Acct 201 Final

Which of the following types of companies would typically use process costing rather than job-order costing?

A breakfast cereal manufacturer

Which of the following would be considered an operating asset in return on investment computations?

Accounts receivable

What is found on a job cost sheet under a normal cost system?

Actual direct material cost & Actual manufacturing overhead cost

Which of the following may appear on flexible budget performance report?

All of the above may appear on a flexible budget performance report

Which of the following will not result in return on investment (ROI), assuming other factors remain the same?

An increase in operating assets

The costs of direct materials are classified as:

Manufacturing cost, prime cost and no conversion cost

Under the FIFO method, in addition to the cost of units started and completed during the period, the cost of the units transferred out of the department includes:

The cost in beginning work in process inventory and The cost to complete the units in beginning work in process inventory

In a flexible budget, what will happen to fixed costs as the activity level increases?

The fixed cost per unit will decrease

Which of the following statements is NOT correct concerning the Manufacturing Overhead Budget?

The manufacturing overhead budget shows only the variable portion of manufacturing overhead.

If the contribution margin is not sufficient to cover fixed expenses:

a loss occurs

The salary paid to the president of a company would be classified on the income statement as a(n):

administrative expense

Manufacturing overhead includes:

all manufacturing costs except direct labor and direct materials

Costs that can be eliminated in whole or in part if a particular business segment is discontinued are called:

avoidable costs

Direct costs:

can be easily traced to a particular cost object

Under a job-order costing system, the dollar amount transferred from Work in Process to Finished Goods is the sum of the costs charged to all jobs:

completed aduring the period

Prime costs consists of:

direct materials and direct labor

The internal rate of return method assumes that a project's cash flows are reinvested at the

internal rate of return

A preference decision in capital budgeting

is concerned with determining which of several acceptable alternative is best

Which of the following costs are always irrelevant in decision making?

sunk costs

When manufacturing overhead is applied to production, it is added to:

the Cost of Goods Sold account

Accepting a special order will improve over net operating income if the revenue from the special order exceeds:

the incremental costs associated with the order

The usual starting point for a master budget is:

the sale forecasts or sales budget

In activity-based costing, the activity rate for an activity cost pool is computed by dividing the total overhead cost in the activity cost pool by:

the total activity for the activity cost pool

The project profitability index and the internal rate of return

will sometimes result in different preference rankings for investment projects

The opportunity cost of making a component part in a factory with excess capacity for which there is no alternative use is:

zero

Under the FIFO method, the cost per equivalent unit equals:

Cost added during the period divided by equivalent units of production

Which of the following costs is classified as both a prime cost and a conversion cost?

Direct labor

Which of the following is correct concerning reactions to INCREASES in activity?

Increase Total variable cost Variable cost per unit remains constant

Guerra Electronics manufactures a variety of electronic gadgets for use in the home. Which of the following would probably be the most accurate measure to use for allocating the costs of inspecting the finished products at Guerra?

Inspection time

There are various budgets within the master budget. One of these budgets is the production budget. Which of the following BEST describes the production budget?

It is calculated based on the sales budget and the desired ending inventory

Amster Corporation has not yet decided on the required rate of return to use in its capital budgeting. This lack of information will prevent Amster from calculating a project's

Net Present value

All of the following statements are correct when referring to process costing except:

Process costing would be appropriate for a jeweler who makes custom jewelry to order

Which of the following statements about products costs is true?

Product costs associated with unsold finished goods and work in process appear on the balance sheet as assets.

In the schedule of Cost of Goods Manufactured and Cost of Goods Sold, the "Total raw materials available" is computed by adding together the "Beginning raw materials inventory" and:

Purchases of raw materials