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54. Writer One Inc. manufactures ball point pens that sell at wholesale for $0.80 per unit.
Budgeted production in both 2015 and 2016 was 8,000 units. There was no beginning inventory in
2015. The following data summarized the 2015 and 2016 operations:
2015 2016
Units sold 6,500 9,000
Units produced 8,000 8,000
Costs:
Variable factory overhead per unit $0.20 $0.20
Fixed factory overhead $1,200 $1,200
Variable marketing per unit $0.30 $0.30
Fixed Selling and Administrative $320 $320
Variable costing operating income for 2016 is calculated to be:
55. The value stream income statement can be compared to:
56. The six steps Ittner and Larcker propose for maximizing the value of nonfinancial
measures when using a balanced scorecard include all of the following except:
57. The balanced scorecard is particularly important in difficult economic times because:
58. The value stream income statement provides the following information not usually
contained in the contribution income statement:
59. Tokless Inc. planned and manufactured 400,000 units of its single product in 2016, its
first year of operations. Variable manufacturing costs were $50 per unit of production. Planned
and fixed manufacturing costs were $800,000. Marketing and administrative costs (all fixed) were
$600,000 in 2016. Tokless Inc. sold 195,000 units of product in 2016 at $65 per unit.
Sales for 2016 are calculated to be:
60. Tokless Inc. planned and manufactured 400,000 units of its single product in 2016, its
first year of operations. Variable manufacturing costs were $50 per unit of production. Planned
and fixed manufacturing costs were $800,000. Marketing and administrative costs (all fixed) were
$600,000 in 2016. Tokless Inc. sold 195,000 units of product in 2016 at $65 per unit.
Full costing operating income for 2016 is calculated to be:
61. Tokless Inc. planned and manufactured 400,000 units of its single product in 2016, its
first year of operations. Variable manufacturing costs were $50 per unit of production. Planned
and fixed manufacturing costs were $800,000. Marketing and administrative costs (all fixed) were
$600,000 in 2016. Tokless Inc. sold 195,000 units of product in 2016 at $65 per unit.
Variable costing operating income for 2016 is calculated to be:
62. Profit center income statements are most meaningful to managers when they are
prepared:
63. A unit of an organization is referred to as a profit center if it has:
64. A unit of an organization is referred to as an investment center if it has:
65. Of most relevance in deciding how or which costs should be assigned to an SBU is the
degree of:
66. A significant problem in comparing profitability measures among companies is the:
67. The most important objective of a strategic performance measurement system is:
68. What costs are treated as product costs under variable costing?
69. Inventory under the variable costing method includes:
70. In an income statement prepared using the variable costing method, which of the
following terms should appear?
Gross Profit
(margin)
Net income
A) Yes Yes
B) Yes No
C) No No
D) No Yes
71. Other things being equal, income computed by the variable costing method will exceed
that computed by the full costing method if:
72. Home Products Inc has failed to reach its planned activity level during its first two years
of operation. The following table shows the relationship between units produced, sales, and
normal activity for these years and the projected relationship for Year 3. All prices and costs have
remained the same for the last two years and are expected to do so in Year 3. Income has been
positive in both Year 1 and Year 2.
Units
Produced
Sales Planned Production
Year 1 90,000 90,000 100,000
Year 2 95,000 95,000 100,000
Year 3 95,000 90,000 100,000
Because Home Products uses a full costing system, one would predict operating income for Year
3 to be:
73. A company's operating income was $70,000 using variable costing for a given period.
Beginning and ending inventories for that period were 45,000 units and 50,000 units, respectively.
Ignoring income taxes, if the fixed factory overhead application rate was $8.00 per unit, what
would operating income have been using full costing?
74. A company had income of $50,000 using variable costing for a given period. Beginning
and ending inventories for that period were 80,000 units and 90,000 units, respectively. If the
fixed overhead application rate were $10.00 per unit, what would operating income have been
using full costing?
75. The balanced scorecard is widely used in performance evaluation and management
control. In which regions around the world is it most and least, respectively, commonly used:
76. Operating income reported under full costing will exceed operating income reported
under variable costing for a given period if:
77. A company's operating income recently increased by 30% while its inventory increased in
a given year. Which of the following accounting methods would be most likely to produce the
favorable income results?
