ACC381

A $5,000 unfavorable flexible-budget variance indicates that ________. A. the actual variable manufacturing overhead exceeded the flexible-budget amount by $5,000 B. the flexible-budget amount exceeded standard variable manufacturing overhead by $5,000 C. the standard variable manufacturing overhead exceeded the flexible-budget amount by $5,000 D. the flexible-budget amount exceeded actual variable manufacturing overhead by $5,000

A

Costing systems measure ________. A. cost incurrence B. locked in costs C. sunk costs D. out of pocked costs

A

In a noncompetitive environment, the key factor affecting pricing decisions is the ________. A. customer's willingness to pay B. information on competitor's cost structure C. minimum price acceptable to the firm D. price charged for alternative products

A

Practical capacity is the denominator-level concept that ________. A. reduces theoretical capacity for unavoidable operating interruptions B. is based on anticipated levels of capacity utilization for the coming budget period C. is based on the level of capacity utilization that satisfies average customer demand over periods generally longer than one year D. is the maximum level of operations at maximum efficiency

A

Salary of top management and general-administration costs is an example of which of the following? A. corporate-sustaining costs B. distribution-channel costs C. customer batch-level costs D. customer output unit-level costs

A

Samuels Company is considering pricing its 10,000-gallon petroleum tanks using either variable manufacturing or full product costs as the base. The variable cost base provides a prospective price of $6,000 and the full cost base provides a prospective price of $6,100. Which of the following explains the difference in the two prices? A. the variable cost base estimates fixed costs in the markup percentage while the full cost base includes an amount for fixed costs B. the difference is caused by the inability to estimate fixed cost per unit with any degree of reliability C. there is no explanation since this is known as price discrimination D. the estimated amount of profit

A

The Conity Corporation has an Electric Mixer Division and an Electric Lamp Division. Of a $15,000,000 bond issuance, the Electric Mixer Division used $9,400,000 and the Electric Lamp Division used $5,600,000 for expansion. Interest costs on the bond totaled $980,000 for the year.The above interest costs would be considered a(n) ________. A. product-sustaining cost B. batch-level cost C. facility-sustaining cost D. output unit-level cost

A

Under standard costing, ________. A. fixed overhead costs are treated as if they are a variable cost B. fixed overhead costs are treated as if they are a sunk cost C. variable overhead costs are treated as if they are a fixed cost D. fixed overhead costs are treated as if they are a fixed cost

A

Under variable costing, if a manager's bonus is tied to operating income, then increasing inventory levels compared to last year would result in ________. A. not affecting the manager's bonus B. increasing the manager's bonus C. decreasing the manager's bonus D. being unable to determine the manager's bonus using only the above information

A

When the purpose of cost allocation is to provide information for economic decisions or to motivate managers and employees, which of the following would be the best criteria? A. the cause-and-effect and the benefits-received criteria B. the cause-and-effect and the ability-to bear criteria C. the benefits-received and the fairness criteria D. the fairness and the ability-to-bear criteria

A

Which cost-allocation criterion is most likely to subsidize poor performers at the expense of the best performers? A. the ability to bear criterion B. the cause-and-effect criterion C. the fairness or equity criterion D. the benefits-received criterion

A

any companies have switched from absorption costing to variable costing for internal reporting ________. A. to reduce the undesirable incentive to build up inventories that would show higher operating income B. to increase bonuses for managers C. to comply with external reporting requirements as required by GAAP D. so the denominator level is more accurate

A

n planning and control of capacity costs, managers must consider possible capacity measures. Which of the following measures the available supply of capacity in a factory? A. Practical capacity B. Theoretical capacity C. Normal capacity D. Master-budget capacity

A

A company is using a standard cost system and receives its electricity bill. Electricity is considered a variable cost of operations for this company. The bill is for $15,000 and will be paid next month. Which of the following entries would be the correct recording of the electricity bill?A) Work-in-Process Control $15,000Variable Overhead Allocated $15,000B) Variable Overhead Control $15,000Accounts payable $15,000C) Work-in-Process Control $15,000Accounts Payable $15,000D) Variable Overhead Control $15,000Variable Overhead Allocated $15,000 B) Variable Overhead Control $15,000Accounts payable $15,000

B

Allocation of corporate-sustaining costs is useful for which of the following? A. evaluating the performance of salespersons with individual customer accounts B. motivating division managers to examine how corporate costs are planned and controlled C. motivating distribution-channel management D. focusing on the cause-and-effect relationships with the cost-allocation bases

B

Corporate administrative costs allocated to a division cost pool are most likely to be ________. A. output unit-level costs B. facility-sustaining costs C. product-sustaining costs D. batch-level costs

B

Fixed overhead costs include ________. A. the cost of sales commissions B. Leasing of machinery used in a factory C. indirect materials D. energy costs

B

For fixed manufacturing overhead, there is no ________. A. flexible-budget variance B. efficiency variance C. spending variance D. production-volume variance

B

How is value-engineering relevant to a well done customer profitability analysis, especially when an ABC system is utilized to calculate customer profits (or losses)? A. customer profitability analysis will reveal that the cost drivers of less profitable customers are the problem and that value-engineering is the solution B. ABC offers the opportunity to analyze the costs of activities assigned to each customer and to determine if improvements can be made to optimize profits C. Only value-added activities will be shown in the cost analysis and thus all other costs will be eliminated via value-engineering D. ABC will satisfy GAAP and provide input into value-engineering decisions

B

Life-cycle costing is best described by which of the following? A. it is a method of cost planning to reduce manufacturing costs to targeted levels B. it is the process of tracking and accumulating costs that are incurred within the manufacturing and distribution links of the value chain C. it is the process of tacking and accumulating business function costs across the entire value chain D. it is a costing system that focuses on reducing costs during the manufacturing cycle

B

One possible means of determining the difference between operating incomes for absorption costing and variable costing is by ________. A. multiplying the number of units produced by the budgeted fixed manufacturing cost rate B. subtracting fixed manufacturing overhead in beginning inventory from fixed manufacturing overhead in ending inventory C. subtracting sales of the previous period from sales of this period D. adding fixed manufacturing costs to the production-volume variance

B

Service-sector companies have no use of variance analysis as only few costs can be traced to their outputs in a cost effective way. A. TrueB. False

B

The product strategy in which companies first determine the price at which they can sell a new product and then design a product that can be produced at a low enough cost to provide adequate operating income is referred to as ________. A. kaizen costing B. target costing C. cost-plus pricing D. full costing

B

The variable overhead efficiency variance measures the difference between the ________, multiplied by the budgeted variable overhead cost per unit of the cost-allocation base. A. actual cost incurred and the budgeted quantity of the cost-allocation base that should have been used to produce the actual output B. actual quantity of the cost-allocation base used and the budgeted quantity of the cost-allocation base that should have been used to produce the actual output C. budgeted quantity of the cost-allocation base used and the budgeted quantity of the cost-allocation base that should have been used to produce the actual output D. budgeted cost and the actual cost used to produce the actual output

B

Top management at Gifford manufacturing are planning capacity levels and how to assign capacity costs for an upcoming period. Which of the following factors should be considered while developing this plan so that proper control can be achieved? A. The requirements of SFAS 151 B. The level of uncertainty of expected costs and demand C. The IRS tax implications of such decisions D. The GAAP rules requiring absorption costing

B

When the firm uses the target-costing approach to pricing, the target cost per unit is the difference between the per unit target price and the per unit target ________. A. gross margin B. operating income C. cost of goods sold D. contribution margin

B

When variable overhead spending variance is unfavorable, it can be safely assumed that ________. A. actual quantity of cost-allocation base used is higher than budgeted quantity B. actual rate per unit of cost-allocation base is higher than budgeted rate C. actual quantity of cost-allocation base used is lower than budgeted quantity D. actual rate per unit of cost-allocation base is lower than budgeted rate

B

Which of the following assumes that capacity will be decreased because of slowdowns due to plant maintenance or other interruptions of the production lines? A. Master-budget capacity utilization B. Practical capacity C. Theoretical capacity D. Normal capacity utilization

B

Which of the following customer related costs are NOT economically feasible to trace but are related to a customer? A. the shipping costs that result from shipping a package by Fed Ex to a customer when the technology allows a direct match of that cost to the direct material and direct labor costs of the product B. the allocation of the cost of travel, lodgings, and meals that result from visiting customers at their locations C. the direct material costs of a product that a customer has purchased D. the additional cost of selling one more unit to a new customer who has never done business with the firm before

B

Which of the following is true about discontinuing an unprofitable customer? A. will not eliminate all corporate costs assigned to and may result in gaining more revenues relative to costs saved B. will not eliminate all costs assigned to and may result in losing more revenues relative to costs saved C. will eliminate all corporate costs assigned to and may result in losing more revenues relative to costs saved D. will eliminate all costs assigned to and may result in gaining more revenues relative to costs saved

B

When individual activities within a cost pool have a similar relationship with the cost driver, which of the following could be said about the cost pool? A. the costs accumulated in the cost pool are not used for customer-profitability analysis B. the cost pool is considered contains only direct variable costs C. the cost pool is considered a homogeneous cost pool D. there is a need for need multiple cost drivers to allocate costs from the pool to customers

C

Which f the following methods focuses on reducing costs during the manufacturing stage? A. Cost-plus pricing B. Life-cycle costing C. Kaizen costing D. Target costing

C

Which of the following costs is inventoried when using variable costing? A. advertising costs incurred for the product B. rent on factory building C. electricity consumed in manufacturing process D. sales commission paid on each sale

C

Which of the following is a component of sales-volume variance? A. Budgeted revenue variance B. Net-income volume variance C. Operating-income volume variance D. Taxable-income volume variance

C

Which of the following is true of master-budget capacity utilization? A. It is an average that provides no meaningful feedback to a firm's marketing manager for a particular year. B. It provides the best cost estimate for benchmarking purposes. C. It hides the amount of unused capacity. D. It represents the maximum units of production intended for current capacity.

C

Which of the following journal entries is used to record fixed overhead costs allocated? A. Fixed Overhead ControlWork-in-Process Control B. Fixed Overhead AllocatedFixed Overhead Control C. Work-in-Process ControlFixed Overhead Allocated D. Fixed Overhead AllocatedWork-in-Process Control

C

Crimpson Corp., a California-based company is selling its products for $21. Its average variable costs is $23 and the average selling price of its competitors is $26. This is an example of ________. A. suicidal pricing B. dumping C. collusive pricing D. predatory pricing

D

In a perfectly competitive market, which of the following is a primary factor influencing pricing decisions? A. information on competitor's cost structure B. cost of production C. availability of raw materials in the market D. value customers place on product

D

Relevant costs for target pricing are ________. A. variable manufacturing costs B. variable manufacturing and variable nonmanufacturing costs C. all fixed costs D. all future costs, both variable and fixed

D

To reduce distribution-channel costs, a company could ________. A. improve the efficiency of the ordering process B. reduce product-handling costs C. make fewer customer visits D. eliminate distribution to retailers and only service wholesalers

D

Using ________ as the denominator level also gives the manager a more accurate idea of the resources needed and used to produce a unit by excluding the cost of unused capacity. A. theoretical capacity B. normal capacity utilization C. master-budget capacity utilization D. practical capacity

D

Variable manufacturing overhead$7,300 F$35,000 U(B) Fixed manufacturing overhead$28,300 U(A)$90,000 U The total production-volume variance should be ________. A. $90,000 F B. $118,300 F C. $118,300 U D. $90,000 U

D

Which of the following is an example of price discrimination? A. Nathan sells his ice-creams for a discount during winter season. B. Chang sells his wares at different prices based on the market conditions. C. Enrique Corp sells different kind of goods at different prices. D. Larry's offers a 30% discount to buyers making repeat purchases within 30 days.

D

Budgeted variable overhead cost rate = Budgeted variable manufacturing oh cost /Budgeted output = 119,000/7,000 = $17

N

InventoriableCostperUnit=DirectMaterialCost+DirectManufacturingLabor+VariableManufacturingCosts​

N/A

Under variable costing, the cost of of goods sold will be the variable cost of production.

N/A