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