In a job-order costing system, the use of indirect material would usually be reflected in
the general ledger as an increase in
A. stores control.
B. work in process control.
C. manufacturing overhead applied.
D. manufacturing overhead control.
Under the two-variance approach, the volume variance is computed by subtracting
____ based on standard input allowed for the production achieved from budgeted
overhead.
A. applied overhead
B. actual overhead
C. budgeted fixed overhead plus actual variable overhead
D. budgeted variable overhead
____ is (are) a strategy for dealing with environmental effects.
A. End-of-pipe strategies
B. Process improvements
C. Pollution prevention
D. All of the above
Normal spoilage units resulting from a continuous process
A. are extended to the EUP schedule.
B. result in a higher unit cost for the good units produced.
C. result in a loss being incurred.
D. cause estimated overhead to increase.
Which of the following is usually perceived as being the master budget’s greatest
advantage to management?
A. performance analysis
B. increased communication
C. increased coordination
D. required planning
Gallagher Company produces a part that has the following costs per unit:
Homeland Corporation can provide the part to Gallagher for $19 per unit. Gallagher
Company has determined that 60 percent of its fixed overhead would continue if it
purchased the part. However, if Gallagher no longer produces the part, it can rent that
portion of the plant facilities for $60,000 per year. Gallagher Company currently
produces 10,000 parts per year. Which alternative is preferable and by what margin?
A. Make-$20,000
B. Make-$50,000
C. Buy-$10,000
D. Buy-$40,000
Which of the following are relevant in a make or buy decision?
A. no yes yes
B. yes no yes
C. no no yes
D. yes yes no
A credit to Work in Process Inventory represents
A. work still in process.
B. raw material put into production.
C. the application of overhead to production.
D. the transfer of completed items to Finished Goods Inventory.
Rosewood Corporation
Rosewood Corporation produces a single product. The following cost structure applied
to its first year of operations:
Refer to Rosewood Corporation. Assume for this question only that during the current
year Rosewood Corporation manufactured 5,000 units and sold 3,800. There was no
beginning or ending work-in-process inventory. How much larger or smaller would
Rosewood Corporation’s income be if it uses absorption rather than variable costing?
A. The absorption costing income would be $6,000 larger.
B. The absorption costing income would be $6,000 smaller.
C. The absorption costing income would be $4,800 larger.
D. The absorption costing income would be $4,000 smaller.
Cost allocation bases in activity-based costing should be
A. cost drivers.
B. value-added activities.
C. activity centers.
D. processes.
Mass customization can be achieved through the use of
A. activity-based costing.
B. just-in-time inventory.
C. flexible manufacturing systems.
D. all of the above.
The addition or removal of product or service characteristics to satisfy additional
needs, especially price, reflect the ____ of a product or service.
A. value
B. grade
C. quality
D. durability
Stocks Corporation
Stocks Corporation has the following information available for June of the current year:
All material is added at the start of production and all products completed are
transferred out.
Refer to Stocks Corporation. Prepare an equivalent units schedule using the (a) FIFO
and (b) weighted average method.