5 Financial and Managerial Accounting questions for my review sheet! i rate well.

Question 37

Which of the following statements is incorrect?

A. A predetermined overhead rate may be used to allocate overhead costs when volume varies during the year.

B. A predetermined overhead rate is calculated using actual cost and volume data.

C. A predetermined overhead rate is calculated by dividing costs by volume, using a measure of volume such as direct labor hours or direct materials cost.

D. A company may need to allocate overhead costs to products to make pricing decisions for the products.

Question 39

When evaluating alternatives, what type of costs should be considered?

A. Relevant costs

B. Sunk costs

C. Prevention costs

D. Fixed costs

Question 42

Ethan paid $3 for a bottle of ThirstAid. Later while on a hiking trip, she was offered $8 for the ThirstAid. Select the correct statement from the following:

A. The $8 offer is not relevant if Ethan refuses to sell the ThirstAid.

B. If Ethan drinks the ThirstAid, no opportunity cost is associated with his decision.

C. The $3 original purchase price is irrelevant to his decision to sell the ThirstAid.

Question 46

Select the incorrect statement regarding the cash budget.

		A. The cash budget helps managers to anticipate cash shortages and excess cash balances.
		B. Cash inflows and outflows indicated on the cash budget are reported on a company's pro forma statement of cash flows.
		C. Cash payments may include outflows for inventory, selling and administrative expenses, and equipment purchases.
		D. The total cash available is calculated by adding cash receipts and the ending cash balance.

D. All of these.

Question 50

Great Outdoors Company makes two types of camping tents. Making a standard camping tent requires 4 hours of labor while making a deluxe camping tent requires 10 hours of labor. During the most recent accounting period the company made 2,000 standard camping tents and 500 deluxe camping tents. Indirect manufacturing costs amounted to $52,000 and are allocated based on labor hours. Based on this information:

		A. $4 of overhead cost should be allocated to each camping tent regardless of the type of tent made.
		B. $20.80 of overhead cost should be allocated to each camping tent regardless of the type of tent made.
		C. $16 of overhead cost should be assigned to each standard camping tent and $40 of overhead cost should be assigned to each deluxe tent.
		D. None of these answers is correct.