1) The Fortise Corporation manufactures two types of vacuum cleaners, the Victor for
commercial building use and the House-Mate for residences. Budgeted and actual
operating data for the year 2015 were as follows:
What is the contribution margin for the flexible budget?
A) $1,250,000
B) $4,200,000
C) $5,250,000
D) $5,850,000
2) Osium Company made the following journal entry:
Which of the following statements is true of the given journal entry?
A) Osium overallocated variable manufacturing overhead.
B) A $10,000 unfavorable spending variance was recorded.
C) Work-in-Process is currently overstated.
D) A $60,000 unfavorable efficiency variance was recorded.
3) Tiger Pride produces two product lines: T-shirts and Sweatshirts. Product
profitability is analyzed as follows:
Under the revised ABC system, overhead costs per unit for the Sweatshirts will be
________.
A) $1.39 per unit
B) $1.60 per unit
C) $2.19 per unit
D) $2.47 per unit
4) Assuming previous year’s production capacity was inadequate to produce current
year output, the cost effect of growth for fixed costs is calculated by multiplying the
difference between ________ by price per unit of capacity in the previous year.
A) capacity units required to produce previous year output in current year and the
current year capacity units
B) capacity units required to produce current year output in previous year and the
current year capacity units
C) capacity units required to produce previous year output in current year and the
previous year capacity units
D) capacity units required to produce current year output in previous year and the
previous year capacity units
5) Gregory Company has identified three cost pools to allocate overhead costs. The
following estimates are provided for the coming year:
The accounting records show the Mossman Job consumed the following resources:
Under activity-based costing, what is the amount of machine maintenance costs
allocated to the Mossman Job?
A) $206.00
B) $206.25
C) $206.75
D) $206.50
6) Managers need to understand customers because ________.
A) they are the key in influencing the board decisions and help in formulating policies
with the suppliers
B) they guide the managers to formulate pricing policies
C) they are more knowledgeable as they easy access to price and other information
online
D) they influence the costing decisions of the product
7) ABC systems use the concept of a ________ to identify the cost drivers that best
demonstrate the cause-and-effect relationship between each activity and the costs in the
related cost pool.
A) cost hierarchy
B) customer -cost analysis
C) cost allocation
D) variance analysis
8) Which of the following costs is a relevant inventory carrying cost under EOQ
decision model?
A) The lost contribution margin on future sales forgone as a result of customer
dissatisfaction in product quality.
B) The lost contribution margin on sales forgone because of the shortage of inventory.
C) The costs of storage space owned that cannot be used for other profitable purposes
when inventories decrease.
D) The costs of receiving and inspecting inventory and moving the inventories to the
warehouses.
9) The Fortise Corporation manufactures two types of vacuum cleaners, the Victor for
commercial building use and the House-Mate for residences. Budgeted and actual
operating data for the year 2015 were as follows:
What is the total sales-quantity variance in terms of the contribution margin?
A) $200,000 unfavorable
B) $540,000 favorable
C) $960,000 unfavorable
D) $1,560,000 favorable
10) A controllable cost is any cost that can be ________ by a responsibility center
manager for a period of time.
A) controlled
B) influenced
C) segregated
D) excluded