ACC 2023 Practice Exam

Manager who practice total quality management: A. Invest more resources at the front end of the value chain in research and development produce a superior product B. Invest more resources in inspecting and repairing products once they are produced C. Practice both A and B D. Practice neither A and B

C. Both A and B

4. What are scatter plots useful for: A. Identifying potential outliers B. Determining the overall strength of the relationship between historical cost and volume C. Both of the above D. Neither of the above

C. Both of the above

Which of the following conditions favors using departmental overhead rates in place of plantwide overhead rates: A. Different jobs or products use the departments to a different extent B. Different departments incur different amounts and types of manufacturing overhead C. Both of the above D. Neither of the above

C. Both of the above

The cost of lost furniture sales after a customer finds flaws in a product or service is which of the following quality costs: A. External Failure Costs B. Internal Failure Costs C. Appraisal Costs D. Prevention Costs

a. External failure costs

Variable costs are described by which of the following statements: A. They are fixed per unit and vary in total B. They are fixed in total C. They vary per unit of output D. They decrease per unit as production volume increase

a. They are fixed per unit and vary in total

A _______ cost is a cost whose total abount changes in direct proportion to a change in volume:

variable

The maple company has total fixed costs of $400,000. It also has $300,000 in total variable costs. These costs exist at a production level of 100,000 units. The fixed cost per unit is...

$4.00

Which of the following is true about lean thinking: A. Customer orders drive the production process B. Finished goods are produced ahead of customers' orders to protect against running out of finished goods inventory C. Raw materials are purchased in large quantities D. Inventory levels are maintained at high levels

A. Customer orders drive the production process

For external reporting purposes U.S. GAAP allows companies to use _____: A. Only the traditional format of the income statement B. Either the traditional format or the contribution margin format C. The variable costing format D. Only the contribution margin format of the income statement

A. Only the traditional format

Which term best describes the quality cost category for "cost of warranty repairs on ****:

external failure costs

When calculating a departmental overhead rate, what should the numerator be? (Numerator is the top part, I honestly forgot don't judge)

total estimated departmental overhead

Watson's Company uses ABC to account for it manufacturing process. In terms of ACTIVITIES: INDIRECT ACTIVITY BUDGET: All.BASEDRIVER, we have: Materials handling= $52,000, Based on # of parts Machine setup= $30,000, Based on # of setups Assembling= $9750, Based on # of parts Packaging = $15300, Based on # of unfinished parts Watsons Computer Company expects to produce 2,250 computers. Watson Company also expects to use 13,000 parts and have 20 setups. The allocation rate for packaging is:

$6.80

The benefits of adopting ABC/ABM are higher for companies in competitive markets because:

ABM can pinpoint opportunities for cost savings

A company produces unique birdcages. The company's average cost per unit is $15.00 when it produces 2,300 birdcages. If 3,500 of the cost are fixed. The total expected costs for 3,000 birdcages will be: A. $52,000 B. $39,400 C. $44,400 D. $54,000

Another iffy question but my money is on $44,400

Which of the following is most likely to be the cost driver for the packaging and shipping activity: A. Hours of Testing B. Number of Units Produced C. Number of Orders Shipped D. Number of Setups

B

Which of the following is a lean strategy: A. Group like machines together B. Produce in smaller batches than a traditional system C. Maintain a higher level of inventory than a traditional system D. Lengthen setup times relative to a traditional system

B. Produce in smaller batches than a traditional system

Within the relevant range, which of the following statements is true with respect to fixed costs per unit: A. They will remain the same as production levels change B. They will increase as production decreases C. They will decrease as production decreases D. They will increase as production increases

B. They will increase as production decreases

A company wants to determine the relationship between its monthly operating costs and a potential cost driver. The output of regression analysis showed the flowing information: Intercept Coefficient= 75,830 X Variable 1 Coefficient= 52.68 R-Square= 8.9756 Should your client use this information t0 predict monthly operating costs: A. Yes, because regression analysis can be referred upon B. Yes, because R-Square is so high C. No, because R-Square is so high D. There is not enough information to make this prediction

B. Yes, Because the R-square is so high

Renting a scooter and paying $30 a day and $0.30 a mile is an example of what type of cost?

Mixed cost

Fixed costs that are the result of previous management decisions that current managers have no control over in the short run are called _____ fixed costs:

Committed costs

1. Which of the following is not an activity in ABC systems that determines the cost of a manufactured product: A. Material Handling B. Inspecting C. Machining D. Accounting

D. Accounting

The only difference between variable costing and absorption costing lies in the treatment of: A. Variable Manufacturing Cost B. Direct Materials and Direct Labor Costs C. Variable Manufacturing Overhead Costs D. Fixed Manufacturing Overhead Costs

D. FIxed Manufacturing Overhead Costs

Which is true about a scatter plot: A. A strong relationship between production and inventory is shown by a liner pattern B. If there is a strong relationship between cost and volume, the point will fall in a scattered pattern C. Cost and volume have no effect on the pattern of the points on a scatter plot D. If there is a strong relationship between cost and volume, the points will fall in a linear pattern

D. If there is a strong relationship between cost and volume, the points will fall in a linear pattern

Which of the following is not a characteristic of a traditional operation: A. Large Inventories B. Alike machines grouped together C. Excess processing D. Multiple task performed by one employer

D. Multiple tasks performed by one employer

Which of the following is a result of cost distribution: A. Accurate costing of all products B. Under costing of all product C. Over costing of all products D. Over costing of some products and under costing of other products

D. Overcosting of some, undercosting of others

Lean companies use a workplace organization system called "SS" to keep their cells clean and organized. Which of the following terms is not one of the "SS" components: A. Sustain B. Set in Order C. Standardize D. Sanitize

D. Sanitize

When a company has established manufacturing overhead rates for each department, it is using:

Departmental overhead rates

Using account analysis, what type of cost is the local phone service which charges a flat fee for unlimited local calls:

Fixed

Which of the following is not a factor in the success of a lean company: A. The focus on quality B. Inflexible production operations C. Short production cycle times D. Continuous flow of production without interruptions

Inflexible operations (B)

A system to which companies purchase raw materials only when needed is called:

JIT production

The management strategy designed to eliminate waste is called:

Lean thinking

In the equation y= $7.20x+ $790, "x" represents:

Number of units produced

When using either the high-low method or regression analysis to develop a cost prediction model, managers should consider:

Outliers

The cost of installing improved production equipment and production processes is a ______ cost:

Preservation

Costs incurred to avoid manufacturing poor quality goods are considered to be:

Prevention costs

Which of the following costs is an example of a fixed costs: A. Delivery Costs B. Salary of Plant Manager C. Direct Materials D. Sales Commission

Salary of Plants Manager (B)

Stanley's bicycles store buys bicycles on average for $600 and sells them on average for $790. He pays a sales commission of 15% of sales to his sales staff. Stanley pays $1,400 a month for his staff, and also pays $3,000 a month, to his staff in addition to the commission. Stanley sold 120 bicycles in June. If Stanley prepares a traditional income statement for the month of June, what would his operating income: A. $90,000 B. $18,000 C. $35,000 D. $100

So this is a bad question. BUT: my guess is $18000.

Total contribution margin less total fixed expenses equals:

operating income

The income statement is organized by ____ under absorption costing:

product and period costs