MAS PART 1-3

The recording of the jobs shipped and customers billed would include a debit to?

COGS

Which of the following budgets is not directly associated with the production budget?

Captial Expenditures budget

What ratio indicates the percentage of each sales dollar that is available to cover fixed costs and to provide a profit?

Contribution Margin

The entry to record direct labor costs into production in a job order cost accounting system is?

Debit Work in Process; Credit Wages Payable

If the amount of factory overhead incurred exceeds the amount applied, the factory overhead account will have a ?

Debit balance; underapplied

Which of the following entries would probably not be found on the books of a service provider?

Debit: Work in Process; Credit:Materials

As production increases, what should happen to the fixed costs per unit?

Decrease

A receiving report is prepared when purchased materials are first received by the manufacturing department? t/f?

False

Cost behavior refers to the methods used to estimate costs for use in managerial decison making t/f

False

If a busiess sells two products, it is not possible to estimate the break-even point? t/f

False

If divison inc expects to sell 20,000 units in 2003, desires ending inventory of 24,000 and has 22,000 units on hand as of the begining of the year, the budgeted volume of production for 2003 is 198,000 units? t/f

False

In the job order cost system, the finished goods account is the controlling account for the factory overhead ledger? t/f?

False

Rental charges of 40,000 per year plus $3 for each machine hour over 18,000 hour is an example of a fixed cost? t/f

False

The budget procedure that requires all levels of management to start from zero in estimating sales, production, and other operating data is called continuous budgeting? t/f

False

The master budget of a small manufacture would normally include all necessary component budgets expect the capital expenditures budget? t/f

False

What is the 1st step of a flexible budget?

Identify the relevant activity levels

Which of the following bases would be the most appropriate for gasoline costs of a delivery service?

Miles driven

Which of the following is the correct flow of manufacturing costs?

Raw materials - Work in Process - Finished Goods - COGS

Bar code scanners are now being used to track incoming materials and to electronically transmit this data. Scanners have replaced which of the following?

Receiving cost

All of the following are examples of activity bases expect?

Salaries of supervisors

A disadvantage of static budgets is that they do not adjust for changes in activity levels? t/f

True

A manufacturer may employ a job order cost system for some of its products and a process cost system for others? t/f?

True

A process cost accounting system is best used by manufactures of like nites of product that are not distinguishable from each other during a continuous production process. t/f

True

Companies with large amounts of fixed cost will generally have a high operating leverage? t/f

True

If employees accept a wage contract that increases the unit contribution margin, the break-even point will decrease? t/f

True

If the volume of sales is 6,000,000 and sales at the break-even point amount to 4,800,000 the margin of saftey is 20? t/f

True

Job order cost systems can be used to compare unit cost of similar jobs to determine if costs are staying withing expected ranges? t/f

True

Materials are transferred from the storeroom to the factory in response to material requisitions? t/f?

True

The capital expenditures budget summarizes future plans for acquisition of fixed assets? t/f

True

The flexible budget is, in effect, a series of static budgets for different levels of activity? t/f

True

Variable costs are costs that remain constant on a per-unit basis as the level of activity changes

True

The 3 most common cost behavior classifcations?

Varaible, fixed, mixed

The process of developing budget estimates by requiring all levels of management to estimate sales, production, and other data as though operations were being initated for the first time is refrred to as?

Zero based budegting

Forde CO has an operating leverage of 4. sales are expected to increase by 8% next year. Operating income is?

32%

A manufacturing company applies factory based on direct hours. At the begining of the year, it estimated factory overhead costs would be 360,000 and direct labor hours would be 45,000. Actual manufacturing overhead costs incurred were 377,200, and actural direct labor hours were 46,000. What is the predetermined overhead rate per direct labor hour?

8.20

A produciton superviosrs salary that does not vary with the number of units produced is an exampale of a fixed cost? t/f

false