ACCT 202 Test #3

4) which of the following accounts would NOT appear on a budgeted income statement? A) Inc Tax Expense B) A/R C) Sales Rev D) Depr. Exp E) All of the Above

B) A/R

10) The usual starting point for preparing a master budget is forecasting or estimating. A) Expenditures. B) Sales. C) Production. D) Income. E) Cash payments.

B) Sales

3) The CMPU is expressed as a percentage of the product's selling price. A) Volume Variance B) Margin of Safety C) Contribution Margin Ratio D) BEP E) Rate of Return on Sales

C) Contribution Margin Ratio

7) what are 3 advantages of ABC Costing over Traditional volume based allocation methods? A) Easy to use, more accurate product costing, and more effective control B) Fewer allocation bases, easy to use, and direct correlation to production volume C) More accurate product costing, more effective cost control, and better focus on relevant factors of decision making D) More accurate product costing, fewer cost objects, and a direct correlation to production volume E) More accurate product costing, easy to use, less costly to implement

C) More accurate product costing, more effective cost control, and better focus on relevant factors of decision making

6) DM Util. Exp Rent Exp 1000 units of output total: 5000 1000 4000 cost/unit: 5 1 4 5000 units of output total: 25000 3750 4000 cost/unit: 5 0.75 0.8 Based on the Info: A) Both DM and Rent Exp are VC B) Util Exp is a mixed cost and Rent Exp is a VC C) Util Exp is a mixed cost and Rent Exp is a FC D) DM is a FC and Util Exp is a Mixed Cost E) Both DM and Util Exp are mixed costs

C) Util Exp is a mixed cost and Rent Exp is a FC

5) In the cost equation TC = F +VX, X is best described as the: A) Costs that do not vary with changes in the activity level B) Costs that do vary with changes in the activity level C) Total cost estimate at a particular activity level D) Activity level used to estimate the total cost

D) Activity level used to estimate the total cost

9) The basic difference between a master budget and a flexible budget is that a: A) Flexible budget considers only variable costs but a master budget considers all costs B) Flexible budget allows management latitude in meeting goals whereas a master budget is based upon a fixed standard C) Master budget is for an entire production facility but a flexible budget is applicable to single departments only D) Master budget is based on one specific level of production and a flexible budget can be prepared for any production level within a relevant range

D) Master budget is based on one specific level of production and a flexible budget can be prepared for any production level within a relevant range

8) Which of the following statements about budgeting is false? A) Budgeting is an aid to planning and control B) Budgets help coordinate the activities of the entire organization C) Budgeting forces the manager to think ahead and formulize future objectives D) The master budget should be only prepared by top management

D) The master budget should be only prepared by top management

2) Which of the following must be prepared before the DL Budget? A) Budgeted Income Statement B) Merchandise Purchases Budget C) Capital expenditures budget D) Selling Expense budget E) Production Budget

E) Production Budget

Aztec Industries produces bread which goes through two operations, mixing and baking, before it is ready to be packaged. Next year's expected costs and activities are shown below. Direct labor hours Machine hours Overhead costs Mixing 300,000DLH 800,000MH $ 600.000 Baking 70.000DLH 800,000MH $ 400,000 12. Compute Aztec's departmental overhead rate for the mixing department based on direct labor hours. A) $2.00 per DLH. B) $5.00 per DLH. C) $0.75 per DLH. D) $0.50 per DLH. E) $2.70 per DLH.

A) $2.00 per DLH

1) Which of the following statements is true about ABC Costing rates? A) The premise of ABC is that activities are what cause costs to be incurred B) ABC is another way to refer to a plant with 2 departments C) There is 1 basic stage to ABC. D) ABC is simpler and less expensive to implement than other traditional methods of allocating OH Costs.

A) The premise of ABC is that activities are what cause costs to be incurred

11) K Company estimates that overhead costs for the next year will be $2,900,000 for indirect labor and $700,000 for factory utilities. The company uses direct labor hours as its overhead allocation base. If 75,000 direct labor hours are planned for this next year, how much overhead would be assigned to a product requiring 4 direct labor hours? A)$46.25 B) $36.25 C) $185.00 D) $192.00 E) None of the choices

A)$46.25

13-15) DM 10 DL 9 Ind Mats 3 Fix OH 6 VOH 2 Fix sell and admin exp 8 V sales comm 14 13. If 21,000 units are produced, what are total variable costs? A) $336,000 B) $441,000 C) $735,000 D) $399,000 E) $294,000 14. If 19,000 units are produced, what are the total manufacturing overhead costs incurred? A) $170,000 B) $132,000 C) $152,000 D) $114,000 E) $38,000 15. If 19,000 are produced, what are the total fixed costs? A) $266,000 B) $132,000 C) $305,000 D) $308,000 E) $114,000

13) C) $735,000 14) A) $170,000 15) D) $308,000