ACC 220 final (cengage questions)

Activities necessary to remain in business are called valuable activities. a. True b. False

false

Sales revenue equals the product cost per unit times the number of units sold. a.True b.False

false

Which of the following is true? a. The adjusted cost of goods sold is equal to normal cost of goods sold plus or minus the overhead variance. b. Variances in overhead are expected every month. c. If the overhead variance shows overapplied overhead, then that amount would be subtracted from normal cost of goods sold. d. All of these choices are correct. e. None of these choices are correct.

All of these choices are correct

Total variable costs a.equal a variable rate × amount of output. b.increases as output increases. c.decreases as output decreases. d.All of these choices are correct.

All of these choices are correct.

Variable costs within the relevant range a. increase in total as output increases. b. stay constant on a per unit basis as output changes. c. decrease in total as output decreases. d. All of these choices are correct.

All of these choices are correct.

Which of the following is an example of a period cost? a. research and development b. selling and marketing c. general accounting d. All of these choices are correct.

All of these choices are correct.

Standlar Company makes wireless speakers. The standard model price is $360 and variable expenses are $210. The deluxe model price is $500 and variable expenses are $300. The superior model price is $1,600 and variable expense per unit is $600. Total fixed expenses are $300,000. Generally, Standlar sells 8 standard models and 4 deluxe models for every superior model sold. What is the number of standard models sold at break-even? a. 100 b. 1,000 c. 250 d. 180 e. 800

800

At the begining of the year, Zinc inc. estimated that overhead would be $115,000 and direct labor hours would be 23,000. At the end of the year, actual overhead was $175,900 and there were actually 35,000 direct labor hours what is the overhead variance? a. $600 overapplied b. $700 overapplied c. $300 underapplied d. $900 underapplied

900 underapplied

____ can help a company become more competitive by providing more accurate cost data. a. Unit-based costing b. Kaizen costing c. Volume-based costing d. Activity-based costing e. Production costing

Activity-based costing

Which of the following is true about normal costing? a. Normal costing does not solve the problems associated with actual costing. b. Normal costing uses only the indirect costs of direct materials. c. The applied overhead is not calculated on a job specific basis in normal costing. d. Actual overhead costs are not assigned directly to jobs in normal costing. e. All of these choices are correct.

Actual overhead costs are not assigned directly to jobs in normal costing

Production costs do not include a. fixed overhead. b. direct labor. c. variable overhead. d. direct materials. e. All of these are production costs.

All of these are production costs.

Which of the following is true about the job-order cost sheet? a. It is subsidiary to the work-in-process account. b. It contains all information pertinent to a job. c. It is prepared for every job. d. It is the primary document for accumulating all costs related to a particular job. e. All of these choices are correct.

All of these choices are correct.

____ are assigned using direct tracing and resource drivers. a. Profits b. Materials c. Resources d. Products e. Costs

Costs

Manufacturing overhead a. consists of all manufacturing costs other than direct materials and direct labor. b. consists of all manufacturing costs other than direct materials. c. consists of all costs other than direct materials and direct labor. d. consists of all costs other than direct materials.

consists of all manufacturing costs other than direct materials and direct labor.

A(n) ____ ratio measures the proportion of an activity consumed by a product. a. quality b. efficiency c. production d. consumption e. usage

consumption

Gross margin is to absorption costing as ____ is to variable costing. a. income b. territory margin c. contribution margin d. gross profit

contribution margin

An income statement of a manufacturer a. will show the ending balance of materials inventory. b. contains only manufacturing costs. c. covers a certain period of time. d. will show the ending balance of work in process.

covers a certain period of time.

Which of the following is true about the cost formula given below? Total cost = $90,000 + ($300 × number of tax returns) The term "total cost" is the: a. independent variable. b. dependent variable. c. mixed rate. d. overhead rate.

dependent variable

Conversion cost is the sum of a. selling cost and administrative costs. b. product costs and period costs. c. direct labor cost and direct materials costs. d. direct labor cost and overhead costs.

direct labor cost and overhead costs

Which of the following would not be a period cost? a. office supplies b. direct materials c. advertising costs d. research and development

direct materials

Prime cost is a. direct materials cost and direct labor cost. b. direct materials cost and indirect labor cost. c. indirect materials cost and direct labor cost. d. direct labor cost and indirect labor cost.

direct materials cost and direct labor cost.

Product costs consist of a. direct materials, direct labor, and selling costs. b. direct materials, direct labor, and overhead. c. period costs. d. indirect materials, indirect labor, and administrative costs.

direct materials, direct labor, and overhead.

Cost of advertising is an example of a _____. a. discretionary fixed cost b. variable cost c. committed fixed cost d. semi-variable cost

discretionary fixed cost

All of the following are supplier-driven activities except a. inspection of incoming components. b. efficiency. c. receiving. d. purchasing.

efficiency.

Which of the following types of costs is a product cost for absorption costing but a period cost for variable costing? a. fixed factory overhead per unit sold b. variable selling expense c. direct materials d. total administrative expense e. direct labor

fixed factory overhead per unit sold

which of the following types of costs is a product cost for absorption costing but a period cost for variable costing? a. direct materials b. variable selling expense c. fixed factory overhead per unit sold d. direct labor

fixed factory overhead per unit sold

the inventory cost computed under absorption costing is ___ the inventory cost computed using variable costing a. half of b. thrice as much c. greater than d. equal to

greater than

Gross margin percent equals a. gross margin/cost of goods sold. b. gross margin/sales revenue. c. operating income/sales revenue. d. sales revenue/gross margin.

gross margin/sales revenue.

The fixed cost per unit _____ within the relevant range when the output decreases. a. remains the same b. decreases at first and then increases c. increases d. decreases

increases

The following cost formula was developed using monthly data for a retail clothing store. Total cost = $75,620 + ($242 × number of customers) The term "total cost" a. is the intercept. b. is the dependent variable. c. is the independent variable. d. is the variable rate.

is the dependent variable

Cost of goods sold a. is the total product cost for the units sold during a period. b. is the cost of the partially completed goods that are still on the factory floor at the end of the period. c. is found on the Balance Sheet. d. represents all costs associated with research, development, and general administration of the organization.

is the total product cost for the units sold during a period.

the unit cost a. includes period costs b. is the total conversion costs divided by the number of units produced c. is the total prime costs divided by the number of units produced d. is the total product costs divided by the number of units produced

is the total product costs divided by the number of units produced

which of the following is not a possible source of customer diversity? a. sales support b. geographic distance c. delivery frequency d. pricing

pricing

Product (or manufacturing) costs consist of a. direct materials, direct labor, and selling costs. b. direct materials, direct labor, manufacturing overhead, and operating expense. c. administrative costs and conversion costs. d. prime costs and manufacturing overhead. e. selling and administrative costs.

prime costs and manufacturing overhead

Operating income equals a. gross margin − selling expenses b. sales revenue − selling and administrative expenses c. sales revenue − cost of goods sold − selling and administrative expense d. sales revenue − cost of goods sold

sales revenue − cost of goods sold − selling and administrative expense

Which of the following is not one of the three conditions necessary to be classified as a discretionary activity? a. the change of state was not achievable by preceding activities b. the activity produces a change of state c. the activity enables other activities to be performed d. the activity increases efficiency

the activity increases efficiency

An opportunity cost is: a. the cost to market, distribute, and service a product or service. b. expensed in the period in which it is incurred; it is not inventoried. c. the difference between gross margin and operating expenses. d. the benefit given up or sacrificed when one alternative is chosen over another.

the benefit given up or sacrificed when one alternative is chosen over another.

Which of the following is an indirect cost? a. The cost of denim in a jeans factory b. The cost of mixing labor in a factory that makes over-the-counter pain relievers c. The cost of bottles in a shampoo factory d. The cost of restriping the parking lot at a perfume factory e. All of these.

the cost of restriping the parking lot at a perfume factory

Cost of goods manufactured equals a. sales − cost of goods sold. b. direct materials cost + direct labor cost + overhead cost. c. total product costs incurred during the current period + beginning work in process − ending work in process. d. None of these choices are correct.

total product costs incurred during the current period + beginning work in process − ending work in process.

Unit-level activities are performed each time a unit is produced. a. True b. False

true

Variable costing and absorption costing income statements may differ because of their treatment of fixed factory overhead. a. True b. False

true

materials in the raw materials account do not become direct materials a. until they are withdrawn from inventory for use in production b. until they are purchased from a vendor c. until the finished product is sold d. none of these choices are correct

until they are withdrawn from inventory for use in production

the slope of the line in a mixed cost graph represents the _____ per unit of activity driver a. total cost b. total fixed cost c. variable cost d. step cost

variable cost

which of the following is the order in which cost elements flow through accounts until they are recognized as an expense? a. raw materials, work-in-process, purchase returns b. work-in-process, unsold goods, finished goods c. finished goods, cost of goods sold, work-in-process d. work-in-process, finished goods, costs of goods sold

work-in-process, finished goods, costs of goods sold

The overhead variance is least likely to be a. underapplied. b. zero (actual overhead equals applied overhead). c. underapplied and material. d. immaterial. e. overapplied.

zero (actual overhead equals applied overhead)

Atlas Company sells only one product at a regular price of $10.00 per unit. Variable expenses are 70% of sales, and fixed expenses are $50,000. Management has decided to decrease the selling price to $9.00 in the hope of increasing its volume of sales. What is the sales dollars level required to break even at the old price of $10.00? (Note: Round answer to two decimal places.) a. $150,000.25 b. $126,000.50 c. $166,666.67 d. $180,000.30

$166,666.67

Pauley Company provides home health care. Pauley charges $35/hour for professional care. Variable costs are $21/hour and fixed costs are $78,000. Next year, Pauley expects to charge out 12,000 hours of home health care. What is the break-even point in sales dollars? a. $195,000 b. $252,000 c. $420,000 d. $342,000 e. $130,000

$195,000

Suppose that a company has the following accounts receivable collection pattern: Paid in the month of sale 25% Paid in the month following sale 75% All sales are on credit. If credit sales for January and February are $250,000 and $120,000 respectively, the cash collection for February is: a. $210,000. b. $130,000. c. $140,000. d. $100,000. e. $217,500.

$217,500

Trust company applies overhead based on direct labor hours. At the beginning of the year, Trust estimates overhead to be $700,000, machine hours to be 200,000, and direct labor hours to be 35,000. During February, Trust has 5,000 direct labor hours and 10,000 machine hours. what is the amount of overhead applied for Feb? a. $69,500 b. $185,200 c. $124,000 d. $100,000

100,000

Planet Company sells a product for $16 per unit, variable cost is $12 per unit, and the total fixed cost is $6,000. What is the break-even point in units? a. 640 units b. 1,210 units c. 1,700 units d. 1,500 units e. 1,360 units

1500

Which of the following is a period expense? a. Factory insurance b. CEO salary c. Direct labor d. Factory maintenance e. All of these.

CEO salary

The lease cost of office computers is a _____ for an accounting firm. a. committed fixed cost b. discretionary fixed cost c. semi-variable cost d. variable cost

committed fixed cost

A(n) ____ ratio measures the proportion of an activity consumed by a product. a. consumption b. quality c. production d. usage e. efficiency

consumption

Using only unit-based activity drivers to assign nonunit-related overhead costs can cause a. product diversity. b. distorted product costs. c. efficiency. d. activity sharing. e. None of these choices are correct.

distorted product costs

One way to improve efficiency is to produce higher activity output with higher cost. a. True b. False

false

A manufacturer normally has a.one inventory account. b.three inventory accounts. c.four inventory accounts. d.None of these choices are correct.

three inventory accounts

Interviews and surveys are used to identify a. control costs. b. cycle time. c. activities. d. velocity. e. costs.

activities

the identification and elimination of activities that fail to add value refers to a. activity reduction b. activity elimination c. internal failures d. external failures

activity elimination

The process of decreasing the time and resources required by an activity is known as a. activity output measure. b. activity analysis. c. activity attributes. d. activity reduction.

activity reduction.

Increasing the efficiency of necessary activities by using economies of scale is known as a. activity inputs. b. control activities. c. cycle time. d. activity sharing.

activity sharing

A costing system that first assigns costs to activities and then to products is a. nonunit-level costing. b. activity-based management. c. activity-based costing. d. volume based costing. e. job-order costing.

activity-based costing

Which of the following would probably be a discretionary fixed cost for a law firm? a. cost of legal forms b. advertising c. salary of receptionist d. depreciation on furniture and equipment

advertising

Which of the following is an example of a period cost? a. general accounting b. research and development c. selling and marketing d. All of these choices are correct.

all of these choices are correct.

Company had a gross margin fro the month of February totaling $46,200. they sold 5,500 units during the month at a sales price of $22 per unit. What was the total amount of goods sold for the month? a.$100,000 b. $74,800 c. $42,000 d. none of these choices are correct

74800

Assume the following information for a product line: Sales: $700,000 Variable expenses: 185,000 Direct fixed expenses: 115,000 Variable selling and administrative expenses: 70,000 Direct fixed selling and admin. expenses: 90,000 What is the segment margin of the product line? a. $200,000 b. $240,000 c. $350,000 d. $325,000

$240,000

Elegance Bath Products, Inc. (EBP) makes a variety of ceramic sinks and tubs. EBP has just developed a line of sinks and tubs made from a mixture of glass and ceramic. The sinks sell for $150 each and have variable costs of $80. The tubs sell for $600 and have variable costs of $450. The glass and ceramic sinks and tubs require the use of specialized molding equipment. The specialized molding equipment has 4,050 hours of capacity per year. A sink uses an average of 2 hours of specialized molding equipment time; a tub uses an average of 5 hours of specialized molding equipment time. What is the contribution margin per hour of specialized molding time for tubs? a. $68.33 b. $200 c. $35 d. $30 e. $70

$30

Sabor Inc. is a medical testing laboratory that performs several tests and analyses for hospitals in the area. Four of the tests that they perform require the use of a specialized machine that can supply 14,000 hours per year. Information on the four lab tests follows: Test A Test B Test C Test D Charging rate $65 $51 $48 $32 Variable cost $25 $18 $13 $8 Machine hours 3 2 1 0.5 What is the contribution margin per hour of machine time for Test C? a. $24 b. $35 c. $16 d. $13 e. $48

$35

Foster Company makes power tools. The budgeted sales are $420,000, budgeted variable costs are $147,000, and budgeted fixed costs are $227,500. What is the break-even point in sales dollars? a. $420,000 b. $350,000 c. $650,000 d. $780,000 e. $567,000

$350000

Bergamit Company manufactures veterinary products. One joint process involves refining a chemical (dactylyte) into two chemicals − dac and tyl. One batch of 10,000 gallons of dactylyte can be converted to 4,000 gallons of dac and 6,000 gallons of tyl at a total joint processing cost of $15,000. At the split-off point, dac can be sold for $5 per gallon and tyl can be sold for $7 per gallon. Bergamit has just learned of a new process to convert dac into prodac. The new process costs $5,000 and yields 2,500 gallons of prodac for every 3,000 gallons of dac. Prodac sells for $6 per gallon. What is Bergamit's profit from refining one batch of dactylyte if both dac and tyl are sold at the split-off point? a. $47,000 b. $25,000 c. $36,000 d. $17,000 e. $52,000

$47,000

Raffles Company routinely bids on construction jobs. Raffles first determines the budgeted product cost of the job and then applies a markup of 50%. If a bid of $15,000 is submitted for a new job, which of the following is true? a. $5,000 includes fixed overhead, selling and administrative expense, and profit. b. $5,000 is pure profit. c. $5,000 includes selling and administrative expense, and profit. d. All costs pertaining to the job total $15,000. e. Budgeted product cost is $15,000.

$5,000 includes selling and administrative expense, and profit

A company provided the following data: Sales $600,000 Variable costs 380,000 Fixed costs 150,000 Expected production and sales in units 45,000 units How much sales in dollars is necessary to generate a profit of $40,000? (Note: Round contribution margin ratio and sales in dollars to two decimal places.) a. $513,513.51 b. $150,000.50 c. $214,286.62 d. $528,000.50 e. $100,000.00

$513,513.51

The following information relates to a product produced by Creamer Company: Direct materials $24 Direct labor 15 Variable overhead 30 Fixed overhead 18 Unit cost $87 Fixed selling costs are $500,000 per year, and variable selling costs are $12 per unit sold. Although production capacity is 600,000 units per year, the company expects to produce only 400,000 units next year. The product normally sells for $120 each. A customer has offered to buy 60,000 units for $90 each. If the firm produces the special order, the effect on income would be a a. $360,000 increase. b. $540,000 decrease. c. $360,000 decrease. d. $540,000 increase.

$540,000 increase.

Paney Company makes calendars. Information on cost per unit is as follows: Direct materials $1.50 Direct labor 1.20 Variable overhead 0.90 Variable marketing expense 0.40 Fixed marketing expense totaled $13,000 and fixed administrative expense totaled $35,000. The price per calendar is $10. What is the contribution margin per unit? a. $6.30 b. $6.40 c. $5.00 d. $5.40 e. $6.00

$6

Standlar Company makes wireless speakers. The standard model price is $360 and variable expenses are $210. The deluxe model price is $500 and variable expenses are $300. The superior model price is $1,600 and variable expense per unit is $600. Total fixed expenses are $300,000. Generally, Standlar sells 8 standard models and 4 deluxe models for every superior model sold. What is the overall sales revenue at break-even? a. $648,000 b. $550,000 c. $778,800 d. $387,200 e. $480,000

$648,000

Lavandyr Company has two divisions with the following segment margins for the current year: Northern, $300,000 and Southern, $500,000. Common expenses of the company are $75,000. What is Lavandyr Company's income? a. $360,000 b. $215,000 c. $725,000 d. $420,000

$725,000

Hill & Scott Company sells a product for $20. Variable costs are $15 per unit, and total fixed costs are $7,000. How many units must be sold by Hill & Scott to earn a profit of $1,000? a. 62 units b. 1,600 units c. 1,040 units d. 247 units e. 1,400 units

1,600 units

Connor Company produces speaker systems for cars. Estimated sales (in units) in January are 40,000; in February 37,000; and in March 34,000. Each unit is priced at $60. Connor wants to have 35% of the following month's sales in ending inventory. That requirement was met on January 1. Each speaker system requires 3 boxes and 15 yards of wire. Boxes cost $4 each and wire is $0.60 per yard. Connor wants to have 20% of the following month's production needs in ending raw materials inventory. On January 1, Connor had 24,000 boxes and 100,000 yards of wire in inventory. How many boxes does Connor expect to purchase in January? a. 114,420 b. 214,550 c. 148,500 d. 138,420 e. 159,650

114,420

Kenner Company produces two products: SR200 and TX500. Budgeted sales for four months are as follows: SR200 TX500 May 8,000 20,000 June 13,000 32,000 July 11,000 39,000 August 18,000 46,000 Kenner's ending inventory policy is that SR200 should have 15% of next month's sales in ending inventory and TX500 should have 40% of next month's sales in ending inventory. On May 1, there were 1,200 units of SR200 and 9,000 units of TX500. TX500 requires 6 units of component A. (SR200 does not use component A.) There were 30,000 units of component A in inventory on May 1. Kenner wants to have 20% of the following month's production needs in inventory for Component A. What is the budgeted amount of component A to be purchased in May? a. 66,600 b. 41,760 c. 164,600 d. 154,560 e. 142,800

154,560

Taylor & Edwards Inc. Manufactures television sets. last month, direct materials costing $550,000 were put into production. direct labor of $880,000 was incurred, manufacturing overhead equaled $495,000, and selling and admin costs totaled $396,000. The company manufactured 8,400 television sets during the month. Assume there were no beginning or ending work in process balances. What was the per-unit conversion cost? a. $163.69 b. $100.15 c. $162.52 d. $218.75

163.69

Dartmouth Company produces a single product with a price of $12, variable cost per unit of $2, and total fixed cost of $8,300. The variable cost ratio and the contribution margin ratio for Dartmouth, rounded to the nearest whole number, are a. 17% and 17%, respectively. b. 83% and 17%, respectively. c. 83% and 83%, respectively. d. 17% and 83%, respectively. e. The contribution margin ratio cannot be determined from the information given.

17% and 83%, respectively

A company provided the following data: Selling price per unit $60 Variable cost per unit 40 Total fixed costs 400,000 What is the break-even point in units? a. 20,000 b. 6,667 c. 10,000 d. 12,000 e. 13,333

20,000

Wright & Boyle Company budgeted the following production in units for the second quarter of the year: April 50,000 May 43,000 June 47,000 Each unit requires five pounds of raw material. Wright & Boyle's policy is to have 20% of the following month's production needs for materials in inventory. This policy was met in March. Raw materials purchases budgeted for May in pounds equal: a. 171,600 pounds. b. 219,000 pounds. c. 45,600 pounds. d. 202,400 pounds. e. 225,600 pounds.

219,000 pounds

A company provided the following data: Selling price per unit $60 Variable cost per unit 40 Total fixed costs 400,000 How many units must be sold to earn a profit of $40,000? a. 23,333 b. 22,000 c. 8,500 d. 20,000 e. 2,000

22,000

Rocha & Noel Company makes and sells dolls. The price is $15 and the variable expense per unit is $10. What is the contribution margin ratio? (Note: Round answer to two decimal places.) a. 55.67% b. 33.33% c. 37.45% d. 60.27% e. 62.55%

33.33%

Thompson Company makes and sells power tools. The budgeted sales are $450,000, the budgeted variable costs are $150,000, and the budgeted fixed cost is $230,000. What is the budgeted variable cost ratio? (Note: Round answer to two decimal places.) a. 33.33% b. 19.23% c. 54.66% d. 89.50% e. 50.50%

33.33%

Yerke Company makes jungle gyms and tree houses for children. For jungle gyms, the price is $120 and variable expenses are $90 per unit. For tree houses, the price is $200 and variable expenses are $100. Total fixed expenses are $253,750. Last year, Yerke sold 12,000 gyms and 4,000 tree houses. Now suppose that Yerke expects tree house demand to increase from 4,000 to 8,000 units. What is the new (combined, overall or package) contribution margin ratio (rounded to two decimal places)? a. 40% b. 62% c. 60% d. 50% e. 38%

38%

Paney Company makes calendars. Information on cost per unit is as follows: Direct materials $1.50 Direct labor 1.20 Variable overhead 0.90 Variable marketing expense 0.40 Fixed marketing expense totaled $13,000 and fixed administrative expense totaled $35,000. The price per calendar is $10. What is the variable expense ratio? a. 40% b. 46% c. 50% d. 60% e. 36%

40%

Forward Company makes and sells power tools. The budgeted sales are $480,000, budgeted variable costs are $175,000, and budgeted fixed costs are $260,000. What is the budgeted contribution margin ratio? (Note: Round answer to two decimal places.) a. 89.50% b. 35.64% c. 50.20% d. 54.45% e. 63.54%

63.54%

Elite Company had originally expected to earn operating income of $140,000 in the coming year. Elite's degree of operating leverage is 2.6. Recently, Elite revised its plans and now expects to increase sales by 25% next year. What is the percent change in operating income expected by Elite in the coming year? a. 20% b. 65% c. 8% d. 54% e. 30%

65%

Discretionary activities are necessary to comply with legal mandates. a. True b. False

False

Which of the following is not true about job-order costing? a. It is used in firms that produce homogeneous products. b. The key document for accumulating manufacturing costs is the job-order cost sheet. c. The cost of each job is accumulated on the job-order cost sheet. d. All of these choices are correct. e. None of these choices are correct.

It is used in firms that produce homogeneous products.

Which of the following statements is true of the sequential method of allocation? a. The sequential method is considered more accurate than the direct method. b. In the sequential method, once a support department's costs are allocated, it receives a subsequent allocation from another support department. c. In the sequential method, no cost from one support department is given to another support department. d. The sequential method assigns support department costs only to the producing departments. e. The sequential method recognizes all interactions among the support departments.

The sequential method is considered more accurate than the direct method.

An activity-based costing system first assigns costs to activities and then to cost objects. a. True b. False

True

When a job is completed but not sold, the accounts affected are a. Raw Materials and Work-in-Process. b. Finished Goods and Overhead Control. c. Work-in-Process and Finished Goods. d. Work-in-Process and Cost of Goods Sold. e. Finished Goods and Cost of Goods Sold.

Work-in-Process and Finished Goods

Kerrigan Lumber Yard receives 12,000 large trees each year that they process into rough logs. Currently, Kerrigan sells the rough logs for $75 each. Kerrigan is considering processing the logs further into refined lumber. Each log can be processed into 200 feet of refined lumber at an additional cost of $0.40 per foot. The refined lumber can be sold for $0.95 per foot. Should Kerrigan process the rough logs into refined lumber? a. No, income will decrease by $110 per log. b. Yes, income will increase by $75 per log. c. Yes, income will increase by $110 per log. d. Yes, income will increase by $35 per log. e. No, income will decrease by $35 per log.

Yes, income will increase by $35 per log

Information about three joint products follows: X Y Z Anticipated production 12,000 lbs. 8,000 lbs. 7,000 lbs. Selling price/lb. at split-off $16 $26 $48 Additional processing costs/lb. after split-off (all variable) $8 $20 $20 Selling price/lb. after further processing $20 $40 $70 The cost of the joint process is $140,000. Which of the joint products should be processed further? a. Z. b. X. c. Y. d. Both X and Y.

Z

A source document that would not be used to help decide the cost of a job when using normal costing is (are) a. a material requisition form and a time ticket for direct labor. b. a material requisition form. c. a time ticket for indirect labor. d. a time ticket for direct labor. e. All items listed are helpful to decide the cost of a job.

a time ticket for indirect labor.

Information about three joint products follows: A B C Anticipated production 5,000 lbs. 1,000 lbs. 2,000 lbs. Selling price/lb. at split-off $10 $30 $16 Additional processing costs/lb. after split-off (all variable) $6 $12 $24 Selling price/lb. after further processing $20 $40 $50 The cost of the joint process is $60,000. Which of the joint products should be sold at split-off? a. A. b. B. c. C. d. Both A and B.

b

Which of the following is not an example of a direct materials cost? a. nails used to manufacture a desk b. tires on a bicycle c. shelves on a bookcase d. engine in a car

nails used to manufacture a desk

The method of least squares was used to develop a cost equation to predict the cost of monthly equipment maintenance. The following computer output was received: Intercept 32,00 Slope 25 What is the independent variable of the cost formula for equipment maintenance? a. the fixed cost b. the total cost c. number of machine hours d. the variable rate

number of machine hours