Which of the following is a tool in quality control that defines the effect and list events
that may be the cause of the problem?
A.cause-and-effect analyses.
B.Pareto charts.
C.control charts.
D.PERT charts.
KF Company
KF Company uses standard costing. The company reported the following information
for the current period:
Refer to KF Company. Calculate the total Variable Overhead variance.
A.$1,000 U
B.$ 500 F
C.$1,000 F
D.$ 500 U
Fixed costs expressed on a per unit basis
A.will react directly with changes in activity.
B.will react inversely with changes in activity.
C.are not affected by activity.
D.should be ignored in making decisions since they cannot change over the long run.
Which statement is true with regards to the product lifecycle?
A.The product life cycle is usually 10 to 20 years.
B.Life-cycle costs should never been considered in short run pricing decisions.
C.Life-cycle costs provide important information for pricing.
D.Life-cycle costs are not relevant in differential analysis.
Which of the following are true regarding activity-based cost management (ABCM)?
A.ABCM has two parts, the costing part known as activity-based costing and the
management part known as activity-based management.
B.ABCM rests on the premise that products require activities.
C.ABCM rests on the premise that activities consume resources.
D.All of the answers are correct.
Which of the following tool for quality control has the four categories: human factors,
methods and design factors, machine-related factors, and materials and components
factors?
A.Warning signals
B.Control charts
C.Pareto charts
D.Cause and effect analysis
MultiFrame Company has the following revenue and cost budgets for the two products
it sells:
The budgeted unit sales equal the current unit demand, and total fixed overhead for the
year is budgeted at $975,000. Assume that the company plans to maintain the same
proportional mix. In numerical calculations, MultiFrame rounds to the nearest cent and
unit.
REQUIRED:
a. What is the total number of units MultiFrame needs to produce and sell to break
even?
b. What is the total number of units needed to break even if the budgeted direct labor
costs were $2 for plastic frames instead of $3?
c. What is the total number of units needed to break even if sales were budgeted at
150,000 units of plastic frames and 300,000 units of glass frames with all other costs
remaining constant?
Marshall Manufacturing Co.
Marshall Manufacturing Co. uses an activity-based costing system. The company has
gathered the following information concerning various cost pools and activity drivers;
The following data was collected and is specific to Item No. 824.
Refer to Marshall Manufacturing Co. What would be the unit cost for the inspection
activity on Item No. 824?
A.$ 4.00
B.$80.00
C.$ 5.00
D.$ 1.00
Which statement is true concerning a dual transfer pricing system?
A.It provides the selling division with a profit but charges the buying division with
costs.
B.It provides the buying division with a profit but charges the selling division with
costs.
C.It is required by generally accepted accounting principles.
D.None of the answers is correct.
Solving for materials and labor. Howard Company makes screen doors. Under the
flexible budget, when the firm uses 85,000 direct labor hours, budgeted variable
overhead is $85,000, whereas budgeted direct labor costs are $573,750. The company
applies variable overhead to production units on the basis of direct labor hours. All data
apply to the month of February. The following are some of the variances for February
(F denotes favorable; U denotes unfavorable):
During February, the firm incurred $600,000 of direct labor costs. According to the
standards, each screen door uses one pound of materials at a standard price of $5.00 per
pound. The firm produced 100,000 screen doors in February. The materials price
variance was $0.40 per pound, whereas the average wage rate exceeded the standard
average rate by $0.50 per hour.
Required:
Compute the following for February, assuming there are beginning inventories but no
ending inventories of materials:
a. pounds of materials purchased
b. pounds of material usage over standard
c. standard hourly wage rate
d. standard direct labor hours for the total February production
If direct labor cost is variable, then it is considered to be which type of cost in the cost
hierarchy?
A.product-level cost.
B.facility-level cost.
C.unit-level cost.
D.all of the above.
What transfer pricing mechanism generally applies a normal markup to costs as a
surrogate for market prices when intermediate market prices are not available?
A.Fixed price-based transfer pricing
B.Full-absorption costing
C.Activity-based costing
D.Cost-plus transfer pricing
Who is the manager in charge of raising cash for operations and managing cash and
near-cash assets?
A.Chief financial officer.
B.Controller.
C.Treasurer.
D.Internal auditor.
In managerial accounting, what can help the manager decide where to direct the
organization’s resources?
A.Capital resource allocation models
B.Quantum resource analysis
C.Balanced scorecard
D.Strategic cost analysis
What is the primary difference between a fixed budget and a flexible budget?
A.A fixed budget includes only fixed costs, while a flexible budget includes only
variable costs.
B.A fixed budget is concerned only with future acquisitions of fixed assets, while a
flexible budget is concerned with expenses, which vary with sales.
C.A fixed budget cannot be changed after the period begins, while a flexible budget can
be changed after the period begins.
D.A fixed budget is a plan for a single level of sales (or other measure of activity),
while a flexible budget consists of several plans, one for each of several levels of sales
(or other measure of activity).
Narrative 5-1
The following question(s) refer to the this equation analyzing the relationship of total
cost to changes in machine hours. The following relationship was determined:
TC = $2,200 + $3X
Refer to Narrative 5-1. The above equation was probably found through the use of
which of the following mathematical techniques?
A.Linear programming
B.Multiple regression analysis
C.Simple Regression analysis
D.Dynamic programming
Use this information to answer the following question(s):
The following output of overhead on direct labor hours was obtained using regression
analysis:
The company is planning to operate at a level that would call for 3,000 direct labor
hours to be utilized for the coming year.
Refer to the above data. Based on the regression equation, compute the estimated
overhead cost for the coming year.
Which of the following are not examples of non-value-added costs?
A.Storage
B.Moving items
C.Waiting for work
D.Production