Its a 23 multiple choice questionnaire... .. .
Cost Accounting 1. During the month just ended, Delta Co. experienced scrap, normal spoilage, and abnormal spoilage in its manufacturing process. The cost of units produced includes a. Scrap, normal spoilage, and abnormal spoilage b. Scrap and normal spoilage, but not abnormal spoilage c. Scrap, but not spoilage d. Normal spoilage, but neither scrap nor abnormal spoilage 2. A manufacturing company prepares income statements using both absorption and variable costing methods. At the end of a period, actual sales revenues, total gross profit, and total contribution margin approximated budgeted figures, whereas net income was substantially greater than the budgeted amount. There were no beginning or ending inventories. The most likely explanation of the net income increase is that, compared to budget, actual a. Selling and administrative fixed expenses had decreased b. Sales prices had declined proportionately less than variable costs c. Manufacturing fixed costs had increased d. Sales prices and variable costs had increased proportionately 3. Oradell Company sells its single product at a price of $60 per unit and incurs the following variable costs per unit of product: Direct material $16 Direct labor 12 Manufacturing overhead 7 Total variable manufacturing costs $35 Selling expenses 5 Total variable costs $40 Oradell's annual fixed costs are $880,000, and Oradell is subject to a 30% income tax rate. If prime costs increased by 20% and all other values remained the same, Oradell Company's contribution margin (to the nearest whole percent) would be a. .30 b. .24 c. .76 d. .20 4. In developing a predetermined factory overhead application rate for use in a process costing system, which of the following could be used in the numerator and denominator? Numerator Denominator a. Estimated factory overhead Actual machine hours b. Actual factory overhead Actual machine hours c. Estimated factory overhead Estimated machine hours d. Actual factory overhead Estimated machine hours 5. A company employs a process cost system using the first-in, first-out (FIFO) method. The product passes through both Department 1 and Department 2 in order to be completed. Units enter Department 2 upon completion in Department 1. Additional direct materials are added in Department 2 when the units have reached the 25% stage of completion with respect to conversion costs. Conversion costs are added proportionately in Department 2. The production activity in Department 2 for the current month was as follows: Beginning work-in-process inventory (40% complete with respect to conversion costs) 15,000 Units transferred in from Department 1 80,000 Units to account for 95,000 Units completed and transferred to finished goods 85,000 Ending work-in-process inventory (20% complete with respect to conversion costs) 10,000 Units accounted for 95,000 How many equivalent units for direct materials were added in Department 2 for the current month? a. 80,000 units b. 85,000 units c. 90,000 units d. 70,000 units 6. a. b. c. d. Which of the following forecasting methods relies mostly on judgment? Econometric models Delphi Regression Time series models 7. All types of organizations can benefit from budgeting. A major difference between governmental budgeting and business budgeting is that a. Governmental budgeting is usually done on a zero-base b. Business budgeting is required by the SEC c. Governmental budgeting usually represents a legal limit on proposed expenditures d. Business budgeting can be used to measure progress in achieving company objectives, whereas governmental budgeting cannot be used to measure progress in achieving objectives 8. The flexible budget for a company may include Direct Material Costs Variable Selling Costs a. Yes Yes b. No Yes c. No No d. Yes No 9. The first step in the sales planning process is to a. Develop management guidelines specific to sales planning, including the sales planning process and planning responsibilities b. Secure managerial commitment to attain the goals specified in the comprehensive sales plan c. Prepare a sales forecast consistent with specified forecasting guidelines, including assumptions d. Assemble all the data that are relevant in developing a comprehensive sales plan 10. Digital Tech uses an accounting system that charges costs to the manager who has the authority to make decisions incurring the costs. For example, if a sales manager authorizes a rush order that results in additional manufacturing costs, these additional costs are charged to the sales manager. This type of accounting system is known as a. Functional accounting b. Responsibility accounting c. Contribution accounting d. Transfer-pricing accounting 11. An example of an internal failure cost is a. Rework b. Product recalls c. Maintenance d. Inspection 12. Carr Co. had an unfavorable materials usage variance of $900. What amounts of this variance should be charged to each department? Purchasing Warehousing Manufacturing a. $300 $300 $300 b. $900 $0 $0 c. $0 $0 $900 d. $0 $900 $0 13. In comparing the FIFO (first-in, first-out) and weighted-average methods for calculating equivalent units a. The FIFO method is better than the weighted-average method for judging the performance in a period independently from performance in preceding periods b. The FIFO method tends to smooth costs out more over time than the weightedaverage method c. The two methods will give similar results even if physical inventory levels and the production costs (material and conversion costs) fluctuate greatly from period to period d. The weighted-average method is more precise than the FIFO method because the weighted-average method is based only on the work completed in the current period 14. Presented are Valenz Company's records for the current fiscal year ended November 30: Direct materials used $300,000 Direct labor 100,000 Variable manufacturing overhead 50,000 Fixed manufacturing overhead 80,000 Selling and admin. costs-variable 40,000 Selling and admin. costs-fixed 20,000 Using absorption (full) costing, inventoriable costs for Valenz are a. $590,000 b. $530,000 c. $450,000 d. $400,000 15. A limitation of transfer prices based on actual cost is that they a. Lack clarity and administrative convenience b. Can lead to suboptimal decisions for the company as a whole c. Charge inefficiencies to the department that is transferring the goods d. Must be adjusted by some markup 16. Which of the following is a disadvantage of participative budgeting? a. It is less accurate b. It decreases motivation c. It is more time consuming d. It decreases acceptance 17. To determine the best cost driver of warranty costs relating to glass breakage during shipments, Wymer Co. used simple linear regression analysis to study the relationship between warranty costs and each of the following variables: type of packaging, quantity shipped, type of carrier, and distance shipped. The analysis yielded the following statistics: Independent Variable Coefficient of Determination Standard Error of Regression Type of packaging 0.60 1,524 Quantity shipped 0.48 1,875 Type of carrier 0.45 2,149 Distance shipped 0.20 4,876 Based on these analyses, the best driver of warranty costs for glass breakage is a. Distance shipped b. Type of carrier c. Type of packaging d. Quantity shipped 18. A successful responsibility accounting reporting system is dependent upon a. The correct allocation of controllable variable costs b. Identification of the management level at which all costs are controllable c. The proper delegation of responsibility and authority d. A reasonable separation of costs into their fixed and variable components since fixed costs are not controllable and must be eliminated from the responsibility report 19. The budgeting tool or process in which estimates of revenues and expenses are prepared for each product beginning with the product's research and development phase and traced through to its customer support phase is a(n) a. Activity-based budget b. Master budget c. Life-cycle budget d. Zero-base budget 20. Moss Point Manufacturing recently completed and sold an order of 50 units that had costs as shown in the next column The company has now been requested to prepare a bid for 150 units of the same product Direct materials $1,500 Direct labor (1,000 hours x $8.50) 8,500 Variable overhead (1,000 hours x $4.00) 4,000 (applied on the basis of direct labor hours) Fixed overhead 1,400 (applied at the rate of 10% of variable cost) If an 80% learning curve is applicable, Moss Point's total cost on this order would be estimated at a. $26,400 b. $32,000 c. $38,000 d. $41,800 21. Customer relationship management is best defined as a. Attracting and satisfying customers b. Market sensing c. Coordination with members of the film's supply chain d. Maximizing customer loyalty by managing customer \"touchpoints\" 22. Oradell Company sells its single product at a price of $60 per unit and incurs the following variable costs per unit of product: Direct material $16 Direct labor 12 Manufacturing overhead 7 Total variable manufacturing costs $35 Selling expenses 5 Total variable costs $40 Oradell's annual fixed costs are $880,000, and Oradell is subject to a 30% income tax rate a. b. c. d. The number of units of product that Oradell Company must sell annually to break even is 44,000 units 30,800 units 22,000 units 35,200 units 23. A company manufactures a product that passes through two production departments, molding and assembly. Direct materials are added in the assembly department when conversion is 50% complete. Conversion costs are incurred uniformly. The activity in units for the assembly department during April is as follows: Units Work-in process inventory, April 1 (60% complete as to conversion costs) 5,000 Transferred in from molding department 32,000 Defective at final inspection (within normal limits) 2,500 Transferred out to finished goods inventory 28,500 Work-in process inventory, April 30 (40% complete as to conversion costs) 6,000 The number of equivalent units for direct materials in the assembly department for April calculated on the weighted-average basis is a. 28,500 units b. 34,000 units c. 26,000 units d. 31,000 units
