ACC- 500 Questions- Set-2

Question No 11

Budgeted cost rates are used for allocating variable costs of service departments to user departments because ________.

A.

it provides service departments a greater incentive to be efficient

B.

it protects user departments from inefficiencies in service departments

C.

it protects managers in service departments from inflation

D.

A and B

Question No 12

When determining product costs, the last step in the traditional approach to cost allocation is ________.

A.

trace direct costs to products

B.

divide costs in each producing department into direct costs and indirect costs

C.

select cost pools and cost allocation bases in each production department and assign indirect department costs to the appropriate cost pool

D.

allocate the costs in each cost pool to the products in proportion to their usage of the related

costallocation

base

Question No 13

USC Company has the following information available:

Budgeted factory overhead costs $90,000

Actual factory overhead costs $80,000

Budgeted direct labor hours 20,000

Actual direct labor hours 21,000

Assume direct labor hours are the cost driver of factory overhead costs. The budgeted factory overhead rate is ________.

A.

$4.50 per direct labor hour

B.

$4.00 per direct labor hour

C.

$3.57 per direct labor hour

D.

$3.81 per direct labor hour

Question No 14

If a department identifies more than one cost driver for overhead costs, the department ideally should________.

A.

create as many cost pools as there are cost drivers

B.

put 80 percent of the costs into one pool and 20 percent into a second pool

C.

allocate 80 percent of the costs with 20 percent of the cost drivers

D.

select a single cost driver

Question No 15

The only difference between the net income between variable costing and absorption costing is the treatment of ________.

A.

fixed selling costs

B.

fixed manufacturing overhead costs

C.

variable administrative costs

D.

variable selling costs

Question No 16

Is the comparison of actual overhead costs to budgeted overhead costs part of the product-costing process or part of the control process? Explain.

The comparison of actual overhead costs to budgeted overhead costs is part of the

• Control Process or 2) Product Costing Process

Then

it is part of this process because

A.

it tells managers how to control actual overhead costs.

B.

it tells managers when the actual results differ from what was expected.

C.

it tells managers how to control inventory costs.

D.

it tells managers how to improve the process.

Question No 27

The production volume variance is a line item on the ________ income statement.

A.

variable costing

B.

absorption costing and variable costing

C.

absorption costing

D.

contribution approach

Question No 17

The ________ system is better suited for a single physical unit or a few similar units.

A.

activitybased costing

B.

joborder costing

C.

processcosting

D.

activitybased management

Question No 18

In a joborder system, accountants apply factory overhead costs to

WorkInProcess Inventory by using the ________. The company does not use

activitybased costing.

A.

budgeted overhead rate

B.

actual overhead costs

C.

actual overhead rate

D.

budgeted indirect costs for value chain functions

Question No 19

Durante Company produces plastic cups in a onedepartment

process. The following data is available for the past month:

Workinprocess inventory, beginning 0

Units started 60,000

Units completed and transferred 48,000

Workinprocess inventory, ending 12,000

The units in process at the end of the month are 100 percent complete with respect to materials and 50 percent complete with respect to conversion costs. What are the equivalent units for conversion costs for the month?

A.

30,000

B.

60,000

C.

54,000

D.

12,000