Acct 2362 final exam h

Lawrence Company applies manufacturing overhead to jobs based on machine hours used. Overhead costs are estimated to be​ $300,000 and estaimted machine hours are​ 125,000 hours. During the​ year, actual overhead costs totaled​ $322,0000 and it incurred​ 130,000 machine hours. What is the amount of over or under allocated​ overhead?

$10,000 underallocated

Rec Equipment incurred​ $58,500 in total costs when it produced​ 9,000 balls. Total fixed costs are​ $36,000. What is the variable cost per unit when it produces​ 12,000 balls?

$2.50

Tess Industries manufactures product Q in its factory. The standard direct material quantity is 2 pounds per unit at a cost of​ $5.20 per pound. ​ 4,200 pounds of material were purchased at a total cost of​ $20,580. The actual usage for the production of​ 2,000 units was​ 3,900 pounds. - Calculate the direct materials price variance. - Calculate the direct material quantity variance

- $1,260 favorable - $520 favorable

Beau Corporation sells a unit of its product for​ $250 per​ unit, while its variable costs per unit are​ $75. Fixed cost are budgeted at​ $325,000. - How many units must Beau Corporation sell in order to earn a target income of​ $200,000? - Using the information above, what is the contribution margin ratio?

- 3,000 units - 0.70 or 70%

Which of the following shows the correct order of preparing components of the master​ budget? 1. Sales Budget 2. Budgeted Income Statement 3. Direct Materials Budget 4. Cash Budget

1,3,2,4

Robyn Company produces and sells automobile batteries. The sales forecast for 2019 is as​ follows: Quarter Batteries​ (in units) 1. ​5,000 2. ​7,000 3. ​8,000 4. ​10,000 The January​ 1, 2019 inventory of batteries is forecasted to be​ 2,000 units. Management desires an ending inventory each quarter equal to​ 40% of the next​ quarter's sales. What are the budgeted units to produce for the second quarter of​ 2019?

7,400

When using an ABC cost allocation​ system, all of the following steps are performed at the beginning of a​ company's year except​:

Allocate the costs from each activity using the cost allocation rate

Which of the following is NOT an example of an Operating​ Budget?

Cash budget

Which of the following are responsible for general financial and managerial​ accounting, and tax​ reporting:

Controller

Which of the following describes an employee of a corporation whose responsibilities include overseeing the general financial and managerial accounting​ function, as well as tax​ reporting:

Controller

Which of the following describes the combination of direct labor and manufacturing overhead costs?

Conversion Costs

The production line of American​ Apparel, where clothing is manufactured.

Cost Center

Denim used to manufacture jeans would be a considered a

Direct Material Cost

which of the following costs would be considered a product cost?

Factory's manager's salary

True or False: ABC uses only one cost driver when allocating overhead.

False

True or False: All else being​ equal, an increase in the variable cost per unit will result in a decrease in the breakeven point.

False

True or False: Departmental Cost Allocation is used to allocate direct​ materials, direct​ labor, and manufacturing overhead costs.

False

True or False: From a purely financial​ standpoint, a product line should always be discontinued if it has a negative operating income.

False

True or False: Process Costing is used by companies that produce​ unique, custom-ordered​ products, or small batches of products.

False

True or False: When units produced are less than units​ sold, operating income under absorption costing will be higher than operating income under variable costing.

False

Which inventory account holds the cost of inventory​ produced, but not yet​ sold?

Finished Goods Inventory

The corporate division of​ Apple, Inc. responsible for​ revenues, costs, and managing its​ division's assets.

Investment Center

Identify whether the following characteristics relates to managerial​ accounting, or financial​ accounting: Reports are prepared on an as needed basis as determined by the​ company's managers.

Managerial Accounting

Which of the following companies carry three inventory accounts?

Manufacturing Company

Managers have three primary​ responsibilities: Planning,​ directing, and controlling. Kong Corporation is planning for the upcming​ year, and is forecasting an increase of​ 5% in its operating income due to a planned reduction in operating expenses. Which of the three primary responsibilities would this fall​ under?

Planning

Which of the following is not an advantage of​ decentralization:

Potential duplication of costs

Which of the following is most likely to be the allocation base for the Material Handling​ activity?

Pounds of material used

Which costing system is used for each, job costing or process costing? Soft Drink Bottling Company Law Firm Advertising Agency Textbook Publisher

Process Costing Job Costing Job Costing Process Costing

The IMA issues the Statement of Ethical Professional Practice to aid management accountants in handling ethical challenges. Which standard is being described in the following​ statement: Maintain an appropriate level of professional expertise by continually developing knowledge and skills.

Professional Competence

The production engineers have prepared a report detailing the types and amounts of inventory required for production. Before the factory manager requests that the purchasing department order material for the​ period, they must first check the bill of materials against which​ document?

Raw Materials Record

A Target​ store, which is part of the national store​ brand, and reports its own revenues and costs.

Revenue Center

The subscription sales department of The Wall Street Journal.

Revenue Center

Sustainabiility refers to the ability of a system to operate in such a manner that it is able to continue indefinitely. Which of the three pillars is being described when an organization volunteers in its community to aid and provide for the most vulnerable members of its​ community?

Social

With respect to fixed costs per unit, which of the following statements is true?

They will decrease as volume increases, within the relevant range.

True or False: ABC is beneficial for companies at high risk of cost distortion because it allocates overhead based on the resources used by each​ product, and the extent to which they use them.

True

True or False: Unit-level activities are one level within the ABC cost hierarchy

True

For​ Apple, Inc., the cost of partially completed iPhones would be held in which inventory​ account:

Work In Process Inventory

In a​ make-or-buy decision, relevant costs​ are:

all of the above are relevant (the opportunity costs, the purchase price of the units, manufacturing costs that will be saved by outsourcing)

The contribution margin ratio explains the percentage of sales revenue that

contributes towards fixed costs and generating a profit

Assembly line worker's wages would be considered a

direct labor cost

True or False: ABC can only be used in a job-costing system

false

Which of the following is a potential disadvantage of participative​ budgeting?

managers may build slack into the budget

Property taxes incurred on the factory would be considered a:

manufacturing overhead cost

The difference between actual revenues and expenses and the master budget is known as​ the:

master budget variance

Segment Margin is the income generated by​ subtracting:

only direct fixed expenses from a segment's contribution margin

Depreciation on printers at sales office would be considered a

period cost

In a highly competitive​ market, where products are very​ similar, a seller would most likely​ use:

target costing

A favorable direct materials price variance indicates which of the following

the standard cost of materials purchased was greater than the actual cost of materials purchased

Which of the following is​ false:

the volume variance is due to causes other than volume