Deluxe Jewelry Corporation produces quality jewelry items for various retailers. For
the coming year, it has estimated it will consume 500 ounces of gold. Its carrying costs
for a year are $2 per ounce. No safety stock is maintained. If the EOQ is 100 ounces,
what is the cost per order?
A. $40
B. $20
C. $5
D. $25
Brennan Company
The following information is for Brennan Company’s September production:
(Round all answers to the nearest dollar.)
Refer to Brennan Company. What is the material quantity variance?
A. $ 740 F
B. $ 750 F
C. $ 750 U
D. $2,625 U
The accounting function in an organization is expected to support managers in which
of the following functions?
A. yes yes no
B. no yes no
C. no no yes
D. yes yes yes
In relationship to changes in activity, fixed overhead changes
A. yes yes
B. no no
C. no yes
D. yes no
Budgeted sales for Fleetwood Corporation for the first quarter the year are shown
below:
The company has a policy that requires the ending inventory in each period to be 10
percent of the following period’s sales. Assuming that the company follows this policy,
what quantity of production should be scheduled for February?
A. 24,300 units
B. 24,700 units
C. 25,000 units
D. 25,700 units
A company using very tight (high) standards in a standard cost system should expect
that
A. no incentive bonus will be paid.
B. most variances will be unfavorable.
C. employees will be strongly motivated to attain the standards.
D. costs will be controlled better than if lower standards were used.
Bradley Corporation
Bradley Corporation has three production departments A, B, and C. Bradley
Corporation also has two service departments, Administration and Personnel.
Administration costs are allocated based on value of assets employed, and Personnel
costs are allocated based on number of employees. Assume that Administration
provides more service to the other departments than does the Personnel Department.
Refer to Bradley Corporation. Using the direct method, what amount of Personnel costs
is allocated to B (round to the nearest dollar)?
A. $50,000
B. $43,750
C. $26,923
D. $58,333
Awesome Wood Products manufactures two types of wooden bookends: plain and
hand-carved. The following information about the production process is available:
Total factory overhead is $1,200,000. Of this overhead, $500,000 is related to utilities
and the remainder is related to quality control.
a. Determine the total overhead cost assigned to each type of bookend using machine
hours as the allocation base. Calculate the gross profit per unit for each product. b.
Determine the total overhead cost assigned to each type of bookend if overhead is
assigned using allocation bases appropriate to the overhead costs. Calculate the gross
profit per unit of each product.
c. Explain why the unit cost for each model is different between the two methods of
allocation.
Ongoing efforts to reduce costs, increase product quality, and/or improve production
process once manufacturing has begun is known as
A. cost management.
B. kaizen costing.
C. target costing.
D. life-cycle costing.
Cibolo Company
Cibolo Company has the following information available for March when 4,200 units
were produced (round answers to the nearest dollar).
Refer to Cibolo Company. Assume that the company computes the material price
variance on the basis of material issued to production. What is the total material
variance?
A. $1,050 U
B. $1,050 F
C. $3,030 U
D. $3,030 F
Today, traditional accounting methods are
A. still appropriate for financial reporting.
B. still appropriate for providing useful cost information to internal managers.
C. still appropriate for both internal and external financial reporting.
D. outdated for all purposes.
In comparing financial and management accounting, which of the following more
accurately describes management accounting information?
A. historical, precise, useful
B. required, estimated, internal
C. budgeted, informative, adaptable
D. comparable, verifiable, monetary
For game playing to work, motivation must come from
A. individual employees.
B. lower management.
C. the board of directors.
D. upper management.
The net present value method of evaluating proposed investments
A. measures a project’s internal rate of return.
B. ignores cash flows beyond the payback period.
C. applies only to mutually exclusive investment proposals.
D. discounts cash flows at a minimum desired rate of return.
Each of the following is a method to allocate joint costs except
A. relative sales value.
B. relative net realizable value.
C. relative weight, volume, or linear measure.
D. average unit cost.
Mayer Company had beginning Work in Process Inventory of 6,000 units that were 45
percent complete as to conversion costs. Mayer Company started and completed 46,000
units this period and had ending Work in Process Inventory of 11,000 units. How many
units were started this period?
A. 46,000
B. 52,000
C. 57,000
D. 63,000
A producer of ____ would not use a process costing system.
A. gasoline
B. potato chips
C. blank videotapes
D. stained glass windows
Which of the following standards can commonly be reached or slightly exceeded by
workers in a motivated work environment?
A. no no no
B. no yes yes
C. yes yes no
D. no yes no
The ethical standards established for management accountants are in the areas of
A. competence, licensing, reporting, and education.
B. budgeting, cost allocation, product costing, and insider trading.
C. competence, confidentiality, integrity, and credibility.
D. disclosure, communication, decision making, and planning.