AC 642
Which of the following statements is true of the coefficient of determination? a. Perfect negative correlation would yield a coefficient of correlation of -1.00. b. The value of the coefficient of determination (R2) can range between -1 and +1. c. The lower the percentage of cost variability explained, the better job the dependent variable does of explaining the independent variable. d. There is no cut-off point for a good versus a bad coefficient of determination.
D
Error costs are costs associated with a. the measurements required by the cost management system. b. the noncompliance of financial laws and regulations. c. producing an additional unit of a product or service. d. making poor decisions based on bad cost information.
D
Manufacturing overhead consists of all a. costs other than direct materials and direct labor. b. manufacturing costs other than direct materials. c. costs other than direct materials. d. manufacturing costs other than direct materials and direct labor.
D
The collection of all job cost sheets defines a a. materials file. b. finished goods file c. cost of goods file. d. work-in-process file.
D
The degree of association between cost and activity output is measured by a. coefficient of variation. b. hypothesis test of cost parameters. c. confidence intervals. d. goodness of fit.
D
The ethical standard that assigns a cost accountant the responsibility to perform professional duties in accordance with relevant laws, regulations, and technical standards is a. independence. b. credibility. c. confidentiality. d. competence.
D
The income statement prepared for external parties is referred to as absorption-costing income because all a. selling and administration expenses are assigned to the product. b. overheads are classified as fixed and variable overheads. c. manufacturing costs are assigned to the period in which they are incurred. d. manufacturing costs are fully assigned to the product.
D
The percentage of variability in the dependent variable explained by an independent variable is called the a. coefficient of regression. b. coefficient of correlation. c. coefficient of variation. d. coefficient of determination.
D
Unit cost information is needed for a. financial reporting requirements. b. decision making. c. costing inventory. d. all of the above
D
When there are three independent variables, at least three points are needed to compute the parameters F, V 1, and V 2, which are plotted in three dimensions. Which of the following methods is the most practical to use in this situation? a. Account analysis method b. Scatterplot method c. High-low method d. Multiple regression method
D
Which of the following accurately summarizes the meaning of the term "inseparability"? a. Services are distinctly not uniform in quality. b. Services cannot be stored. c. Buyers of services cannot feel, see, hear, or taste a service before it is bought. d. Buyers and producers of services must be in direct contact for an exchange to take place.
D
Which of the following corresponds to the variable cost per unit of output? a. Dependent variable b. Intercept parameter c. Independent variable d. Slope parameter
D
Which of the following costs are expensed in the period in which they are incurred? a. Product costs b. Direct materials costs c. Factory overhead costs d. Nonproduction costs
D
Which of the following emerging trends in cost accounting deals with managers striving to create an environment that will enable workers to manufacture perfect (zero-defect} products? a. time as a competitive element b. global competition c. advances in information technology d. total quality management
D
Which of the following expenses incurred by a department store is a direct cost for the women's shoe department? a. the advertising expense for the service department b. the salaries for individuals working in the accounting department c. the allocated rent expense for the clothing department d. the salespersons' commissions in the women's shoe department
D
Which of the following is a key feature of job-order costing? a. The products considered lose their identity as they are a part of mass production. b. The products considered are all homogenous in nature. c. The costs are assigned to one or more production processes. d. The cost of one product differs from that of another product.
D
Which of the following is an advantage of using managerial judgment to separate fixed and variable costs? a. It eliminates the need for advanced data analytics. b. It prohibits errors. c. The level of understanding that the manager has of the specific company does not come into play. d. It is very simple.
D
Which of the following statements is true of services? a. They are homogeneous in nature. b. The production and consumption of services can be separated. c. They can be inventoried to be consumed later. d. They are intangible in nature.
D
Which of the following statements is true of the managerial judgment method of determining cost behavior? a. Managers use only the prior period's costs to determine cost behavior. b. It is rarely used by managers to determine cost behavior. c. It involves too many complications and calculations for separating costs. d. Managers identify mixed costs and divide them into fixed and variable components.
D
Scarlet Company is a job-order firm that follows a normal costing approach. Consider the following information regarding Scarlet Company: Estimated overhead costs $7,500 Estimated direct labor hours 1,500 hours Hours worked for Job 10 45 hours For Job 10, with a total of 45 hours worked, the amount of overhead cost posted is a. $215. b. $250. c. $235. d. $225.
D 7500/1500 = 5 5*45=225
Canmore Company has the following data pertaining to 2014: Beginning materials inventory - $50,000 Beginning WIP inventory - $0 Beginning finished goods inventory - $0 Materials placed into production - $125,000 Materials purchased on account - $137,500 Direct labor incurred (10,000 hours) - $62,500 Cost of goods completed (Job BB8) Factory overhead rate is 125% of direct labor costs What is the ending materials inventory balance for Canmore in 2014? a. $37,500 b. $12,500 c. $50,000 d. $62,500
D Ending Material Inventory = Beginning Material Inventory + Materials Purchased on Account - Materials Placed into Production = 62,500
Total cost of direct materials used
=Beginning Direct Materials+Direct Materials Purchases- Ending Direct Materials
Cost of goods manufactured
=Cost of Direct Materials+Direct Labor+Overhead+Beginning WIP-Ending WIP
Calculate Unit Manufacturing Cost
=Cost of goods manufactured/number of units produced
Direct Labor
=product cost-direct materials-overhead
If there is a debit balance in overhead control, that implies a. actual overhead costs exceed overhead applied. b. applied overhead exceeds actual overhead. c. actual overhead has not been closed to cost of goods sold. d. none of the above.
A
A coefficient of correlation value close to zero indicates a. no correlation. b. negative correlation. c. positive correlation. d. perfect correlation.
A
A cost accounting system that uses only unit-based activity drivers to assign costs to cost objects is called a(n) a. traditional cost system. b. absorption cost system. c. activity-based cost system. d. marginal cost system.
A
A job-order costing process would be most applicable for a. airplane manufacturing. b. natural gas processing. c. a food processing plant. d. fertilizer production.
A
A normal costing system records which costs in work in process? a. actual materials, actual labor and applied manufacturing overhead b. applied direct materials, applied direct labor, and applied manufacturing overhead c. applied materials. applied labor, and actual manufacturing overhead d. actual direct materials, actual direct labor, and actual manufacturing overhead
A
Before assessing data using analytical methods, accountants should begin their data analytic work by clearly understanding a. what they are trying to measure and why it should be measured. b. who in the company is providing the information and when the data were recorded. c. what underlying data are available. d. the data that other companies use in their measurements.
A
Costs sustained before production are referred to as a. upstream costs. b. nonproduction costs. c. downstream costs. d. manufacturing overhead costs.
A
Daisy Inc., a manufacturing company, is planning to invest in new equipment. Thomas, the cost accounting manager, was in favor as the investment had seemed profitable by his calculations. Later, he realized that some of his assumptions were impractical and the investment would not be as profitable as he had thought. He refrained from disclosing this information to management. In this scenario, which of the following ethical behavior principles did Thomas violate? a. Credibility b. Objectivity c. Confidentiality d. Independence
A
In a traditional enterprise, the flow of costs through the system is a. materials inventory, work-in-process inventory, finished goods inventory, and cost of goods sold. b. materials inventory, work-in-process inventory, cost of goods sold, and finished goods inventory. c. work-in-process inventory, materials inventory, finished goods inventory, and cost of goods sold. d. work-in process inventory, materials inventory, and finished goods.
A
Searching for ways to increase overall efficiency by reducing waste, improving quality, and reducing costs is a function within an organization that is known as a. continuous improvement. b. regulating. c. controlling. d. planning.
A
The ability to assign a cost directly to a cost object in an economically feasible way by means of a causal relationship is known as a. traceability. b. inseparability. c. measurability. d. relatability.
A
The absolute maximum production activity of a manufacturing firm is referred to as a. theoretical activity level. b. normal activity level. c. expected activity level. d. practical activity level.
A
The acceptance of a savings bond from a supplier would be a violation of which standard of ethical conduct for management accountants? a. integrity b. reliability c. confidentiality d. none of these
A
The association of production costs with the units produced is called: a. Cost assignment b. Job-order costing c. Cost measurement d. Cost accumulation
A
The association of production costs with the units produced is referred to as cost a. assignment. b. depletion. c. measurement. d. accumulation.
A
The cost of goods that have been sold, after an adjustment is made for the period's overhead variance, is called the a. adjusted cost of goods sold. b. normal cost of goods sold. c. finished goods cost flow. d. actual overhead.
A
The cost of units completed during a period is called a. cost of goods manufactured. b. cost of goods sold. c. current manufacturing costs. d. finished goods inventory.
A
The document which indicates the type and quantity of each material issued to the factory is called the: a. materials requisition form b. production list c. work ticket d. control account
A
The following is an example of a mixed cost: a. salary plus commission on sales b. materials used in production c. direct materials d. supervisors· salaries
A
The managerial judgment method of determining cost behavior can be used in conjunction with the a. least-squares method. b. multiple regression method. c. variance analysis method. d. regression analysis method.
A
The set of activities required to design, develop, produce, market, deliver, and provide post-sales service for the products and services sold to customers is known as a. the value chain. b. the supply chain. c. order fulfillment. d. the value delivery network.
A
Which of the following costing activities is associated with the financial accow1ting system? a. determining the cost of goods sold for financial statements b. determining the cost of a customer c. preparing budgets d. determining the cost of a department
A
Which of the following costs are, in total, constant within the relevant range while the level of the associated driver varies? a. Fixed cost b. Variable cost c. Opportunity cost d. Step-up cost
A
Which of the following costs incurred by a furniture manufacturer would be a product cost? a. lumber b. commissions paid to sales staff c. office salaries d. controller's salary
A
Which of the following costs is NOT included on a job-order cost sheet? a. actual factory overhead costs b. applied factory overhead costs c. direct labor costs d. direct material costs
A
Which of the following data analytic types is exemplified by a strategic cost management analysis that pinpoints specific process reengineering actions to lower the cost of services and product manufacturing activities? a. Prescriptive b. Descriptive c. Diagnostic d. Predictive
A
Which of the following statements is true of an actual cost system? a. It uses predetermined direct materials, direct labor, and overhead costs. b. It measures overhead costs on a predetermined basis and uses actual costs for direct materials and direct labor. c. It uses predetermined direct materials cost, predetermined direct labor cost, and actual overhead costs. d. It measures costs of direct materials on a predetermined basis and uses actual costs for direct labor and overhead.
A
The controller for Hydraulics Unlimited felt that the number of purchase orders alone did not explain the monthly purchasing cost. She knew that nonstandard orders took more time and effort. She collected data on the number of nonstandard orders for the past 12 months and added that information to the data on purchasing cost and total number of purchase orders. Multiple regression was run on these data; the coefficients shown by the regression program are as follows: Intercept $14,460 (rounded to the nearest dollar) X variable 1 8.92 (rounded to the nearest cent) X variable 2 20.39 (rounded to the nearest cent) If Hydraulics Unlimited estimates that next month will have 430 total purchase orders and 45 nonstandard orders, what is the total estimated purchasing cost for that month? (Round to the nearest dollar.) a. $19,213 b. $918 c. $4,753 d. $3,836
A 14,460 + 8.92*430 + 20.39*45 = 19,213
Beaver Manufacturing expects to produce 20,000 units next year and has budgeted overhead for the year at $240,000. Over the past four years, Beaver Manufacturing produced the following number of units: Year 1 22,000 Year 2 17,000 Year 3 21,000 Year 4 20,000 Calculate the predetermined overhead rate that Beaver Manufacturing will apply if normal capacity is used. a. $12 b. $14 c. $15 d. $10
A Average activity usage = (22000+17000+21000+20000) / 4 = 20000 units Predetermined overhead rate = budgeted overhead for the year / average activity usage = $12
SunTex Limited reported the following information for August: Direct materials $125,000 Direct labor 80,000 Manufacturing overhead 40,000 Beginning work-in-process inventory 50,000 Ending work-in-process inventory 55,000 The cost of goods manufactured in August is a.$240,000. b.$115,000. c.$175,000. d.$225,000.
A DM+DL+MO+BWIPI-EWIPI
On March 9, 2014 Job XX4 was completed. The job cost sheet showed a total of $6,000 in direct materials and $8,000 in direct labor at a rate of $20 per direct labor hour. Factory overhead is applied at $30 per direct labor hour. The debit to Finished Goods Inventory to record the completion of Job XX4 is a. $26,000. b. $6,000. c. $11.000. d. $17,000.
A Debit to Finished Goods Inventory = Direct Materials+Direct Labor+((Direct Labor/20)*30)
Collossal Company uses a predetermined rate to apply overhead. At the beginning of the year, Collossal estimated its overhead costs at $240,000, direct labor hours at 40,000, and machine. hours at 10,000. Actual overhead costs incurred were $249,280, actual direct labor hours were 41,000, and actual machine hours were. 11,000. If the predetermined overhead rate is based on machine hours, what is the total amount credited to the Factory Overhead account for the year for Collossal? a. $264,000 b. $246.000 c. $240,000 d. $249,280
A Ignore direct labor hours, actual overhead costs, and actual direct labor hours. Only use estimated overhead, machine hours, and actual machine hours pre determined overhead rate = estimated overhead/machine hours = 24 per Mhs actual machine hours = 11,000 total amount credited = 11,000 machine hours * 24 = $264,000
SloGo Manufacturing expects to produce 25,000 units next year and has budgeted overhead for the year at $352,000. Over the past four years, SloGo Manufacturing produced the following number of units: Year 1 23000 Year 2 19000 Year 3 24000 Year 4 22000 Calculate the Predetermined overhead rate that SloGo Manufacturing will apply if normal capacity is used. a. $16.00 b. $15.50 c. $17.00 d. $16.50
A Take average = 22000 Predetermined overhead rate = overhead for the year / average = 16
Gidget's Gadgets manufactured 20,000 units and reported the following information during October: Direct materials $200,000 Direct labor 70,000 Variable overhead 30,000 Fixed overhead 500,000 The total unit product cost is: The total unit product cost is a. $40.00. b. $5.00. c. $13.50. d. $15.00.
A all added together divided by 20000
A joumal entry debiting Work-in-Process would normally NOT be accompanied by a credit to a. Overhead Control. b. Wages Payable. c. Matedal:s Inventory. d. Finished Goods.
D
A debit to Materials Inventory indicates materials were a. requisitioned. b. purchased. c. ordered. d. put into production.
B
According to the integrity standard, each member has a responsibility to a. refrain from using confidential information for unethical or illegal advantage. b. abstain from engaging in or supporting any activity that might discredit the profession. c. maintain an appropriate level of professional expertise by continually developing knowledge and skills. d. disclose all relevant information that could reasonably be expected to influence an intended user's understanding of the reports, analyses, or recommendations.
B
Multiple regression can be a useful tool for identifying the a. activity rate. b. behavior of activity costs. c. unused capacity. d. step-cost function.
B
Operation costing is a hybrid of a. process and marginal costing. b. job-order and process costing. c. job-order and standard costing. d. marginal and standard costing.
B
Product costs are converted from cost to expense when a. units are completed. b. units are sold. c. materials are purchased. d. materials are requisitioned.
B
Selling and administrative costs are classified as a. product costs. b. period costs. c. conversion costs. d. factory overhead.
B
The cost management subsystem designed to provide accurate and timely feedback concerning the performance of managers and others relative to their planning and control of activities is known as the a. activity-based management system. b. operational control information system. c. cost accounting information system. d. financial accounting information system.
B
The high-low method may give unsatisfactory results if a. volume of activity is heavy. b. the points are unrepresentative. c. volume of activity is light. d. the data points all fall on a line.
B
The operational control information system is a cost management subsystem a. used to provide information for investment decisions, stewardship evaluation, activity monitoring, and regulatory measures. b. designed to provide accurate and timely feedback concerning the performance of managers and others relative to their planning and control of activities. c. that is primarily concerned with producing outputs for external users. d. in which the nature of the inputs and the rules and conventions governing processes are defined by the Securities and Exchange Commission (SEC).
B
The persistent pursuit and elimination of waste in manufacturing that simultaneously embodies respect for people is called a. lean manufacturing. b. just-in-time manufacturing. c. flexible manufacturing. d. target-based manufacturing.
B
The primary objective of the cost management information system is to provide a. the Internal Revenue Service with information about taxable income. b. management with information useful for planning and control of operations. c. banks and other creditors with information useful in making credit decisions. d. stockholders and potential investors with useful information for decision making.
B
Which of the following data analytic types is exemplified by a profit and loss analysis that considers historic trends in the profitability of the company? a. Prescriptive b. Descriptive c. Diagnostic d. Predictive
B
Which of the following is a difference between traditional and activity-based cost management systems? a. The traditional cost management system uses unit- and non-unit-based drivers, whereas the activity-based cost management system uses only unit-based drivers. b. The traditional cost management system is allocation intensive, whereas the activity-based cost management system is tracing intensive. c. The traditional cost management system uses nonfinancial measures of performance, whereas the activity-based cost management system uses financial measures of performance. d. The traditional cost management system focuses on system-wide performance maximization, whereas the activity-based cost management system focuses on individual unit wise performance maximization.
B
Which of the following is an example of a pure service? a. A service provided by a beautician b. A service provided by an Internet cafe c. A service provided by a restaurant d. A service provided by a transport agency
B
Which of the following manufacturing approaches strives to produce a product only when it is needed and only in the quantities demanded by customers? a. Lean manufacturing approach b. Just-in-time manufacturing approach c. Computer-integrated manufacturing approach d. Traditional manufacturing approach
B
Which of the following methods of determining cost behavior estimates costs by classifying accounts in the general ledger as fixed, variable, or mixed? a. Industrial accounting method b. Account analysis method c. Regression accounting method d. Scattergraph method
B
Which of the following statements is true of production costs considering the cost classification required for external reporting? a. Production costs never appear on the balance sheet. b. Production costs attached to the units not sold are reported as inventory on the balance sheet. c. Production costs attached to the units not sold are recognized as an expense on the income statement. d. Production costs attached to the units sold are reported as inventory on the balance sheet.
B
Which of the following statements is true of the financial accounting information system? a. It is primarily concerned with reducing and controlling costs. b. It is primarily concerned with producing outputs for external users. c. It is governed by the inputs and rules defined by the people in the company. d. It uses predetermined costs for recording transactions.
B
Which of the following would NOT be a cost that could be directly traced to a custom piece of furniture based upon physical observation? a. the labor of the woodworker who finishes the wood of the piece b. the depreciation paid on factory equipment c. the wood and upholstery materials that are in the final piece d. the labor of the worker assembling the piece of furniture
B
Fixed cost per unit is $7 when 25,000 units are produced and $5 when 35,000 units are produced. What is the total fixed cost when nothing is produced? a. $130.000 b. $175,000 c. $200,000 d. $12
B 25,000*7 OR 35000*5
Alpha Systems, Inc., manufactures computer keyboards. The data for the month of June are as follows: Direct materials per unit $10 Direct labor per unit $ 6 Variable overhead per unit $ 4 Supervisor's salary $25,000 Units produced 12,500 Calculate the variable cost per computer keyboard. a. $16 per keyboard b. $20 per keyboard c. $18 per keyboard d. $22 per keyboard
B Direct materials per unit+direct labor per unit+variable overhead per unit = 20
The following information was available about supplies cost for the second quarter of the year: Month Production Volume Supplies Cost July 700 3,185 August 1,600 7,100 September 600 2,700 Using the high-low method, the estimate of supplies cost at 1,000 units of production is a. $2,700. b. $4,460. c. $7,100. d. $4,900.
B Subtract low from high production volume and supplies cost supplies cost difference/production volume difference fixed cost = total cost at high point - (units * variable cost per unit) = $60 variable cost = 1000*$4.40 fixed cost = 60 total cost for 100 units = $4,460 *Note - probably going to be a tens digit
Jackson Assembly has 11 assemblers. Each assembler can process 19,000 orders in a year. Last year, 200,000 orders were processed. Determine the unused capacity in terms of the number of orders processed. a. 11,000 orders b. 9,000 orders c. 13,000 orders d. 7,000 orders
B Unused capacity = Total activity availability-activity used = (11 assemblers * 19000 orders)- 200000 orders processed = 9000 orders
If beginning work in process inventory is $160,000, ending work in process inventory is $180,000, cost of goods manufactured is $500,000, and direct materials used are $130,000, what are the conversion costs? a. $340,000 b. $390,000 c. $320,000 d. $210,000
B conversion costs = (COGM + Ending WIP inventory) - (beginning WIP inventory + direct materials used)
Ending Direct Materials Inventory
Beginning inventory+purchases-Direct materials used
A treasurer of a company is responsible for a. supervising all accounting departments. b. internal auditing. c. raising capital. d. keeping accounting records.
C
Allocation is the assignment of a. direct costs to cost objects. b. costs accomplished by physical observation. c. indirect costs based on convenience or assumed linkage. d. costs using cost drivers.
C
Assuming costs are represented on the vertical axis and volume of activity on the horizontal axis, which of the following costs could be represented by a line that is parallel to the horizontal axis? a. employees who are paid $10 per hour and guaranteed a minimum weekly wage of $200 b. a consultant paid $75 per hour with a maximum fee of $1,200 c. rent on exhibit space at a convention d. total direct material costs
C
If data points are plotted so that the relationship between activity output and materials handling costs is visible, the plot is referred to as a(n) a. slope parameter. b. experience curve. c. scattergraph. d. learning curve.
C
If you determine the cost of goods manufactured for a single product, then you can determine the average unit cost by a. dividing the number of units produced by the cost of goods manufactured. b. determining the difference between sales and cost of goods sold. c. dividing the cost of goods manufactured by the number of units produced. d. determining the difference between gross margin and sales.
C
Legal disputes can be settled by identifying, recording, settling, extracting, reporting, and verifying past financial data in an activity known as a. governance. b. data analytics. c. forensic accounting. d. total quality management.
C
Ruby Company is a job-order firm that follows a normal costing approach. During the month of January, Ruby worked on two jobs: Job 52 and Job 56. For Job 52, the total direct labor cost is $450; for Job 56, the total direct labor cost is $250. What journal entry should be made to record the direct labor costs assigned to the two jobs? a. Credit Work-in-Process Inventory by $700 and debit Wages Payable by $700. b. Credit Wages Payable by $700 and debit Finished Goods by $700. c. Debit Work-in-Process Inventory by $700 and credit Wages Payable by $700. d. Debit Wages Payable by $700 and credit Finished Goods by $700.
C
The association of production costs with the units produced is referred to as cost a. depletion. b. accumulation. c. assignment. d. measurement.
C
The cost accounting information system is a cost management subsystem designed to a. provide accurate and timely feedback concerning the performance of managers and others relative to their planning and control of activities. b. produce cost information for external users. c. assign costs to individual products and services and other objects as specified by management. d. assign costs to activities and processes as per the Financial Accounting Standards Board (FASB).
C
The source document used to assign direct labor to each particular job is known as a a. requisition form. b. subsidiary ledger. c. time ticket. d. job cost sheet.
C
Which of the following can significantly affect how accountants process information? a. Understanding of cost relationships b. Whether labor is a variable or fixed cost c. Cognitive heuristics and biases d. Ability to use Excel
C
Which of the following is an example of a line position in a manufacturing company? a. Vice president of human resource b. Chief accounting officer c. Factory manager d. Treasurer
C
Which of the following items would NOT be classified as part of facto1y overhead of a firm that makes sailboats? a. indirect materials b. depreciation of factory buildings c. canvas used in sail d. factory supplies
C
Which of the following statements is TRUE about fixed and valuable costs? a. Variable costs are constant in total and fixed costs are constant per unit. b. Both costs are constant when considered on a per-unit basis. c. Fixed costs are constant in total and variable costs are constant per unit. d. Both costs are constant when considered on a total basis.
C
Which of the following statements is true of flexible resources? a. They are not fully utilized and always have unused capacity. b. The quantity of the resource supplied is more than the quantity demanded. c. They are supplied as used and needed. d. The cost of a flexible resource is a fixed cost.
C
Which of the following statements is true of the industrial engineering method of estimating costs? a. It can be used to estimate costs by classifying accounts in the general ledger as fixed, variable, or mixed. b. It is most frequently used in the service sector, where there is no direct link between materials and labor inputs with the output. c. It uses physical observation and analysis to determine what activities, in what amounts, are needed to complete a process. d. It is useful in determining the cost of manufactured items, where the process differs from unit to unit.
C
Which of the following statements is true regarding the role of cost behavior for forensic accounting? a. Very few areas within accounting can play a role in forensic accounting situations. b. Cost behavior is the least frequently used accounting area for evaluating legal issues. c. Cost behavior can be used to determine if liability exists and, if it does, the total damages resulting from the liability. d. Cost estimations and income measurements cannot be used to resolve legal issues.
C
Which of the following statements regarding the financial accounting information system is true? a. It is designed to provide accurate and timely feedback for planning and control of cost activities. b. It is designed to assign costs to individual products and services and other objects as specified by management. c. It is primarily concerned with producing outputs such as the balance sheet and income statement for external users. d. It is bound by internally imposed criteria that define inputs and processes and are set by people in the company.
C
Daffodil Company manufactures a wide variety of unique products. During April, Daffodil worked on Job 20.The following information is related to Job 20: Job 20 Beginning balance $ 500 Materials requisitioned 4,500 Direct labor cost 2,250 Overhead is assigned at the rate of 60% of direct labor cost. From the provided information, calculate the total cost of Job 20. a. $8,400 b. $8,000 c. $8,600 d. $8,800
C Applied overhead = rate * direct labor Cost of Job 20 = beginning balance + materials requisitioned + direct labor cost + applied overhead = 8600
Foothill Hospital recorded the following costs for the meals served in its cafeteria during the last seven weeks: Week Meals served Cafeteria Costs 1 1500 4800 2 1600 5800 3 1800 5280 4 1450 4900 5 1000 4000 6 1650 5100 7 1900 5800 Using the high-low method, the total fixed costs for the cafeteria are a. $1,400. b. $1,800. c. $2,000. d. $1,000.
C Variable Rate = (high cost - low cost) / (high output - low output) = (5800-4000)/(1900-1000)=$2 Fixed Cost = total cost - variable cost = 5800 - ($2*1900) = $2,000
The following information relates to the factory overhead incurred by Burlywood, Inc., in the month of September: Indirect labor cost $15,000 Electricity charges 9,450 Ordering costs 12,000 The indirect labor hours vary according to the number of hours worked. The workers worked for 3,000 hours in the month of September. Determine the expected indirect labor cost for the month of October if the workers are expected to work for 3,500 hours in the month of October. a. $14,000 b. $16,500 c. $17,500 d. $11,000
C Variable rate for indirect labor = 15000/3000=5 expected indirect labor cost for october = 5*3500 hours = 17,500
A coefficient of correlation value close to zero indicates a. negative correlation. b. perfect correlation. c. positive correlation. d. no correlation.
D
A function that shows a steady level of cost for an output range and then moves up to a higher level of cost, where it stays for another range of activity, is called a(n) a. regression function. b. coefficient of correlation function. c. intercept function. d. step-cost function.
D
The records of Custom Choppers, Inc. for September 2014 shows the following information: Sales - 820000 Selling and Admin Expenses - 140000 Direct materials purchases - 176000 Direct Labor - 200,000 Factory Overhead - 270,000 Direct Materials, September 1 - 24000 Work in process, September 1 - 50000 Finished goods, Spetember 1 - 46000 Direct Materials September 30 - 28000 Work in process, September 30 - 56000 Finished goods, Spetember 30 - 38000 The net income for the month of September is: a. $644,000. b. $636,000 c. $180,000 d. $36,000
D Net Income = (sales + end direct materials + end work in process + end finished goods)-(beginning Direct materials + beginning work in process + beginning finished goods + selling and administration + direct material purchases + direct labor + factory overhead) basically net income = sales and ending DM, WIM, FG - everything else
Conversion Cost
Direct Labor+overhead
Prime Cost
Direct materials+Direct Labor