Cost Accounting Final

which methods are acceptable ways to allocate common costs

Stand-alone cost allocation method and incremental cost allocation method

Which of the following best explains the major difference between the direct methodand step method

under the step method, the total support department costs to be allocated willalso include any costs that were allocated to that support department from othersupport departments

omitting costs for a job will result in

undercharging

Most companies begin with a centralized organizational model and gradually move towards a decentralized model. As some companies grow, they will acquire others in an effort to streamline operations and become more efficient. One result of these acquisitions is integration. Which of the following is an example of an integration type other than vertical integration?

) A peanut butter producer buys a factory that manufactures jelly.

Which one of the following would cause a company's production budget to decrease

A decrease in required ending inventory

) Most companies begin with a centralized organizational model and gradually move towards a decentralized model. As some companies grow, they acquire other companies in an effort to streamline operations and become more efficient. One result of these acquisitions is integration. Which of the following is an example of vertical integration?

A factory that manufactures furniture purchases a furniture marketing and distribution firm This question requires familiarity with integration, specifically vertical integration. This type of integration involves a company acquiring another company that exists within the same value chain.

As companies expand and become more decentralized, they will often seek ways in which they can save money. Additionally, management will seek ways to increase efficiency, and that may include purchasing other companies. These acquisitions will involve an integration of the supply chain and will help the company better achieve long-term company goals. Which of the following is an example of an integration type other than backward vertical?

A farm that grows soybeans purchases a company that can convert the beans into soy milk that will be available for resale

a budget can help implement

A. strategic planningB. long-run planningC. short-run planning

n organization currently employs traditional costing for its cost accounting functions. It hascomputed the following unit costs for two of their current products: Salt, $0.45 per unit; andPepper, $0.52 per unit. If the company was instead using Activity-Based Costing (ABC), then itwould have resulted in the following unit costs: Salt, $0.48 per unit; and Pepper, $0.49 per unit.Which of the following statements is correct

As compared to ABC, the profit of salt will be overstated under traditional costing

Which of the following statements about cost accounting is correct?

Cost accounting helps owners and managers make decisions about their companies

As a company decides between using the First-In, First-Out (FIFO) or Weighted-Averagemethod for its process costing, a number of factors must be considered. Managementshould always ensure that they have taken the proper time to consider all factors ascompanies are urged to apply the same method from year to year and switching betweenmethods later on will not likely be possible. Which of the following is a rationale forselecting the FIFO rather than the Weighted-Average method?

FIFO is more accurate that WAVG method

oth traditional and activity-based costing have certain features that may make them unique incomparison. Which of the following traits is most closely aligned with activity-based costing

Its separates the MOH into smaller activity pools and used related cost drivers

The main difference between normal costing and actual costing is the treatment of

MOH cost

What is the first step in allocating support costs using the step method?

Rank support departments by the service that provides the most support to othersupport departments.`

When using the step method to allocate support department costs, what is considered aweakness in the method

The order of support department allocation must be determined

If a company operates two producing departments and they are serviced by the samethree support departments, which support departments costs should be allocated firstwhen using the step method?

The support department that provides the most services to other support departments

Which of the following statements best explains the significant difference between the step method and the reciprocal method?

Under the reciprocal method, all inter-support-department services are allocated to support departments.

A company services office equipment. Some customers bring their equipment to the company'sservice shop; other customers prefer to have the company's service personnel come to theiroffices to repair their equipment. The most appropriate costing method for the company is

a job order costing system

Companies that use actual costing, include the actual MOH cost when costing a product orservice, which indicates that they choose to prioritize

accuracy of information over the relevance of that information

support department costs are

allocated by the user department to the units produced

the best way to allocate suppprt department costs is

based on the suppport department and the most logincal allocation base for that department

The primary difference in reporting between cost accounting and financial accounting is that

cost accounting reports support internal management decision-making whereas financialaccounting reports present financial statement information to external users and decision-makers who do not work for the company

For financial statement reporting, Inventories are reported as

current assets on the balance sheet

The journal entry to move a completed job out of production is a

debit to Finished Goods Credit to wip invt

product costs are classified as

direct materials, direct labor, manufacturing overhead

which method of allocating support department costs is easiest but least accurate

direct method

the two commonly used approaches to eliminate the balance of under or overapplied manufacting overhead costa are

direct write off method, and prorated method

When considering implementing activity-based costing, management should consider alladvantages and disadvantages. Which of the following would be considered a disadvantage

employee pushback

participation of employees in the budgeting process helps to create

greater commitment

the sale of bundled products/services consist of

group several products together that share one transaction price

When allocating common costs, which method ranks the users of the cost to determine who is most responsible

incremental cost allocation method

support departments costs are related to production

inderectly

Some organizations choose a responsibility center to focus on selecting assets to reacha target return and then putting those profits back into the business or other assets.Certain organizations have done this to great success including Amazon, Netflix, and the New York Yankees. Which of the following best represents the most accurate responsibility center as described

investment center

Under the weighted-average method, the stage of completion of beginning work inprocess:

irrelevant in determining the equivalent-unit calculation

the support departments includes all of the following except

machining

Which of the following is reported on the balance sheet of a merchandiser?

merchandise inventory

An organization finds that it has no beginning or ending Work-in-Progress (WIP)Inventory due to the way that it has set up its production operations. A company like this would not have to be concerned with assessing or calculating equivalent units of production. Which of the following is true for a company with no beginning or ending WIP Inventory in the production process

no ending WIP Inventory means that all production costs were moved to Finished Goods

the highest cost that relates to support department costs s

personnel

Costing systems that are used for the costing of like or similar units of products in massproduction are called:

process costing systems

All of the following are types of work completed in a support department except

production work to produce the product

fixed OH costs include

property taxes paid on plant facilities

which of the methods used to allocate support costs recognizes the services thatsupport departments provide to each other?

reciprocal method

The variance that LEAST affects cost control is the

sales volume variance

support departments are also known as

service departmnets

a favorable efficiency variance for direct manufacturing labor indicates that

ss direct manufacturing labor-hours were used during production than planned for actual output

when allocating common costs, which method allocates the cost based on the percentage paid

stand alone cost allocation method

. Which of the following shows the required quantities and current prices of manufacturingcosts for each input: direct materials, direct labor, variable manufacturing overhead andfixed manufacturing overhead

standard cost card

Which of the following terms describes departments within a company that providesthe necessary services to produce a product but is not directly involved in theproduction of the product?

support departments

hen allocating support department costs, the reciprocal method is preferred over thestep method because it considers all reciprocal flows between

support departments

operating budgets include all of the following except

the budgeted balance sheet

in a process system the calculation of equivalent units is used for calculating

the dollar amount of ending inventoryB. the dollar amount of the cost of goods sold for the accounting period

A large home improvement retail company is moving towards a decentralizedmanagement system from a centralized system after years in business. They are awarethat this will entail generating various responsibility centers and placing the appropriatepeople in charge. Which of the following would be considered a profit center for thecompany?

the garden center in the store

A boutique hotel is in the process of upgrading all of its systems including itsmanagement control system. Since its inception, the hotel has employed a centralizedsystem, but the hotel has grown enough to consider decentralization. Of the followingunits or departments, which would be considered a cost center for the boutique hotel?

the housekeeping department

A common cost occurs when

the same resource is used for two or more business units

When using the step method to allocate support department costs, which of thefollowing statements is true?

the step method is more accurate than the direct method but less accurate than the reciprocal method The step method captures some, but not all, inter-support department services by allocating support department costs to other support departments and production departments

Which of the following spotlights which factors contribute to differences betweenbudgeted and actual outcomes?

variance analysis

Which of the following costs reported in the financial statements would uniquely identify thebusiness entity as a manufacturer?

work in process inventory