Question
1.As activity level decreases, unit variable cost: A. remains constant. B. decreases by a fixed amount. C. decreases proportionately with activity. D. increases proportionately with
1.As activity level decreases, unit variable cost:
A.
remains constant.
B.
decreases by a fixed amount.
C.
decreases proportionately with activity.
D.
increases proportionately with activity.
2.
What type of accounting system is part of an organisation's management information system for internal use only?
Select one:
A.
Management accounting
B.
All of the given answers
C.
Governmental accounting
D.
3.Financial accounting
Econ Pty Ltd produced and sold 45 000 units of a single product last year. Data concerning the year's profit and loss statement is as follows:
| Sales revenue | $1350000 | |
| Manufacturing cost | ||
| Variable | $585000 | |
| Fixed | $270000 | |
| Selling costs | ||
| Variable | $40500 | |
| Fixed | $54000 | |
| Administrative cost | ||
| Variable | $585000 | |
| Fixed | $108000 | |
What was Econ's break-even point (rounded) in units?
A.
142 555
B.
139 355
C.
129 570
D.
125 750
4.
To accumulate costs under job costing
A.
the cost of direct material is assigned to each production job.
B.
the cost of manufacturing overhead is allocated to each production job.
C.
the cost of direct labour is assigned to each production job.
D.
All of the given answers
5.
The Longreach Toy Factory has determined machine hours to be the cost driver of the company's electricity costs. During the first six months of the year, the company incurred the following electricity costs:
Month Machine Hours Electricity Cost
Jan 780 $8,200
Feb 720 $8,360
Mar 800 $8,950
Apr 900 $9,360
May 950 $9,625
Jun 920 $9,150
Using the high-low method, determine the cost formula that expresses the cost behaviour of the company's Electricity Costs.
A.
Y= $4,760 + $5.50X
B.
Y= $3,735 + $6.20X
C.
Y= $4,400 + $5.50X
D.
Y= $1,664 + $8.38X
6.
The Casual Furniture Company manufactures outdoor furniture and incurred the following costs during the month of January:
| Timber | $ 25 000 |
| Paint | $ 5 000 |
| Glue | $ 500 |
| Wagesassembly personnel | $ 20 000 |
| Wagesfactory supervisor | $ 3 500 |
| Factory cleaner's wages | $ 2 000 |
| Sales commissions | $ 10 000 |
| Administrative staff salaries | $ 4 000 |
| Depreciationfactory equipment | $ 3 000 |
| Depreciationsales office equipment | $ 1 000 |
| Utilities, insurancefactory | $ 6 000 |
| Utilities, insurancesales office | $ 2 000 |
| Advertising | $ 8 000 |
| Total costs | $ 90 000 |
The prime costs are:
A.
$50 000
B.
$65 000
C.
$50 500
D.
$30 000
7.
As production takes place, all manufacturing costs are debited to the:
A.
manufacturing overhead account.
B.
cost of goods sold account.
C.
finished goods account.
D.
work in process inventory account.
8.
As production takes place, all manufacturing costs are debited to the:
A.
manufacturing overhead account.
B.
cost of goods sold account.
C.
finished goods account.
D.
work in process inventory account.
9.
Chelonia Ltd manufactures small robot toys. It plans to introduce two products, Speedie and Spunkie. It is anticipated that the product mix will be 40% Speedie and 60% Spunkie. One unit of Speedie will be sold for $100, with variable cost equals $40. For a unit of Spunkie, the selling price will be $120 and the variable cost is $70. The fixed cost for producing the two products is $108 000. What is the break even point?
A.
Speedie: 1800 units; Spunkie: 2160 units
B.
Speedie: 1200 units; Spunkie: 800 units
C.
Speedie: 2160 units, Spunkie: 1800 units
D.
Speedie: 800 units, Spunkie: 1200 units
10.
Chelonia Ltd manufactures small robot toys. It plans to introduce two products, Speedie and Spunkie. It is anticipated that the product mix will be 40% Speedie and 60% Spunkie. One unit of Speedie will be sold for $100, with variable cost equals $40. For a unit of Spunkie, the selling price will be $120 and the variable cost is $70. The fixed cost for producing the two products is $108 000. What is the break even point?
A.
Speedie: 1800 units; Spunkie: 2160 units
B.
Speedie: 1200 units; Spunkie: 800 units
C.
Speedie: 2160 units, Spunkie: 1800 units
D.
Speedie: 800 units, Spunkie: 1200 units
11.
Lenco Industries has cost of goods manufactured of $65 000 in May. The finished goods inventory at the end of May was $20 000 and the cost of goods sold during May was $75 000.
The inventory in finished goods at the beginning of May was:
A.
$20 000
B.
$30 000
C.
$10 000
D.
$5 000
12.
Costs that can be significantly influenced by a particular manager are:
A.
administrative costs.
B.
product costs.
C.
controllable costs.
D.
period costs.
13.
The firm's fixed costs are $60 000, variable cost per unit is $15 and selling price per unit is $20. The break-even point in units is
A.
12000
B.
1715
C.
3000
D.
4000
14.
The following data apply to Stratford Ltd
| Work in process inventory, beginning of the year | $ | 9 000 | |
| Manufacturing overhead applied during the year | $ | 20 000 | |
| Work in process inventory, end of the year | $ | 14 000 | |
| Under-applied manufacturing overhead | $ | 2 000 | |
What was the actual manufacturing overhead incurred during the year?
A.
$20 000
B.
$22 000
C.
$16 000
D.
$18 000
15.The debit side of the manufacturing overhead account is used to accumulate:
A.
predetermined overhead.
B.
actual manufacturing overhead costs as they are incurred throughout the accounting period.
C.
overapplied overhead.
D.
overhead applied, to work in process inventory.
16.
Which of the following do limitations of cost volume profit include?
- Not all costs can be classified as fixed or variable.
- Revenue changes may not be linear.
- Sales volume is the only cost driver.
- Inventory levels do not change.
A.
All of the given answers
B.
i, ii, and iii
C.
i and iii
D.
i and ii
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The Internal Auditing Handbook
Authors: K. H. Spencer Pickett
3rd Edition
0470518715, 978-0470518717
