The net realizable value approach mandates that the NRV of the by-products/scrap be
treated as
A. an increase in joint costs.
B. a sunk cost.
C. a reduction of joint costs.
D. a cost that can be ignored totally.
If r is the discount rate, the formula [1/(1 + r)] refers to the
A. future value interest factor associated with r for one period.
B. present value of some future cash flow.
C. present value interest factor associated with r for one period.
D. future value interest factor for an annuity with a duration of r periods.
For a particular product in high demand, a company decreases the sales price and
increases the sales commission. These changes will not increase
A. sales volume.
B. total selling expenses for the product.
C. the product contribution margin.
D. the total variable cost per unit.
Pearce Company
Pearce Company uses a standard cost system for its production process. Pearce
Company applies overhead based on direct labor hours. The following information is
available for July:
Refer to Pearce Company Using the two-variance approach, what is the controllable
variance?
A. $21,650 U
B. $16,480 U
C. $5,775 U
D. $12,080 U
Dollarwise Trainers provides a personalized training program that is popular with
many companies. The number of programs offered over the last five months, and the
costs of offering these programs are as follows:
The number of orders that will be submitted each year for raw material is given by
which formula?
A. Economic order quantity x order point
B. Total annual material needs/economic order quantity
C. Order point/economic order quantity
D. Total annual material needs/safety stock
Broadly speaking, cost accounting can be defined as a(n)
A. external reporting system that is based on activity-based costs.
B. system used for providing the government and creditors with information about a
company’s internal operations.
C. internal reporting system that provides product costing and other information used
by managers in performing their functions.
D. internal reporting system needed by manufacturers to be in compliance with Cost
Accounting Standards Board pronouncements.
A balanced scorecard
A. records the variances between budgeted and actual revenues and expenses.
B. can be used at multiple organizational levels by redefining the categories and
measurements.
C. is most concerned with organizational financial solvency and business processes.
D. all of the above.
Hennessey Company manufactures card tables. The company has a policy of
maintaining a finished goods inventory equal to 40 percent of the next month’s planned
sales. Each card table requires 3 hours of labor. The budgeted labor rate for the coming
year is $13 per hour. Planned sales for the months of April, May, and June are
respectively 4,000; 5,000; and 3,000 units. What is Hennessey Company’s budgeted
direct labor cost for May?
A. $54,600
B. $163,800
C. $226,200
D. $179,400
On the variable costing income statement, the difference between the “contribution
margin” and “income before income taxes” is equal to
A. the total variable costs.
B. the Cost of Goods Sold.
C. total fixed costs.
D. the gross margin.
Patterson Company
The following information is for Patterson Company’s July production:
(Round all answers to the nearest dollar.)
Refer to Patterson Company. What is the labor rate variance?
A. $3,480 U
B. $3,480 F
C. $2,800 U
D. $2,800 F
Terrell Corporation has the following data relating to its power usage for the first six
months of the current year.
Assume usage is within the relevant range of activity.
Required:
Ultimate Vision Corporation
Ultimate Vision Corporation has two product lines: LCD televisions and projection
televisions. The company has budgeted the following production and overhead costs for
the upcoming year:
Refer to Ultimate Vision Corporation. If the company uses an activity-based costing
(ABC) system to allocate factory overhead, the materials handing cost allocated to
projection TVs would be:
A. $35,000
B. $45,000
C. $46,875
D. $51,923
A machine constraint creates
A. an autonomation.
B. a bottleneck.
C. a push inventory system.
D. the need for third-party logistics.
A journal entry includes a debit to Work in Process Inventory and a credit to Raw
Material Inventory. The explanation for this would be that
A. indirect material was placed into production.
B. raw material was purchased on account.
C. direct material was placed into production.
D. direct labor was used for production.
TriCities Corporation
TriCities Corporation adds material at the start to its production process and has the
following information available for August:
Refer to TriCities Corporation. Calculate equivalent units of production for material
using FIFO.
A. 32,000
B. 36,800
C. 37,125
D. 39,000
Wright Company
Wright Company adds material at the start of production. The following production
information is available for September:
Refer to Wright Company. What is the conversion cost per equivalent unit using the
FIFO method?
A. $1.05
B. $.95
C. $1.61
D. $1.55