1. Variable cost per unit is budgeted to be $6.00 and fixed cost per unit is budgeted to be $3.00 in a period when 5,000 units are produced. If production is actually 4,500 units, what is the expected total cost of the units produced?
$45,000
$40,500
$43,500
$42,000

2. Instant Charm, Inc. sells mascara. In June, it produced and sold 10,000 tubes of mascara. Total variable costs were $21,000 and fixed costs totaled $24,000. In August, Instant Charm produced and sold 9,000 units. Which statement is correct? (Points : 2)
Fixed cost per unit will be $2.67
Total fixed costs will be $21,600
Variable costs in total will be $40,500
Variable costs per unit will be $2.33

3. Marco Diner produced and sold 2,000 bagels last month and had fixed costs of $6,000. If production and sales are expected to increase by 10% next month, which of the following statements is true?
Total fixed costs will increase.
Total fixed costs will decrease.
Fixed cost per unit will increase.
Fixed cost per unit will decrease.

4. Incremental analysis involves calculating the difference in revenue and difference in costs between alternatives. (Points : 2)
True
False

5. Supply Chain Management Systems (SCM):
computerize inventory control and production planning
organize activities between a company and its suppliers
automate customer service and support.
allow customers to track their purchase as it is being produced.

6. Deere Farm Products applies overhead using a predetermined overhead rate. Overhead is applied based on direct labor hours. At the beginning of the year it is estimated that $500,000 in overhead will be incurred and 25,000 hours will be worked. At year end, 24,000 hours were actually worked, and actual overhead costs were $470,000. What can be concluded from this?
Cost control was good.

Overhead is overapplied by $10,000
Overhead is underapplied by $10,000
Overhead is applied at a rate of $19.58 per hour

7. Process costing systems are generally used by companies that produce large quantities of identical items.
True
False

8. Total quality management (TQM) programs are also known as
just-in-time programs.
activity-based allocation programs.
critical path programs.

continuous quality improvement programs.

9. Which of the following is not a commonly used measure of activity for allocating overhead?
direct labor cost
machine hours
sales commissions
direct labor hours

10. Job-order costing can be used by service companies.
True
False