1) a plan that states the units or costs of merchandise to be purchased by a retailer or
wholesaler during the budget period is called a:
a.production budget
b.merchandise purchases budget
c.accounts payable budget
d.cash payments budget
e.cost of goods sold budget
2) one of the behavioral problems with relevant cost analysis is the overemphasis on:
a.short-term goals
b.unit fixed costs
c.opportunity costs
d.long-term strategic goals
e.goal congruency issues
3) which one of the following methods of allocating joint costs allocates joint costs to
joint products on the basis of estimated sales values at the split-off point?
a.net realizable value method
b.physical measure method
c.average cost method
d.net sales value method
e.sales value at split-off method
4) revenue methods of by-product cost allocation are justified on financial accounting
concepts of:
a.revenue realization and materiality
b.revenue realization, materiality, and cost-benefit
c.materiality and cost-benefit
d.materiality and stable dollar
e.cost-benefit and stable dollar
5) the learning curve in cost estimation is a good example of:
a.non-linear cost behavior
b.machine-intensive production
c.simple regression
d.a random variable
e.efficient labor
6) catlett company manufactures products to customer specifications. a job costing
system is used to accumulate production costs. factory overhead cost was applied at
120% of direct labor cost. selected data concerning operations of the company are
presented below.
required:
prepare a schedule of cost of goods manufactured and sold.
7) burmer co. has accumulated data to use in preparing its annual profit plan for the
upcoming year. the cost behavior pattern of the maintenance costs must be determined.
data regarding the machine hours and maintenance costs for the last year and the results
of the regression analysis are as follows:
a staff assistant has run regression analyses on the data and obtained the following
output using excel:
regression analysis
y (dependent) variable: maintenance cost
x (independent) variable: maintenance hours
the lower95% and upper95% shown in the output suggests that:
a.we can be 95% confident that the precision of the regression equation will be within
the ranges specified
b.we can be 95% confident that the statistical reliability of the regression equation will
be within the ranges specified
c.we can be 95% confident that the coefficients of the dependent variable will be within
the ranges specified
d.we can be 95% confident that the coefficients of the independent variables will be
within the ranges specified
e.we can be 95% confident that the regression equation will be within the ranges
specified
8) talamoto co. manufactures a single product that goes through two processes mixing
and cooking. the following data pertains to the mixing department for september.
material p is added at the beginning of work in the mixing department. material q is also
added in the mixing department, but not until units of product are forty percent
completed with regard to conversion. conversion costs are incurred uniformly during
the process.
cost per equivalent unit for conversion under the weighted-average method is calculated
to be:
a.$5.10
b.$2.60
c.$2.50
d.$2.30
e.$5.40
9) the high-low method:
a.always selects the highest and lowest data points
b.chooses the data points that are likely to produce a line that is representative of the
data
c.chooses the highest and lowest data points for the dependent variable only
d.chooses the highest and lowest data points for the independent variable only
10) which of the following industries is often suitable for applying operation costing?
a.electronic equipment
b.healthcare
c.legal services
d.universities
11) the practice of managers knowingly including a higher amount of expenditures (or
lower amount of revenue) in the budget than they actually believe will occur is called:
a.goal congruency
b.resource capacity planning
c.participative budgeting
d.budgetary slack
e.kaizen budgeting
12) which of the following formulas best reflects target costing?
a.target cost = firm-determined price less desired profit
b.target cost = market-determined price less desired profit
c.target cost = firm-determined price less desired revenue
d.target cost = market-determined price less desired revenue
e.target cost = firm-determined price less market-determined price
13) which of the following best describes the process of sales forecasting?
a.multiple sales forecasting tools are available
b.trend analysis cannot be used for sales forecasting
c.econometric models cannot be used for sales forecasting because of their inherent
complexity
d.sales forecasting works best with a simple visual plotting of past data on a graph
e.generally speaking, the level of unfilled back order and credit policies of the company
in question can be ignored since these represent competitive responses
14) which one of the following methods of allocating joint costs uses a measure of
weight, size or number of units to allocate joint costs to joint products?
a.net realizable value method
b.physical unit method
c.product measure method
d.cost measure method
e.sales value at split-off method
15) armer company is accumulating data to use in preparing its annual profit plan for
the coming year. the cost behavior pattern of the maintenance costs must be determined.
the accounting staff has suggested the use of linear regression to derive an equation for
maintenance hours and costs. data regarding the maintenance hours and costs for the
last year and the results of the regression analysis follow:
at 400 hours of activity, armer management can be approximately two-thirds confident
that the maintenance costs will be in the range of
a.$3,550.50 to $3,649.53
b.$3,551.37 to $3,648.51
c.$3,586.18 to $3,613.93
d.$3,565.54 to $3,634.48
e.none of the above
16) which of the following is a benefit of activity-based costing?
a.reduced overhead costs
b.more accurate measures of production volume
c.facilitate better product pricing decisions
d.having fewer cost drivers than volume-based costing systems
e.more streamlined manufacturing processes
17) matrix inc. calculates cost for an equivalent unit of production using both the
weighted-average and the fifo methods.
cost per equivalent unit for materials under the weighted-average method is calculated
to be:
a.$2.00
b.$2.40
c.$3.00
d.$3.10
e.$3.20