pick the correct answer:

1. The company has provided the following estimated costs: Advertising expense 5 800 Direct labor 3,000 Direct materials 1,500 Indirect materials 400 Rent on factory equipment 1,000 Salary of production supervisor 2,000 Sales commissions 4,000 The total amount of estimated manufacturing overhead would be: a. 52,400 b. 3,200 c. 3,400 d. 12,200 e. None ofthe above. The answer is 2. Two major concerns of Management Accounting are: a. Controlling and Executing. c. Planning and Controlling. b. Controlling and Investigating. d. Planning and Investigating. 3. Which of the following equations represents Total Cost: W: is total variable cost; FC is total xed cost; Q is total quantity [i.e. total units]; UnitVC is variable cost per unit; UnitFC is fixed cost per unit; "' is multiplication a. Total Cost= FC + VC b. Total Cost = UnitFC "' FC + UnitVC "' VC c. Total Cost = FC * Q + 'v'C d. Total Cost = FC "' Q + Unit'v'C * Q 4. Beau Company reported the following: Cost of Goods Manufactured $800,000; Beginning Raw Materials Inventory $400,000; Ending Raw Materials Inventory $600,000; Beginning Finished Goods Inventory $100,000; Ending Finished Goods Inventory $200,000. Cost of Goods Sold would be: a. S 650,000 b. 700,000 c. 900,000 d. 1,500,000 e. None ofthe above. The answer is 5. A company has $600,000 of Fixed Costs. It produces only one product which it sells for $50 per unit. Variable costs per unit are $20. At a level of production of 120,000 units, Fixed costs per unit would be $5. The company's breakeven point would be: a. 12,000 units b. 18,000 units c. 20,000 units d. 30,000 units e. None of the above. The answer is 6. A company had Estimated Machine Hours 150,000 hours Actual Machine Hours 155,000 hours ACTUAL Manufacturing Overhead of $1,325,000; Predetermined Overhead Rate of $9 per Machine Hour This would result in which ofthe following a. Manufacturing Overhead Underapplied $70,000 b. Manufacturing Overhead Overapplied $70,000 c. Manufacturing Overhead Underapplied $25,000 d. Manufacturing Overhead Overapplied $25,000 e. None ofthe above. The answer is 7. Which of the following would most likely NOT be included as manufacturing overhead in a furniture Factory? a. The cost of the glue in a chair. b. The amount paid to the individual who glues the chair. c. The electricity used in cutting materials. d. All would be included in manufacturing overhead. e. None of the above 8. A company has $600,000 of Fixed Costs. It produces only one product which it sells for $50 per unit. Variable costs per unit are $20. At a level of production of 120,000 units, Fixed costs per unit would be $5. The company's breakeven point would be: a. 12,000 units b. 18,000 units c. 20,000 units d. 30,000 units e. None of the above. The answer is 9. Which ofthe following budgets are prepared before the purchases budget? Purchases budget Sales budget a. Yes Yes b. Yes No c. No Yes d. No No C 10. Cybil just inherited a 1958 Chevy Impala from her late Aunt Jalopy. Aunt Jalopy purchased the car 40 years ago for $8,000. Cybil is either going to sell the car for $10,000 or have it restored and then sell it for $22,000. The restoration will cost $9,000. Cybil would be financially better off by: a. $3,000 to have the vehicle restored b. $6,000 to have the vehicle restored c. $9,000 to have the vehicle restored d. $11,000 to have the vehicle restored e. None of the above. The answer is 11. Sixty percent of Apple Company's sales are collected in the month of sale, 10% in the month Following sale, and 30% in the second month following sale. The following are budgeted sales: January February March April Total sales $600,000 $700,000 $500,000 $300,000 Total budgeted cash collections in April would be: a. $400,000 c. $440,000 b. $420,000 d. $460,000 e. None of the above. The answer is 12. Consider the following statements: I. Actual costs are determined by plugging the actual level of activity for the period into the cost formulas used in flexible budgets. II. A cost that will be incurred regardless of which alternative is selected is not relevant when choosing between the alternatives. a. I is true; II is true b. I is true; II is false c. I is false; II is true d. I is false; II is false 13. Straight Framing's cost formula for its supplies cost is $1,640 per month plus $9 per frame. For the month of August, the company planned for activity of 572 frames, but the actual level of activity was 573 frames. The actual supplies cost for the month was $7,080. The supplies cost in the planning budget for August would be closest to: a. $7,080 b. 7,068 C. 6,788 d. 6,797 e. None of the above. The answer is14. Consider the following definition: An analytical approach that focuses only on those costs and revenues that change as a result of a decision. This refers to which term: a. Decision analysis. b. Incremental analysis. c. Margin of safety analysis. d. Target profit analysis 15. Consider the following definition: A costing system used in situations where many different products, jobs, or services are produced each period. This refers to which term: a. Absorption costing. b. Cost driver. c. Job-order costing. d. Variable costing 16. Consider the following definition: A limitation under which a company must operate, such as limited available machine time or raw materials, that restricts the company's ability to satisfy demand. This refers to which term: a. Constraint b. Differential cost c. Incremental cost d. Relevant cost 17. Special Company makes a single product. Production and selling prices per unit [based on normal production levels] are: Direct materials $5.00; Direct labor $3.00; variable manufacturing overhead $1.00; Fixed manufacturing overhead $4.50; Variable selling and administrative expense $2.00; And Fixed selling and administrative expense $2.50. An order has been received for 1,000 units at a special price of $14.00 per unit. This order will not affect regular sales. Special Company has enough production capacity to produce the items without changing total fixed costs. If the order is accepted annual profits will: a. Decrease $18,000 d. Increase $ 4,000 b. Increase $18,000 e. Decrease $ 3,000 c. Decrease $ 4,000 f. Increase $ 3,000 g. None of the above. The answer is18. Splitoff Company produces three products from the same batch of raw material. Processing results in 15,000 pounds of product A which can be sold at a price of $10 per pound; or processed further to yield 10,000 pounds of product AA which can be sold at a price of $25 per pound. The additional process costs total $40,000. If the product A is processed further [making product AA], profits will a. Decrease $185,000 e. Decrease $ 60,000 b. Increase $185000 f. Increase $ 60,000 c. Decrease $100,000 d. Increase $100,000 g. None of the above. The answer is 19. Consider the following statements: I. A VARIANCE is the difference between actual results and what should have happened according to the Budget. Il. Under Traditional Absorption Costing, Direct and Indirect Manufacturing Costs would be part of Product Costs a. I is true; II is true b. I is true; II is false c. I is false; II is true d. I is false; II is false 20. In analyzing whether to continue or discontinue a Segment of a company, one should consider: a. Common Fixed Costs only. b. Traceable Fixed Costs only. c. Both Common Fixed Costs and Traceable Fixed Costs. d. Neither Common Fixed Costs nor Traceable Fixed Costs. Answer 21. Beau Corporation has two divisions: East Division and West Division. The corporation's net operating income is $165,000. The East Division's divisional segment margin is $210,000 and the West Division's divisional segment margin is $15,000. What is the amount of common fixed expense not traceable to the individual divisions? a. $ 90,000 b. $ 75,000 c. $ 60,000 d. $ 45,000 e. None of the above. The answer is 22. When preparing a production budget, the required production equals: a. Budgeted Sales + Desired Ending Inventory + Beginning Inventory b. Budgeted Sales + Desired Ending Inventory - Beginning Inventory c. Budgeted Sales - Desired Ending Inventory - Beginning Inventory d. Budgeted Sales s - Desired Ending Inventory + Beginning Inventory23. Consider the following statements: I. When a company has a production constraint, the product with the smallest contribution margin per unit of the constrained resource should usually be given highest priority. Il. A Make or Buy decision involves how much of a product to Make or Buy. a. I is true; II is true b. I is true; II is false c. I is false; II is true d. I is false; II is false 24. Rick Corporation makes three products (X, Y, & Z) with the following characteristics: Products X Y Z Selling price per unit 10 $ 15 $ 20 Variable cost per unit 6 5 10 $ 10 Machine hours to make 5 8 10 The company has a capacity of 2,000 machine hours, but there is virtually unlimited demand for each product. In order to maximize total contribution margin, how many units of each product should the company produce? a. 2,000 units of X, 250 units of Y, and 200 units of Z b. 0 units of X, 0 units of Y, and 200 units of Z c. 0 units of X, 250 units of Y, and 0 units of Z d. 1,500 units of X, 0 units of Y, and 0 units of Z e. None of the above. The answer is 25. The Free Company produces three products, X, Y, Z, from a single raw material input. Product Y can be sold at the split-off point for total annual revenues of $50,000, or it can be processed further at a total annual cost of $16,000 and then sold for $60,000. Which of the following statements is true concerning Product Y? a. Product Y should be sold at the split-off point rather than processed further. b. The annual financial advantage from processing Product Y further is $ 6,000. c. The annual financial advantage from processing Product Y further is $10,000. d. The annual financial advantage from processing Product Y further is $44,000. e. None of the above. The answer is 26. Consider the following statements: 1. A Materials Efficiency Variance considers the difference between Standard quantity at standard price and Actual quantity at standard price. II. "A standard is a benchmark for measuring performance". [see textbook page 497] a. I is true; II is true b. I is true; II is false c. I is false; II is true d. I is false; II is false27. Under an Activity Based Costing system, Both Direct Manufacturing Costs and Direct Non-manufacturing costs would be considered Product Costs. a. The Statement is TRUE. 28. A company plans to produce 1,000 units at a cost of $5.00 per unit. The company actually Spends $7,180 while making 1,200 units. The company's spending variance is: a. $ 2,180 Unfavorable b . 1,180 Unfavorable C. 180 Favorable 180 Unfavorable 29. Consider the following statements: I. Reynolds Enterprises sells a single product for $25. The variable expense per unit is $20 and the fixed expense per unit is $5 at the current level of sales. The company's net operating income would increase by $5 if one more unit is sold. Il. On a cost-volume-profit graph, the revenue line will be shown above the total expense line for any activity level above the break-even point. a. I is true; II is true b. I is true; II is false c. I is false; II is true d. I is false; II is false From Quiz 30. Consider the following statements: I. The Activity variance for a cost is favorable if the actual cost exceeds the cost in the applicable flexible budget. II. A Planning Budget is a budget created at the beginning of the budget period that is valid only for the planned level of activity. a. I is true; II is true b. I is true; II is false c. I is false; II is true d. I is false; II is false From Quiz 31. A budget that is based on the actual activity of a period is known as a: A) continuous budget. B) flexible budget. C) static budget. D) master budget. From Quiz