1) The prime cost for September was:
A) $114,000
B) $100,000
C) $103,000
D) $47,000
2) Netzone Company is in semiconductor industry and fabrication of silicon-wafer
chips splits off two types of memory chips, Standard and Premium. The following
information was collected for last quarter of the calendar year:
The cost of purchasing 200 kgs of direct materials and processing it up to the splitoff
point to yield a total of 16,500 chips of good products was $1,950,000.
Beginning inventories totalled 100 chips for Standard and 50 chips for Premium.
Ending inventory amounts reflected 100 chips of Standard and 50 chips of Premium.
October costs per unit were the same as November.
What are the physical-volume proportions for products Standard and Premium,
respectively?
A) 60.00% and 40.00%
B) 55.00% and 45.00%
C) 60.61% and 39.39%
D) 54.00% and 46.00%
3) Which of the following is a financial measure of quality?
A) operating income growth
B) percentage of highly satisfied customers
C) number of defective units shipped to customers as a percentage of total units shipped
D) interest costs
4) ________ is a measure of the balanced scorecard’s customer perspective.
A) Number of client complaints
B) Defect rates
C) Number of process improvements
D) Revenue growth
5) Which of the following is true if the volume of sales increases?
A) fixed cost increases
B) variable cost decreases
C) variable cost increases
D) fixed cost decreases
6) Pederson Company reported the following:
What is the manufacturing cost for the ending finished goods inventory?
A) $12,000
B) $8,000
C) $11,000
D) $5,000
7) For each of the following statements regarding the satisfaction of transfer pricing
criteria, identify whether you would expect the transfer pricing method to meet the
criteria. Provide a yes, no, or sometimes for each situation.
________a.Market-Based transfer pricing achieves goal congruence.
________b.Cost-Based transfer pricing achieves goal congruence.
________c.Negotiated transfer pricing achieves goal congruence.
________d.Market-Based transfer pricing motivates management effort.
________e.Cost-Based transfer pricing motivates management effort.
________f.Negotiated transfer pricing motivates management effort.
________g.Market-Based transfer pricing is useful for evaluating subunit performance.
________h.Cost-Based transfer pricing is useful for evaluating subunit performance.
________i.Negotiated transfer pricing is useful for evaluating subunit performance.
________j.Market-Based transfer pricing preserves subunit autonomy.
________k.Cost-Based transfer pricing preserves subunit autonomy.
________l.Negotiated transfer pricing preserves subunit autonomy.
8) ________ is considered while choosing a cost allocation base for activity costs in
ABC costing.
A) Marketing strategy and material price level
B) Availability of reliable data and measures
C) Product price level
D) Market share of a product
9) Which of the following is true of financial accounting information?
A) It is prepared based on cost-benefit analysis.
B) It is primarily used by managers to make internal business decisions.
C) It focuses on the past-oriented financial performance of a company.
D) It only measures the cash transactions of a company.
10) The contribution margin income statement ________.
A) reports gross margin
B) is allowed for external reporting to shareholders
C) categorizes costs as either direct or indirect
D) can be used to predict future profits at different levels of activity
11) Stonex Corp, whose tax rate is 40%, has two sources of funds: long-term debt with
a market value of $6,000,000 and an interest rate of 8%, and equity capital with a
market value of $14,000,000 and a cost of equity of 12%. Stonex has two operating
divisions, the Blue division and the Gold division, with the following financial
measures for the current year:
Calculate EVA for the Gold Division.
A) ($57,640)
B) ($27,840)
C) ($37,340)
D) $397,440
12) In designing strategy, a company must match its opportunities in the marketplace
with ________.
A) environment friendly goals
B) its resources and capabilities
C) branding opportunities
D) the requirements of credit rating agencies
13) Brix, Inc., prepares frozen food for fast-food restaurants. It has two workstations,
cooking and assembly. The cooking station is limited by the cooking time of the food.
Assembly is limited by the speed of the workers. Assembly normally waits on food
from cooking. Because the demand has increased in recent months to 2,800 dozen units,
management is considering adding another cooking station or else having the cooks
start to work earlier. The monthly cost of operating the cooking station one more hour
each day is $2,400. The cost of adding another cooking station would add an average of
$10 per hour. The current operating hours total eight hours a day, 22 days a month. The
contribution margin of the finished products is currently $8 per dozen. Inventory
carrying costs average $2.00 per dozen per month. Either the extra hour or the new
cooking station would increase production by 20 dozen a day, with a long-run increase
of 80 dozen units in finished goods inventory to 280 dozen.
Required:
a.What is the total production per month if the change is made?
b.What is the increase in the expected monthly product contribution for each of the
possible changes? Assume long-run production equals sales.
14) Which of the following represents cross-sectional data?
A) indirect manufacturing labor costs for the past 5 years
B) number of machine-hours used for the past 10 years
C) personnel costs of a month at 10 different organizations
D) maintenance cost of machine in a plant for the past 3 years
15) 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 physical units as the weight for revenue allocation,
what amount will be allocated to the refrigerator?
A) $500
B) $20
C) $600
D) $825
16) Euphoria Company has two departments, X and Y. Overhead is applied based on
direct labor cost in Department X and machine-hours in Department Y. The following
additional information is available:
Required:
a.Compute the budgeted factory overhead rate for Department X.
b.Compute the budgeted factory overhead rate for Department Y.
c.What is the total overhead cost of Job 25?
d.If Job 25 consists of 50 units of product, what is the profit per unit if selling price is
$2,000 per unit?
e.What is the proportion of the direct labor cost incurred with respect to the total cost of
the job?
f.Should the company go ahead with this job?
17) Wayland Manufacturing uses a normal cost system and had the following data
available for 2010:
The ending balance of finished goods inventory is ________.
A) $58,000
B) $36,000
C) $94,000
D) $292,000