1. Walmart Co. has in-store space that it continuously utilizes to make and sell carmeled popcorn. The only other possible use of that space would be to rent it to a discountoptometrist, $1.99 Optical. From Walmart Co.'s perspective, the foregone rent revenue represents

Group of answer choices

a sunk cost for Walmart Co.

an opportunity cost for Walmart Co.

a differential cost for Walmart Co.

a discretionary cost for Walmart Co.

2. A manufacturer (seller) received an offer from an exporter (buyer) for 10,000 units of product at the reduced purchase price of $16 per unit. (Firm's normal domestic selling price is $20.) Acceptance of the offer will not affect normal production or domestic sales prices. The seller's data is available:

Exporter's offer price ..................................................................... $16

Unit manufacturing costs: Variable cost/unit .............................. $13

Fixed (nondiscretionary) costs: Fixed cost/unit ............................ $ 1

What is the total amount of seller's profit or loss from acceptance of the offer?

Group of answer choices

$20,000 profit

$30,000 profit

$40,000 profit

$60,000 profit

3. The condensed income statement for a business for the past year is as follows:

Product T Product U Product V Total

Sales $600,000 320,000 520,000 $ 1,440,000

Less variable costs <540,000> <220,000> < 440,000> < 1,200,000>

Contribution margin $ 60,000 $100,000 $ 80,000 $ 240,000

Less fixed costs <145,000> <40,000> <145,000> < 330,000>

Income (loss) $ (85,000) $ 60,000 $ (65,000) $ (90,000)

Management is considering the discontinuance of the manufacture and sale of Product V at the end ofthe current year. The discontinuance would have no effect on the total fixed costs and expenses oron the sales of Product T or Product U. What change in net income will result if Product V isdiscontinued?

4. Bell Company is considering the disposal of equipment that is no longer needed for operations when it unexpectedly received an offer to lease the machine to another business for a total of $170,000. The repair, insurance, and property tax expenses during the period of the lease are estimated at$40,000. Alternatively, the equipment can be sold through a broker for $120,000 less a 10%commission. Show your work to determine whether the equipment should be leased or sold.

5. Which of the following is an example of direct labor cost for an airplane manufacturer?

Group of answer choices

Cost of oil lubricants for factory machinery

Salary of plant supervisor

Cost of jet engines

Cost of wages of pilot and flight crew

Cost of wages of assembly worker

6. Conversion costs are made up of:

Group of answer choices

materials and labor

product costs and labor

labor and factory overhead

factory overhead and product costs

All of the Above

7. Which statement is NOT true?

Group of answer choices

Work in process inventory account appears on the balance sheet

Materials inventory account contains only direct materials

Finished goods inventory account is valued at the selling price of the goods manufactured

All of the statements are true

8. The entry to record direct labor costs into production in a job order cost accounting system is:

Group of answer choices

debit Work in Process, credit Wages Payable

debit Finished Goods, credit Wages Payable

debit Factory Overhead, credit Work in Process

debit Factory Overhead, credit Wages Payable

9. Sam's Shirts manufactures men's dress shirts. If the cost pool is the overall production process, which of the following would be considered an indirect cost?

Group of answer choices

The cost of material

The salary of the production manager

The labor cost to sew the shirts

None of the above are indirect costs

10. If the cost of materials purchased in the period is $120,000, and, $95,000 of those materials are used in the manufacturing process, then:

Group of answer choices

the unused $25,000 is a period cost

the unused $25,000 is part of work-in-process inventory in the period

the unused $25,000 is classified as materials inventory on the balance sheet

the unused $25,000 is part of finished goods inventory on the balance sheet

11. Collins Company forecasts in January that total overhead for the current year will be $12,000,000 and that total machine hours will be 200,000 hours. Year to date, the actual overhead is $8,000,000 and actual machine hours are 100,000 hours. If Collins Company uses a predetermined overhead rate based on machine hours for applying overhead, what is that overhead rate?

Group of answer choices

$80 per hour

$120 per hour

$66.67 per hour

$40 per hour

$60 per hour

12. Activity Based Costing (ABC) is most useful when used in a company that produces a single product through a single process

Group of answer choices

True

False

13. Activity Based Costing (ABC) is required for most GAAP financial reporting

Group of answer choices

True

False

14. Activity-based costing

Group of answer choices

applies only to discretionary fixed costs

is used only in JIT operations

requires the identification of cost drivers

all of the above

15. The recording of the jobs completed would include a credit to which account?

Group of answer choices

Factory Overhead

Finished Goods

Work in Process

Cost of Goods Sold