1

1. Both financial and managerial accounting rely on accepted principles that are enforced through an extensive set of rules and guidelines.
2. True
3. False

1 points

QUESTION 2

1. Direct costs are incurred for the benefit of more than one cost object.
2. True
3. False

1 points

QUESTION 3

1. A process cost summary usually does not include the number of equivalent units of production for the period.
2. True
3. False

1 points

QUESTION 4

1. Equivalent units of production are always the same as the total number of physical units finished during the period.
2. True
3. False

1 points

QUESTION 5

1. A major disadvantage of using a plantwide overhead rate is the extreme difficulty in gathering the needed information.
2. True
3. False

1 points

QUESTION 6

1. Activity-based costing often shifts overhead costs from large volume, standardized products to low-volume, specialty products that consume disproportionate resources.
2. True
3. False

1 points

QUESTION 7

1. As the level of volume of activity increases, the variable cost per unit remains constant.
2. True
3. False

1 points

QUESTION 8

1. As the volume increases, fixed cost per unit of output remains constant.
2. True
3. False

1 points

QUESTION 9

1. A favorable direct materials price variance might lead to an unfavorable direct materials quantity variance because the company purchased inferior materials.
2. True
3. False

1 points

QUESTION 10

1. A variable or flexible budget is so named because it only focuses on variable costs.
2. True
3. False

1 points

QUESTION 11

1. Managerial accounting is different from financial accounting in that:
2. Managerial accounting is more focused on the organization as a whole and financial accounting is more focused on subdivisions of the organization.
3. Managerial accounting never includes nonmonetary information.
4. Managerial accounting includes many projections and estimates whereas financial accounting has a minimum of predictions.
5. Managerial accounting is used extensively by investors, whereas financial accounting is used only by creditors.
6. Managerial accounting is mainly used to set stock prices.

1 points

QUESTION 12

1. A direct cost is a cost that is:
2. Identifiable as controllable.
3. Traceable to the company as a whole.
4. Does not change with the volume of activity.
5. Traceable to a single cost object.
6. Traceable to multiple cost objects.

1 points

QUESTION 13

1. An approach to managing inventories and production operations such that units of materials and products are obtained and provided only as they are needed is called:
2. Continuous improvement.
3. Customer orientation.
4. Just-in-time manufacturing.
5. Theory of constraints.
6. Total quality management.

1 points

QUESTION 14

1. Product costs:
2. Are expenditures necessary and integral to finished products.
3. Are expenditures identified more with a time period rather than with units of product.
4. Include selling and administrative expenses.
5. Are expensed on the income statement when incurred.
6. Are moved to the income statement for any unsold inventory at the end of the year.

1 points

QUESTION 15

1. A manufacturing company has a beginning finished goods inventory of $14,600, raw material purchases of $18,000, cost of goods manufactured of $32,500, and an ending finished goods inventory of $17,800. The cost of goods sold for this company is:
2. $21,200$29,300$32,500$47,100$27,600

1 points

QUESTION 16

1. A job order costing system would best fit the needs of a company that makes:
2. Shoes and apparel.Paint.Cement.Custom machinery.Pencils and erasers.

1 points

QUESTION 17

1. Adams Manufacturing allocates overhead to production on the basis of direct labor costs. At the beginning of the year, Adams estimated total overhead of $396,000; materials of $410,000 and direct labor of $220,000. During the year Adams incurred $418,000 in materials costs, $413,200 in overhead costs and $224,000 in direct labor costs. Compute the amount of under- or overapplied overhead for the year.
2. $10,000 overapplied.
3. $17,200 overapplied.
4. $10,000 underapplied.
5. $17,200 underapplied.
6. $4,800 underapplied.

1 points

QUESTION 18

1. Andrew Industries purchased $165,000 of raw materials on account during the month of March. The beginning Raw Materials Inventory balance was $22,000, and the materials used to complete jobs during the month were $141,000 direct materials and $13,000 indirect materials. What is the ending Raw Materials Inventory balance for March?
2. $46,000$11,000$33,000$24,000$9,000

1 points

QUESTION 19

1. A company has an overhead application rate of 125% of direct labor costs. How much overhead would be allocated to a job if it required total labor costing $20,000?
2. $5,000.$16,000.$25,000.$125,000.$250,000.

1 points

QUESTION 20

1. Marshall Enterprises charged the following amounts of overhead to jobs during the year: $20,000 to jobs still in process, $60,000 to jobs completed but not sold, and $120,000 to jobs finished and sold. At year-end, Marshall Enterprise's Factory Overhead account has a credit balance of $5,000, which is not a material amount. What entry should Marshall make at year-end?
2. No entry is needed.Debit Factory Overhead $5,000; credit Cost of Goods Sold $5,000.Debit Cost of Goods Sold $5,000; credit Factory Overhead $5,000.Debit Factory Overhead $5,000; credit Work in Process Inventory $5,000.Debit Factory Overhead $5,000; credit Finished Goods Inventory $5,000.

1 points

QUESTION 21

1. Job A3B was ordered by a customer on September 25. During the month of September, Jaycee Corporation requisitioned $2,500 of direct materials and used $4,000 of direct labor. The job was not finished by the end of the month, but needed an additional $3,000 of direct materials and additional direct labor of $6,500 to finish the job in October. The company applies overhead at the end of each month at a rate of 200% of the direct labor cost incurred. What is the total cost of the job when it is completed in October?
2. $16,000$22,500$37,000$26,500$32,000

1 points

QUESTION 22

1. A company that applies process costing is most frequently characterized by:
2. Low standardization and high production volume.Custom orders and mass production.Repetitive production and unique products.Repetitive production and low production volume.Similar products and high production volume.

1 points

QUESTION 23

1. A company uses a process costing system. Its Weaving Department completed and transferred out 120,000 units during the current period. The ending inventory in the Weaving Department consists of 40,000 units (20% complete with respect to direct materials and 60% complete with respect to conversion costs).
3. Determine the equivalent units of production for the Weaving Department for direct materials and conversion costs assuming the weighted average method.
4. 120,000; 120,000120,000; 160,000128,000; 120,000128,000; 144,000128,000; 184,000

1 points

QUESTION 24

1. A company uses the weighted average method for inventory costing. At the beginning of a period the production department had 20,000 units in beginning Work in Process inventory which were 40% complete; the department completed and transferred 165,000 units. At the end of the period, 22,000 units were in the ending Work in Process inventory and are 75% complete. Compute the number of equivalent units produced by the department.
2. 181,500.165,000.173,500.145,000.187,000.

1 points

QUESTION 25

1. A key idea in process costing that refers to the number of units that could have been started and completed given the costs incurred during the period is known as:
2. Manufacturing overhead.Units in process.A job cost sheet.Equivalent units of production.Process cost summary.

1 points

QUESTION 26

1. What is the reason for pooling costs?
2. To shift costs from low-volume to high-volume products.It is a budgeting technique designed to accurately track fixed costs.Determining a pool rate for all costs incurred by the same activity reduces the number of cost assignments required.This procedure helps to determine which costs are directly related to production volume.It simplifies departmental overhead costing procedures.

1 points

QUESTION 27

1. A company uses activity-based costing to determine the costs of its three products: A, B, and C. The budgeted cost and activity for each of the company's three activity cost pools are shown in the following table:
3. Budgeted ActivityActivity Cost PoolBudgeted CostProduct AProduct BProduct CActivity 1$70,0006,0009,00020,000Activity 2$45,0007,00015,0008,000Activity 3$82,0002,5001,0001,625
4. What are the activity rates for the three activities under activity based costing?
5. (1) $2.00; (2) $3.00; (3) $3.50.(1) $3.50; (2) $1.50; (3) $32,80.(1) $3.50; (2) $3.00; (3) $16.00.(1) $2.00; (2) $1.50; (3) $16.00.(1) $2.00; (2) $1.50; (3) $32.80.

1 points

QUESTION 28

1. A company uses activity-based costing to determine the costs of its three products: A, B and C. The budgeted cost and activity for each of the company's three activity cost pools are shown in the following table:
3. Budgeted ActivityActivity Cost PoolBudgeted CostProduct AProduct BProduct CActivity 1$70,0006,0009,00020,000Activity 2$45,0007,00015,0008,000Activity 3$82,0002,5001,0001,625
4. How much overhead will be assigned to Product B using activity-based costing?
5. $56,500$78,000$62,500$197,000$70,000

1 points

QUESTION 29

1. A method of assigning overhead costs to a product using a single overhead rate is:
2. Plantwide overhead rate method.Cost pool overhead rate method.Departmental overhead rate method.Activity-based costing.Overhead cost allocation method.

1 points

QUESTION 30

1. A graph used to analyze past cost behaviors by displaying costs and unit data for each period as points on the diagram is called a:
2. Least-squares diagram.Step-wise diagram.Scatter diagram.Break-even diagram.Composite diagram.

1 points

QUESTION 31

1. A company's product sells at $12 per unit and has a $5 per unit variable cost. The company's total fixed costs are $98,000. The break-even point in units is:
2. 5,158.7,000.8,167.14,000.19,600.

1 points

QUESTION 32

1. Which of the following is the correct interpretation of a degree of operating leverage of 5?
2. Operating leverage of 5 means that sales can decrease by 5% before the firm's current level of sales will hit the break-even point.Operating leverage of 5 means that if sales increase by 5% the firm will hit its break-even point.Operating leverage of 5 means that if sales increase by 5%, there will be a 25% increase in the firm's pretax profit.Operating leverage of 5 measures the degree of debt employed by the firm's debt structure.Operating leverage of 5 means that the company would need to increase sales by 5 times in order to hit its break-even point.

1 points

QUESTION 33

1. A company has fixed costs of $270,000, a unit contribution margin of $14, and a contribution margin ratio of 55%. If the firm wants to earn a target $60,000 pretax income, what amount of sales must the company make (rounded to the nearest whole dollar)?
2. 490,909.330,000.109,090.381,818.600,000.

1 points

QUESTION 34

1. A company's normal operating range, which excludes extremely high or low operating levels that are not likely to occur, is called the:
2. Margin of safety.Contribution range.Break-even point.Relevant range.High-low point.

1 points

QUESTION 35

1. A statistical method for identifying cost behavior is the:
2. Scatter diagram method.High-low method.Composite method.CVP charting method.Least-squares regression method.

1 points

QUESTION 36

1. Mentor Corp. has provided the following information for the current year:
2. Units produced3,500 unitsSale price$200 per unitDirect materials$70 per unitDirect labor$55 per unitVariable manufacturing overhead$20 per unitFixed manufacturing overhead$350,000 per yearVariable selling and administrative costs$30 per unitFixed selling and administrative costs$150,000 per year
3. Calculate the unit product cost using absorption costing.
4. $245
5. $275
6. $55
7. $145

1 points

QUESTION 37

1. Using the information in Question 35above,calculate the unit product cost using variable costing.
2. $245
3. $275
4. $55
5. $145

1 points

QUESTION 38

1. Cool Pools, a manufacturer of above ground pools, began operations on January 1 of the current year. During this time, the company produced 45,000 units and sold 44,000 units at a sales price of $60 per unit. Cost information for this year is shown in the following table:
3. Production costsDirect materials$11.25 per unitDirect labor$3.20 per unitVariable overhead$315,000 in totalFixed overhead$39,600 in totalNonproduction costsVariable selling and administrative$2,000 in totalFixed selling and administrative$6,000 in total
5. Given the Cool Pools Company data, what is net income using variable costing?
6. $1,649,480$1,648,600$1,627,150$1,709,480$1,708,600

1 points

QUESTION 39

1. Which of the following best describes costs assigned to the product under the absorption costing method?
3. Direct labor (DL)
4. Direct materials (DM)
5. Variable selling and administrative
6. Variable manufacturing overhead
7. Fixed selling and administrative
8. Fixed manufacturing overhead
9. DL, DM, variable selling and administrative costs, and variable manufacturing overhead.DL, DM, and variable manufacturing overhead.DL, DM, variable manufacturing overhead, and fixed manufacturing overhead.DL and DM.DL, DM, fixed selling and administrative, and fixed manufacturing overhead.

1 points

QUESTION 40

1. In preparing a budgeted balance sheet, the amount for Accounts Receivable data can be derived from:
2. The purchases budget and schedule of cash payments.The sales budget and the schedule of cash receipts.The capital expenditures budget and purchases budget.The budgeted income statement and budgeted balance sheet.The selling expenses budget and the schedule of cash receipts.

1 points

QUESTION 41

1. Fortune Company's direct materials budget shows the following cost of materials to be purchased for the coming three months:
3. JanuaryFebruaryMarchMaterial purchases$12,04014,15010,970
4. Payments for purchases are expected to be made 50% in the month of purchase and 50% in the month following purchase. The December Accounts Payable balance is $6,500. The budgeted cash payments for materials in January are:
5. $6,500.$9,270.$12,520.$13,095.$18,540.

1 points

QUESTION 42

1. Southland Company is preparing a cash budget for August. The company has $17,000 cash at the beginning of August and anticipates $120,800 in cash receipts and $134,500 in cash disbursements during August. Southland Company wants to maintain a minimum cash balance of $10,000. To maintain the minimum cash balance of $10,000, the company must borrow:
2. $0.$10,000.$6,700.$7,000.$27,700.

1 points

QUESTION 43

1. Frankie's Chocolate Co. reports the following information from its sales budget:
3. Expected Sales:July$90,000August104,000September120,000
4. Cash sales are normally 25% of total sales and all credit sales are expected to be collected in the month following the date of sale. The total amount of cash expected to be received from customers in September is:
5. $30,000.$78,000.$108,000.$120,000.$130,500.

1 points

QUESTION 44

1. A department store has budgeted sales of 12,000 men's suits in September. Management wants to have 6,000 suits in inventory at the end of the month to prepare for the winter season. Beginning inventory for September is expected to be 4,000 suits. What is the dollar amount of the purchase of suits if each suit has a cost of $75.
2. $750,000.$900,000.$1,050,000.$1,200,000.$1,350,000.

1 points

QUESTION 45

1. A company's flexible budget for 12,000 units of production showed sales, $48,000; variable costs, $18,000; and fixed costs, $16,000. The operating income expected if the company produces and sells 16,000 units is:
2. $2,667.$14,000.$18,667.$24,000.$35,000.

1 points

QUESTION 46

1. The difference between actual quantity of input used and the standard quantity of input used results in a:
2. Controllable variance.Standard variance.Budget variance.Quantity variance.Price variance.

1 points

QUESTION 47

1. Parallel Enterprises has collected the following data on one of its products. During the period the company produced 25,000 units. The direct materials price variance is:
3. Direct materials standard (7 kg. @ $2/kg)$14 per finished unitActual cost of materials purchased$322,500Actual direct materials purchased and used150,000 lbs.
4. $27,500 unfavorable.$50,000 unfavorable.$50,000 favorable.$22,500 unfavorable.$22,500 favorable.

1 points

QUESTION 48

1. Regarding overhead costs, as volume increases:
2. Unit fixed cost increases, unit variable cost decreases.Unit fixed cost decreases, unit variable cost increases.Unit variable cost decreases, unit fixed cost remains constant.Unit fixed cost decreases, unit variable cost remains constant.Both unit fixed cost and unit variable cost remain constant.

1 points

QUESTION 49

1. A flexible budget performance report compares the differences between:
2. Actual performance and budgeted performance based on actual sales volume.Actual performance over several periods.Budgeted performance over several periods.Actual performance and budgeted performance based on budgeted sales volume.Actual performance and standard costs at the budgeted sales volume.

1 points

QUESTION 50

1. Based on a predicted level of production and sales of 12,000 units, a company anticipates reporting operating income of $26,000 after deducting variable costs of $72,000 and fixed costs of $10,000. Based on this information, the budgeted amounts of fixed and variable costs for 15,000 units would be:
2. $10,000 of fixed costs and $72,000 of variable costs.$10,000 of fixed costs and $90,000 of variable costs.$12,500 of fixed costs and $90,000 of variable costs.$12,500 of fixed costs and $72,000 of variable costs.$10,000 of fixed costs and $81,000 of variable costs.