ACCT 2302 - BBA

Oxnard Industries produces a product that requires 2.6 pounds of materials per unit. The allowance for waste and spoilage per unit is .3 pounds and .1 pounds, respectively. The purchase price is $2 per pound, but a 2% discount is usually taken. Freight costs are $.10 per pound, and receiving and handling costs are $.07 per pound. The hourly wage rate is $12.00 per hour, but a raise which will average $.30 will go into effect soon. Payroll taxes are $1.20 per hour, and fringe benefits average $2.40 per hour. Standard production time is 1 hour per unit, and the allowance for rest periods and setup is .2 hours and .1 hours, respectively. The standard direct labor rate per hour is $ 12.00. $ 12.30. $15.60. $15.90.

$15.90

Amber Manufacturing provided the following information for last month: Sales $20,000 Variable costs 6,000 Fixed costs 9,000 Operating income $5,000 If sales double next month, what is the projected operating income? $10,000 $25,000 $19,000 $12,000

$19,000

The per-unit standards for direct materials are 2 gallons at $4 per gallon. Last month, 11,200 gallons of direct materials that actually cost $42,400 were used to produce 6,000 units of product. The direct materials quantity variance for last month was? $3,200 favorable. $2,400 favorable. $3,200 unfavorable. $5,600 unfavorable.

$3,200 favorable.

The following credit sales are budgeted by Terra Co.: January $204,000 February 300,000 March 420,000 April 360,000 The company's past experience indicates that 70% of the accounts receivable are collected in the month of sale, 20% in the month following the sale, and 8% in the second month following the sale. The anticipated cash inflow for the month of April is $370,320. $336,000. $360,000. $352,800.

$360,000.

The predetermined overhead rate for Zane Company is $5, comprised of a variable overhead rate of $3 and a fixed rate of $2. The amount of budgeted overhead costs at normal capacity of $150,000 was divided by normal capacity of 30,000 direct labor hours, to arrive at the predetermined overhead rate of $5. Actual overhead for June was $9,500 variable and $6,050 fixed, and standard hours allowed for the product produced in June was 3,000 hours. The total overhead variance is $3,050 F. $550 F. $550 U. $3,050 U.

$550 U.

Marburg Co. expects direct materials cost of $6 per unit for 100,000 units (a total of $600,000 of direct materials costs). Marburg's standard direct materials cost and budgeted direct materials cost is Standard Budgeted $6 per unit, $600,000 per year $6 per unit, $6 per unit $600,000 per year, $6 per unit $600,000 per year, $600,000 per year

$6 per unit, $600,000 per year

The East Company manufactures several different products. Unit costs associated with Product ORD203 are as follows: Direct materials $50 Direct manufacturing labor 8 Variable manufacturing overhead 10 Fixed manufacturing overhead 23 Sales commissions (2% of sales) 5 Administrative salaries 9 Total $105 What are the variable costs per unit associated with Product ORD203? $60 $82 $73 $105

$73

Off-Line Co. has 9,000 units in beginning finished goods. The sales budget shows expected sales to be 36,000 units. If the production budget shows that 42,000 units are required for production, what was the desired ending finished goods? 3,000. 9,000. 15,000. 27,000.

15,000

Hollis Industries produces flash drives for computers, which it sells for $20 each. Each flash drive costs $12 of variable costs to make. During April, 1,000 drives were sold. Fixed costs for March were $2 per unit for a total of $1,000 for the month. How much is the contribution margin ratio? 30% 40% 60% 70%

40%

A company sells a product which has a unit sales price of $5, unit variable cost of $3 and total fixed costs of $180,000. The number of units the company must sell to break even is 90,000 units. 36,000 units. 360,000 units. 60,000 units.

90,000 units.

Two costs at Bradshaw Company appear below for specific months of operation. Month Amount Units Produced Delivery costs September $ 40,000 40,000 October 55,000 60,000 Utilities September $ 84,000 40,000 October 126,000 60,000 Which type of costs are these? Delivery costs and utilities are both variable. Delivery costs and utilities are both mixed. Utilities are mixed and delivery costs are variable. Delivery costs are mixed and utilities are variable.

Delivery costs are mixed and utilities are variable.

Top management notices a variation from budget and an investigation of the difference reveals that the department manager could not be expected to have controlled the variation. Which of the following statements is applicable? Department managers should be held accountable for all variances from budgets for their departments. Department managers should only be held accountable for controllable variances for their departments Department managers should be credited for favorable variances even if they are beyond their control. Department managers' performances should not be evaluated based on actual results to budgeted results

Department managers should only be held accountable for controllable variances for their departments

Which of the following statements about the direct/indirect cost classification is NOT true? Indirect costs are always traced. Indirect costs are always allocated. The design of operations affects the direct/indirect classification. The direct/indirect classification depends on the choice of cost object.

Indirect costs are always traced.

Which of the following is not a correct match? 1. Incurs costs 2. Generates revenue 3. Controls investment funds Investment Center1, 2, 3 Cost Center1 Profit Center1, 2, 3 All are correct matches.

Profit Center 1, 2, 3

Which of the following statements about standard costs is false? Properly set standards should promote efficiency. Standard costs facilitate management planning. Standards should not be used in "management by exception." Standard costs can simplify the costing of inventories.

Standards should not be used in "management by exception."

Boland Manufacturing prepared a 2013 budget for 120,000 units of product. Actual production in 2013 was 130,000 units. To be most useful, what amounts should a performance report for this company compare? The actual results for 130,000 units with the original budget for 120,000 units. The actual results for 130,000 units with a new budget for 130,000 units. The actual results for 130,000 units with last year's actual results for 134,000 units. It doesn't matter. All of these choices are equally useful.

The actual results for 130,000 units with a new budget for 130,000 units.

Which of the following statements about a budgeted income statement is not true? The budgeted income statement is prepared after the financial budgets are prepared The budgeted income statement is prepared on the accrual basis of accounting The budgeted income statement can be prepared in a multiple-step format The budgeted income statement is prepared using the individual operating budgets.

The budgeted income statement is prepared after the financial budgets are prepared

What is the primary difference between a static budget and a flexible budget? The static budget contains only fixed costs, while the flexible budget contains only variable costs. The static budget is prepared for a single level of activity, while a flexible budget is adjusted for different activity levels. The static budget is constructed using input from only upper level management, while a flexible budget obtains input from all levels of management. The static budget is prepared only for units produced, while a flexible budget reflects the number of units sold.

The static budget is prepared for a single level of activity, while a flexible budget is adjusted for different activity levels.

Why are budgets useful in the planning process? They provide management with information about the company's past performance. They help communicate goals and provide a basis for evaluation. They guarantee the company will be profitable if it meets its objectives. They enable the budget committee to earn their paycheck.

They help communicate goals and provide a basis for evaluation.

Cost objects include: products customers departments all of these answers are correct.

all of these answers are correct.

Customer relationship management initiatives use technology to coordinate all:? production activities research activities customer-facing activities inventory management activities

customer-facing activities

Management accounting: focuses on estimating future revenues, costs, and other measures to forecast activities and their results provides information about the company as a whole reports information that has occurred in the past that is verifiable and reliable provides information that is generally available only on a quarterly or annual basis

focuses on estimating future revenues, costs, and other measures to forecast activities and their results

Linking rewards to performance: helps to motivate managers allows companies to charge premium prices should only be based on financial information All of these answers are correct.

helps to motivate managers

Each of the following is a limitation of activity-based costing except that? it can be expensive to use. it is more complex than traditional costing. more cost pools are used. some arbitrary allocations continue.

more cost pools are used.

An "Ordering and Receiving Materials" cost pool would most likely have as a cost driver: machine hours. number of setups. number of purchase orders. number of inspection tests.

number of purchase orders.

Often the most difficult part of computing accurate unit costs is determining the proper amount of _________ to assign to each product, service, or job. direct materials direct labor overhead direct materials and direct labor

overhead

Management accounting includes all of the following EXCEPT implementing strategies developing budgets preparing special studies and forecasts preparing the statement of cash flows

preparing the statement of cash flows

An understanding of the underlying behavior of costs helps in all of the following EXCEPT: costs can be better estimated as volume expands and contracts true costs can be better evaluated process inefficiencies can be better identified and as a result improved sales volume can be better estimated

sales volume can be better estimated

Cost-volume-profit analysis includes all of the following assumptions except? the behavior of costs is curvilinear throughout the relevant range. costs can be classified accurately as either variable or fixed. changes in activity are the only factors that affect costs. all units produced are sold.

the behavior of costs is curvilinear throughout the relevant range.