A process costing system is used by a company that
A. produces heterogeneous products.
B. produces items by special request of customers.
C. produces homogeneous products.
D. accumulates costs by job.
Stewart Company
The following information relates to financial projections of Stewart Company:
Refer to Stewart Company. How many units would Stewart Company need to sell to
earn a profit before taxes of $10,000?
A. 25,714
B. 10,000
C. 8,571
D. 12,000
Cost accounting standards
A. are legal standards set by the Institute of Management Accountants for use in all
manufacturing and professional businesses.
B. are set by the Cost Accounting Standards Board and are legally binding on all
manufacturers, but not service organizations.
C. do not exist except for those legal pronouncements for companies bidding or pricing
cost-related contracts with the government.
D. are developed by the Cost Accounting Standards Board, issued by the Institute of
Management Accountants, and are legally binding on CMAs.
Chambers Company
Chambers Company produces two products from a joint process: X and Z. Joint
processing costs for this production cycle are $8,000.
If X and Z are processed further, no disposal costs will be incurred or such costs will be
borne by the buyer.
Refer to Chambers Company. Which products would be processed further?
A. only Product X
B. only Product Z
C. both Products X and Z
D. neither Product X or Z
Which of the following is a consistently desirable characteristic in a transfer pricing
system?
A. system is very complex to be the most fair to the buying and selling units
B. effect on subunit performance measures is not easily determined
C. system should reflect organizational goals
D. transfer price remains constant for a period of at least two years
The Mahan Corporation is considering an investment in a project that generates a
profitability index of 1.3. The present value of the cash inflows on the project is
$44,000. What is the net present value of this project?
A. $10,154
B. $13,200
C. $57,200
D. $33,846
Which of the following would generally be considered a fixed factory overhead cost?
A. no no no
B. yes no yes
C. yes yes no
D. no yes no
Mass customization is closely associated with
A. yes no no yes
B. yes yes yes no
C. no yes no no
D. yes no yes yes
An investment project is expected to yield $10,000 in annual revenues, has $2,000 in
fixed costs per year, and requires an initial investment of $5,000. Given a cost of goods
sold of 60 percent of sales, what is the payback period in years?
A. 2.50
B. 5.00
C. 2.00
D. 1.25
Andersen Corporation
Andersen Corporation has the following information for the current month:
All materials are added at the start of the production process. Andersen Corporation
inspects goods at 75 percent completion as to conversion.
Refer to Andersen Corporation. What are equivalent units of production for conversion
costs assuming weighted average is used?
A. 103,750
B. 104,500
C. 104,750
D. 105,500