Accounting Exam 2 final review

which of the following methods allocates joint costs based on measures estimated after the final products are fully processed and are ready to be sold

net realizable value method

which of the following statements sis true about the direct method of allocating support department costs to production departments?

the direct method allocates all support department costs directly to production departments thus ignoring the possibility that some support departments may also serve other support departments

contribution margin is

the excess of sales revenue over variable cost

the contribution margin ratio is the

the same as the profit-volume ratio

which of the following describes how support department costs are related to production

they are indirectly related to production

of the actual direct labor hours spent producing a commodity differ from the standard hours, the variance is a ____ variance

time

if fixed costs are $850,000 and variable costs are %60 of sales, the break-even point (dollars) is

$2,125,000

which of the following is the correct formula for the direct labor time variance in a service business?

(actual staff hours - standard staff hours) × standard rate per hour

Connor company has fixed costs of $400,000, the unit selling by price is $25, and the unit variable costs are $15. the break-even sales (unit) if the variable costs are increased by $2 is

30,770 units

which of the following would be classified as a mixed cost for a t shirt manufacturer

maintenance costs with sewing machine company contracted at $2,000 per year plus $0.001 for each machine hour of use

which of the following is an integrated set of operating and financial budgets for a period of time

master budget

when weight factors are used in the weighted average method, they are

multiplied by the actual physical units to arrive at weighted physical units

under the net realizable method of allocating joint costs, which of the following equations is used to compute the value of products processed beyond the split-off point

net realizable value = (final selling price × quantity) - additional processing costs

an unfavorable factory overhead controllable variance may be due to which of the following factors?

unexpected increases in the cost of utilities

for a supervisor of a manufacturing department, which of the following costs is controllable?

direct materials

the production budget is used to prepare which of the following budgets

direct materials purchases, direct labor cost, and factory overhead cost

which of the following terms is commonly used to describe the concept whereby the cost of manufactured products is composed of direct materials cost, direct labor costs, and all factory overhead cost

absorption costing

which of the following represents a favorable cost variance

actual cost < standard cost at actual volumes

actual cost > standard cost at actual volumes which of the following represents an unfavorable cost variance

actual cost > standard cost at actual volumes

understanding how costs behave is useful to management for

all of these choices (analyzing the effects of changes made to the cost structure, predicting profits as sales and production volumes change, estimating costs)

which of the following budgets is directly associated with the production budget

all of these choices (direct materials purchases budget, wales budget, direct labor cost budget)

budgeting involves which of the following activities

all of these choices (establishing specific goals, executing plans to achieve the goals, periodically comparing actual results with the goals)

an unfavorable staff time variance may be the result of

all of these choices (overscheduling staff, insufficient staff training, difficult room cleaning situations)

which of the following would be classified as a fixed cost for a T-shirt manufacturer

all of these choices (salary of the production supervisor, advertising costs of $12,000 per month, straight line depreciation on sewing machines)

contribution margin reporting can be beneficial for analyzing which of the following

all of these choices (sales personnel, products, sales territory)

which of the following activity bases would be the most appropriate for gasoline costs of a delivery service

total miles driven

the budget that summarizes future plans for the acquisition to fixed assets is the ___ budget

capital expenditures

cost behavior refers to the manner in which a cost

changes as the related activity changes

the contribution margin ratio is computed as

contribution margin divided by sales

another name for variable costing is

direct costing

under absorption costing, which of the following costs would be included in finished goods inventory?

direct labor, direct materials, and all factory overhead costs

of the total revenue variance is favorable and the revenue price variance is unfavorable, then the revenue volume variance must

exceed the revenue price variance and be favorable

costs that remain constant in total dollar amount as the level of activity changes are called ____ costs

fixed

which of the following is an example of a cost that stays the same in total as the number of units produced changes

insurance premiums on factory building

which of the following statements is true about joint manufacturing process

joint costs are by definition inseparable

which of the following estimates the number of units to be manufactured to meet budgeted sales and desired inventory levels

production budget

which of the following is the type of work done in production department as opposed to a support department

putting together the final product on an assembly line

which of the following is the most difficult but most accurate of the commonly used methods for allocating support department costs to production departments

reciprocal services method

which of the following is an example of a mixed cost

rental costs of $10,000 per month plus $0.30 per machine hour of use

which of the following begins by estimating the quality of sales

sales budget

the principle of exceptions allows managers to focus on correcting variances between

standard costs and actual costs

a favorable cost variance occurs when

standard costs are more than actual costs

the graph of a variable cost when plotted against its related activity base appears as a

straight line

budgeting affects which of the following management process functions

strategic planning, measurement, evaluation, and control

which of the following methods allocates joint costs based on physical units that are weighted and then multiplied by actual physical units

weighted average method

the process developing budget estimates by requiring managers to estimate sales, production, and other operating data as though operations were being initiated for the first time is referred to as ____ budgeting

zero-based

with the aid of computer software, managers can vary assumptions regarding selling prices, costs, and volume, and can immediately see the effects of each change on the break-even point and profit. this is called

"what if" or sensitivity analysis

costs that can be influenced by management at a specific level of management are called

controllable costs

which of the following are the three commonly used methods for allocating support department costs to production departments

direct method, sequential method, and reciprocal services method

a disadvantage of static budgets is that they

do not allow for possible changes in activity levels