1) which of the following is not a step in the cost estimation process?
a.determine the cost drivers
b.determine the outliers
c.select and employ the estimation method
d.graph the data
2) assume only the specified parameters change in a sensitivity analysis. if the
contribution margin increases by $2 per unit, then operating profits will:
a.also increase by $2 per unit
b.increase by less than $2 per unit
c.decrease by $2 per unit
d.increases, but by an indeterminate amount
3) information pertaining to yekstop corp.’s sales revenue is presented below.
management estimates that 4% of credit sales are eventually uncollectible. of the
collectible credit sales, 65% are likely to be collected in the month of sale and the
remainder in the month following the sale. the company desires to begin each month
with an inventory equal to 75% of the sales projected for the month. all purchases of
inventory are on open account; 30% will be paid in the month of purchase, and the
remainder paid in the month following the month of purchase. the purchase costs are
approximately 60% of the selling prices.
budgeted december cash payments by yekstop corp. for december inventory purchases
are:
a.$67,995
b.$103,500
c.$158,655
d.$241,500
e.$289,440
4) joe’s mart policy is to have 20% of the next month’s sales on hand at the end of the
current month. projected sales for august, september, and october are 25,000 units,
20,000 units, and 30,000 units, respectively. how many units must be purchased in
september?
a.16,000
b.17,000
c.22,000
d.26,000
e.28,000
5) giddings pharmaceutical company is a maker of drugs for high blood pressure and
uses a process costing system. the following information pertains to the final
department of giddings’s blockbuster drug called solcax.
giddings 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 solcax that are spoiled are the result of defects
not discovered before inspection of finished units. materials are added at the beginning
of the process. using the weighted-average method, answer the following question:
what are the total conversion costs transferred to finished goods?
a.$6,750
b.$7,740
c.$8,600
d.$9,460
6) transferred-in costs are costs of work performed:
a.in the current department from last period that are transferred in this period
b.in the preceding department that are transferred into the present department
c.in a prior period that transferred in this period
d.by an outside supplier of materials or labor
7) georgia meadows company uses the high-low method to analyze production costs.
the following information relates to the production data for the first six months of the
year.
how should the cost function be properly stated using the high-low method?
a.y = $1,025 + $1.25h
b.y = $875 + $1.05h
c.y = $325 + $1.25h
d.y = $9,263 + $0.162h
8) sterling glass company uses the high-low method to analyze mixed costs. the
following information relates to the production data for the first six months of the year.
what is the estimated total cost at an operating level of 150 hours?
a.$4,385.00
b.$4,785.20
c.$4,185.65
d.$4,875.00
9) randall company manufactures products to customer specifications. a job costing
system is used to accumulate production costs. factory overhead cost was applied at
125% of direct labor cost. selected data concerning the past year’s operation of the
company are presented below.
the total manufacturing costs for the year are:
a.$850,000
b.$348,000
c.$867,000
d.$835,000
e.$811,000
10) employee morale and social responsibility represent two examples of:
a.qualitative decision factors
b.differential factors
c.opportunity costs
d.sunk cost expenditures
e.relevant costs