1) There are several advantages to using activity-based costing. Which of the following
is one of these advantages?
A.Services not performed in a department are allocated a portion of the cost of
operating that department
B.Each department can choose the activity base that relates best to its cost
C.Simplified costing is time-consuming and expensive to administer
D.Activity-based rates are much less time-consuming to prepare
2) The standard capacity of a factory is 9,000 units per month. Cost and production data
follow:
What is the amount of overhead allowed for the actual volume of production?
A.$22,000
B.$22,400
C.$22,500
D.$22,700
3) In Activity-based costing, the activity rates that are used to charge costs to each job
are based on:
A.the direct labor hours incurred by each activity
B.the number of units produced
C.each activitys consumption of the resources required to sustain it
D.volume related cost drivers
4) The file that serves as a basis for reporting payroll information to governmental
agencies and preparing Form W-2 is the:
A.labor time record
B.payroll record
C.employees earnings record
D.labor cost summary
5) Earl Company’s direct labor costs for the month of January follow:
What was Earl’s direct labor efficiency variance?
A.$6,500 favorable
B.$6,400 unfavorable
C.$1,800 favorable
D.$6,400 favorable
6) A typical factory overhead cost is:
A.Freight out
B.Stationery and printing
C.Depreciation on machinery and equipment
D.Postage
7) During June, Birch Bay Company’s Department B equivalent unit product costs
computed under the average cost method were as follows:
Materials are introduced at the end of the process in Department B. There were 4,000
units (60 % complete as to conversion costs) in work in process at June 30 . The total
costs assigned to the June 30 work in process inventory should be:
A.$20,000
B.$24,800
C.$27,200
D.$35,200
8) Which of the following is the best example of a non-financial performance measure
for the learning and growth perspective of a colleges balanced scorecard?
A.Size of endowment
B.Number of degrees awarded
C.Number of conferences attended by faculty members
D.Percentage of students retained from freshman to sophomore year
9) Which of the following is not an operating budget?
A.Cash budget
B.Sales and administrative budget
C.Sales budget
D.Cost of goods sold budget
10) The beginning work in process inventory is 60 percent complete, and the ending
work in process inventory is 45 percent complete. The dollar amount of the production
cost included in the ending work in process inventory (using the average cost method)
is determined by multiplying the average unit costs by what percentage of the total units
in the ending work in process inventory?
A.100 percent
B.60 percent
C.55 percent
D.45 percent
11) The excess of revenue over variable costs, including manufacturing, selling and
administrative, is called:
A.Gross margin
B.Manufacturing margin
C.Contribution margin
D.Segment margin
12) A wage plan based solely on an employee’s quantity of production is known as a(n):
A.Modified wage plan
B.Hourly-rate plan
C.Incentive wage plan
D.Piece-rate plan
13) The Binding Department is the second stage of News Printings production cycle.
On May 1, the beginning work in process contained 30,000 units that were 60 percent
complete. During May, 170,000 units were transferred in from the first stage of Pine’s
production cycle and 160,000 units were completed and transferred to Finished Goods.
On May 31, the ending work in process contained 40,000 units that were 25 percent
complete. Using the average cost method, the equivalent units of the Assembly
Department are:
A.170,00054,000 50,000
B.200,000160,000160,000
C.200,000170,000170,000
D.240,000200,000200,000
14) During March, Hart Company incurred the following costs on Job 122 for the
manufacture of 200 motors:
The rework costs were attributable to the exacting specifications of Job 122, and the full
rework costs were charged to this specific job. What is the cost per finished unit of Job
122?
A.$25.00
B.$23.50
C.$27.00
D.$24.00
15) Lunchco Inc. produces picnic tables in a two-step process. Pretreated wood is cut in
the Cutting Department and then the lumber is assembled into tables in the Assembly
Department. It takes 30 minutes of direct labor time to cut the lumber and the standard
hourly labor rate in the Cutting Department is $12. The tables take one hour to assemble
and the standard hourly rate in the Assembly Department is $10. If Lunchcos
production budget is 20,000, what is the companys direct labor budget?
A.$340,000
B.$680,000
C.$330,000
D.$320,000
16) Cost of activities incurred to remedy shipment of defective products to customers
are classified as:
A.prevention costs
B.appraisal costs
C.internal failure costs
D.external failure costs
17) Nate Company manufactures Products A and B from a joint process that also yields
a by-product, X. Nate Company accounts for the revenue from its by-product sales as a
deduction from the cost of its main products. Additional information is as follows:
(1) Assuming that joint product costs are allocated using the relative sales value at
split-off approach, what was the joint cost allocated to Products A and B?
(2) Prepare the journal entry to transfer the finished products to separate inventory
accounts.
(3)Assuming the sales value of X is stable, prepare the journal entries to:
(a) place the by-product in stock
(b) record the sale of 3,000 units for $10,500 on account.
18) Lee Company’s direct labor costs for the month of February follow:
What was Lee’s standard direct labor rate?
A.$9.50
B.$9.75
C.$9.40
D.$9.25
19) The materials quantity variance, in a standard cost system, is the:
A.Difference between the actual and standard quantities
B.Difference between the actual and standard quantities multiplied by the actual unit
price
C.Difference between the actual quantity used and the actual quantity purchased
multiplied by the standard unit price
D.Difference between the actual and standard quantities multiplied by the standard unit
price
20) Which of the following would not be classified as an external failure cost on a cost
of quality report?
A.customer support representatives
B.labor costs to replace recalled brake parts on automobiles
C.the cost of a batch of chemicals that was scrapped when too much acid was added
D.a coupon for a free meal given to a customer because his steak was too well done