1) ABC systems and department costing systems use totally different approaches
towards indirect cost allocation and can never be used together.
2) A performance report compares actual performance to the amount budgeted.
3) Managers cannot use human resource consideration to obtain a reliable estimate of
the denominator level for the budget period as they cannot be quantified.
4) To calculate the value of fixed assets for an overseas branch, the historical rate of
exchange is used for its conversion.
5) Just-in-time costing system is a costing system that omits recording some or all of
the journal entries relating to the stages from purchase of direct materials to the sales of
finished goods.
6) As a discounted cash flow method does not report good operating income results in
the project’s early years, managers are tempted to not use discounted cash flow methods
even though the decisions based on them would be in the best interests of the company
as a whole over the long run.
7) The price of a bundled product is typically more than the sum of the prices of the
individual products sold separately.
8) Management accountants must work well in cross-functional teams and as a business
partner.
9) Strategy describes how an organization matches its own capabilities with the
opportunities in the marketplace to accomplish its overall objectives.
10) In joint costing, the sales value at splitoff method allocates joint costs entirely to
joint products sold during the accounting period on the basis of the relative total sales
value at the splitoff point.
11) Misinterpretation of data can arise when fixed costs are reported on a per unit basis.
12) A master budget is called a static budget because it is developed around a single
planned output level.
13) Simple regression analysis estimates the relationship between the dependent
variable
and one independent variable.
14) A flexible budget is calculated at the end of the budget period.
15) What is the total amount of the costs listed above that are direct costs of the Shoe
Department?
A) $38,000
B) $29,000
C) $70,000
D) $34,000
16) Jupiter Corporation incurred fixed manufacturing costs of $16,000 during 2015.
Other information for 2015 includes:
The budgeted denominator level is 2,000 units.
Units produced total 2,200 units.
Units sold total 1,900 units.
Variable cost per unit is $4.
Beginning inventory is zero.
The fixed manufacturing cost rate is based on the budgeted denominator level.
Under absorption costing, the production-volume variance is ________.
A) $2,400
B) $2,000
C) $1,600
D) 0
17) The capital budgeting method which calculates the expected monetary gain or loss
from a project by discounting all expected future cash inflows and outflows to the
present point in time using the required rate of return is the ________.
A) payback method
B) accrual accounting rate-of-return method
C) sensitivity method
D) net present value method
18) Which of the following is true of variance?
A) Managers should interpret a favorable variance as “good news” or assume it means
their subordinates performed well.
B) A variance within an acceptable range is considered to be an “in-control occurrence”
and calls for no investigation or action by managers.
C) The purchasing manager secured a discount for buying in bulk with fewer purchase
orders which results in unfavorable material price variance.
D) Managers’ performance must be evaluated solely on single variance.
19) Which of the following statements best defines an enterprise resource planning
(ERP) system?
A) a demand-pull system in which each component in a production line is produced
immediately as needed by the next step in the production line as planned by enterprise
resource management
B) a system that comprises a single database that collects data and feeds it into software
applications supporting all of a company’s business activities
C) a planning system that omits recording some of the journal entries relating to the
stages from the purchase of direct materials to the sale of finished goods
D) a system that is made up of work areas with different types of equipment grouped
together to make related products
20)
What is operating income for 2014?
A) $450,000
B) $1,000,000
C) $750,000
D) $700,000
21) Which of the following is one of the methods of allocating support department costs
to operating departments?
A) dual-cost allocation method
B) incremental method
C) step-down method
D) single-rate cost allocation method
22) The sales-volume variance is subdivided into ________.
A) sales-mix variance and static-budget variance
B) sales-mix variance and sales-quantity variance
C) flexible-budget variance and fixed-budget variance
D) market-share variance and static-budget variance
23) Monticello Corp manufactures expensive tables. Its varnishing department is fully
automated and requires substantial inspection to keep the machines operating properly.
An improperly varnished table is very expensive to correct. Inspection hours for the
5,000 tables varnished in September totaled 1,500 hours by 8 employees. Eight quarts
of varnish were used, on average, for each table. The standard amount of varnish per
table is nine quarts. The cost of inspection for September was equal to the budgeted
amount of $40,000.
What is the inspection cost per unit?
A) $30.40
B) $8.00
C) $9.00
D) $4,750
24) Which of the following entries properly records the cost of goods sold for the
month?
A) Finished Goods 1,045,000
Work in Process 1,045,000
B) Cost of Goods Sold 1,045,000
Finished Goods 1,045,000
C) Finished Goods 1,045,000
Cost of Goods Sold 1,045,000
D) Cost of Goods Sold 1,045,000
Work in Process 1,045,000
25) An increase in direct labor cost per unit ________.
A) increases the fixed cost
B) increases profits
C) increases the variable cost
D) increases overhead costs