1) committed or ‘sunk” costs are generally:
a.not fixed
b.small in amount
c.the result of prior bad decisions
d.those that have been incurred in the past
e.recoverable in trade
2) the long term care plus company has two service departments actuarial and premium
rating, and two production departments marketing and sales. the distribution of each
service department’s efforts to the other departments is shown below:
the direct operating costs of the departments (including both variable and fixed costs)
were as follows:
the total cost accumulated in the sales department using the reciprocal method is
(calculate all ratios and percentages to 4 decimal places, for example 33.3333%, and
round all dollar amounts to the nearest whole dollar):
a.$102,222
b.$122,402
c.$127,778
d.$142,471
e.$150,050
3) the master budget for a given accounting period has all the following except:
a.it consists of a series of operating and financial budgets
b.it is considered the “grand plan of action” for the upcoming period
c.it culminates in a set of pro forma financial statements
d.it is considered an important planning document for many organizations
e.it is based on the actual level of sales activity for the period
4) jit (just in time) methods are designed primarily to:
a.reduce costs
b.reduce inventory levels
c.improve product design
d.improve the accuracy of product costs
5) wings co. budgeted $555,600 manufacturing direct wages, 2,315 direct labor hours,
and had the following manufacturing overhead:
using abc, overhead cost assigned to job #971 for machine setup is:
a.$2,300
b.$990
c.$6,500
d.$690
e.$1,020
6) the merchant manufacturing company has two service departments purchasing and
maintenance, and two production departments fabrication and assembly. the distribution
of each service department’s efforts to the other departments is shown below:
the direct operating costs of the departments (including both variable and fixed costs)
were as follows:
the total cost accumulated in the fabrication department using the step method is
(assume the purchasing department goes first; calculate all ratios and percentages to 4
decimal places, for example 33.3333%, and round all dollar amounts to the nearest
whole dollar):
a.$104,500
b.$109,950
c.$124,050
d.$130,750
e.$136,500
7) a “participative” budget is a(n):
a.good two-way communication device
b.relatively inexpensive and efficient approach to budget preparation
c.”top down” approach
d.”zero-based” approach
e.alternative budgeting approach to traditional budgeting
8) when a decision is made in an organization, it is selected from a group of alternative
courses of action. the loss associated with choosing the alternative that does not
maximize the benefit is the:
a.net realizable value
b.expected value
c.opportunity cost
d.incremental cost
e.outlay cost
9) regression analysis is better than the high-low method of cost estimation because
regression analysis:
a.is mathematical
b.can provide greater precision and reliability
c.fits data into a mathematical equation
d.takes less time
e.is a statistical method
10) which of the following means that two or more independent variables are highly
correlated with each other?
a.correlation
b.t-value
c.r-squared
d.standard error
e.multicollinearity
11) the cash budget does not include:
a.cash inflows from the collection of receivables
b.cash outflows for purchases of direct materials
c.cash outflows for acquisition of fixed (long-term) assets
d.all sales revenues
e.interest paid and interest received
12) conversion costs are the sum of direct labor and:
a.unit costs
b.factory overhead costs
c.process costs
d.labor costs
13) costs at the unit-level of activity should be allocated to products using cost drivers
that are:
a.customer-oriented
b.design-related
c.volume-related
d.product-related
e.order-related
14) which of the following is an example of a high-value-added activity?
a.shipping the customer’s order
b.scheduling the customer order for production
c.inspecting goods to ensure the right quantity is being shipped
d.e-mailing a customer to assure that a complaint will be resolved expeditiously
e.more than one of the above activities is high-value-added
15) which one of the following is most descriptive of a strategic analysis conducted as
part of a decision analysis?
a.quantitative
b.customer focus
c.short-term orientation
d.individual product focus
e.differential costing
16) swot analysis, a valuable analysis tool, stands for:
a.strengths – workability – opportunities – threats
b.strategies – weaknesses – opportunities – threats
c.strengths – weaknesses – observations – threats
d.strengths – weaknesses – opportunities – threats
e.strategies – weaknesses – observations – threats
17) the cause and effect relationships among critical success factors are best captured
in:
a.the balanced scorecard
b.business intelligence
c.the value chain
d.the strategy map
e.swot analysis
18) universal automotive group is a maker of engines for high performance cars and
uses a process costing system. the following information pertains to the final
department of manufacturing for universal’s most popular engine, the “atomic 8”.
universal automotive group calculates separate costs of spoilage by computing both
normal and abnormal spoiled units. normal spoilage costs are reallocated to good units
and abnormal spoilage costs are charged as a loss. the units of the atomic 8 that are
spoiled are the result of defects not discovered before inspection of finished units. using
the weighted-average method, answer the following question:
what are the total conversion costs transferred to finished goods?
a.$801,810
b.$855,720
c.$921,340
d.$910,000
19) with the increase in competition over the past several years and the need for
additional accuracy in product costing, traditional cost accounting systems have become
less common in product costing because
a.they use volume-based cost drivers
b.they use structural cost drivers
c.they use executional cost drivers
d.they use indirect cost drivers
e.none of the above