Acct Exam 2

Jenny was reviewing the water bill for her doggy day spa and determined that her highest bill, $3,000, occurred in July when she washed 2,000 dogs and her lowest bill, $2,000, occurred in November when she washed 1,000 dogs. What was the variable rate for Jenny's water bill? A. $2.00 B. $1.00 C. $0.67 D. $0.50

$1.00

The long distance company that you use charges $5.00 per month and $0.10 per minute per call. If your current bill is $25.00, how many minutes did you use? A. 100 minutes B. 150 minutes C. 200 minutes D. 250 minutes

200 minutes

XYZ has 5,000 gallons of paint in WIP inventory, with all materials already added. What are equivalent units in ending WIP inventory for materials if the paint is 75% through the process? A. 0 B. 1,250 C. 3,750 D. 5,000

5,000

During a period, 50,000 units were completed and 3,600 units were in ending WIP inventory. Ending WIP was 75% complete for direct materials and 25% complete for conversion costs. What are the equivalent units for direct materials? A. 45,900 B. 47,700 C. 50,900 D. 52,700

52,700

What is the minimum r^2 to be accepted in a business setting?

80%

Which of the following statements does not describe an ABC system? A. ABC systems can create more accurate product costs. B. ABC systems may only be used by service companies. C. ABC systems are more complex and costly than traditional costing systems. D. ABC systems are used in both manufacturing and nonmanufacturing companies.

ABC systems may only be used by service companies.

Which of the following can be used in conjunction with activity-based costing? A. Job costing B. Process costing C. Neither A nor B D. Both A and B

Both Job and Process costing

Which of the following is a required step in an ABC system? A. Estimate the total direct costs of each activity. B. Estimate the total quantity of each cost. C. Compute the cost allocation rate for each activity. D. Allocate the costs to the activities.

Compute the cost allocation rate for each activity.

If production increases by 15%, how will total variable costs likely react? A. Increase by 7.5% B. Increase by 15% C. Decrease by 15% D. Remain the same

Increase by 15%

Which of the following statements is true with respect to total variable costs? A. They will remain the same as production levels change within the relevant range. B. They will decrease as production increases within the relevant range. C. They will decrease as production decreases within the relevant range. D. They will increase as production decreases within the relevant range.

They will decrease as production decreases within the relevant range.

Which of the following statements is true with respect to variable costs per unit? A. They will decrease as production increases within the relevant range. B. They will increase as production decreases within the relevant range. C. They will remain the same as production levels change within the relevant range. D. They will decrease as production decreases within the relevant range.

They will remain the same as production levels change within the relevant range.

In the equation: y = a + b(x) what term represents the fixed cost?

a

The __________________system focuses on activities as the fundamental cost objects. It uses the costs of those activities as building blocks for compiling the indirect costs of products and other cost objects. A. activities-based costing B. job costing C. process costing D. product costing

activities-based costing

What is the last step in developing an ABC system? A. Identify the activities B. Allocate the costs to the cost object C. Estimate the total quantity of the cost driver D. Estimate the total indirect costs of each activity

allocate the costs to the cost object

In the equation: y = a + b(x), what term represents the variable cost per unit of activity? (Assume x represents the volume of activity.)

b

Process costing is most likely used in which of the following industries? A. Aircraft B. Chemicals C. Construction D. Printing

chemicals

Direct labor costs plus manufacturing overhead costs equal: A. prime costs. B. operating costs. C. equivalent costs. D. conversion costs.

conversion costs

In a process costing system, the number of WIP inventories: A. equals the number of products produced. B. equals the number of production departments. C. equals the number used in a job cost system. D. cannot the number of parts used in the product

equals the number of production departments

The benefits of using the ABC costing system are higher if the company: A. has high indirect costs. B. produces many different products that use differing amounts of resources. C. produces only one product. D. has high indirect costs and produces many different products that use differing amounts of resources.

has high indirect costs and produces many different products that use differing amounts of resources.

The costing system used by a company producing custom window treatments would be: A. job costing. B. process costing. C. equivalent units costing. D. conversion cost costing.

job costing

Assume no beginning WIP inventory. The ending WIP inventory is 30% complete for materials. The total number of equivalents for materials would be: A. less than the units completed. B. less than the units started. C. equal to the units completed. D. equal to the units started.

less than the units started

The costing system used by a company making computer chips would be: A. job costing. B. process costing. C. equivalent units costing. D. conversion cost costing.

process costing

The product costing system normally used to assign costs to goods that are mass produced is: A. fixed costing. B. job costing. C. LIFO costing. D. process costing.

process costing

ABC costing might lead to: A. cutting back on high-volume products that appear unprofitable. B. expanding low-volume products that appear profitable. C. raising the sale price of high-volume products. D. raising the sale price of low-volume products.

raising the sale price of low-volume products

Which of the following costs is an example of a fixed cost? A. Salary of plant manager B. Sales commissions C. Direct materials D. Delivery costs

salary of a plant manager

What does r^2 represent in a linear regression?

strength of relationship, x explains __% of the change in y

A cost whose total amount changes in direct proportion to a change in volume is a __________ cost. A. fixed B. variable C. mixed D. irrelevant

variable

The costs of adopting ABC may be lower for some companies than for others. This may occur: A. when a company has the accounting and information system expertise to develop the system. B. when a company has the information technology to record and compile cost driver data. C. with either situation A or situation B. D. in none of the above instances.

with either situation A or situation B

In the equation: y = a + b(x), what variable represents the volume of activity? (Assume v represents the variable cost per unit of activity.)

x

In the equation: y = a + b(x) what term represents the total cost?

y