In a standard job-order costing system, factory overhead is applied using
predetermined rates times actual input.
In a multi-product environment, CVP analysis makes the assumption that a company’s
sales mix is constant.
Activity-based costing is appropriate for a company that manufactures a wide variety of
products
The slope of a regression line is determined by dividing the change in activity level by
the change in total cost.
When manufacturing overhead is charged to a job, the work in process account is
credited.
In a just-in-time (JIT) environment, design changes may be made at any time during
the production process.
Abnormal spoilage is always accounted for on an equivalent unit basis.
Data mining employs statistical techniques to uncover answers to issues about business
operations.
Shiny Floors Company
Shiny Floors Company produces four floor cleaners from the same process: C, D, E,
and G. Joint product costs are $9,000. (Round all answers to the nearest dollar.)
If Shiny Floors sells the products after further processing, the following disposal costs
will be incurred: C, $2.50; D, $1.00; E, $3.50; G, $6.00.
Refer to Shiny Floors Company. Using sales value at split-off, what amount of joint
processing cost is allocated to Product C?
A. $4,433
B. $2,276
C. $1,108
D. $1,182
Traditionally, managers have focused cost reduction efforts on
A. activities.
B. processes.
C. departments.
D. costs.
Industrial Solutions Company
Industrial Solutions Company produces three products from the same process that has
joint processing costs of $4,100. Products R, S, and T are produced in the following
quantities: 250 gallons, 400 gallons, and 750 gallons. Industrial Solutions Company
also incurred advertising costs of $60,000. The ad was used to run sales for all three
products. The three products occupy floor space in the following ratio: 5:4:9. (Round all
answers to the nearest dollar.)
Refer to Industrial Solutions Company. Using gallons as the physical measurement,
what amount of joint processing cost is allocated to Product R?
A. $2,196
B. $1,171
C. $1,367
D. $ 732
Which of the following U.S. legislation relates to bribes being offered to foreign
officials?
A. Racketeer Influenced and Corrupt Organizations Act
B. Foreign Illegal Activities Act
C. Foreign Corrupt Practices Act
D. Federal Bribery and Corrupt Practices Act
Stocks Corporation
Stocks Corporation has the following information available for June of the current year:
All material is added at the start of production and all products completed are
transferred out.
Refer to Stocks Corporation. Prepare a schedule showing the assignment of costs
assuming the (a) FIFO and (b) weighted average method.
Accounting for product costs in a JIT environment
A. uses a job order costing system.
B. classifies processing costs as raw (or direct) material, direct labor, and overhead.
C. is more complex than in other types of manufacturing environments.
D. follows process costing procedures whereby costs are accumulated by the process
(cell) and attached to units processed for the period.
The information below relates to costs, revenues, and assets anticipated in the Shoe
Division of DKY Footwear Corporation:
How would each of the following measures be affected if sales rise by $5,000 in the
Shoe Division?
A. increase increase increase
B. increase no change increase
C. increase increase no change
D. no change no change increase
If an analyst desires a conservative net present value estimate, he/she will assume that
all cash inflows occur at
A. mid year.
B. the beginning of the year.
C. year end.
D. irregular intervals.
Shiny Floors Company
Shiny Floors Company produces four floor cleaners from the same process: C, D, E,
and G. Joint product costs are $9,000. (Round all answers to the nearest dollar.)
If Shiny Floors sells the products after further processing, the following disposal costs
will be incurred: C, $2.50; D, $1.00; E, $3.50; G, $6.00.
Refer to Shiny Floors Company. Using sales value at split-off, what amount of joint
processing cost is allocated to Product D?
A. $4,433
B. $2,276
C. $1,108
D. $1,182
Measuring the firm’s performance against established objectives is part of which of the
following functions?
A. Planning
B. Controlling
C. Organizing
D. Staffing
The budgeted payment for labor cost each period would be found in the
A. labor budget.
B. pro forma income statement.
C. selling, general, and administrative expense budget.
D. cash budget.
____ is a “pull” system of production and inventory control.
A. EDI
B. EOQ
C. JIT
D. ABC
As the economy becomes more and more depressed, a company’s management decides
to slash spending on research and development. What is the likely effect of this action
on net income? Net income will be
A. higher this period and lower in future periods.
B. higher this period and higher in future periods.
C. lower this period and higher in future periods.
D. lower this period and lower in future periods.
In selecting non-financial performance measures managers should choose measures
that reflect
A. qualitative characteristics that point out sub-optimization activities and throughput
bottlenecks.
B. both short-term and long-term measures related to critical success factors.
C. long-term supplier satisfaction levels.
D. short-term financial viability.
Which of the following items would not be found in the financing section of the cash
budget?
A. cash payments for debt retirement
B. cash payments for interest
C. cash payments for sales of investments
D. payment of accounts payable
Griffith Corporation
Griffith Corporation is considering an investment in a labor-saving machine.
Information on this machine follows:
Refer to Griffith Corporation. Assume for this question only that Griffith Corporation
uses a discount rate of 16 percent to evaluate projects of this type. What is the project’s
net present value? Present value tables or a financial calculator are required.
A. $(6,283)
B. $(3,806)
C. $(23,451)
D. $(22,000)
All other factors equal, which of the following would affect a project’s internal rate of
return, net present value, and payback period?
A. an increase in the discount rate
B. a decrease in the life of the project
C. an increase in the initial cost of the project
D. all of the above
Epplin Company
The following information is provided for Epplin Company for the month of
September:
Refer to Epplin Company. What is the efficiency variance?
A. $4,450 F
B. $4,450 U
C. $1,000 F
D. $1,000 U
The Du Pont model measures ROI as it is affected by
A. contribution margin and asset turnover.
B. profit margin and asset turnover.
C. asset turnover.
D. profit margin.
In comparing two projects, the ____ is often used to evaluate the relative riskiness of
the projects.
A. payback period
B. net present value
C. internal rate of return
D. discount rate
A costing method that involves ongoing efforts for continuous improvement to reduce
product costs, increase product quality and improve the production process after
manufacturing activities have begun is referred to as
______________________________.
A measuring device that identifies what is happening in a process being controlled is
referred to as a(n) ____________________.
detector or
What is the major advantage of the accounting rate of return relative to the other
techniques that can be used to evaluate capital projects?
Mobile Corporation
Mobile Corporation is a manufacturer of electronic blood pressure monitors for
home use. The following is a summary of quality costs for the first year of operations.
Refer to Mobile Corporation. Determine the total quality cost.
Total units produced during the period divided by the value-added processing time is
referred to as ______________________________.