Chapman Company
Chapman Company uses a job-order costing system. At the beginning of March, the
company had two jobs in process with the following costs:
Chapman pays its workers $8.50 per hour and applies overhead on a direct labor hour
basis.
Refer to Chapman Company. How much overhead was included in the cost of Job #461
at the beginning of March?
A. $ 144.50
B. $ 153.00
C. $2,200.00
D. $2,456.50
Buxton Company
One of the products manufactured by Buxton Company is a plastic tray. The
information below relates to the Tray Production Department:
Refer to Buxton Company. What is the throughput per hour in the Tray Production
Department?
A. 470 units
B. 500 units
C. 625 units
D. 667 units
The difference between actual sales and budgeted sales is
A. a flexible budget variance.
B. an efficiency measure.
C. required in program budgeting.
D. an effectiveness measure.
Sunderland Wood Creations
Sunderland Wood Creations is considering a proposal to sell an existing lathe and
purchase a new computer-operated lathe. Information on the existing lathe and the
computer-operated lathe follow:
Refer to Sunderland Wood Creations. If the company uses 10 percent as its discount
rate, what is the net present value of the proposed new lathe purchase? Present value
tables or a financial calculator are required.
A. $236,465
B. $256,465
C. $195,485
D. $30,422
Bridges Corporation
The following information has been taken from the cost records of Bridges Corporation
for the past year:
Refer to Bridges Company. Direct labor cost charged to production during the year was
A. $125
B. $188
C. $250
D. $375.
JIT seeks to
A. reduce production cost while increasing quality.
B. radically redesign the production process for effectiveness.
C. modify all non-value-added activities.
D. all of the above.
Morrison Company
Morrison Company manufactures two products: digital cameras and video cameras. The
company uses an activity-based costing system. The annual production and sales
volume of digital cameras is 10,000 units and of video cameras is 8,000 units. Direct
costs for the digital cameras are $122; for the video cameras, direct costs are $153.
For overhead costs, there are three activity cost pools with the following expected
activities and estimated total costs:
Refer to Morrison Company. Using ABC, the total cost per video camera is
approximately:
A. $162.50
B. $163.69
C. $168.35
D. $168.07
In a cost of production report using process costing, transferred-in costs are similar to
the
A. cost of material added at the beginning of production.
B. conversion cost added during the period.
C. cost transferred out to the next department.
D. cost included in beginning inventory.
Which of the following statements is false?
A. A primary purpose of cost accounting is to determine valuations needed for external
financial statements.
B. A primary purpose of management accounting is to provide information to managers
for use in planning, controlling, and decision making.
C. The act of converting production inputs into finished products or services
necessitates cost accounting.
D. Two primary hallmarks of cost and management accounting are standardization of
procedures and use of generally accepted accounting principles.
One major difference between financial and management accounting is that
A. financial accounting reports are prepared primarily for users external to the
company.
B. management accounting is not under the jurisdiction of the Securities and Exchange
Commission.
C. government regulations do not apply to management accounting.
D. all of the above are true.