Question 1 (1 point)

The Weighted Average method is used for process costing at Elvis Corporation, direct materials are added at the beginning of the process and conversions costs are uniformly applied. Other details include:

WIP beginning (60% for conversion)	17,500 units
Units started	114,500 units
Units completed and transferred out	111,700 units
WIP ending (30% for conversion)	20,300 units
Beginning WIP direct materials	$22,300
Beginning WIP conversion costs	$19,700
Costs of materials added	$370,000
Costs of conversion added	$280,000

What are the total equivalent units for conversion costs at Davide Corporation?

Question 1 options:

	117,790
	132,000
	123,880
	122,200

Question 2 (1 point)

Which of the following is unique to a process costing system?

Question 2 options:

	Direct materials, direct labour and manufacturing overhead are assigned to the first department only
	Costs for each process stay with that process until the goods are moved to finished goods
	Each process has its own WIP account
	Work is not started on a product until an order is received

Question 3 (1 point)

In a process system with multiple processes, the cost of units completed in department one is transferred to

Question 3 options:

	cost of goods sold
	finished goods
	WIP in department two
	overhead

Question 4 (1 point)

The costing system used by a company producing custom window treatments would be

Question 4 options:

	process costing
	conversion cost costing
	job costing
	equivalent units costing

Question 5 (1 point)

Which of the following condition(s) favours using departmental overhead rates in place of a plantwide overhead rate?

Question 5 options:

	Manufacturing overhead represents a small proportion of total cost
	Departments use a similar amount of indirect costs
	Different jobs or products use the departments to a different extent
	Products spend the same amount of time in each department

Question 6 (1 point)

The use of departmental overhead rates will generally result in the use of a

Question 6 options:

	single cost allocation base
	separate cost allocation base for each activity in the factory
	single overhead cost pool for the factory
	separate cost allocation base for each department in the factory

Question 7 (1 point)

In using an ABC system, which of the following steps is NOT performed before the company's year begins?

Question 7 options:

	Allocate the costs to the cost object using the activity cost allocation rates
	Calculate an activity cost allocation rate for each activity
	Identify the primary activities and estimate a total cost pool for each
	Select an allocation base for each activity

Question 8 (1 point)

The benefits of using the ABC costing system are higher if the company

Question 8 options:

	produces only one product
	has high indirect costs
	produces many different products that use differing amounts of resources
	has high indirect costs and produces many different products that use differing amounts of resources

Question 9 (1 point)

Outsourcing the accounting function is an example of what facet of activity-based management

Question 9 options:

	improve selection of process activities to enhance profit
	achieve planned growth
	match the company's use of resources to customer demand
	reduce costs of non-value-added activities

Question 10 (1 point)

Big-box retailers such as Best Buy are considered price-takers because

Question 10 options:

	their products are unique
	there is less competition in the consumer electronics retail sector
	their products are not unique.
	they emphasize cost-plus pricing

Question 11 (1 point)

When making a short-term special order decision, a company should

Question 11 options:

	focus on qualitative factors only
	focus on quantitative factors only
	use a traditional direct costing approach
	separate variable costs from fixed costs

Question 12 (1 point)

The minimum transfer price should be

Question 12 options:

	the available market price
	the full product cost
	the variable manufacturing cost
	the direct materials cost only

Question 13 (1 point)

A grocery store decides to drop its health and beauty section of products because it has been unprofitable. This strategy could backfire because

Question 13 options:

	the store can readily fill the available space
	it has automatically saved that department's fixed costs
	the store's sales may suffer by not having this convenience category of products
	variable costs are not avoidable

Question 14 (1 point)

Which of the following describes the target total cost?

Question 14 options:

	Revenue at market price minus desired profit
	Revenue at market price plus desired profit
	Total cost plus desired profit
	Total cost minus actual cost

Question 15 (1 point)

A standard cost can be thought of as

Question 15 options:

	the regular selling price for a single unit of product
	the budgeted selling price for a single unit of product
	the average cost for a single unit of product
	the budgeted cost for a single unit of product

Question 16 (1 point)

What does a favourable direct materials price variance indicate?

Question 16 options:

	The standard cost of materials purchased was greater than the actual cost of materials purchased
	The actual quantity of materials used was less than the standard quantity of materials used for actual
	The standard cost of materials purchased was less than the actual cost of materials purchased
	The actual cost of materials purchased was greater than the standard cost of materials purchased

Question 17 (1 point)

Yamane Industries has collected the following data for one of its products:

Direct materials standard (5 kilograms per unit @ $0.50/kg.)	$2.50 per finished good
Direct materials flexible budget variance-unfavourable	$10,000
Actual direct materials purchased and used	100,000 kilograms
Actual finished goods produced	24,000 units

How much is the direct materials efficiency variance at Grayson Industries?

Question 17 options:

	$10,000 favourable
	$10,000 unfavourable
	$12,000 unfavourable
	$12,000 favourable

Question 18 (1 point)

What could cause a production volume variance for fixed expenses?

Question 18 options:

	Insurance costs on the factory rise unexpectedly during the year due to a crisis in the insurance industry
	The number of units actually sold is different that the units upon which the static budget was based
	The lease on the manufacturing facility is renegotiated and the lease payments increase during the year
	The union calls for a strike of factory workers and temporary workers are hired to fill in for the striking employees

Question 19 (1 point)

Which of the following statements regarding static budgets is TRUE?

Question 19 options:

	They are designed to estimate revenues only
	Managers use them to help plan for uncertainties
	They are prepared for a range of activity levels
	They are prepared for one level of sales volume

Question 20 (1 point)

Assuming that all activity is within the relevant range, a decrease in the activity level in a flexible budget will

Question 20 options:

	decrease total fixed costs
	decrease the variable cost per unit
	decrease total costs
	increase the variable cost per unit

Question 21 (1 point)

Which term below best describes the quality cost category for "cost to re-inspect reworked food processors"?

Question 21 options:

	Internal failure costs
	Appraisal costs
	Prevention costs
	External failure costs

Question 22 (1 point)

Which of the following is an inventoriable cost?

Question 22 options:

	Distribution expenses
	Direct labour expenses
	Research and development expenses
	Marketing expenses

Question 23 (1 point)

Express Company reports the following data for its first year of operation.

Cost of goods manufactured $475,000 Work in process inventory, beginning 0 Work in process inventory, ending 140,000 Direct materials used 110,000 Manufacturing overhead 185,000 Finished goods inventory, ending 101,000

What are the total manufacturing costs to account for at Express Company?

Question 23 options:

	$615,000
	$475,000
	$295,000
	$529,000

Question 24 (1 point)

Farm Supply plans to make 10,000 tractors at its plant. Fixed costs are $1,000,000 and variable costs are $500 per tractor. What is the average cost per tractor?

Question 24 options:

	$1,500
	$600
	$100
	$500

Question 25 (1 point)

A company produces toy airplanes. If 6,000 toys are produced at a total variable cost of $126,000, the total variable cost at 4,000 toys will be

Question 25 options:

	$86,000
	$210,000
	$84,000
	$126,000

Question 26 (1 point)

Total fixed costs for Yellow Boats Inc. are $100,000. Total costs are $500,000 if 125,000 units are produced. The total variable costs at a level of 200,000 units would be

Question 26 options:

	$312,000.
	$640,000.
	$800,000.
	$160,000.

Question 27 (1 point)

Traceable fixed costs

Question 27 options:

	are allocated across all segments of a business.
	are directly related to a specific segment of a business.
	are also called common fixed costs.
	always account for all fixed costs.

Question 28 (1 point)

To compute the unit contribution margin, ________ should be subtracted from the sales price per unit.

Question 28 options:

	all variable costs
	only variable inventoriable product costs
	all fixed costs
	only variable period costs

Question 29 (1 point)

What types of businesses can use a job costing system?

Question 29 options:

	Service and merchandising businesses
	Manufacturing and merchandising businesses
	Service and manufacturing businesses
	Service, manufacturing, and merchandising businesses

Question 30 (1 point)

The difference between the sales price and the job cost is

Question 30 options:

	cost of goods sold
	operating income
	net income
	gross profit

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