ACCT 302 Final Study Guide

_____________ costs support the organization as a whole. A) Unit-level B) Facility-sustaining C) Product-sustaining D) Batch-level

B) Facility-sustaining

Payment of the total manufacturing payroll decreases the: A) Wages-Payable account B) Work in Process account C) Manufacturing Overhead Account D) None of these answers are correct

A) Wages Payable Account

A manufacturing firm produces multiple families of products requiring various combinations of different types of parts. Of the following, the MOST appropriate cost driver for assigning materials handling costs to the various products is: A) Number of parts used B) number of suppliers involved C) direct labor hours D) number of units produced

A) Number of parts used

A single indirect-cost rate may distort product costs because: A) There is an assumption that all support activities affect all products B) costs are not consistently recorded C) it recognizes specific activities that are required to produce a product D) it fails to measure the correct amount of total costs

A) There is an assumption that all support activities affect all products

Activity based costing is most likely to yield benefits for companies with all of the following characteristics EXCEPT: A) a single type of product is manufactured B) accessible accounting and information systems expertise to maintain the system C) Numerous products that consume different amounts of resources D) a highly competitive environment, where cost control is critical

A) a single type of product is manufactured

The purpose of the equivalent-unit computation is to: A) convert partially completed units into the amount of completed output units that could be made with that quantity of input B) convert completed units into the amount of partially completed output units that could be made with that quantity of input C) assist that business in determining ending inventory D) Both B and C are correct.

A) convert partially completed units into the amount of completed output units that could be made with that quantity of input

Which of the following cost(s) are inventoried when using variable costing? A) direct manufacturing costs B) variable marketing costs C) fixed manufacturing costs D) Both A and B are correct

A) direct manufacturing costs

Cost tracing is: A) the assignment of direct costs to the chosen cost object B) the process of tracking both direct and indirect costs associated with a cost object C) the process of determining the actual cost of the cost object D) a function of cost allocation

A) the assignment of direct costs to the chosen cost object

The basic source document for direct manufacturing labor is the: A) materials-requisition record B) labor-time record C) job-cost record D) All of these answers are correct

B) Labor-time record

What is the journal entry used to write off the difference between allocated and actual overhead directly to cost of goods sold? A) Manufacturing Overhead Control 200,000 Cost of Goods Sold 25,000 Manufacturing Overhead Allocated 225,000 B) Manufacturing Overhead Allocated 200,000 Cost of Goods Sold 25,000 Manufacturing Overhead Control 225,000 C) Manufacturing Overhead Control 225,000 Work in Process Control 55,000 Cost of Goods Sold 170,000 D) Manufacturing Overhead Allocated 200,000 Work in process control 30,000 Cost of good sold 170,000

B) Manufacturing Overhead Allocated 200,000 Cost of Goods Sold 25,000 Manufacturing Overhead Control 225,000

When a bakery transfers good from the Baking Department to the Decorating Department, the accounting entry is: A) Work in Process - Decorating Department Accounts Payable B) Work in Process - Decorating Department Work in Process - Baking Department C) Work in Process - Baking Department Accounts Payable D) Work in Process - Baking Department Work in Process - Decorating Department

B) Work in Process - Decorating Department Work in Process - Baking Department

Sunk costs: A) are relevant to all decisions B) are past costs C) are future costs D) have future implications

B) are past costs

Target pricing: A) is used for short-term pricing decisions B) estimates are based on customers' perceived value of the product C) relevant costs are all variable costs D) is one form of cost-based pricing

B) estimates are based on customers' perceived value of the product

All of the following are true EXCEPT that indirect costs: A) may be included in manufacturing overhead B) are not easily traced to products or services C) may be included in prime costs D) vary with the selection of the cost object

C) May be included in prime costs

An assumption of the FIFO process-costing method is that: A) ending inventory will always be completed in the next accounting period B) no calculation of conversion costs is possible C) the units in beginning inventory are assumed to be completed first D) the units in beginning inventory are not necessarily assumed to be completed by the end of the period.

C) the units in beginning inventory are assumed to be completed first

The margin of safety is the difference between: A) actual operating income and budgeted operating income B) actual contribution margin and budgeted contribution margin C) budgeted expenses and breakeven expenses D) budgeted revenues and breakeven revenues

D) budgeted revenues and breakeven revenues

The cost of inventory reported on the balance sheet may include all of the following EXCEPT: A) wages of the plant supervisor B) the cost of parts used in the manufacturing process C) depreciation of the factory equipment D) customer-service costs

D) customer-service costs

Which of the following is an equation of a variable cost function? A) y=a+bX B) y=b C) y=a D) y=bX

D) y=bX