Number of payroll checks
An activity base is used to charge service department expenses. Match the following
activity bases with the appropriate department (a-h).
a. Purchasing
b. Payroll accounting
c. Human resources
d. Maintenance
e. Information systems
f. Marketing
g. President’s Office
h. Transportation
Answer:
The following data relate to direct materials costs for February:
Materials cost per yard: standard, $2.00; actual, $2.10
Standard yards per unit: standard, 4.5 yards; actual, 4.75 yards
Units of production: 9,500
Calculate the total direct materials cost variance.
a. $9,262.50 unfavorable
b. $9,262.50 favorable
c. $3,780.00 unfavorable
d. $3,562.50 favorable
Answer:
A lean nonmanufacturing process can be accomplished by consolidating, in one area, all
of the services provided to a customer.
a. True
b. False
Answer:
When a process cost accounting system records the purchase of materials, the Materials
account is credited.
a. True
b. False
Answer:
Widgeon Co. manufactures three products: Bales, Tales, and Wales. The selling prices
are $55, $78, and $32, respectively. The variable costs for each product are $20, $50,
and $15, respectively. Each product must go through the same processing in a machine
that is limited to 2,000 hours per month. Bales take 5 hours to process; Tales, 7 hours;
and Wales 1 hour.
Which product has the highest contribution margin per machine hour?
a. Bales
b. Tales
c. Wales
d. Bales and Tales have the same
Answer:
ABC Corporation has three service departments with the following costs and activity
base:
ABC has three operating divisions, Micro, Macro and Super. Their revenue, cost and
activity information are as follows:
How much service department cost would be allocated to the Macro Division?
a. $405,000
b. $175,000
c. $130,000
d. $305,000
Answer:
Charlotte Co. has budgeted salary increases to factory supervisors totaling 9%. If
selling prices and all other cost relationships are held constant, next year’s break-even
point
a. will decrease by 9%
b. will increase by 9%
c. cannot be determined from the data given
d. will increase at a rate greater than 9%
Answer:
The following data is given for the Zoyza Company:
Overhead is applied on standard labor hours.
The fixed factory overhead volume variance is
a. $73,250 unfavorable
b. $73,250 favorable
c. $59,400 favorable
d. $59,400 unfavorable
Answer:
The expected average rate of return for a proposed investment of $6,000,000 in a fixed
asset, using straight-line depreciation, with a useful life of 20 years, no residual value,
and an expected total net income of $12,000,000 over the 20 years is
a. 20%
b. 10%
c. 40%
d. 5%
Answer:
The adoption of variable costing for managerial decision making is based on the
premise that fixed factory overhead costs are related to productive capacity of the
manufacturing plant and are normally not affected by the number of units produced.
a. True
b. False
Answer:
Fixed factory overhead costs are included as part of the cost of products manufactured
under the absorption costing concept.
a. True
b. False
Answer:
Selected accounts with a credit amount omitted are as follows
Work in Process
Apr. 1 Balance 7,000 Apr. 30 Goods finished X
30 Direct materials 78,400
30 Direct labor 195,000
30 Factory overhead 136,500
Finished Goods
Apr. 1 Balance 42,000
30 Goods finished 387,000
a. $8,100
b. $35,000
c. $29,900
d. $22,900
Answer:
An example of a period cost is
a. advertising expense
b. indirect materials
c. depreciation on factory equipment
d. property taxes on plant facilities
Answer:
Costs that remain constant in total dollar amount as the level of activity changes are
called
a. fixed costs
b. mixed costs
c. product costs
d. variable costs
Answer:
If the volume of sales is $7,000,000 and sales at the break-even point amount to
$4,800,000, the margin of safety is 45.8%.
a. True
b. False
Answer:
The contribution margin ratio is the same as the profit-volume ratio.
a. True
b. False
Answer: