Under variable costing, which of the following are costs that can be inventoried?
A. variable selling and administrative expense
B. variable manufacturing overhead
C. fixed manufacturing overhead
D. fixed selling and administrative expense
A master budget contains which of the following?
A. yes yes yes
B. no no yes
C. no no no
D. yes no yes
After the completion of production, standard and actual costs are compared to
determine the ____ of the production process.
A. effectiveness
B. complexity
C. homogeneity
D. efficiency
In job-order costing, payroll taxes paid by the employer for factory employees are
commonly accounted for as
A. direct labor cost.
B. manufacturing overhead cost.
C. indirect labor cost.
D. administrative cost.
Fulton Company
Fulton Company is placing an ad in the local paper to advertise its products. The ad will
run for one week at a total cost of $5,500. Fulton Company has four categories of
products as follows:
Refer to Fulton Company. What amount of advertising cost should be allocated to
hardware, assuming Fulton allocates based on percent of floor space occupied?
A. $1,375
B. $1,100
C. $2,475
D. $ 825
The Logan Publishing Corporation is contemplating the acquisition of a state of the art
printing press. The following information is relevant:
Ignore income taxes.
Required:
Richards Company
The following information has been taken from the cost records of Richards Company
for the past year:
Refer to Richards Company. Cost of Goods Manufactured was
A. $636.
B. $716.
C. $736.
D. $766.
Beasley Company
Beasley Company prepared a cash budget by quarters for the upcoming year. Missing
data amounts are indicated with question marks or lower case letters; these lower case
letters will be referred to in the questions that follow.
Beasley requires a minimum balance of $10,000 to start a quarter.
All data are in thousands.
Beasley Corporation
Cash Budget
Refer to Beasley Company. The cash disbursed for purchases during the second quarter
(item c) is:
A. $13
B. $55
C. $ 9
D. $21
Stillwater Corporation
The following information is available for Stillwater Corporation for the current year:
All materials are added at the start of production.
Refer to Stillwater Corporation. Using FIFO, what is the cost per equivalent unit for
conversion costs?
A. $4.46
B. $4.15
C. $4.30
D. $3.84
Texas Company
Texas Company has established a target rate of return of 16% for all divisions. For the
most recent year, San Marcos Division generated sales of $10,000,000 and expenses of
$7,500,000. Total assets at the beginning of the year were $5,000,000 and total assets at
the end of the year were $7,000,000.
Refer to Texas Company. In the most recent year, what was San Marcos Division’s
residual income?
A. $ 960,000
B. $1,380,000
C. $1,540,000
D. $1,700,000
Variable costing considers which of the following to be product costs?
A. yes no yes no
B. yes no yes yes
C. no no yes yes
D. no no yes no
Which of the following organizational characteristics critically affect the design of a
cost management system?
A. yes yes yes yes
B. yes no yes no
C. no yes no yes
D. no yes yes no
A project has an initial cost of $125,000 and generates a present value of net cash
inflows of $150,000. What is the project’s profitability index?
A. .20
B. 1.20
C. .83
D. 5.00
Riley Company
Riley Company produces two products from a joint process: A and C. Joint processing
costs for this production cycle are $9,000.
If A and C are processed further, no disposal costs will be incurred or such costs will be
borne by the buyer.
Refer to Riley Company. Using approximated net realizable value at split-off, what
amount of joint processing cost is allocated to Product C (round to the nearest dollar)?
A. $4,500
B. $5,986
C. $6,062
D. $6,282
Spears Manufacturing Company
Spears Manufacturing Company produces beach chairs. Chair frames are all the same
size, but can be made from plastic, wood, or aluminum. Regardless of frame choice, the
same sailcloth is used for the seat on all chairs. Spears has set a standard for sailcloth of
$9.90 per square yard and each chair requires 1 square yard of material. Spears
produced 500 plastic chairs, 100 wooden chairs, and 250 aluminum chairs during June.
The total cost for 1,000 square yards of sailcloth during the month was $10,000. At the
end of the month, 50 square yards of sailcloth remained in inventory.
Refer to Spears Manufacturing Company. The unfavorable material price variance for
sailcloth purchases for the month was
A. $ 100.
B. $ 495.
C. $1,090.
D. $1,585.
Lincoln Corporation
Lincoln Corporation distributes its service department overhead costs directly to
producing departments without allocation to the other service departments. Information
for January is presented here.
Refer to Lincoln Corporation. Assume that Lincoln Corporation distributes service
department overhead costs based on the algebraic method. What would be the formula
to determine the total maintenance costs?
A. M = $18,700 + .10U
B. M = $9,000 + .20U
C. M = $18,700 + .30U + .40A + .40B
D. M = $27,700 + .40A + .40B
A quality audit involves a review of
A. yes yes yes
B. no yes yes
C. no no no
D. yes no yes
Reducing inventory to the lowest possible levels is a major focus of
A. JIT.
B. push inventory systems.
C. EOQ.
D. ABC.
Romano Company
The following information pertains to Romano Company for September:
Romano Company applies overhead for Job #323 at 140 percent of direct labor cost and
at 150 percent of direct labor cost for Jobs #325 and #401. The total cost of Jobs #323
and #325 is identical.
Refer to Romano Company. What amount of overhead is applied to Job #325?
A. $8,325
B. $7,500
C. $7,000
D. $5,000
The cost of abnormal discrete units must be assigned to
A. yes yes
B. no no
C. yes no
D. no yes