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1) which of the following is not one of the main issues regarding data collection which
can significantly affect precision and reliability when using regression or any other cost
estimation method?
a.data accuracy
b.time period choice
c.nonlinearity
d.relevant range
2) kelvin co. produces and sells socks. variable costs are budgeted at $4 per pair, and
fixed costs for the year are expected to total $90,000. the selling price is expected to be
$6 per pair.
the sales dollars required for kelvin co. to make a before-tax profit of $10,000 are:
a.$300,000
b.$309,000
c.$276,000
d.$306,000
e.$312,000
3) salich manufacturing corporation has provided the following sales budget
information:
cash sales are normally 40% of total sales and the credit sales are expected to be
collected in their entirety in the month following the month of sale. the amount of cash
expected to be received from customers in september is:
a.$24.000
b.$55,000
c.$57,000
d.$58,000
e.$60,000
4) which of the following is not a major change in the business environment that has
affected the way many companies think about conducting business?
a.an increased focus on the customer, especially their opinions about functionality and
quality
b.a growing emphasis on globalization -new markets for products and new competitors
c.a larger number of companies are starting to use advanced information technologies,
such as business intelligence
d.the development of improved cost management methods
5) during the current year, outlytech corp. expected to sell 24,000 telephone switches.
fixed costs for the year were expected to be $12,144,000, the unit sales price was
budgeted at $3,200, and unit variable costs were budgeted at $1,440.
outlytech's margin of safety (mos) in units is (rounded up to nearest whole number):
a.18,270
b.17,100
c.20,880
d.16,970
e.22,190
6) the value chain analysis used in connection with the make-or-buy decision often
leads a firm to make use of:
a.activity-based costing (abc)
b.cost-volume profit (cvp) analysis
c.outsourcing options
d.relevant cost-based pricing
e.value stream accounting
7) operation costing uses which of the following costing systems?
a.option a
b.option b
c.option c
d.option d
8) backflush costing:
a.is a simplified approach to determining product cost that is used when there is little or
no work-in-process inventory
b.involves the use of standard costing
c.allows product costs to be quickly and conveniently calculated
d.is an approach to determining product cost that is used when jit is used
e.all of the above
9) a manufacturer of machinery currently produces equipment for a single client. the
client supplies all required raw material on a no-cost basis. the manufacturer contracts
to complete the desired units from this raw material. the total production costs incurred
by the manufacturer are correctly identified as:
a.prime costs
b.conversion costs
c.variable production costs
d.factory overhead
10) which one of the following is not a type of cost driver?
a.structural cost driver
b.executional cost driver
c.volume-based cost driver
d.differential cost driver
e.activity-based cost driver
11) kelvin co. produces and sells socks. variable costs are budgeted at $4 per pair, and
fixed costs for the year are expected to total $90,000. the selling price is expected to be
$6 per pair.
the sales units required for kelvin co. to make an after-tax profit of $15,000, given an
income tax rate of 40%, are:
a.47,500 units
b.56,500 units
c.65,661 units
d.60,000 units
e.57,500 units
12) stoltenberg co. had the following information for the month of june:
beginning work-in-process inventory is 30 percent complete as to conversion. ending
work-in-process inventory is 50 percent complete as to conversion. materials are added
at the end of the process.
the equivalent units for conversion under the weighted average method are calculated to
be:
a.12,000
b.10,000
c.14,000
d.16,000
e.18,000
13) which of the following five steps (out of six) of cost estimation is out of order?
a.step 1: define the cost object to be estimated
b.step 2: determine the cost driver(s)
c.step 3: collect relevant data on the cost of the cost object and the cost driver
d.step 4: evaluate the accuracy of the cost estimate
e.step 5: graph the data
14) when using the first-in, first-out method of process costing, equivalent units for
work done during this period is equal to the number of units:
a.in work-in-process at the beginning of the period times the percent of work necessary
to complete the items, plus the number of units started and completed during the period,
plus the number of units remaining in work-in-process at the end of the period times the
percent of work done during the period
b.in work-in-process at the beginning of the period, plus the number of units started
during the period, plus the number of units remaining in work-in-process at the end of
the period times the percent of work necessary to complete the items
c.started into process during the period, plus the number of units in work-in-process at
the beginning of the period
d.transferred out during the period, plus the number of units remaining in
work-in-process at the end of the period times the percent of work necessary to
complete the items
e.none of the above
15) which is not a common method used to allocate costs under the departmental
approach?
a.dual method
b.step method
c.reciprocal method
d.direct method
