Top-down budgeting is also referred to as participative budgeting.
Absorption costing is used for managerial accounting, but is not allowed for reporting
in accordance with generally accepted accounting principles.
The goal of an ERP system is to integrate all data from the company ‘s many business
processes into a single information system.
Companies that mass produce similar products or employ a continuous production
process typically use a job order system.
Creditors are interested in determining the likelihood that a company will be able to
meet future obligations, but shareholders are rarely interested in this information.
Which of the following is not a measure that relates to the financial perspective?
a. EVA
b. Return on investment
c. Cost per unit
d. Profit margin
Which of the following types of entities would probably use a process costing system?
a. Automobile repair shop
b. Paint manufacturer
c. Printing company
d. Law firm
Changing a company’s cost structure may affect
a. Operating leverage.
b. Behavioral implications for employees.
c. Both operating leverage and behavioral implications for employees.
d. Neither operating leverage nor behavioral implications for employees.
Investigating the cause of a variance is a part of a manager’s responsibility under which
of the following management functions?
a. Planning
b. Controlling
c. Evaluating
d. Decision-making
Dusk Industries produces industrial convection ovens. For the year, management
estimated that total manufacturing overhead would be $2,978,760. Management
decided to use direct labor hours to apply manufacturing overhead and budgeted
144,600 direct labor hours. The following information was compiled before an
adjustment had been made to close Manufacturing Overhead Control:
If Dusk closes the entire amount of under-or overapplied overhead to Cost of Goods
Sold, what was the ending balance in that account?
a. $4,795,826
b. $4,932,174
c. $4,780,170
d. $4,947,830
Which of the following is not an example of a variable cost for a manufacturer of
bicycles?
a.Number of tires.
b.Gallons of paint.
c.Wages for factory workers.
d.President of the company’s salary.
Which of the following is not one of the top ten reasons companies outsource their
operations?
a. More effective than producing all the components of a product
b. Provides a cash infusing as freed-up assets are sold
c. Provides world-class capabilities at lower cost
d. Transfers a portion of business risk to an outsource provider
Gooding Company manufactures two models of its skillet, the Kitchen and the
Campfire. The Kitchen model requires 10,000 direct labor hours and the Campfire
requires 30,000 direct labor hours. The company produces 3,400 units of the Kitchen
model and 600 units of the Campfire model each year. The company inspects one
Kitchen for every 100 produced, and inspects one Campfire for every 10 produced. The
company expects to incur $84,600 of total inspecting costs this year. How much of the
inspecting costs should be allocated to the Kitchen model using ABC costing?
a. $21,150
b. $30,600
c. $42,300
d. $71,910
Which of the following might be a reason that allocating overhead under an
activity-based approach might have less manufacturing overhead allocated to the
products?
a. The general overhead cost pool is not allocated to products under activity-based
costing
b. The product mix includes products that are not similar in material and labor
c. The product mix has all products that are similar in makeup of materials and labor
d. None of these answer choices are correct.
The predetermined overhead rate is calculated as
a. Actual overhead divided by estimated activity level.
b. Actual overhead divided by actual activity level.
c. Estimated overhead divided by actual activity level.
d. Estimated overhead divided by estimated activity level.
What is the formula for calculating breakeven point in units? In sales dollars? What
action might a company take if it wishes to reduce breakeven point?
In a decentralized organization, upper managers need a way to evaluate the
performance of unit managers. Based on factors under the unit manager ‘s control,
organizational units are categorized as cost centers, profit centers, or investment
centers. Classify each of the following centers by placing an “X” in the appropriate
column.
Simple Styles is a dress manufacturer. The company purchases fabric with a list price of
$200 per bolt and pays shipping charges of $3 per bolt. Each bolt contains 100 yards of
fabric. Simply Styles receives a volume discount of 15% per bolt. Each dress uses a
standard quantity of 2 yards of fabric.
Required:
Calculate the standard cost of material for one dress.
If the sales mix changes, so do the breakeven point and the other targets.
Which of the following is the formula for calculating the percentage in trend analysis?
What is an activity cost pool and how are activity cost pool rates calculated?
The following standards for variable manufacturing overhead have been established for
Windsor, Inc. a manufacturer of reproduction vintage hats.
Standard hours per unit 2.5 hours
Standard variable overhead rate $15.80 per direct labor hour
The following data pertain to operations for the month of July.
Actual direct labor hours 4,200
Actual total variable overhead cost $63,050
Actual production 1,800 units
Required:
Calculate the variable overhead spending variance and the variable overhead efficiency
variance for July and indicate whether the variances are favorable or unfavorable.