1) Under the weighted-average method, the stage of completion of beginning work in
process ________.
A) is relevant in determining the equivalent units
B) must be combined with the work done during the current period to determine the
equivalent units
C) is irrelevant in determining the equivalent-unit calculation
D) can almost always be determined with a high degree of precision
2) Ventaz Corp has a variable demand. Historically, its demand has ranged from 30 to
50 windows per day with an average of 40. Alex works eight hours a day, five days a
week. Each order is one window and each window takes 11 minutes.
What is the cycle time for an order?
A) 11 minutes per window
B) 66 minutes per window
C) 71.50 minutes per window
D) 69.50 minutes per window
3) Genosis Metals provided the following information for last month:
If sales reduce to half the amount in the next month, what is the projected operating
income?
A) $0
B) $4,000
C) $2,000
D) $6,000
4) The following information pertains to the January operating budget for Casey
Corporation, a retailer:
Budgeted sales are $200,000 for January
Collections of sales are 50% in the month of sale and 50% the next month
Cost of goods sold averages 70% of sales
Merchandise purchases total $150,000 in January
Marketing costs are $3,000 each month
Distribution costs are $5,000 each month
Administrative costs are $10,000 each month
For January, the amount budgeted for the nonmanufacturing costs budget is ________.
A) $78,000
B) $10,000
C) $168,000
D) $18,000
5) In a noncompetitive environment, the key factor affecting pricing decisions is the
________.
A) customer’s willingness to pay
B) price charged for alternative products
C) information on competitor’s cost structure
D) minimum price acceptable to the firm
6) Maintenance costs at a Whetsel Corporation factory are listed below:
Management believes that maintenance cost is a mixed cost that depends on
machine-hours. Use the high-low method to estimate the variable and fixed components
of this cost. Compute the variable component first and round off to the nearest whole
cent. Compute the fixed component second and round off to the nearest whole dollar.
These estimates would be closest to:
A) $8.86 per machine-hour; $20,577 per month
B) $0.11 per machine-hour; $48,192 per month
C) $15.48 per machine-hour; $48,103 per month
D) $8.81 per machine-hour; $20,718 per month
7) Mynarc Corporation produces fertilizer and distributes the product by using his
tanker trucks. Mynarc
uses budgeted fleet hours to allocate variable manufacturing overhead. The following
information pertains to the company’s manufacturing overhead data:
What is the flexible-budget amount for variable manufacturing overhead?
A) $83,025
B) $82,350
C) $76,860
D) $77,490
8) Contrafic Corporation used the following data to evaluate its current operating
system. The company sells items for $21 each and used a budgeted selling price of $21
per unit.
What is the static-budget variance of variable costs?
A) $25,000 favorable
B) $25,000 unfavorable
C) $215,000 favorable
D) $215,000 unfavorable
9) Which of the following departments is most likely to be a cost center?
A) sales department of a company selling industrial tools
B) call center of a company that serves customers and cross-sells other products
C) maintenance department of a luxury resort
D) research department of a company providing consultancy services
10) Leslie Manufacturing reported the following:
What is Leslie’s gross margin (or gross profit)?
A) $103,000
B) $152,000
C) $341,000
D) $317,000
11) Which of the following statements is true of costing systems?
A) Single-indirect cost pool systems always result in overcosting of products.
B) Single-indirect cost pool systems classify some direct costs as indirect costs.
C) ABC systems always result in overcosting of products.
D) ABC systems classify some indirect costs as direct costs helping to improve
processes
12) An advantage of using budgeted costs for transfer pricing among divisions is that
________.
A) overall corporate profitability is usually higher
B) it usually provides a basis for optimal decision making
C) the divisions know the transfer price in advance
D) it promotes subunit autonomy
13) When benchmarking, management accountants are most valuable when they
________.
A) present differences in the benchmarking data to management
B) highlight differences in the benchmarking data to management
C) provide insight into why costs or revenues differ across companies
D) provide complex mathematical analysis