactions for the year 2016.
| Direct labor | $80,000 |
| Direct materials purchased | $30,000 |
| Actual direct materials used | $20,000 |
| Manufacturing Overhead | $30,000 |
| Cost of finished goods | $130,000 |
| Selling expenses | $15,000 |
| Non-manufacturing expenses | $10,000 |
OpikiOpaka Manufacturers produced 10,000 jackets in the year 2016 and sold 8,000 of the manufactured jackets for $30 a jacket.
9. Answer the following questions:
a. What was the unit cost of one cowboy jacket.
b. What was the cost of the goods sold during the year.
10. Assume the tax paid by the company was 10% of total sales;
a. Calculate the gross profit for the year
b. Calculate the net profit for the year
c. Calculate the gross profit and net profit for the year if the company could have sold all the jackets produced.