Final Exam
Job A3B was ordered by a customer on September 25. During the month of September, Jayce Corporation requisitioned $1,600 of direct materials and used $3,100 of direct labor. The job was not finished by the end of the month, but needed an additional $2,100 of direct materials and additional direct labor of $4,700 to finish the job in October. The company applies overhead at the end of each month at a rate of 200% of the direct labor cost incurred. What is the balance in the Work in Process account at the end of September relative to Job A3B? a) $10,900 b) $6,800 c) $3,700 d) $7,800 e) $4,700
a) $10,900
Morse Company reports total contribution margin of $48,000 and pretax net income of $12,000 for the current month. The degree of operating leverage is a) 4.0 b) 0.25 c) 1.25 d) 2.5 e) 250%
a) 4.0
A hybrid costing system would be most appropriate when: a) a manufacturer is able to standardize processes while at the same time attempting to cater to individual customer needs b) large quantities of identical products are being produced c) the volume of production is low and costs are high d) there is no standardization of units of production e) the volume of production is low and standardized products are produced
a) a manufacturer is able to standardize processes while at the same time attempting to cater to individual customer needs
From an ABC perspective, what causes costs to be incurred? a) financial transactions b) the volume of units produced c) debits and credits d) management decisions e) activities
a) activies
If the labor efficiency variance is unfavorable, then: a) actual hours exceeded standard hours allowed for the actual output b) standard hours allowed for the actual output exceeded actual hours c) the standard rate exceeded the actual rate d) the actual rate exceeded the standard rate
a) actual hours exceeded standard hours allowed for the actual output
A company is currently operating at 60% capacity producing 10,000 units. Cost information relating to this current production is shown in the following table. At what price should the company accept the special order? Per Unit Sales Price - $21.00 Direct Material - $6.00 Direct Labor - $4.12 Variable Overhead - $2.23 Fixed Overhead - $0.80 a) any sales price that exceeds $12.35 b) the company should reject the offer c) any sales price that exceeds $10.12 d) any sales price that exceeds $13.15
a) any sales price that exceeds $12.35
A company normally sells a product for $20 per unit. Variable per unit costs for this product are $2 direct materials, $4 direct labor, and $1.50 variable overhead. The company is currently operating at 70% of capacity producing 14,000 units per year. Total fixed costs are $42,000 per year. At what price should the company accept a special order for 2,000 units? a) any sales price that exceeds $7.50 b) the company should reject the offer below its selling price c) any sales price that exceeds $10.50 d) the company should accept any offer because it has excess capacity
a) any sales price that exceeds $7.50
Product costs: a) are expenditures necessary and integral to finished products b) are expenditures identified more with a time period rather than with finished products c) include selling and administrative expenses d) are only costs that vary with the volume of activity e) are only costs that do not vary with the volume of activity
a) are expenditures necessary and integral to finished products
The most useful data for evaluation of a manager's cost performance is based on: a) controllable costs: b) contribution percentage c) departmental contribution to overhead d) uncontrollable expenses e) direct costs
a) controllable costs
The variable costing income statement classifies costs based on which of the following concepts: a) cost behavior rather than function b) function rather than cost behavior c) whether costs are controllable or non-controllable d) whether costs are direct or indirect e) whether costs are product or period costs
a) cost behavior rather than function
In most process costing systems, per-unit costs are determined by: a) dividing the total manufacturing costs incurred during the period by the equivalent number of units completed during the period b) dividing the number of units completed during the period by the total manufacturing costs incurred during the period c) dividing the total manufacturing costs incurred during the period by the number of units worked on during the period d) unit costs cannot be determined in a process costing system
a) dividing the total manufacturing costs incurred during the period by the equivalent number of units completed during the period
Which of the following statements regarding fraud is true? a) fraud is a deliberate act b) fraud can be deliberate or unintentional c) a company with a strong code of ethics can eliminate fraud d) a company with strong internal controls can eliminate fraud e) the most common type of fraud is financial statement fraud
a) fraud is a deliberate act
Materials that are used in support of the production process but that do not become a part of the product and are not clearly identified with units or batches of products are called: a) indirect materials b) secondary materials c) general materials d) direct materials e) materials inventory
a) indirect materials
Horizontal analysis: a) is a method used to evaluate changes in financial data across time b) is also called vertical analysis c) is the presentation of financial ratios d) is a tool used to evaluate financial statement items relative to industry statistics e) evaluates financial data across industries
a) is a method used to evaluate changes in financial data across time
A disadvantage of using the payback period to compare investment alternatives is that: a) it ignores cash flows beyond the payback period b) it includes the time value of money c) it cannot be used when cash flows are not uniform d) it cannot be used if a company records depreciation e) it cannot be used to compare investments with different initial investments
a) it ignores cash flows beyond the payback period
Which of the following is a disadvantage of the departmental overhead rate method? a) it may fail to accurately assign many overhead costs that are not driven by production volume b) allows each department to have its own overhead rate c) allows each department to have its own allocation base d) the departmental overhead rate is usually more accurate in overhead allocations than plantwide overhead rate
a) it may fail to accurately assign many overhead costs that are not driven by production volume
A comprehensive or overall formal plan for a business that includes specific plans for expected sales, the units of product to be produced, the merchandise or materials to be purchased, the expense to be incurred, the long-term assets to be purchased, and the amounts of cash to be borrowed or loans to be repaid, as well as a budgeted income statement and balance sheet, is called a: a) master budget b) cash budget c) capital expenditure budget d) rolling budget e) production budget
a) master budget
Which of the following statements is correct concerning the elements of cycle time? a) move time is the time spent moving (1. raw material from storage to production and (2. goods in process from one factory location to another factory location b) inspection time is the time spent producing the product c) process time is considered non-value-added time d) wait time is considered value-added time e) cycle efficiency is the ratio of non-value-added time to total cycle time
a) move time is the time spent moving (1. raw material from storage to production and (2. goods in process from one factory location to another factory location
A cost that requires a current and/or future outlay of cash, and is usually an incremental cost, is a(n): a) out-of-pocket cost b) sunk cost c) opportunity cost d) operating cost e) uncontrollable cost
a) out-of-pocket cost
Costs that flow directly to the current income statement are called a) period costs b) product costs c) general costs d) balance sheet costs e) capitalized costs
a) period costs
Direct labor hours is an appropriate cost driver when: a) production is labor intensive b) overhead costs increase c) production is automated d) all of these answers are correct
a) production is labor intensive
Common-size statements: a) reveal changes in the relative magnitude of each financial statement item b) do not emphasize the relative magnitude of each item c) compare financial statements over time d) show the dollar amount of change for financial statement items e) consist of two or more balance sheets arranged side-by side
a) reveal changes in the relative magnitude of each financial statement item
Allocating joint costs to products using a value basis method is based on their relative a) sales (or market values) b) direct costs c) gross margins d) total costs e) variable costs
a) sales (or market values)
A cost with a flat cost line within a relevant range that shifts to another level when volume significantly changes is a(n): a) step-wise cost b) fixed cost c) curvilinear cost d) incremental cost e) flat line cost
a) step-wise cost
In preparing financial budgets a) the budgeted balance sheet is usually prepared last b) the cash budget is usually not prepared c) the budgeted income statement is usually not prepared d) the capital expenditures budget is usually prepared last e) the budgeted income statement is usually prepared last
a) the budgeted balance sheet is usually prepared last
To compute an equivalent unit of production, one must be able to reasonably estimate: a) the percentage of completion b) units completed c) units started and completed d) direct labor cost
a) the percentage of completion
When graphing cost-volume-profit data on a CVP chart: a) units are plotted on the horizontal axis; costs on the vertical axis b) units are plotted on the vertical axis, costs on the horizontal axis c) both units and costs are plotted on the horizontal axis d) both units and costs are plotted on the vertical axis e) data points always represent expected future points
a) units are plotted on the horizontal axis; costs on the vertical axis
Which of the situations below will result in variable costing income being higher than absorption costing income? a) units produced is less than units sold b) units produced equals units sold c) units produced is greater than units sold d) net income under variable costing will never equal net income under absorption costing
a) units produced is less than units sold
Soar Incorporated is considering eliminating its mountain bike division, which reported an operating loss for the recent year of $3,000. The division sales for the year were $1,050,000 and the variable costs were $860,000. The fixed costs of the division were $193,000. If the mountain bike division is dropped, 30% of the fixed costs allocated to that division could be eliminated. The impact on operating income for eliminating this business segment would be: a) $57,900 decrease b) $132,100 decrease c) $190,000 increase d) $54,900 decrease e) $190,000 decrease
b) $132,100 decrease
A company's product sells at $12 per unit and has a $5 per unit variable cost. The company's total fixed costs are $98,000. What is the contribution margin per unit? a) $5 b) $7 c) $8.17 d) $12 e) $17
b) $7
If a manager were concerned with the time value of money, from which two capital budgeting methods should the manager choose? a) IRR or Payback b) BET or IRR c) BET or Payback d) NPV or ARR e) NPV or Payback
b) BET or IRR
Internal users of financial information: a) are not directly involved in operating a company b) are those individuals involved in managing and operating the company c) include shareholders and lenders d) include directors and customers e) include suppliers, regulators, and the press
b) are those individuals involved in managing and operating the company
The process of analyzing alternative long-term investments and deciding assets to acquire or sell is known as: a) planning and control b) capital budgeting c) variance analysis d) master budgeting e) managerial accounting
b) capital budgeting
Variable budget is another name for a) cash budget b) flexible budget c) fixed budget d) manufacturing budget e) rolling budget
b) flexible budgeting
Which of the following statements is true with regard to the departmental overhead rate method? a) it is logical to use this method when overhead resources are consumed by various products in substantially the same way throughout multiple departments b) it is logical to use this method when overhead resources are consumed by various products in substantially different ways throughout multiple departments c) each department has the same rate for the same activity pool d) it requires one overhead cost pool and one rate e) it is synonymous with activity-based costing
b) it is logical to use this method when overhead resources are consumed by various products in substantially different ways throughout multiple departments
An analytical technique used by management to focus on the most significant variances and give less attention to the areas where performance is satisfactory is known as: a) controllable management b) management by exception c) management by variance d) performance management e) management by objectives
b) management by exception
Which of the following is not true with regards to determining the best sales mx of a particular project? a) when a company sells a variety of products, some are likely to be more profitable than others b) management should concentrate sales efforts equally on all profitable products c) if production facilities or other factors are limited, producing more of one product usually means producing less of others d) management must identify the most profitable sales mix of products e) management focuses on the contribution margin per unit of scarce resource
b) management should concentrate sales efforts equally on all profitable products
Features of a job order costing system include all but which of the following: a) diversity of products produced b) mass production c) heterogeneity d) customization e) separate manufacturing from other products
b) mass production
Which one of the following methods considers the time value of money in evaluating alternative capital expenditures? a) accounting rate of return b) net present value c) payback period d) cash flow method e) return on average investment
b) net present value
The expected amount of time to recover the initial amount of an investment is called the a) amortization period b) payback period c) interest period d) budgeting period e) discounted cash flow period
b) payback period
A system of accounting in which costs are accumulated and then measured per unit at the end of a period by combining costs per equivalent unit from various departments is a: a) general cost accounting system b) process costing system c) job order cost accounting system d) manufacturing cost accounting system e) work in process accounting system
b) process costing system
In business decision-making, managers typically examine the two fundamental factors of a) risk and capital investment b) risk and rate of return c) capital investment and rate of return d) risk and payback e) payback and rate of return
b) risk and rate of return
The dollar change for a financial statement item is calculated by a) subtracting the analysis period from the base amount period amount b) subtracting the base period amount from the analysis period amount c) subtracting the analysis period amount from the base period amount, dividing the result by the base period amount, then multiplying that amount by 100 d) subtracting the base period amount from the analysis period amount, dividing the result by the base period amount, then multiplying that amount by 100 e) subtracting the base period amount from the analysis amount, then dividing the result by the base period amount
b) subtracting the base period amount from the analysis period amount
A company has been approached by a customer with a request for a special order for 5,000 units at $13.20 each. The company is currently operating at full capacity producing 10,000 units. Cost information relating to this current production is shown in the following table below. What is the minimum per unit sales price that management would accept for this order? Per Unit Sales Price - $21.00 Direct Material - $6.00 Direct Labor - $4.12 Variable Overhead - $2.23 Fixed Overhead - $0.80 a) any sales price that exceeds $12.35 b) the company should reject the offer c) any sales price that exceeds $10.12 d) any sales price that exceeds $13.15
b) the company should reject the offer
Which of the following is not a category used to reconcile the number of physical units using the weighted average method of process costing? a) units started b) ending units in process c) cost of goods sold d) units completed
c) cost of goods sold
Which of the following are advantages of using the plantwide overhead rate method? a) the use of cost pools is considerably more accurate than other overhead allocations b) the necessary information is readily available c) it is more accurate than traditional overhead allocations d) each department has its own overhead rate and its own allocation base e) it takes into account that when products differ in batch size and complexity, they usually consume different amounts of overhead resources
b) the necessary information is readily available
In preparing a budgeted balance sheet, the amount for Accounts Receivable data can be derived from: a) the purchases budget and schedule of cash payments b) the sales budget and the schedule of cash receipts c) the capital expenditures budget and purchases budget d) the budgeted income statement and budgeted balance sheet e) the selling expenses budget and the schedule of cash receipts
b) the sales budget and the schedule of cash receipts
O Corporation produces and sells a single product. Its contribution formal income statement for March is below. If the company sells 5,400 units, its net operating income should be closest to which of the possible answers? Sales (5,000 units) - $205,000 Variable Expenses - $125,000 Contribution Margin - $80,000 Fixed Expense - $62,400 Net Operating Income - $17,600 a) $19,008 b) $17,600 c) $24,000 d) $34,000
c) $24,000
Company A's manufacturing costs for August are: direct labor of $13,000; indirect labor for $6,500; direct materials of $15,000; $800 in taxes on both raw materials and work in process; factory heat, lights, and power of $1,000; and insurance on plant and equipment, $200. "A" Company's actual factory overhead incurred for August is: a) $2,000 b) $6,500 c) $8,500 d) $21,500 e) $36,500
c) $8,500
Which of the following formulas is used to calculate the contribution margin ratio? a) (sales - fixed expenses) / sales b) (sales - cost of goods sold) / sales c) (sales - variable expenses) / sales d) (sales - total expenses) / sales
c) (sales - variable expenses) / sales
During April, the production department of a process manufacturing system completed a number of units of a product and transferred them to finished goods. Beginning Work in Process inventory included 40,000 units that were 60% complete with respect to materials, 40% complete with respect to labor, and 35% for overhead. Another 171,000 units were started during the month. At the end of April, 41,000 additional units were in process in the production department and were 80% complete with respect to materials and 30% complete with respect to both labor and overhead. How many units were transferred to finished goods inventory? a) 40,000 b) 130,000 c) 170,000 d) 202,800
c) 170,000
After-tax net income divided by the average amount invested in a project, is the: a) net present value rate b) payback rate c) accounting rate of return d) earnings from investment e) profit rate
c) accounting rate of return
If a company applies overhead to production with a predetermined overhead rate, a credit balance in the Factory Overhead account at the end of the period means that: a) the bookkeeper has made an error because the debits don't equal the credits b) the balance will be carried forward to the next period as an overhead cost c) actual overhead incurred was less than the overhead amount applied to production d) the overhead was underapplied for the period e) actual overhead was greater than the overhead amount applied to production
c) actual overhead incurred was less than the overhead amount applied to production
When the weighted-average method of process costing is used, a department's equivalent units are computed by: a) subtracting the equivalent units in beginning inventory from the equivalent units in ending inventory b) subtracting the equivalent units in beginning inventory from the equivalent units for work performed during the period c) adding the units transferred out to the equivalent units in ending inventory d) subtracting the equivalent units in beginning inventory from the sum of the units transferred out and the equivalent units in ending inventory
c) adding the units transferred out to the equivalent units in ending inventory
The difference between a profit center and an investment center is: a) an investment center incurs costs, but does not directly generate revenues b) an investment center incurs no costs but does generate revenues c) an investment center is responsible for investments made in operating assets d) an investment center provides services to profit centers e) there is no difference; investment centers and profit centers are synonymous
c) an investment center is responsible for investments made in operating assets
External users of financial information: a) are those individuals involved in managing and operating the company b) include internal auditors and consultants c) are not directly involved in operating the company d) make strategic decisions for a company e) make operating decisions for a company
c) are not directly involved in operating the company
A formal statement of future plans, usually expressed in monetary terms, is a: a) variance report b) position statement c) budget d) prospectus e) variance analysis
c) budget
Overhead costs: a) are directly related to production b) can be traced to units of product in the same way that direct materials can c) cannot be traced to units of product in the same way that direct materials can d) are period costs e) include only fixed costs
c) cannot be traced to units of product in the same way that direct materials can
When standard manufacturing costs are recorded in the accounts and the cost variances are immaterial at the end of the accounting period, the cost variances should be a) carried forward to the next accounting period b) allocated between cost of goods sold, finished goods, and goods in process c) closed to cost of goods sold d) written off as a selling expense e) ignored
c) closed to cost of goods sold
What is the reason for pooling costs? a) to shift costs from low-volume to high-volume products b) it is a budgeting technique designed to accurately track fixed costs c) determining a pool rate for all costs incurred by the same activity reduces the number of cost pools required to allocate overhead using ABC d) this procedure helps to determine which costs are directly related to production volume e) it simplifies departmental overhead costing procedures
c) determining a pool rate for all costs incurred by the same activity reduces the number of cost pools required to allocate overhead using ABC
Departmental contribution to overhead is calculated as revenues of the department less: a) controllable costs b) product and period costs c) direct costs and expenses d) direct and indirect costs e) joint costs
c) direct costs and expenses
A report based on predicted amounts of revenues and expenses corresponding to the actual level of output is called a: a) rolling budget b) production budget c) flexible budget d) merchandise purchases budget e) fixed budget
c) flexible budget
Which is not a key component of lean accounting? a) eliminating waste in the accounting process b) using alternative performance measures c) focusing on cost allocation methods d) simplified product costing
c) focusing on cost allocation methods
A company's required rate of return, typically its cost of capital is called the: a) internal rate of return b) average rate of return c) hurdle rate d) maximum rate e) payback rate
c) hurdle rate
A source document that production managers use to request materials for manufacturing and that is used to assign material costs to specific jobs or to overhead is a: a) job cost sheet b) production order c) materials requisition d) materials purchase order e) receiving report
c) materials requisition
Which of the following would usually not be used in computing plantwide overhead rates? a) direct labor hours b) machine hours c) number of quality inspections d) direct labor dollars
c) number of quality inspections
General standard of comparisons (rules-of-thumb) are developed from: a) analysis of competitors b) industry statistics from the government c) past experience d) relations between financial items e) Dun and Bradstreet
c) past experience
The ability to provide financial rewards sufficient to attract and retain financing is called: a) liquidity and efficiency b) solvency c) profitability d) market prospects e) creditworthiness
c) profitability
An accounting system that provides information that management can use to evaluate the performance of a department's manager is called a: a) cost accounting system b) managerial accounting system c) responsibility accounting system d) financial accounting system e) activity-based accounting system
c) responsibility accounting system
In Job Order Costing, the balance in the Work in Process account equals: a) the balance in the Finished Goods inventory account b) the balance in the Cost of Goods Sold account c) the balances on the job cost sheets of uncompleted jobs d) the balance in the Manufacturing Overhead account
c) the balances on the job cost sheets of uncompleted jobs
A job cost sheet shows information about each of the following items except: a) the direct labor costs assigned to the job b) the name of the customer c) the costs incurred by the marketing department in selling the job d) the overhead costs assigned to the job e) the direct materials costs assigned to the job
c) the costs incurred by the marketing department in selling the job
All of the following factors should influence the decision to investigate a variance except a) frequency of occurrence b) materiality of the variance amount c) the direction of the variance (favorable or unfavorable) d) capacity for management to control
c) the direction of the variance (favorable or unfavorable)
For product costs associated with a particular product to be reported on the income statement: a) the product must be transferred to Finished Goods Inventory b) The product must still be in Work in Process Inventory c) the product must be sold d) the product must be in any of the manufacturer's inventory accounts e) the company must expect to sell the product during the next twelve months
c) the product must be sold
Which of the situations below will result in variable costing income being lower than absorption costing income? a) units produced is less than units sold b) units produced equals units sold c) units produced is greater than units sold d) net income under variable costing will never equal net income under absorption costing
c) units produced is greater than units sold
Managers should consider eliminating poorly performing segments in which of the following situations? a) anytime departmental income statement reflects a lost b) when avoidable revenues are greater than avoidable expenses because the company would continue to incur those expenses after the segment is eliminated c) when avoidable expenses are greater than avoidable revenues d) only when avoidable expenses can be eliminated e) when unavoidable expenses are greater than avoidable revenues
c) when avoidable expenses are greater than avoidable revenues
A company manufactures and sells a product for $120 per unit. The company's fixed costs are $68,760, and its variable costs are $90 per unit. What is the company's break-even point in dollars? a) $91,680 b) $68,760 c) $2,292 d) $275,040 e) $206,280
d) $275,040
M Company has a goal of earning $70,000 after-tax income, Ivan would incur a 30% income tax rate on pre-tax income. The contribution margin ratio is 30%. What amount of dollar-sales must be achieved to reach the goal if fixed costs are $80,000? a) $500,000 b) $570,000 c) $233,333 d) $600,000 e) $420,000
d) $600,000
The sales level at which a company neither earns a profit nor incurs a loss is the: a) relevant range b) margin of safety c) step-wise variable level d) break-even point e) contribution margin
d) break-even point
The central guidance of the budget process is the responsibility of the: a) chief accounting officer b) chief executive officer c) chief financial officer d) budget committee e) board of directors
d) budget committee
A plan that shows the expected cash inflows and cash outflows during the budget period, including receipts from loans needed to maintain a minimum cash balance and repayments of cash loans is called a(n): a) capital expenditures budget b) operating budget c) rolling budget d) cash budget e) income statement
d) cash budget
Investment center managers are evaluated on all of the following except: a) return on investment b) residual income c) profit margin d) center net income e) investment turnover
d) center net income
Financial statements with data for two or more successive accounting periods placed in columns side by side, sometimes with changes shown in dollar amounts and percents, are referred to as: a) period-to-period statements b) controlling statements c) successive statements d) comparative statements e) serial statements
d) comparative statements
The practice of preparing budgets for each of several future periods and revising those budgets as each period is completed, adding a new budget each period so that the budgets always cover the same number of future periods, is called: a) participatory budgeting b) capital budgeting c) balanced budgeting d) continuous budgeting e) primary budgeting
d) continuous budgeting
Which of the following would be in a line item for a variable costing income statement? a) gross margin b) cost of goods available for sale c) total cost of goods sold d) contribution margin e) work-in-process inventory
d) contribution margin
Which of the following would not be considered a product cost? a) direct labor costs b) factory supervisor's salary c) factory line worker's salary d) cost accountant's salary e) manufacturing overhead costs
d) cost accountant's salary
Which of the following costs would not increase the work in process inventory account? a) cost of direct labor b) cost of allocated overhead c) cost of direct materials d) cost of selling supplies
d) cost of selling supplies
The net cash flow of particular investment project a) does not take income taxes into consideration b) equals the total of the inflows of the project c) equals the total of the outflows of the project d) does not include depreciation e) is equal to operating income each period
d) does not include depreciation
The target cost for a job using job order costing is calculated as: a) direct costs + desired profit b) direct costs - desired profit c) expected selling price - direct costs d) expected selling price - desired profit e) expected selling price + desired profit
d) expected selling price - desired profit
Which of the following best defines the concept of target costing? a) customer preferences will be the driving factor in setting target costs b) competition will be the driving factor in setting target costs c) set target price as a percentage of variable cost plus variable cost d) expected selling price less desired profit e) set target makeup as a percentage of investments
d) expected selling price less desired profit
Days' sales in raw materials inventory is a measure of: a) how much raw materials are needed for the company to earn a profit b) how long it takes the company to pay for raw materials c) how many times a company turns over its raw materials during a period d) how long it takes raw materials to be used in production e) the product costs a company has incurred during a period
d) how long it takes raw materials to be used in production
An additional cost incurred only if a company pursues a particular course of action is a(n): a) period cost b) pocket cost c) discount cost d) incremental cost e) sunk cost
d) incremental cost
An additional cost that is incurred only if a particular action is taken in a(n): a) period cost b) product cost c) discount cost d) incremental cost e) sunk cost
d) incremental cost
An opportunity cost: a) is an unavoidable cost b) requires a current outlay of cash c) results from managerial decision s d) is the lost benefit of choosing an alternative course of action e) is irrelevant in decision making
d) is the lost benefit of choosing an alternative course of action
Which of the following statements is true regarding absorption costing? a) it is not the traditional costing approach b) it is not permitted to be used for financial reporting c) it is not permitted to be used for tax reporting d) it assigns all manufacturing costs to products e) it requires only variable costs to be treated as product costs
d) it assigns all manufacturing costs to products
A single cost incurred in producing or purchasing two or more essentially different products is a(n) a) product cost b) incremental cost c) differential cost d) joint cost e) fixed cost
d) joint cost
Select the incorrect statement concerning the human factor of performance evaluation. a) variances should not be used to single out managers for punishment b) variances must be analyzed carefully to ensure that they are fully understood c) just because a cost variances is labeled as favorable doesn't necessarily mean that the manager should be commended for a job well done d) managers should always be punished for unfavorable variances
d) managers should always be punished for unfavorable variances
When would a variance be labeled as unfavorable? a) when standard costs are more than actual costs b) when expected sales are less than actual sales c) when actual sales are equal to expected sales d) none of these answers are correct
d) none of these answers are correct
Sales analysis is useful for: a) planning purposes only b) budgeting purposes only c) control purposes only d) planning and control purposes e) planning and budgeting processes
d) planning and control purposes
A plan that lists the types and amounts of selling expenses expected during the budget period is called a(n): a) sales budget b) operating budget c) capital expenditures budget d) selling expense budget e) purchases budget
d) selling expense budget
Which of the following statements pertain to both variable costing and absorption costing? a) the income statement discloses the amount of gross margin generated during the reporting period b) fixed selling and administrative expense are treated in the same manner as fixed manufacturing overhead c) both variable and absorption costing can be used for external financial reporting d) variable selling costs are written-off as expenses of the accounting period e) fixed manufacturing overhead is attached to each unit produced
d) variable selling costs are written-off as expenses of the accounting period
Current assets minus current liabilities is equal to: a) profit margin b) financial leverage c) current ratio d) working capital e) quick assets
d) working capital
Which of the following is not one of the steps in the decision making process? a) define the decision task b) identify alternative courses of action c) collect relevant information on alternatives d) select the preferred course of action e) all are part of the decision making process
e) all are part of the decision making process
Raw materials that physically become part of the product and can be traced to specific units or batches of product are called a) raw materials sold b) chargeable materials c) goods in process d) indirect materials e) direct materials
e) direct materials
Internal Controls are designed to accomplish all of the following EXCEPT: a) ensure reliable accounting b) protect assets c) promote efficient operations d) detect and correct errors and irregularities in the normal course of business e) guarantee that fraud cannot occur
e) guarantee that fraud cannot occur
Which of the following five types of products is least likely to be produced in a process manufacturing system? a) compact disks b) slacks for casual wear c) baseball hats d) calculators e) oil paintings
e) oil paintings
Which of the following must be prepared before the direct labor budget? a) budgeted income statement b) merchandise purchases budget c) capital expenditures budget d) selling expense budget e) production budget
e) production budget
A report that accumulates the actual expenses that a manager is responsible for and their budgeted amounts is a: a) segmental accounting report b) managerial cost report c) controllable expense report d) departmental accounting report e) responsibility accounting performance report
e) responsibility accounting performance report
Which of the following is not part of the production activity of Work in Process? a) direct materials b) cost of goods manufactured c) direct labor d) factory overhead e) total finished goods available for sale
e) total finished goods available for sale
The overhead cost applied to a job during a period is recorded with a credit to Factory Overhead and a debit to: a) jobs overhead expense b) cost of goods sold c) finished goods inventory d) indirect labor e) work in process inventory
e) work in process inventory
The Dina Corp. has applied overhead to jobs during the period as shown in the table below. The application of overhead has resulted in a $5,000 credit balance in the Factory Overhead account, and this amount is not material. The entry to dispose of this remaining factory overhead balance is: Jobs Finished and sold: $46,000 Jobs Finished and in Process: $54,000 Jobs Finished and Unsold: $100,000 a) Cost of Goods Sold $5,600 Factory Overhead $5,600 b) Factory Overhead $5,600 Cost of Goods Sold $5,600 c) Factory Overhead $5,600 Goods in Process $5,600 d) Goods in Process $5,600 Factory Overhead $5,600 e) no entry is needed
journal entry b
