1) Buzz’s Educational Software Outlet sells two or more of the video games as a single
package. Managers are keenly interested in individual product-profitability figures.
Information pertaining to three bundled products and the stand-alone prices is as
follows:
Using the stand-alone method with selling price as the weight for revenue allocation,
what amount of revenue will be allocated to Math Fun in the package that contains all
three products?
A) $24.12
B) $30.00
C) $22.80
D) $25.33
2) Using the high-low method of analysis, the estimated monthly fixed component of
the electrical cost is:
A) $1,520
B) $440
C) $260
D) $560
3) Tally Corp. sells softwares during the recruiting seasons. During the current year,
11,000 softwares were sold resulting in $440,000 of sales revenue, $110,000 of variable
costs, and $48,000 of fixed costs.
Contribution margin per software is ________.
A) $10.00
B) $30.00
C) $40.00
D) $36.00
4) Costs incurred to process orders would most likely be classified as a ________.
A) customer output unit-level cost
B) customer batch-level cost
C) customer-sustaining cost
D) corporate-sustaining cost
5) Corporate administrative costs allocated to a division cost pool are most likely to be
________.
A) output unit-level costs
B) facility-sustaining costs
C) product-sustaining costs
D) batch-level costs
6) Using the high-low method of analysis, the estimated fixed cost per month for
electricity is closest to:
A) $53.46
B) $0.00
C) $3.40
D) $48.00
7) The smaller the residual terms, the ________.
A) better is the fit between the actual cost observations and estimated costs
B) weaker the relationship between the cost driver and costs
C) more the number of units produced during the period
D) stronger the relationship between fixed cost and variable cost
8) Purple Purpose Inc., is in the process of evaluating a new product using the following
information:
A new transformer has two production runs each year, each with $10,000 in setup costs.
The new transformer incurred $30,000 in development costs and is expected to be
produced over the next three years.
Direct costs of producing the transformers are $40,000 per run of 4,500 transformers
each.
Indirect manufacturing costs charged to each run are $45,000.
Destination charges for each transformer average $1.00.
Customer service expenses average $0.20 per transformer.
The transformers are selling for $25 the first year and will increase by $3 each year
thereafter.
Sales units equal production units each year.
What are estimated life-cycle revenues?
A) $225,000
B) $477,000
C) $729,000
D) $756,000
9) A ________ is a diagram that describes how an organization creates value by
connecting strategic
objectives in explicit cause-and-effect relationships with each other in the balanced
scorecard perspectives.
A) value diagram
B) balanced scoreboard
C) strategic scorecard
D) strategy map
10) Overall, was Crynton’s strategy successful in 2015?
A) Yes, because total revenues increased
B) No, because operating income decreased
C) No, because direct materials usage per unit increased
D) No, because direct material cost per unit decreased
11) Which of the following departments is most likely to be a profit center?
A) the accounting department of a company that also assists in budgeting process
B) the research and development department of a company
C) the sales department of a company whose objective is to maximize the revenues
D) the consulting department of a law firm
12) Lungren has budgeted construction overhead for August of $260,000 for variable
costs and $435,000 for fixed costs. Actual costs for the month totaled $275,000 for
variable and $445,000 for fixed. Allocated fixed overhead totaled $440,000. The
company tracks each item in an overhead control account before allocations are made to
individual jobs. Spending variances for August were $10,000 unfavorable for variable
and $10,000 unfavorable for fixed. The production-volume overhead variance was
$5,000 favorable.
Required:
a.Make journal entries for the actual costs incurred.
b.Make journal entries to record the variances for August.
13) Shine Jewelry sells 400 units resulting in $7,000 of sales revenue, $3,000 of
variable costs, and $1,500 of fixed costs.
Calculate the variable cost per unit.
A) $11.00
B) $7.00
C) $8.00
D) $7.50
14) Costing systems measure ________.
A) locked in costs
B) sunk costs
C) cost incurrence
D) out of pocked costs
15) Which of the following helps in avoiding costly transfer-pricing disputes between
taxpayers and tax authorities?
A) transfer price redressal panel
B) grievance redressal forum
C) transfer price agreements
D) advanced pricing agreements
16) Which of the following statements is true of the financial and nonfinancial
measures in just-in-time production systems?
A) The inventory turnover ratio is expected to decrease.
B) Units produced per hour are expected to increase.
C) Manufacturing cycle time is expected to increase.
D) Total setup time for machines with respect to total manufacturing time is expected to
increase.