Cost Accounting Final

Dobbin Co. budgets production of 200,000 units in the next year. Dobbin​'s CFO expects that each unit will take 6 hours to produce at an hourly wage rate of $ 9 per hour. If factory overhead is applied to direct labor hours at $ 10 per​ hour, the budget for factory overhead will​ total:

200,000*6*10=$12,000,000

Which of the following is necessary in order to complete the Cost of Goods Sold budget? Raw Materials Purchases Budget Direct Labor Budget Factory Overhead Budget Salses Budget All of the Above

All of the Above

Which of the following is necessary in order to complete the Cost of Goods Sold budget? Raw materials purchases Dircet Labor budget Factory Overhead Budget Sales Budget

All of the above

Which of the following products/industries would most lend itself to process cost accounting? Automobiles Construction of Homes Breakfast Cereal Custom Furniture Audit Clients

Breakfast Cereal

Direct costs are those costs that

Can be traced to cost objects.

Which of the following is not a primary function of the management​ accountant?

Communicates financial results and position to external parties.

Which of the follwing is an accurate statement?

Depreciation on an administrative building that is not part of the manufacturing process is never part of factory overhead.

Conversion costs include?

Direct Labor Factory Overhead

When allocating costs in a process costing system, an important initial step is to calculate?

Equivalent Units

The Prinicipal difference between financial and managerial accounting is

Financial accounting is primarily intended to produce broadly general financial accounting information according to a set of rules (GAAP) while managerial accounting produces information for management control

In Chapter 11, which of the following would be least useful in providing information for a decision about dropping a product line?

Gross Profit per unit

Conroe Company is reviewing the data provided by its management accounting system. Which of the following statements​ is/are correct? I. A cost driver is a causal factor that increases the total cost of a cost object. II. Cost drivers may be volume based or activity based. III. Cost drivers are normally the largest cost in the manufacturing process.

I and II only are correct.

Nobis Company uses an ABC system. Which of the following statements​ is/are correct with respect to​ ABC? I. Departmental costing systems are a refinement of ABC systems. II. ABC systems are useful in​ manufacturing, but not in merchandising or service industries. III. ABC systems can eliminate cost distortions because ABC develops cost drivers that have a​ cause-and-effect relationship with the activities performed.

III only is correct.

All of the following statements regarding standards are accurate​ except: A. Standards allow management to budget at a​ per-unit level. B. Participative standards usually take longer to implement than authoritative standards. C. Currently attainable standards take into account the level of training available to employees. D. Ideal standards account for a minimal amount of normal spoilage.

Ideal standards account for a minimal amount of normal spoilage.

In a two-department production facility, raw materials may be added

In either department, but always in the first.

In making managerial decisions such as those described in chapter 11, which of the following is the most useful way of thinking about information?

Information in support should be informed by sound economic principles.

Which of the following statements is correct regarding the components of the master​ budget?

Operating budgets are used to create cash budgets.

Cost of goods manufactured for a manufacturing fim is analogous to _________________ for a retail firm

Purchases

What cost estimation method is thought to be the best combination of rigor and objectivity?

Regression Analysis

The reciprocal method may be accomplished through which methods?

Repeated Iterations Linear Equations

What is the first budget prepared in a master budget process?

Sales Budget

Which of the following is typically the first budget prepared in a master budget process?

Sales Budget

For comon cost allocations, the incremental method will favor?

Second Ranked Party (Secondary Party)

As part of her annual review of her​ company's budgets versus​ actuals, Mary Gerard isolates unfavorable variances with the hope of getting a better understanding of what caused them and how to avoid them next year. The variable overhead efficiency variance was the most unfavorable over the previous​ year, which Gerard will specifically be able to trace​ to:

Standard direct labor hours below actual direct labor hours.

In a Raw Materials Purchases budget, the expected beginning inventory for the budget period should be _____________ to (from) Raw Materials to be used in production

Subtracted

In a Raw materials purchases budget, the expected beginning inventory for the budget period should be _________ to (from) Raw materials to be used in production.

Subtracted

Franco Industries sales budget shows quarterly sales for the next year as​ follows: Quarter 1-13,000​; Quarter 2-11,000; Quarter 3-15,000​; Quarter 4-17,000. Company policy is to have a target​ finished-goods inventory at the end of each quarter equal to 10 % of the next​ quarter's sales. Budgeted production for the second quarter of next year would​ be:

Target Ending F.G.= 15,000*10%=1,500 Beginning F.G. Inventory=11,000*10%=1,100 11,000 Q2 sales +1,500 Target F.G. =12,500 Total Required Units -1,100 Beg. F.G. Inv. =11,400 Units to be Produced.

Which of the following is not a true statement

The Cash budget is prepared on an accrual basis as required by GAAP.

Each of the following statements is correct regarding overhead variances​ except: A. The efficiency overhead variance ignores the standard variable overhead rate. Your answer is correct.B. Actual overhead greater than applied overhead is unfavorable. C. Favorable spending and efficiency variances imply that the flexible budget variance must be favorable. D. Variable overhead rates are not a factor in the​ production-volume variance calculation.

The efficiency overhead variance ignores the standard variable overhead rate.

Basix Inc. calculates direct manufacturing labor variances and has the following​ information: Actual hours​ worked: 200 Standard​ hours: 250 Actual rate per​ hour: $ 12 Standard rate per​ hour: $ 10 Given the information​ above, which of the following is correct regarding direct manufacturing labor​ variances?

The price variance is​ unfavorable, while the efficiency variance is favorable.

Metal Shelf ​Company's standard cost for raw materials is $ 4.00 per pound and it is expected that each metal shelf uses two pounds of material. During October Year​ 2, 25,000 pounds of materials are purchased from a new supplier for $ 97,000 and 13,000 shelves are produced using 27,000 pounds of materials. Which statement is a possible explanation concerning the direct materials​ variances?

The production department had to use more materials since the quality of the materials was inferior.

Which of the following statements is correct regarding the drivers of operating and financial​ budgets?

The sales budget will drive the cost of goods sold budget.

In a linear cost function, the variable cost per unit would typically be represented by

The slope term

As production increases, ____________________ increases while ___________________ decreases.

Variable costs; Fixed costs per unit

In a linear cost function, the cost object would typically be represented by?

Y

Relevant range allows

an assumption that costs will be linear with the relevant range.

Mary​ Jacobs, the controller of the Jenks Company is working on​ Jenks' cash budget year 2. She has information on each of the following​ items: I. Wages due to workers accrued as of December​ 31, year 1. II. Limits on a line of credit that may be used to fund​ Jenks' operations in year 2. III. The balance in accounts payable as of December​ 31, year​ 1, from credit purchases made in year 1. Which of the items above should Jacobs take into account when building the cash budget for year​ 2?

​I, II, III

Elmhurst Corporation is considering changes to its responsibility accounting system. Which of the following statements​ is/are correct for a responsibility accounting​ system? I. In a cost​ center, managers are responsible for controlling costs but not revenue. II. The idea behind responsibility accounting is that a manager should be held responsible for those items that the manager can control to a significant extent. III. To be​ effective, a good responsibility accounting system must help managers to plan and to control. IV. Costs that are allocated to a responsibility center are normally controllable by the responsibility center manager.

​I, II, and III are correct