Cost Accounting Final Exam

15) Demand for refinements to the costing system has accelerated due to ________. A) decrease in product diversity B) competition in product markets C) decrease in indirect costs D) increase in direct costs

B) competition in product markets

Aurous Incorporated planned to use $35 of material per unit but actually used $34 of material per unit, and planned to make 1,500 units but actually made 1,300 units. 43) The flexible-budget variance for materials is ________. A) $1,300 favorable B) $1,300 unfavorable C) $1,500 unfavorable D) $1,500 favorable

A) $1,300 favorable

10) Tiscara Company manufactures insulation and applies manufacturing overhead costs to production at a budgeted indirect-cost rate of $15 per direct labor-hour. The following data are obtained from the accounting records for June 2014: Direct materials $440,000 Direct labor (3,500 hours @ $11/hour) 38,500 Indirect labor 15,000 Plant facility rent 50,000 Depreciation on plant machinery and equipment 35,000 Sales commissions 10,000 Administrative expenses 25,000 The actual amount of manufacturing overhead costs incurred in June 2014 totals ________. A) $100,000 B) $80,000 C) $110,000 D) $278,500

A) $100,000

Stephanie's Bridal Shoppe sells wedding dresses. The average selling price of each dress is $1,000, variable costs are $400, and fixed costs are $90,000. 36) What is the Bridal Shoppe's operating income when 200 dresses are sold? A) $30,000 B) $100,000 C) $80,000 D) $200,000

A) $30,000

49) Standard labor rate is $8 per hour. Standard labor allowed per unit is 0.6 hours. Actual cost per labor hour is $7.5 and actual labour hour per unit is 0.7 hours. What is the standard labor cost per output unit? A) $4.80 B) $5.25 C) $4.50 D) $5.60

A) $4.80

2) Which of the following is true of management accounting information? A) It co-ordinates product design, production, and marketing decisions. B) It focuses on documenting past business actions of a firm. C) It is prepared for shareholders. D) It is prepared based on SEC rules and FASB accounting principles.

A) It co-ordinates product design, production, and marketing decisions.

28) Which of the following best describes a rolling budget? A) It is a budget that is always available for a specified future time period. B) It is a budget that is submitted to a bank at the beginning of every month as per a loan covenant. C) It is a budget that outlines budgeted expenses. D) It is a budget that outlines the amount required to roll over debt in a future period.

A) It is a budget that is always available for a specified future time period.

12) Which item is an indication of competence under the Standards of Ethical Conduct? A) Maintain an appropriate level of professional expertise by continually developing knowledge and skills. B) Refrain from engaging in any conduct that would prejudice carrying out duties ethically. C) Keep information confidential except when disclosure is authorized or legally required. D) Abstain from engaging in or supporting any activity that might discredit the profession.

A) Maintain an appropriate level of professional expertise by continually developing knowledge and skills.

37) Regier Company had planned for operating income of $10 million in the master budget but actually achieved operating income of only $7 million. A) The static-budget variance for operating income is $3 million unfavorable. B) The flexible-budget variance for operating income is $3 million favorable. C) The flexible-budget variance for operating income is $3 million unfavorable. D) The static-budget variance for operating income is $3 million favorable.

A) The static-budget variance for operating income is $3 million unfavorable.

19) ________ are the costs of activities undertaken to support individual products or services regardless of the number of units or batches in which the units are produced. A) Unit-level costs B) Product-sustaining costs C) Facility-sustaining costs D) Batch-level costs

A) Unit-level costs

22) If each motorcycle requires a belt that costs $20 and 2,000 motorcycles are produced for the month, the total cost for belts is ________. A) considered to be a direct variable cost B) considered to be a direct fixed cost C) considered to be an indirect fixed cost D) considered to be an indirect variable cost

A) considered to be a direct variable cost

27) Participation of employees in the budgeting process helps ________. A) create greater commitment towards the budget B) decrease deviations from the budget C) secure communication of sensitive information D) create demanding but achievable budget

A) create greater commitment towards the budget

9) New-product development time is the time taken by companies to ________. A) create new products and bring them to market B) design and develop the prototype product C) test the prototype and start the large scale production of a product D) improvise existing products and re-launch them to market

A) create new products and bring them to market

41) In a flexible budget ________. A) fixed costs are kept at the same level of static budget B) variable costs are kept at the same level of static budget C) variable costs are calculated proportionately for the budgeted level of sales D) fixed costs are calculated proportionately for the actual level of sales

A) fixed costs are kept at the same level of static budget

14) Overcosting a particular product may result in ________. A) loss of market share B) pricing the product too low C) understating total product costs D) operating efficiencies

A) loss of market share

7) For a given job the direct costs associated with the job are ________. A) raw materials B) actual overhead C) sunk costs D) fixed costs

A) raw materials

25) A master budget forces managers to examine the business as they plan, so they can ________. A) set expectations against which actual results can be compared B) ensure that only financial risks and opportunities are incorporated C) detect inaccurate historical records to avoid errors in budgets D) complete the budgeting task on time

A) set expectations against which actual results can be compared

Isondo's TV and Appliance Store is a small company that has hired you to perform some management advisory services. The following information pertains to 2015 operations. Sales (1,200 televisions) $ 1,200,000 Cost of goods sold 540,000 Store manager's salary per year 108,000 Operating costs per year 216,000 Advertising and promotion per year 24,000 Commissions (3% of sales) 36,000 48) Which cost estimation method is being used by Isondo's TV and Appliance Store? A) the account analysis method B) the cost-volume-profit analysis method C) the operating costing method D) the marginal costing method

A) the account analysis method

40) An unfavorable flexible-budget variance for variable costs may be the result of ________. A) using more input quantities than were budgeted B) selling output at a higher selling price than budgeted C) selling less quantity compared to the budgeted D) paying lower prices for inputs than were budgeted

A) using more input quantities than were budgeted

39) Crimson Services, Inc., employs 8 individuals. They are all paid $16.50 per hour. How would total costs of personnel be classified? A) variable cost B) irrelevant cost C) mixed cost D) fixed cost

A) variable cost

34) A primary consideration in assigning a cost to a responsibility center is ________. A) who can best control the change in that cost B) whether the cost is direct or indirect C) where in the organizational structure the cost was incurred D) whether the cost is fixed or variable

A) who can best control the change in that cost

29) Fixed costs equal $15,000, unit contribution margin equals $25, and the number of units sold equal 1,150. Operating income is ________. A) $28,750 B) $13,750 C) $14,750 D) $15,000

B) $13,750

The actual information pertains to the month of September. As a part of the budgeting process, Twilith Fencing Company developed the following static budget for September. Twilith is in the process of preparing the flexible budget and understanding the results. Actual Flexible Static Sales volume (in units) 12,000 15,000 Sales revenues $600,000 $ $750,000 Variable costs 307,200 $ ________ 360,000 Contribution margin 292,800 $ 390,000 Fixed costs 274,800 $ ________ 270,000 Operating profit $ 18,000 $ $ 120,000 44) The flexible budget will report ________ for the fixed costs. A) $274,800 B) $270,000 C) $216,000 D) $343,500

B) $270,000

30) Winnz sells 8,000 units resulting in $100,000 of sales revenue, $35,000 of variable costs, and $45,000 of fixed costs. To achieve $150,000 in operating income, sales must total ________. A) $160,000 B) $300,000 C) $130,000 D) $440,000

B) $300,000

Isondo's TV and Appliance Store is a small company that has hired you to perform some management advisory services. The following information pertains to 2015 operations. Sales (1,200 televisions) $ 1,200,000 Cost of goods sold 540,000 Store manager's salary per year 108,000 Operating costs per year 216,000 Advertising and promotion per year 24,000 Commissions (3% of sales) 36,000 45) What was the variable cost per unit sold for 2015? A) $450 B) $480 C) $770 D) $30

B) $480

28) Pacific Company sells only one product for $11 per unit, variable production costs are $3 per unit, and selling and administrative costs are $1.50 per unit. Fixed costs for 10,000 units are $5,000. The operating income is ________. A) $6.50 per unit B) $6.00 per unit C) $5.50 per unit D) $5.00 per unit

B) $6.00 per unit

Kramer Enterprises reports year-end information from 2015 as follows: Sales (160,000 units) $960,000 Cost of goods sold 640,000 Gross margin 320,000 Operating expenses 260,000 Operating income $60,000 Kramer is developing the 2016 budget. In 2016 the company would like to increase selling prices by 12.5%, and as a result expects a decrease in sales volume of 9%. All other operating expenses are expected to remain constant. Assume that cost of goods sold is a variable cost and that operating expenses are a fixed cost. 32) What is budgeted sales for 2016? A) $873,600 B) $982,800 C) $1,000,000 D) $1,080,000

B) $982,800

16) Collin Inc. produces hospital equipment and the setup requirements vary from product to product. Collin produces its products based on customer orders and uses ABC costing. In one of its indirect cost pools, setup costs and distribution costs are pooled together. Costs in this pool are allocated using number of customer orders for the easiness of costing operations. Based on the information provided, which of the following arguments is valid? A) All costs in a homogeneous cost pool have the same or a similar cause-and-effect relationship with the single cost driver that is used as the cost-allocation base for Collin. B) Collin has failed to use the correct cost driver as the cost-allocation base for setup costs. C) Collin has clearly failed to identify as many direct costs as is economically feasible. D) Collin has unnecessarily wasted resources by classifying setup and distribution costs as they could have been considered as direct costs.

B) Collin has failed to use the correct cost driver as the cost-allocation base for setup costs.

2) ________ is the process of distributing indirect costs to products. A) Cost tracing B) Cost allocation C) Job cost recording D) Cost pooling

B) Cost allocation

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

B) Facility-sustaining

18) Which of the following is true of indirect costs? A) Indirect costs always vary in direct proportion to the level of production. B) Indirect costs cannot be traced to a particular cost object in an economically feasible way. C) Indirect costs are always considered sunk costs. D) All indirect costs are included in cost of goods sold.

B) Indirect costs cannot be traced to a particular cost object in an economically feasible way.

5) Which of the following differentiates job costing from process costing? A) Job costing is used by manufacturing industries, and process costing is used by service industries. B) Process costing is used when each unit of output is identical, and job costing deals with unique products not produced in batches. C) Job costing is used when each unit of output is identical, and process costing deals with unique products. D) Job costing is used when each unit of output is identical and not produced in batches, and process costing deals with unique products produced on large scale.

B) Process costing is used when each unit of output is identical, and job costing deals with unique products not produced in batches.

8) ________ is a philosophy in which management improves operations throughout the value chain to deliver products and services that exceed customer expectations. A) Cost-benefit approach B) Total quality management C) Customer focus D) Customer relationship management

B) Total quality management

47) An efficiency variance reflects the difference between ________. A) actual input quantities used last period and current period B) an actual input quantity and a budgeted input quantity C) a standard input quantity in a company and its main competitor's D) an actual input quantity used in a company and its main competitor's

B) an actual input quantity and a budgeted input quantity

6) Which of the following companies will use a process costing system? A) a manufacturer of ships B) an oil refining company C) a custom watch manufacturer D) an advertising firm

B) an oil refining company

11) The budgeted indirect-cost rate is calculated ________. A) at the end of the year B) at the beginning of the year C) at the end of each quarter D) during the year

B) at the beginning of the year

9) The budgeted indirect-cost rate for each cost pool is computed as ________. A) budgeted annual indirect costs divided by budgeted actual quantity of cost allocation base B) budgeted annual indirect costs divided by budgeted annual quantity of cost allocation base C) budgeted annual quantity of cost allocation base divided by budgeted annual indirect costs D) actual annual indirect costs divided by budgeted annual quantity of cost allocation base

B) budgeted annual indirect costs divided by budgeted annual quantity of cost allocation base

31) Sensitivity analysis helps managers evaluate risks ________. A) by identifying gaps in the production process using information on setups needed to manufacture products B) by showing the effects of changes to the original data or an underlying assumption C) by removing the effects of foreign currency exposure and other uncontrollable factors D) by identifying inconsistencies in underlying assumptions and actual conditions

B) by showing the effects of changes to the original data or an underlying assumption

50) The high-low method ________. A) calculates the standard deviation of residuals B) calculates the slope coefficient using only two observed values within the relevant range and their respective costs C) measures the difference between actual cost and estimated cost for each observation of the cost driver D) measures how well the predicted values, y, based on the cost driver, X, match actual cost observations, Y

B) calculates the slope coefficient using only two observed values within the relevant range and their respective costs

26) The selling price per unit less the variable cost per unit is the ________. A) gross margin B) contribution margin per unit C) fixed cost per unit D) margin of safety

B) contribution margin per unit

20) Which of the following is true if the production volume decreases? A) average cost per unit decreases B) fixed cost per unit increases C) variable cost per unit increases D) variable cost per unit decreases

B) fixed cost per unit increases

29) Costs such as supervision, depreciation, maintenance, supplies, and power. are included in the ________. A) capital expenditures budget B) manufacturing overhead budget C) revenues budget D) distribution costs budget

B) manufacturing overhead budget

26) Challenging budgets tend to ________. A) increase anxiety without motivation not meeting them is viewed as a failure B) motivate improved performance as employees work more intensely to avoid failure C) set unrealistic expectations and are perceived as overly ambitious and unachievable D) discourage out-of-the-box and creative thinking as there is very little room for error

B) motivate improved performance as employees work more intensely to avoid failure

21) Maize Plastics manufactures and sells 50 bottles per day. Fixed costs are $30,000 and the variable costs for manufacturing 50 bottles are $10,000. Each bottle is sold for $1,000. How would the daily profit be affected if the daily volume of sales drop by 10%? A) profits are reduced by $1,000 B) profits are reduced by $4,000 C) profits are reduced by $5,000 D) profits are reduced by $6,000

B) profits are reduced by $4,000

5) Which of the following is not a concern for management accountants in formulating a strategy? A) identifying the most important warehouse location for the distribution of goods B) strategizing compliance with GAAP (Generally Accepted Accounting Principles) C) substituting products that exist in the marketplace D) maintaining adequate fixed assets available to implement the strategy

B) strategizing compliance with GAAP (Generally Accepted Accounting Principles)

TEST 1 1) The primary user of management accounting information is a(n) ________. A) external regulator B) the controller C) a shareholder evaluating a stock investment D) bondholder

B) the controller

35) A variance is ________. A) the standard units of inputs for one output B) the difference between an actual result and a budgeted performance C) the difference between actual fixed cost per unit and standard variable cost per unit D) the difference between actual variable cost per unit and standard fixed cost per unit

B) the difference between an actual result and a budgeted performance

Products S5 and CP8 each are assigned $100.00 in indirect costs by a traditional costing system. An activity analysis revealed that although production requirements are identical, S5 requires 45 minutes less setup time than CP8. 20) According to an ABC system, CP8 is ________ under the traditional system. A) fairly costed B) undercosted C) accurately costed D) overcosted

B) undercosted

3) Job costing is ________. A) used to calculate the percentage of work completed B) used by businesses to price unique products for different jobs C) used by businesses to price identical products D) used to calculate equivalent units

B) used by businesses to price unique products for different jobs

19) Which of the following is true if the volume of sales increases (within a relevant range)? A) fixed cost decreases B) variable cost increases C) fixed cost increases D) variable cost decreases

B) variable cost increases

35) Frazer Corp sells several products. Information of average revenue and costs is as follows: Selling price per unit: $28.50 Variable costs per unit: Direct material: $5.50 Direct manufacturing labor: $1.15 Manufacturing overhead: $0.85 Selling costs: $2.50 Annual fixed costs: $125,000 What is the operating income earned if the company sells 15,000 units? A) $148,500 B) $162,750 C) $152,500 D) $150,000

C) $152,500

Genent Company manufactures tires. Some of the company's data was misplaced. Use the following information to replace the lost data: Act Flex Bud Var Flex Bud Sales-Vol Var Stat Bud Units sold 495,000 495,000 453,750 Revenues $185,150 $4,400 F (A) $6,160 U (B) Variable costs (C) $880 U $69,780 $10,300 F $88,080 Fixed costs $36,430 $3,770 F $40,200 0 $40,200 Operating income $78,060 (D) $70,770 (E) $66,630 46) What amounts are reported for revenues in the flexible-budget (A) and the static-budget (B), respectively? A) $185,150; $177,920 B) $164,320; $178,990 C) $180,750; $186,910 D) $178,990; $186,910

C) $180,750; $186,910

17) Dalrymple Company produces a special spray nozzle. The budgeted indirect total cost of inserting 17) the spray nozzle is $80,000. The budgeted number of nozzles to be inserted is 40,000. What is the budgeted indirect cost allocation rate for this activity? A) $1.00 B) $0.50 C) $2.00 D) $1.50

C) $2.00

Trintal Corporation manufactures two models of motorized go-carts, a standard and a deluxe model. The following activity and cost information has been compiled: Product Setups Components Direct Labor Hours Standard 15 10 750 Deluxe 35 15 500 22) Assume a traditional costing system applies the $40,000 of overhead costs based on direct labor hours. What is the total amount of overhead cost assigned to the standard model? A) $15,000 B) $25,000 C) $24,000 D) $16,000

C) $24,000

Stark Corporation has two departments, Car Rental and Truck Rental. Central costs may be allocated to the two departments in various ways. Car Rental Truck Rental Number of Vehicles in fleet 850 430 Number of employees 125 75 Sales $750,000 $375,000 24) If administrative expense of $62,500 is allocated on the basis of number of employees, the cost per cost driver rate would be ________. A) $500.00 B) $833.33 C) $312.50 D) $572.50

C) $312.50

Isondo's TV and Appliance Store is a small company that has hired you to perform some management advisory services. The following information pertains to 2015 operations. Sales (1,200 televisions) $ 1,200,000 Cost of goods sold 540,000 Store manager's salary per year 108,000 Operating costs per year 216,000 Advertising and promotion per year 24,000 Commissions (3% of sales) 36,000 46) What were total fixed costs for 2015? A) $224,000 B) $924,000 C) $348,000 D) $576,000

C) $348,000

Stephanie's Bridal Shoppe sells wedding dresses. The average selling price of each dress is $1,000, variable costs are $400, and fixed costs are $90,000. 37) How many dresses are sold when operating income is zero? A) 90 dresses B) 100 dresses C) 150 dresses D) 225 dresses

C) 150 dresses

10) Place the five steps in the decision-making process in the correct order: A = Obtain information B = Make decisions by choosing among alternatives C = Identify the problem and uncertainties D = Implement the decision, evaluate performance, and learn E = Make predictions about the future A) E D A B C B) A E B D C C) C A E B D D) C D B E A

C) C A E B D

6) Place the four business functions in the order they appear along the value chain: Customer service Design Marketing Production A) Design, Customer Service, Production, Marketing B) Customer Service, Design, Production, Marketing C) Design, Production, Marketing, Customer Service D) Customer Service, Marketing, Production, Design

C) Design, Production, Marketing, Customer Service

40) Which of the following statements is true of a linear cost function? A) It presents total cost as an intercept. B) It presents total cost as slope coefficient. C) It presents variable cost as a slope coefficient. D) It presents variable cost as an intercept.

C) It presents variable cost as a slope coefficient.

51) Which of the following statements shows a difference between simple regression and multiple regression? A) Simple regression uses only one dependent variable and more than one independent variables, whereas multiple regression uses more than one dependent variable and only one independent variable. B) Simple regression uses more than one dependent and independent variables, whereas multiple regression uses only one dependent and independent variable. C) Simple regression uses only one dependent and one independent variable, whereas multiple regression uses one dependent and more than one independent variable. D) Simple regression uses only the independent variables, whereas multiple regression uses only dependent variables.

C) Simple regression uses only one dependent and one independent variable, whereas multiple regression uses one dependent and more than one independent variable.

7) ________ describes the flow of goods, services, and information from the purchase of materials to the delivery of products to consumers, regardless of whether those activities occur in the same organization or with other organizations. A) Customer relationship management B) Quality control C) Supply chain D) Production process

C) Supply chain

27) Which of the following is true of CVP analysis? A) Unit selling price, unit variable costs, and unit fixed costs are known and remain constant. B) Costs may be separated into separate inventoriable and period components with respect to the level of output. C) Total revenues and total costs are linear in relation to output units. D) Proportion of different products will vary according to demand and supply when multiple products are sold.

C) Total revenues and total costs are linear in relation to output units.

38) The flexible budget contains ________. A) actual costs for actual output B) actual costs for planned output C) budgeted amounts for actual output D) budgeted amounts for planned output

C) budgeted amounts for actual output

14) The general term used to identify both the tracing and the allocation of accumulated costs to a cost object is ________. A) cost tracing B) conversion costing C) cost assignment D) cost accumulation

C) cost assignment

11) The scenario that resources should be spent if the expected benefits to the company exceed the expected costs describes ________. A) behavioral and technical considerations B) different costs for different purposes C) cost-benefit approach D) balanced scorecard

C) cost-benefit approach

12) The Materials Control account is increased when ________. A) indirect materials are sold B) materials are converted to finished goods C) direct materials are purchased D) materials are requisitioned for production

C) direct materials are purchased

30) Which of the following information is required by a company's manager while preparing a manufacturing overhead costs budget? A) rent expense for lease of office building B) estimated expense for office supplies C) estimated expense for maintenance of factory building D) estimated incentives to be paid to marketing personnel

C) estimated expense for maintenance of factory building

TEST 2 1) Job costing information is used ________. A) to enhance public relations B) to determine target customers C) for internal financial reporting D) to calculate the percentage of completion

C) for internal financial reporting

38) Which of the following will increase a company's breakeven point? A) reducing its total fixed costs B) increasing the selling price per unit C) increasing variable cost per unit D) increasing contribution margin per unit

C) increasing variable cost per unit

8) The basic source document for direct manufacturing labor is the ________. A) materials-requisition record B) job-cost record C) labor-time record D) labor-requisition record

C) labor-time record

16) A manufacturing plant produces two product lines: golf equipment and soccer equipment. An example of direct costs for the golf equipment line is ________. A) salaries of the clerical staff that work in the company administrative offices B) overheads incurred in producing both golf and soccer equipment C) monthly lease payments for a specialized piece of equipment needed to manufacture the golf driver D) beverages provided daily in the plant break room

C) monthly lease payments for a specialized piece of equipment needed to manufacture the golf driver

32) The breakeven point is the activity level where ________. A) revenues equal variable costs B) revenues equal fixed costs C) revenues equal the sum of variable and fixed costs D) contribution margin equals total costs

C) revenues equal the sum of variable and fixed costs

44) Which cost estimation method may use time-and-motion studies to analyze the relationship between inputs and outputs in physical terms? A) the accrual accounting method B) the cash accounting method C) the industrial engineering method D) the high-low method

C) the industrial engineering method

34) If unit outputs exceed the breakeven point ________. A) there will be an increase in fixed costs B) total sales revenue will exceed variable costs C) there will be a profit D) total sales revenue will exceed fixed costs

C) there will be a profit

13) Ethical challenges for management accountants include ________. A) whether to accept gifts higher incentives from the company for their performance B) whether to file a tax return this year C) whether to accept gifts from suppliers, knowing it is an effort to indirectly influence decisions D) adhering to the principles of accounting

C) whether to accept gifts from suppliers, knowing it is an effort to indirectly influence decisions

41) Which of the following functions represents the least total cost assuming the number of units is equal in each case? A) y = 90 + 7X B) y = 180 + 6X C) y = 90 + 6X D) y = 180 + 7X

C) y = 90 + 6X

Isondo's TV and Appliance Store is a small company that has hired you to perform some management advisory services. The following information pertains to 2015 operations. Sales (1,200 televisions) $ 1,200,000 Cost of goods sold 540,000 Store manager's salary per year 108,000 Operating costs per year 216,000 Advertising and promotion per year 24,000 Commissions (3% of sales) 36,000 47) What are the estimated total costs if the company expects to sell 3,500 units next year? A) $1,429,000 B) $3,271,000 C) $3,619,000 D) $2,028,000

D) $2,028,000

Dynondo Incorporated planned to use materials of $12 per unit but actually used materials of $13 per unit, and planned to make 1,500 units but actually made 1,800 units. 42) The flexible-budget amount for materials is ________. A) $23,400 B) $19,500 C) $18,000 D) $21,600

D) $21,600

Lander Corporation used the following data to evaluate their current operating system. The company sells items for $18 each and used a budgeted selling price of $18 per unit. Actual Budgeted Units sold 41,000 units 40,000 units Variable costs $164,000 $156,000 Fixed costs $46,000 $48,000 36) What is the static-budget variance of variable costs? A) $6,000 unfavorable B) $2,000 favorable C) $4,000 favorable D) $8,000 unfavorable

D) $8,000 unfavorable

The East Company manufactures several different products. Unit costs associated with Product ORD210 are as follows: Direct materials $54 Direct manufacturing labor 8 Variable manufacturing overhead 11 Fixed manufacturing overhead 25 Sales commissions (2% of sales) 5 Administrative salaries 12 Total $115 25) What is the percentage of the total fixed costs per unit associated with Product ORD105 with respect to total cost A) 20% B) 32% C) 26% D) 28%

D) 28%

31) Sky High sells helicopters. During the current year, 100 helicopters were sold resulting in $820,000 of sales revenue, $250,000 of variable costs, and $342,000 of fixed costs. Breakeven point in units is________. A) 64 units B) 78 units C) 80 units D) 60 units

D) 60 units

The East Company manufactures several different products. Unit costs associated with Product ORD210 are as follows: Direct materials $54 Direct manufacturing labor 8 Variable manufacturing overhead 11 Fixed manufacturing overhead 25 Sales commissions (2% of sales) 5 Administrative salaries 12 Total $115 24) What is the percentage of the total variable costs per unit associated with Product ORD105 with respect to total cost? A) 68% B) 75% C) 70% D) 72%

D) 72%

4) An Enterprise Resource Planning System can best be described as ________. A) a sophisticated means of linking two or more companies to facilitate their planning processes B) a collection of programs that use a variety of unconnected databases C) a database that is primarily used by a purchasing department to determine the correct amount of a particular supply item to purchase D) a single database that collects data and feeds it into applications that support each of the company's business activities, such as purchases, production, distribution, and sales

D) a single database that collects data and feeds it into applications that support each of the company's business activities, such as purchases, production, distribution, and sales

4) Job-costing is likely to be used by________. A) oil refining companies B) postal service companies C) beverage production companies D) advertising agencies

D) advertising agencies

48) A price variance reflects the difference between ________. A) an actual input price used last period and current period B) a standard input price in a company and its competitor C) an actual input price used in a company and its competitor D) an actual input price and a budgeted input price

D) an actual input price and a budgeted input price

42) The conference method estimates cost functions ________. A) using quantitative methods that can be very time consuming and costly B) using time-and-motion studies C) by mathematically analyzing the relationship between inputs and outputs in physical terms D) based on analysis and opinions gathered from various departments

D) based on analysis and opinions gathered from various departments

49) When using the high-low method, the two observations used are the high and low observations of the ________. A) slope coefficient B) fixed cost component C) direct cost D) cost driver

D) cost driver

3) Which of the following deals with management accounting? A) preparing the income statement B) preparing the statement of cash flows C) identifying the costs of acquiring the resources of the company D) developing budgets

D) developing budgets

13) Which of the following increases (are debited to) the Work-in-Process Control account? A) marketing expenses B) actual plant insurance costs C) customer services costs D) direct manufacturing labor costs

D) direct manufacturing labor costs

33) A controllable cost is any cost that can be ________ by a responsibility center manager for a period of time. A) segregated B) excluded C) controlled D) influenced

D) influenced

23) It only makes sense to implement an ABC system when ________. A) it traces more costs as direct costs B) production process is labor-intensive C) a single product is produced in bulk D) its benefits exceed its implementation costs

D) its benefits exceed its implementation costs

45) The actual information pertains to the month of September. As part of the budgeting process, Kriger Fencing Company developed the following static budget for September. Kriger is in the process of preparing the flexible budget and understanding the results. Actual Flexible Static Sales volume (in units) 10,000 12,500 Sales revenues $500,000 $ $625,000 Variable costs 256,000 $ ________ 300,000 Contribution margin 244,000 $ 325,000 Fixed costs 229,000 $ ________ 225,000 Operating profit $ 15,000 $ $ 100,000 The primary reason for low operating profits was ________. A) a poor management accounting system B) the variable-cost variance C) increased fixed costs D) lower sales volume than planned

D) lower sales volume than planned

Products S5 and CP8 each are assigned $100.00 in indirect costs by a traditional costing system. An activity analysis revealed that although production requirements are identical, S5 requires 45 minutes less setup time than CP8. 21) Which of the following cost and cost allocation base have a strong cause and effect relationship? A) administration costs and cubic feet B) machine maintenance and setup hours C) setup costs and square feet D) machine depreciation and output units

D) machine depreciation and output units

17) Indirect manufacturing costs ________. A) can be easily identified with the cost object B) can be traced to the product that created the costs C) generally include the cost of material and the cost of labor D) may include both variable and fixed costs

D) may include both variable and fixed costs

23) The most likely cost driver of direct labor costs is the ________. A) number of machine hours B) number of machine setups for the product C) number of miles driven D) number of production hours

D) number of production hours

43) Which cost estimation method analyzes accounts in the subsidiary ledger as variable, fixed, or mixed using qualitative methods? A) the conference method B) the incremental costing method C) the marginal costing method D) the account analysis method

D) the account analysis method

15) Cost accumulation is ________. A) anything for which a cost measurement is desired B) the collection of profit data in some organized way by means of an accounting system C) anything for which a profit measurement is desired D) the collection of cost data in some organized way by means of an accounting system

D) the collection of cost data in some organized way by means of an accounting system

33) The breakeven point decreases if ________. A) the variable cost per unit increases B) the selling price per unit decreases C) the contribution margin per unit decreases D) the total fixed costs decrease

D) the total fixed costs decrease

39) Which of the following items will be same for a flexible budget and a master budget? A) total revenues B) total contribution margin C) total variable cost D) total fixed costs

D) total fixed costs