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1) A budget serves as much as a control tool as a planning tool because ________.
A) it aids in the coordination and communication among various business functions
B) it helps to evaluate customer needs and feedback
C) it is a benchmark against which actual performance can be compared
D) it helps.to make predictions about the future
2) Manufacturing cycle time is ________.
A) the amount of time it takes from when an order is ready to start on the production
line to when the product or service is delivered to the customer
B) the amount of time it takes to deliver a completed order to a customer plus its
waiting time
C) the amount of time it takes from when a customer places an order for a product or
requests a service to when the product or service is delivered to the customer
D) the amount of time it takes from when an order is ready to start on the production
line to when it becomes a finished good plus its waiting time
3) Cannady produces six products. Under their traditional cost system using one cost
driver, SR6 costs $168.00 per unit. An analysis of the activities and their costs revealed
that three cost drivers would be used under the new ABC system. The new cost of SR6
was determined to be $178.00 per unit.
The total amount of indirect costs assigned to product SR6 using the traditional method
is ________ the total amount assigned using ABC.
A) more than
B) less than
C) identical to
D) None of these answers are correct.
4) Sales of Blistre Autos are 350,000, variable cost is 200,000, fixed cost is 75,000, tax
rate is 20%. Calculate the operating leverage of the company.
A) 1.00 time
B) 1.50 times
C) 2.50 times
D) 2.00 times
5) Which of the following statements is true of strategic analysis of operating income?
A) Management accountants compare budgeted operating performance over two
different periods.
B) Management accountants compare actual and budgeted operating performance over
the same time
periods.
C) Management accountants compare actual operating performance of one year and
budgeted operating performance of another year.
D) Management accountants compare actual operating performance over two different
periods.
6) ________ is the process of distributing indirect costs to products.
A) Cost allocation
B) Job cost recording
C) Cost pooling
D) Cost tracing
7) R&D, production, and customer service are business functions that are all included
as part of ________.
A) the value chain
B) benchmarking
C) customer relationship management
D) the supply chain
8) The following information is for Alex Corp:
What is the operating income, assuming actual sales total 150,000 units, and the sales
mix is two units of Product X and one unit of Product Y?
A) $1,950,000
B) $1,850,000
C) $1,750,000
D) $2,150,000
9) ________ is an example of a total factor productivity measure.
A) The number of units produced per month
B) The number of units produced per machine hour
C) The number of units produced per labor hour
D) The number of units produced per dollar of input cost
10) The effect of spreading fixed manufacturing costs over a shrinking master-budget
capacity utilization amount results in ________.
A) greater utilization of capacity
B) increased unit costs
C) more competitive selling prices
D) greater demand for the product
11) The gross margin for October is:
A) $232,000
B) $260,000
C) $397,500
D) $196,500
12) To discourage unnecessary use of a support department, management might
________.
A) allocate user department costs based upon support department usage
B) allocate support department costs based upon user department usage
C) allocate a fixed amount of support department costs to each and every department
D) allocate a fixed amount of user department costs to each and every department
13) Elton, Inc., expects to sell 6,000 ceramic vases for $20 each. Direct materials costs
are $2, direct manufacturing labor is $10, and manufacturing overhead is $3 per vase.
The following inventory levels apply to 2016:
On the 2016 budgeted income statement, what amount will be reported for cost of
goods sold?
A) $105,000
B) $91,500
C) $90,000
D) $88,500
14) Which of the following is an internal-business-process measure to study the output
during bottleneck situations?
A) manufacturing cycle efficiency for key processes
B) carrying cost of inventories
C) number of employees trained to manage bottlenecks
D) customer-response time
15) Filex Company manufactures pipes and applies manufacturing overhead costs to
production at a budgeted indirect-cost rate of $18 per direct labor-hour. The following
data are obtained from the accounting records for June 2014:
The amount of manufacturing overhead allocated to all jobs during June 2014 totals
________.
A) $93,500
B) $72,000
C) $89,000
D) $65,500
16) Craylon Manufacturing Company produces two products, X and Y. The following
information is presented for both products:
Total fixed costs are $275,000.
Required:
a.Calculate the contribution margin for each product.
b.Calculate breakeven point in units of both X and Y if the sales mix is 3 units of X for
every unit of Y.
c.Calculate breakeven volume in total dollars if the sales mix is 2 units of X for every 3
units of Y.
17) Assuming Comco uses the high-low method of analysis, the fixed cost of
maintenance would be estimated to be:
A) $14,500
B) $5,020
C) $13,000
D) $12,320
18) Breakeven point in units is ________.
A) total costs divided by profit margin per unit
B) contribution margin per unit divided by total cost per unit
C) fixed costs divided by contribution margin per unit
D) the sum of fixed and variable costs divided by contribution margin per unit
19) Write a linear cost function equation for each of the following conditions. Use y for
estimated costs and X for activity of the cost driver.
a.Direct materials cost is $1.70 per pound
b.Total cost is fixed at $8,000 per month regardless of the number of units produced.
c.Auto rental has a fixed fee of $80.00 per day plus $2.00 per mile driven.
d.Machine operating costs include $1,000 of maintenance per month, and $12.00 of
coolant usage costs for each day the machinery is in operation.
20) ________ is based on the level of capacity utilization that satisfies average
customer demand over periods generally longer than one year.
A) Practical capacity
B) Theoretical capacity
C) Master-budget capacity utilization
D) Normal capacity utilization
