Acct Final
_____ costs remain constant in total and _______ costs remain constant per unit.
Fixed, variable
Direct materials, direct labor, and manufacturing overhead are all ________ costs.
product
Costs incurred to get the final product to the customer are known as _____ expenses.
selling
Mixed costs are also commonly known as _______ costs.
semivariable
Costs that have already been incurred and cannot be changed by decisions made in the current period or in future periods are called ____ costs.
sunk
Which of the following is NOT a method used for CVP analysis: A. profit equation B. contribution margin ratio C. unit contribution margin D. break-even analysis
D
_____ refers to standards of conduct for judging right from wrong.
Ethics
Sales revenue minus variable costs is ________ ________.
contribution margin
When constructing a CVP graph, the vertical (y) axis represents _____.
dollars
Solving for the sales level needed to attain a target profit of $__ is the same process as solving for the sales level needed to break-even.
0
The break-even point is the level of sales at which the profit equals ___.
0
Steel, Inc. has a margin of safety in dollars of $559,740. If actual sales were $2,946,000, Steel's margin of safety percentage is __%.
19
The Sarbanes-Oxley Act allows a maximum of ___ years jail time for fraudulent reporting.
20
Webster, LLC sells its product for $20 per unit. Variable costs are $11 per unit and total fixed costs are $35,000. The company sells 8,000 units per year. Webster's contribution margin ratio is __%.
45
A company sells its product for $40 per unit. Variable costs are $12 per unit. Total fixed costs are $50,000. In order to reach their profit goal of $90,000 the company must sell ____ units of the product.
5,000
A company has fixed costs of $25,000 and a weighted average unit contribution margin of $25. Of the sales, 65% are Product XYZ and 35% are Project TDW. In order to break-even the company must sell ___ units of Product XYZ and ___ units of Product TDW.
650; 350
Tess's Tidbits sells three different snack packs. The weighted average contribution margin is $15.00 and total fixed costs are $20,000 per month. Tess wants to earn $10,000 per month profit. Of her total sales, 40% are for the deluxe snack pack, 35% are standard snack packs, and 25% are mini snack packs. In order to earn the target profit, Tess needs to sell ____ deluxe snack packs each month.
800
A cost driver is: A. a measure that explains or influences the amount of manufacturing overhead cost incurred B. another name for predetermined overhead rate C. the total estimated manufacturing overhead cost D. the rate that is used to apply manufacturing overhead to products and services
A
A limitation of _______ is that it is subjective and inexact. A. scattergraph B. high-low C. least-squares regression
A
A predetermined overhead rate is calculated by dividing the _____ total manufacturing overhead by the _____ total cost driver. A. estimated; estimated B. actual; actual C. actual; estimated D. estimated; actual
A
Actual manufacturing overhead costs are accumulated on the _____ side of the Manufacturing Overhead account and applied costs are shown on the _____ side. A. debit, credit B. credit, debit
A
Budgeting is an important part of the _______ process. A. Planning and organizing B. Controlling C. Directing and leading
A
Calculate total current manufacturing costs given the following: Direct materials cost: $62,000 Direct labor cost: $78,000 Manufacturing overhead applied: $46,000 Actual manufacturing overhead: $51,000 Beginning Work in process inventory: $32,000 Ending Work in process inventory: $35,000 A. $186,000 B. $191,000 C. $183,000
A
Contribution margin ratio is: A. unit contribution margin/unit sales price B. sales revenue - variable costs C. unit sales price/unit contribution margin D. sales revenue - fixed costs
A
Decision making: A. is at the center of managerial functions B. relies primarily on financial accounting information C. is another term for planning and organizing
A
Direct costs are ______ to products, while overhead costs are ______. A. traced; applied B. applied; allocated C. allocated; applied D. applied; traced
A
Factory materials, such as cleaning supplies, that are not components of finished products are classified as: A. Manufacturing overhead B. Direct materials C. Administrative costs D. Period costs
A
General and administrative expenses include: A. general management salaries and legal department B. shipping costs and sales commissions C. factory maintenance workers' wages and factory supervisors' salaries D. sales commissions and factory supervisors' salaries
A
Gross profit minus selling and administrative expenses equals: A. net operating income B. cost of goods manufactured C. cost of goods sold D. net operating assets
A
Ideally an allocation base should: A. explain or influence the amount of overhead incurred B. be a cost associated with producing the firm's goods C. be calculated using a predetermined overhead rate D. should not be a cost driver
A
Labor costs that can be easily and conveniently traced to specific products are: A. direct labor costs B. indirect labor costs C. selling costs D. manufacturing overhead costs
A
Luver Corporation's gross profit is $100,000, cost of goods sold equals $70,000, and selling and administrative expenses total $45,000. Net operating income (loss) is: A. $55,000 B. $(15,000) C. $30,000 D. $25,000
A
Manufacturing overhead costs include: A. indirect materials, factory supervisors' salaries, and factory taxes and insurance B. direct materials, sales commissions, and factory assembly workers' wages C. direct materials, administrative taxes and insurance, and sales commissions D. administrative taxes and insurance, sales commissions, and factory assembly workers' wages
A
Nonmanufacturing costs increase: A. the Selling, General & Administrative expense accounts B. various assets and liabilities accounts C. the Cost of Goods sold account D. the Manufacturing Overhead account
A
Nonmanufacturing costs incurred during a period are treated as: A. period expenses B. assets C. liabilities D. product costs
A
Once the plan has been set, the _______ process identifies the resources needed to achieve it. A. Organizing B. Controlling C. Directing
A
Overhead costs are debited to Work in process when: A. they are applied to jobs B. the job is sold C. the job is started D. the actual costs are incurred
A
Predetermined overhead rates: A. are based on some secondary allocation measure B. are used to assign both direct and indirect manufacturing costs to jobs C. are calculated using estimated costs and actual cost driver usage D. are generally calculated for each month of the year
A
Source documents keep track of: A. the direct costs of specific jobs B. the indirect costs of specific jobs C. both the direct and indirect costs of specific jobs
A
The ______ tells managers how much contribution margin is generated by every dollar of sales. A. contribution margin ratio B. net income ratio C. gross margin ratio D. contribution margin per unit
A
The amount each unit sold contributes to fixed costs and profit is: A. unit contribution margin B. variable cost per unit C. unit sales price
A
The cost of jobs still unfinished at the end of a period are included in: A. ending work in process inventory B. cost of goods manufactured C. the income statement D. beginning finished goods inventory for the next period
A
The difference in costs between two alternatives is called a(n) ______ cost. A. Differential B. Common C. Opportunity D. Sunk
A
The formula for a predetermined overhead rate is: A. estimated total manufacturing overhead cost / estimated total cost driver B. actual total cost driver / actual total manufacturing overhead cost C. estimated total cost driver / estimated total manufacturing overhead cost D. actual total manufacturing overhead cost / actual total cost driver
A
The future-oriented aspect of the management process is: A. Planning/organizing B. Controlling C. Directing/leading
A
The profit equation method uses which of the following equations? A. Total Sales Revenue - Total Variable Costs - Total Fixed Costs = Profit B. Total Fixed Costs/Unit Contribution Margin = Profit C. Actual or Budgeted Sales - Break-Even Sales = Profit D. (Total Fixed Costs + Target Profit)/Contribution Margin Ratio (%) = Profit
A
The slope (b) of the regression line represents the _____ cost per unit of activity. A. variable B. fixed C. total
A
The work in process account accumulates: A. actual direct materials, actual direct labor, and applied overhead costs B. actual direct materials, applied direct labor, and applied overhead costs C. actual direct materials, actual direct labor, and actual overhead costs D. applied direct material, applied direct labor, and actual overhead costs
A
To calculate total manufacturing costs you: A. cannot add prime costs to conversion costs B. can add prime costs to conversion costs
A
What are the three basic management functions? A. Planning, directing, and controlling B. Recording, analysis, and reporting C. Planning, recording, and summarizing D. Planning, reporting, and analysis
A
What document specifies the type and quantity of direct materials used on a specific job? A. Materials requisition form B. Bill of materials form C. Direct labor time ticket D. Job cost sheet
A
What is the formula for applying overhead to a specific job? A. Predetermined overhead rate x the actual cost driver usage for the specific job B. Estimated manufacturing overhead / cost driver usage for the specific job C. Actual manufacturing overhead rate x actual cost driver usage for the specific job D. Estimated manufacturing overhead / estimated total cost driver usage
A
What is the primary difference between managerial and financial accounting? A. Managerial accounting provides information for internal use and financial accounting provides information for external users. B. Managerial accounting must follow GAAP. Financial accounting does not. C. There is no significant difference between financial and managerial accounting. D. Financial accounting data is based on the business transactions of the business. Managerial accounting is based solely on estimated activity.
A
When a job is completed, its costs are transferred into: A. finished goods B. work in process C. raw materials D. cost of goods sold
A
When are applied manufacturing overhead costs credited to the Manufacturing Overhead account? A. As the costs are applied to jobs B. When the jobs are sold C. At the end of the period D. As they are incurred
A
When is the predetermined overhead rate calculated? A. Before the period begins B. After the period is over C. Throughout the year D. As soon as actual overhead is known
A
When managers put the plan into action with detailed decision making, they are engaging in the ____ function. A. Directing B. Controlling C. Organizing
A
When using _____ proper interpretation of the results in critical. A. least-squares regression B. the high-low method C. scattergraph analysis
A
Which of the following expenses are associated with running the overall business? A. General & Administrative B. Manufacturing C. Marketing & Selling
A
Which of the following includes factory costs such as cleaning supplies, taxes, insurance, and janitor wages? A. Manufacturing overhead B. Period costs C. Indirect labor D. Direct materials
A
Which of the following is an attribute of companies that use job-order costing? A. They make many different products. B. Products flow through the production process on a continuous basis. C. They make a very few products in large numbers.
A
Which of the following is based on the rise-over-run formula for the slope of a straight line? A. The high-low method B. A scattergraph C. Least-squares regression
A
Which of the following is not a method used to estimate the fixed and variable portions of mixed costs? A. Relevant range analysis B. Scattergraph plot C. Least-squares regression D. High-low method`
A
Which of the following would most likely NOT be classified as a direct material? A. Nails and screws B. Laptop keyboard C. Automobile engine D. Drywall
A
Which type of company would be most likely to use job-order costing? A. A constructing company B. A soda bottling company C. A dairy farm that produces raw milk D. An oil refinery
A
Which type of firm converts materials into finished products? A. Manufacturing B. Merchandising C. Service
A
Which of the following are most likely fixed costs? (choose all that apply) A. Rent B. Electricity used to operate machinery C. Property taxes D. Administrative salaries
A, C, D
Multi-product target profit analysis: (choose all that apply) A. is calculated the same way as single product analysis B. depends upon the sales mix C. does not calculate the total units of each individual product
A,B
The Sarbanes-Oxley (SOX) Act: (choose all that apply) A. Has many implications for managers B. Was primarily aimed at renewing investor confidence C. Puts more responsibility on accountants and less on managers D. Is focused on the managerial accounting system
A,B
Which of the following are examples of indirect labor costs? (choose all that apply) A. Factory supervisor salary B. Security guard wages at a factory C. Restaurant cooks D. Administrative assistant salary
A,B
Which statements regarding the high-low method are true? (choose all that apply) A. The high-low method calculates the line based on the most extreme activity data points. B. It only uses two data points. C. It is a better method than least-squares regression. D. The high-low method uses the highest and lowest level of total cost.
A,B
CVP: (choose all that apply) A. allows managers to see how changing one variable can impact another B. can be used to make many different decisions C. can be used for "what-if" analysis D. only works in single product companies
A,B,C
The break-even point can be affected by which of the following? (choose all that apply) A. Total fixed costs B. Product mix C. Sales mix D. Net operating income
A,B,C
The weighted average unit contribution margin: (choose all that apply) A. assumes that the percentage of each product sold is constant B. is based on the relative percentage of each unit sold C. is used instead of the single product contribution margin in multi-product break even analysis D. is calculated by adding up the per unit contribution margin for each product and dividing by the number of products
A,B,C
A relevant cost: (choose all that apply) A. Must pertain to the future B. Must differ between alternatives C. Will not influence a decision D. Is a differential cost
A,B,D
Cost objects include: (choose all that apply) A. anything for which cost data is desired B. activities C. anything for which revenue data is desired D. customers
A,B,D
Fixed costs: (choose all that apply) A. remain constant in total within the relevant range of activity B. should not be expressed on a per unit basis when making decisions C. per unit become progressively larger as the level of activity increases D. generally include rent and supervisor salaries
A,B,D
Which of the following are decisions in which using CVP analysis could be useful? (choose all that apply) A. Deciding which products to offer B. Deciding what price to charge for goods or services C. Deciding to change the sick leave policy for employees D. Deciding which services to offer E. Deciding what marketing strategy to use F. Deciding what cost structure to implement
A,B,D,E,F
A contribution format income statement: (choose all that apply) A. separates cost into their fixed and variable components B. reports both gross margin and net income C. can assist with management decision making D. is prepared primarily for external reporting purposes
A,C
Full absorption costing: (choose all that apply) A. is required for external reporting B. is very useful for management decision making C. assigns all manufacturing costs to products D. focuses on how costs behave
A,C
Materials requisition forms are used for: (choose all that apply) A. recording the cost of raw materials in the accounting system B. specifying the cost of materials to be ordered C. controlling the flow of materials from inventory into production D. summarizing the cost of a job
A,C
Step costs: (choose all that apply) A. may be either step-fixed or step-variable B. are always treated like variable costs when doing cost analysis C. are fixed over some range of activity
A,C
Which of the following are considered nonmanufacturing costs? (choose all that apply) A. Sales commissions B. Assembly-line worker wages C. Company president's salary D. Insurance on plant equipment
A,C
Which of the following statements are true? (Choose all that apply) A. There are many different ways to categorize costs B. Product vs. period costs has more to do with managerial accounting than with financial accounting C. Costs are treated differently in different situations D. Out-of-pocket costs do not always represent an outlay of cash.
A,C
Which of the following statements are true? (choose all that apply) A. Product costs "attach" to units of product as they are purchased for resale or produced B. Product costs include all costs involved in making and selling a product C. Product costs are also called inventoriable costs D. Product costs are always expensed in the same period in which the related products are produced.
A,C
Which of the following statements are true? (choose all that apply) A. Product costs are also called inventoriable costs B. Inventoriable costs are expensed in the period in which they are incurred C. Period costs are expensed when incurred D. All costs in a merchandising company are period costs
A,C
In the profit equation, total _____ is a function of the number of units sold (Q). (choose all that apply) A. unit price B. fixed costs C. sales revenue D. variable costs
A,C,D
Manufacturing overhead costs: (choose all that apply) A. include some materials and labor B. must be traceable to specific jobs C. must be manufacturing costs D. are indirect costs
A,C,D
Which of the following are marketing or selling expenses? (choose all that apply) A. Sales salaries B. Administrative salaries C. Advertising D. Sales commissions
A,C,D
Which of the following statements are true? (choose all that apply) A. The relevant range of activity is approximated by a straight line. B. Within the relevant range of activity total variable costs do not change. C. Outside of the relevant range cost behavior conclusions may not be valid. D. Within the relevant range of activity, fixed costs remain constant in total.
A,C,D
A job cost sheet contains: (choose all that apply) A. manufacturing overhead costs charged to the job B. selling costs charged to the job C. labor costs charged to the job D. the selling price of the job E. materials costs charged to the job
A,C,E
Companies with strong ethical cultures: (check all that apply) A. have higher productivity than those without such cultures B. have adopted a code of ethics that ensures managers will act ethically C. do not need to create tip lines to protect whistleblowers D. have higher levels of customer satisfaction
A,D
Fixed costs: (choose all that apply) A. remain constant in total B. remain constant on a per unit basis C. become progressively larger per unit as the level of activity increases D. become progressively smaller per unit as the level of activity increases
A,D
GAAP requires: (choose all that apply) A. that manufacturing costs be treated as assets until sold B. process costing for all manufacturing firms C. all service companies to record inventory D. all manufacturing costs be charged to products
A,D
Labor costs: (choose all that apply) A. are recorded in basically the same way as material costs B. are always recorded directly into Work in Process C. are determined from the job cost sheets D. may be direct or indirect
A,D
Opportunity costs: (choose all that apply) A. Should be considered in decision making B. Are out-of-pocket costs C. Are uncommon in decision making D. Are the costs of not doing something
A,D
Variable costs: (choose all that apply) A. Vary in total B. Vary per unit C. Remain constant in total D. Remain constant per unit
A,D
Which of the following would be more interested in managerial accounting data than in financial accounting data? (choose all that apply) A. Employees B. Creditors C. Investors D. Business owners
A,D
Why is it important to analyze mixed costs? (choose all that apply) A. Managers must know how costs change to make decisions. B. Within the relevant range of activity fixed costs change as activity changes. C. Within the relevant range of activity variable costs do not change D. Managers need to know how much of a cost is variable and how much is fixed.
A,D
Categories of manufacturing costs include: (choose all that apply) A. manufacturing overhead B. administrative expenses C. selling expenses D. direct labor E. direct materials
A,D,E
A fixed cost remains fixed ____ within the relevant range of activity. A. per unit B. in total
B
ALL managerial functions involve: A. Long-term strategy B. Decision making C. Taking corrective action D. Motivating others
B
Actual manufacturing overhead consists of: A. all manufacturing costs B. all manufacturing costs other than direct labor and direct materials C. all indirect costs D. all costs other than direct labor and direct materials
B
Carlisle, Inc. had Sales revenue of $500,000, Unadjusted cost of goods sold of $395,000, Underapplied manufacturing overhead of $5,000, and Selling and administrative expenses of $50,000. Calculate gross profit. A. $105,000 B. $100,000 C. $50,000 D. $110,000
B
Differential cost is: A. never relevant to a product decision B. the difference in cost between two alternatives C. the same as opportunity cost D. also known as irrelevant cost
B
Direct labor and manufacturing overhead costs are known as _____ costs. A. prime B. conversion C. opportunity D. period
B
Estimated manufacturing overhead: $500,000 Estimated direct labor cost: $250,000 Actual manufacturing overhead: $720,000 Actual direct labor cost: $300,000 Based on the information presented above, calculate the predetermined overhead rate per direct labor dollar. A. $1.67 per direct labor dollar B. $2.00 per direct labor dollar C. $2.40 per direct labor dollar D. $2.88 per direct labor dollar
B
Fixed costs should not be expressed on a per unit basis because: A. putting fixed costs on a per unit basis makes products look like they cost more to produce than they really do B. it may make managers believe they can reduce costs by producing more C. the average cost per unit decreases as more units are made
B
If the manufacturing overhead account has a _____ balance at the end of the period that indicates that overhead was underapplied and cost of goods sold must be _____. A. credit, decreased B. debit, increased C. debit, decreased D. credit, increased
B
Indirect materials and indirect labor are classified as: A. nonspecific labor B. manufacturing overhead C. period costs D. nonspecific materials
B
JVL Inc. sells its only product for $10 per unit. Variable costs are $4 per unit and total fixed costs are $40,000. The company is currently selling 10,000 units per year. How will profits change if sales increase by 1,500 units? A. $29,000 B. $9,000 C. $6,000 D. $15,000
B
Period costs are expensed: A. never; they do not appear on the income statement B. in the period in which they occur C. in the period in which the related goods are sold
B
Salaries of managers and maintenance personnel are examples of ______ labor costs. A. Direct B. Indirect
B
The difference between overhead applied to jobs and actual overhead is: A. ending work in process inventory B. overapplied or underapplied overhead C. cost of goods sold D. cost of goods manufactured
B
The distance between the total revenue line and the total cost line on a cost-volume-profit graph represents: A. the break-even point B. the total amount of either profit or loss C. only the total amount of profit D. the total contribution margin
B
The first step in assigning manufacturing overhead costs using a predetermined overhead rate is: A. calculate the predetermined overhead rate B. determine the cost driver C. assign manufacturing overhead
B
The formula to calculate the variable cost per unit using the high-low method is: A. total cost minus total fixed cost B. difference in total cost divided by difference in activity C. difference in activity divided by difference in total cost D. y = a +bX
B
The total cost of goods manufactured report includes _______ manufacturing overhead costs. A. actual B. applied
B
To calculate direct materials on the schedule of cost of goods manufactured,: A. add purchases to beginning raw materials inventory, and subtract ending raw materials inventory B. add purchases to beginning raw materials inventory, and subtract ending raw materials inventory and indirect materials used C. add purchases to ending raw materials inventory, and subtract beginning raw materials inventory and indirect materials used D. add purchases to ending raw materials inventory, and subtract beginning raw materials inventory
B
Variable costs: A. remain constant both in total and per unit B. remain constant per unit and vary in total C. remain constant in total and vary per unit D. vary both in total and per unit
B
When a company increases the selling price of a product with no change in variable cost per unit or total fixed costs, the break-even point for that product will: A. increase B. decrease C. remain the same
B
When a job is completed, the job costs are transferred OUT OF: A. cost of goods sold B. work in process C. finished goods D. manufacturing overhead
B
When using the high-low method, if the high or low levels of cost do not match the high or low levels of activity: A. choose the periods with the highest and lowest level of cost and their associated activities B. choose the periods with the highest and lowest level of activity and their associated cost C. skip that period and move to the next highest or lowest level where cost and activity match
B
Which of the following is not an activity that managers perform on a regular, routine basis? A. Planning B. Budgeting C. Controlling D. Directing
B
Which of the following is not one of the categories into which manufacturing costs are generally classified? A. Manufacturing overhead B. Selling & administrative expenses C. Direct labor D. Direct materials
B
Which of the following statements is true? A. Every firm can be identified as one type of organization - manufacturer, merchandiser, or service company B. Some firms operate as more than one type of organization - manufacture, merchandiser, and/or service company
B
Which type of cost changes in total, in direct proportion to activity level? A. Opportunity B. Variable C. Differential D. Fixed
B
What methods can be used to dispose of underapplied or overapplied manufacturing overhead? (choose all that apply) A. Allocating it to Raw Materials, Work in Process, and Finished Goods B. Allocate it to Work in Process, Finished Goods, and Cost of Goods Sold C. Make a direct adjustment to Cost of Goods Sold D. Closing it out to Work in process.
B,C
Which of the following statements are true? (choose all that apply) A. When plotting a scattergraph, cost is the independent variable B. Scattergraphs are a way to diagnose cost behavior C. Scattergraphs are used to help determine if the linear assumption is reasonable D. Scattergraphs should be used after high-low or regression analysis is performed
B,C
In an attempt to reduce the opportunities for error and fraud, SOX places additional responsibilities on: (choose all that apply) A. All investors B. Boards of directors C. All managers D. External auditors
B,C,D
Which of the following statements are true? (choose all that apply) A. Mixed costs are also commonly known as step-fixed or step-variable costs B. Mixed costs contain both fixed and variable cost elements C. Both the total cost and the per-unit cost of mixed costs change with changes in the level of activity D. The equation for a straight-line can be used to express the relationship between mixed costs and the level of activity
B,C,D
Overhead is overapplied if: A. adjusted cost of goods sold is more than unadjusted cost of goods sold B. actual overhead is more than applied overhead C. actual overhead is less than applied overhead D. cost of goods manufactured is less than cost of goods sold
C
Lilly's Lilacs sells two different potted plants - A and B. The weighted average per unit contribution margin is $30 and Lilly's fixed costs are $24,000. The sales mix is 60% - A and 40% - B. Which of the following statements are true? (choose all that apply) A. If Lilly's sales mix changes, her break-even point will stay the same. B. Lilly must sell a total of 800 plants to break-even. C. Lilly must sell 320 units of potted plant A to break-even. D. If Lilly sells 480 units of both A and B she will have a net profit.
B,D
The single point where the total revenue line crosses the total expense line on the CVP graph indicates: (choose all that apply) A. profit is less than zero B. the break-even point C. profit is greater than zero D. profit equals zero
B,D
When materials are requisitioned into production: (choose all that apply) A. indirect materials are recorded in Work in Process B. direct materials are recorded in Work in Process C. indirect materials are recorded as a separate line item on the job cost sheet D. direct materials are recorded on the job cost sheet
B,D
Which of the following statements are true? (choose all that apply) A. A direct cost is sometimes referred to as an opportunity cost. B. A regional's sales manager's salary would be a direct cost of the regional office in which the sales manager works. C. A particular cost is either direct or indirect, regardless of the cost object. D. A direct cost can be easily and conveniently traced to a specific cost object.
B,D
Which of the following statements are true? (choose all that apply) A. Period costs are also called inventoriable costs. B. Nonmanufacturing costs are period costs. C. The wages of assembly-line workers are period costs. D. Period costs are expensed in the same period in which they are incurred.
B,D
When comparing financial and managerial accounting, which of the following apply to managerial accounting? A. Information reported for the whole company B. Emphasizes the future C. Objective and reliable D. Reports at the decision making level E. Mandatory for external reports F. Reports are prepared as needed
B,D,F
A company had a Gross profit of $100,000, Cost of goods sold of $70,000, and Selling and administrative expenses of $45,000. Net operating income (loss) was: A. $(15,000) B. $25,000 C. $55,000 D. $30,000
C
A company is currently selling 10,000 units of product for $40 per unit. The unit contribution margin is $27 and current fixed costs are $174,000. The company believes that spending $30,000 on advertising will allow them to increase the selling price to $45. How many units would have to be sold if these changes are made to earn $100,000 per year? A. 6,756 B. 10,000 C. 9,500 D. 11,259
C
A cost is treated as a direct cost when: A. It is not worth the effort to trace it to a cost object B. It is a labor cost C. It is both possible and feasible to trace it to a cost object D. It is a material used in production of the product
C
An allocation base is a(n): A. activity that causes overhead costs to change B. measure used to assign all manufacturing costs to products and services C. measure of activity used to assign overhead costs to products and services
C
Costs of partially completed units are contained in: A. raw materials B. cost of goods manufactured C. work in process D. finished goods
C
Given the following, calculate total current manufacturing costs: Direct materials: $40,000; Direct labor: $100,000 Manufacturing overhead applied: $120,000 Beginning work in process inventory: $30,000 Ending work in process inventory: $12,000 A. $278,000 B. $302,000 C. $260,000 D. $242,000
C
Identifying a problem and taking corrective action is part of the _____ process. A. organizing B. directing C. controlling D. planning
C
If the manufacturing overhead account has a credit balance at the end of the period that indicated that overhead was ________ and Cost of Goods Sold must be _______. A. overapplied, increased B. underapplied, decreased C. overapplied, decreased D. underapplied, increased
C
In a job-order costing system costs flow first to: A. the inventory accounts and then to the Finished Goods account B. the income statement and then to the inventory accounts C. the inventory accounts and then to cost of goods sold D. cost of goods manufactured and then to the inventory accounts
C
Motivating employees is part of the _____ function: A. Planning/organizing B. Controlling C. Directing/leading
C
Nonprofit organizations: A. Have no need for any type of accounting information B. Only need financial accounting information C. Must make decisions that use managerial accounting information
C
________ _______ inventory consists of completed units that have not yet been sold.
Finished Goods
Overhead is underapplied if: A. cost of goods manufactured is less than cost of goods sold B. actual overhead is less than applied overhead C. actual overhead is more than applied overhead D. adjusted cost of goods sold is less than unadjusted cost of goods sold
C
Select the correct statement. A. The merchandising sector of the U.S. economy is larger than either manufacturing or service. B. Over 50% of our nation's GDP comes from manufacturing activities C. The U.S. economy is moving more toward the service industry
C
Solving for the sales level needed to achieve a profit of zero is the same process as solving for the sales level needed to: A. reach a profit level of 100% of sales B. have sales equal fixed costs C. break-even
C
Sweet Dreams sells 15,000 pillows per year for $25 per unit. Each pillow currently incurs a variable cost per unit of $14. Sweet Dreams has developed a plan to improve customer satisfaction by using higher quality direct materials. The change in materials will increase the variable cost per unit to $19. Fixed costs per year total $90,000. If sales increase by 5,000 units per year, what price will Sweet Dreams have to charge to earn the same profit it is earning now ($75,000 per year)? A. $30.00 B. $36.33 C. $27.25 D. $25.00
C
The Sarbanes Oxley Act: A. Is all it takes to create an ethical culture in an organization B. Imposes penalties for whistleblowers C. Includes rules that should help employees make ethical decisions D. Recommends that all public companies adopt a code of ethics for senior financial officers
C
The best fitting line minimizes the sum of the squared errors when using: A. the high-low method B. scattergraph analysis C. least square regression
C
The break-even point is reached when total revenue is _____ total costs. A. greater than B. less than C. equal to
C
The components of prime costs are: A. Direct materials and manufacturing overhead B. Direct labor and manufacturing overhead C. Direct materials and direct labor
C
The major difference between job order and process costing is: A. whether the products produced are hand made or machine made B. job order costing is used for products and process costing is used for services C. whether the products produced are similar or different
C
The predetermined overhead rate is multiplied by the actual cost driver usage for a job to find: A. the predetermined overhead rate for the job B. the total cost of the job C. overhead applied to the job D. actual overhead
C
The total cost transferred out of Work in Process inventory into Finished Goods inventory is: A. cost of goods sold B. gross profit C. cost of goods manufactured D. net operating income
C
The weighted average unit contribution margin is: A. the average unit contribution margin of multiple products weighted according to contribution margin per unit B. the average unit contribution margin of multiple products weighted according to selling price C. the average unit contribution margin of multiple products weighted according to units sold
C
To calculate a predetermined overhead rate, divide estimated total manufacturing overhead by: A. actual total manufacturing overhead B. estimated units of production C. estimated total cost driver D. estimated total direct labor hours
C
To calculate total current manufacturing costs on the Cost of Goods Manufactured report: A. add direct materials, direct labor, and applied manufacturing overhead; then add ending Work in process and subtract beginning Work in process B. add direct materials, direct labor, and actual manufacturing overhead C. add direct materials, direct labor, and applied manufacturing overhead D. add direct materials, direct labor, and applied manufacturing overhead; then add beginning Work in process and subtract ending Work in process
C
What is underapplied or overapplied overhead? A. Actual overhead B. The sum of overhead applied to jobs and actual overhead C. The difference between overhead applied to jobs and actual overhead D. Overhead applied to work in process
C
When goods are sold to customers: A. the inventory accounts are not affected B. costs are transferred from Work in Process to Finished Goods C. costs are transferred from Finished Goods to Cost of Goods Sold D. costs are transferred from Finished Goods to Sales Revenue
C
When making a decision: A. most of the information managers need is not based on cost data B. managers should only consider costs C. cost control is a critical concern for most organizations
C
Which of the following appears on a job cost sheet and in the work in process account? A. Actual manufacturing overhead B. Budgeted manufacturing overhead C. Applied manufacturing overhead
C
Which of the following costs would NOT be classified as manufacturing overhead? A. A factory supervisor's salary B. Depreciation on machinery C. Tires used to produce vehicles D. Factory utilities
C
Which of the following may not represent the general trend in the data? A. A scattergraph B. Least-squares regression C. The high-low method
C
Process costing: (choose all that apply) A. uses job cost sheets B. accumulates costs by customer C. is used for mass production D. is used for homogeneous products
C,D
R square: (choose all that apply) A. can be anything between 1 and 2 B. indicates the percentage of the variation in the independent variable (activity) that is explained by the dependent variable (cost) C. measures goodness of fit D. is usually provided by least-squares regression software
C,D
The high-low method: (choose all that apply) A. is difficult to apply and requires a statistical software package B. generally provides a good estimate of true fixed and variable cost behavior C. uses only two data points D. is based on the two most extreme periods of activity
C,D
Using the high-low method, the fixed cost is calculated: (choose all that apply) A. before the variable cost is calculated B. by adding the total cost to the variable cost C. after the variable cost is calculated D. using either the high or low level of activity
C,D
When actual manufacturing overhead costs are incurred: (choose all that apply) A. the manufacturing overhead cost is credited B. a balance sheet account is debited C. a balance sheet account is credited D. the manufacturing overhead cost is debited
C,D
Which of the following statements are true? (Choose all that apply) A. Sales commissions and shipping costs are product costs. B. Factory cleaning and maintenance are period costs. C. Direct labor and indirect labor are product costs. D. Advertising and sales commissions are period costs.
C,D
Manufacturing costs include: (choose all that apply) A. Administrative costs B. Selling costs C. Indirect labor D. Direct materials E. Direct labor
C,D,E
A laptop computer manufacturer would consider the computer's processor chip to be a(n): A. direct labor cost B. indirect material cost C. manufacturing overhead cost D. direct material cost
D
Contribution margin is: A. all revenues minus all costs B. sales revenue minus fixed costs C. sales revenue minus cost of goods sold D. sales revenue minus variable costs
D
Costs are transferred from raw materials inventory to: A. finished goods inventory only B. either finished goods or work in process C. manufacturing overhead only D. either work in process or manufacturing overhead E. work in process inventory only
D
Costs are transferred out of Finished Goods inventory: A. when goods are completed B. when a customer places an order to purchase the goods C. at the end of the accounting period D. when goods are sold
D
Estimated Manufacturing Overhead: $300,000 Estimated Direct Labor Hours: 2,500 Actual Manufacturing Overhead: $370,000 Actual Direct Labor Hours: 3,000 Based on the information presented above, calculate the predetermined overhead rate per direct hour. A. $148.80 per direct labor dollar B. $124.00 per direct labor hour C. $100.00 per direct labor hour D. $120.00 per direct labor hour
D
Gemini had sales of $50,000, Unadjusted Cost of goods sold of $23,000, Overapplied Manufacturing Overhead of $3,000, and Selling and administrative expenses of $25,000. Gross profit is: A. $27,000 B. $5,000 C. $24,000 D. $30,000
D
Mixed costs: A. have a fixed component that is based on activity B. are the same as step costs C. cannot be analyzed using scattergraphs D. change both in total and per unit as activity changes
D
Net operating income is calculated by subtracting ______ from _______. A. cost of goods sold; gross profit B. cost of goods sold; sales C. selling and administrative expenses; sales D. selling and administrative expenses; gross profit
D
The balance of work in process inventory may be calculated by: A. summing the sales value of all jobs in process B. subtracting the cost of goods sold from the sum of all manufacturing costs C. subtracting the cost of finished goods inventory from the sum of all manufacturing costs D. summing the costs of all jobs in process
D
Which of the following statements is true? A. Managerial accounting reports provide information for the company as a whole B. It is important that managerial accounting reports be objective and reliable C. Financial accounting reports are prepared as needed D. Managers need more detailed information than financial reports can capture
D
Which of the following would NOT be part of direct labor cost? A. Attorney salaries B. Plumber wages C. Assembly-workers wages D. Supervisor salaries
D
Put the steps from the schedule of cost of goods manufactured in the order in which they appear. A. Plus: Beginning Work in process inventory B. Less: Ending Work in process inventory C. Cost of goods manufactured D. Total current manufacturing costs
D,A,B,C
Place these items in the order in which they appear in the cost of goods sold section of the income statement: A. Unadjusted cost of goods sold B. Plus: Cost of goods manufactured C. Less: Ending finished goods inventory D. Beginning finished goods inventory
D,B,C,A
True or False: Monitoring metrics that are important to various areas of operations is part of the directing/leading function.
False
True or false: Job-order costing can only be used in manufacturing firms.
False
True or false: Taking actions that implement the company's plan is a key part of the control process.
False
True or false: Variable costs remain fixed in total within the relevant range of activity.
False
_______ costing is a blend of process and job order costing.
Operations
______ costs are expensed when incurred; _______ costs become part of inventory.
Period, inventoriable
____ ____ is a measure of goodness of fit of a model.
R square
_____ _____ consist of any materials that will be included as part of a finished product.
Raw Materials
True of false: When using the high-low method, fixed costs are calculated after variable costs are determined.
True
True or false: Job cost sheets serve as a subsidiary ledger to the overall Work in Process Inventory account.
True
A specific item that managers are trying to find the cost of is called a(n) ____ _____.
cost object
Cost ______ refers to how total costs changes as the level of activity level increases or decreases.
behavior
Managers use cost _____ to predict how costs will change as the level of activity changes.
behavior
A(n) ________ lays out plans in financial terms so that managers can determine the resources needed to achieve their objectives.
budget
To calculate the degree of operating leverage, divide ______ ______ by net operating income.
contribution margin
Unit ______ ______ is the amount each unit sold contributes toward fixed costs and profit.
contribution margin
Monitoring results to ensure that expectations are being met is part of __________.
controlling
Managers need ____ information to budget and control spending.
cost
When calculating a predetermined overhead rate, the ideal allocation base should be a ____ ____.
cost driver
Materials that become an important component of the finished product and their cost can be easily and conveniently traced to the finished product are _____ materials.
direct
Hands-on work that can be easily traced to a specific product is called _____ _____.
direct labor
In an automobile manufacturing plant, assembly-line workers' wages are ______ ______ costs.
direct labor
Major material inputs that can be easily traced to a specific job are ____ _____.
direct materials
A cost that can be easily and conveniently traced to a specific cost object is a(n) ________ cost, whereas costs that cannot be easily and conveniently traced are ______ costs.
direct, indirect
In order to convert the margin of safety from dollar form to percentage form, the margin of safety in dollars must be _____ by the budgeted (or actual) sales in dollars.
divided
In a least-squares regression line, the vertical intercept (a) of the line represents the total ____ cost.
fixed
A cost is considered _____ if it does not change in total and a cost is considered _____ if it does not change per unit.
fixed, variable
Product costs that attach to a specific product are also known as _______ costs.
inventoriable
Materials are treated as ________ costs when it is not worth the cost or effort to trace them to specific products.
indirect
Manufacturing costs can be divided into three categories: direct materials, direct _____, and _____ _____.
labor, manufacturing overhead
Cost of goods ________ is the total cost of jobs completed during the period.
manufactured
The cost of goods _____ is the sum of all amounts transferred from Work in process to Finished goods during a period.
manufactured
The cost of goods _____ report summarizes the flow of manufacturing costs from Raw Materials to Work in Process Inventory and into Finished Goods.
manufactured
When classifying costs, __________ costs relate to making a product and ___________ relate to delivering and selling a product.
manufacturing, nonmanufactuing
There are two broad classifications of costs: manufacturing costs and __________ costs.
nonmanufacturing
Decisions about whether to use fixed or variable costs to run a business affects a company's _____ leverage.
operating
A forgone benefit of choosing one path over another is a(n) _____ ____.
opportunity cost
If there is a credit balance in the Manufacturing Overhead account after overhead have been applied to all jobs it means overhead was ________.
overapplied
Determining the key factors that are important to a company's success is a major component of the _____ function.
planning
Within the _______ _______ of activity, cost assumptions are reasonably valid.
relevant range
A(n) ____ gives a visual representation of the relationship between cost and activity.
scattergraph
If there is a debit balance in Manufacturing Overhead after overhead has been applied to all jobs it mean overhead was _________.
underapplied
Step-______ costs have a fairly narrow range and rise in multiple steps across the relevant range.
varaible
Within the relevant range, _______ costs remain constant on a per unit basis.
variable