Saturn Corporation
Material A is added at the start of production, while Material B is added uniformly
throughout the process.
Refer to Saturn Corporation Assuming a weighted average method of process costing,
compute the average cost per unit for Material A.
A. $20.10
B. $20.00
C. $31.25
D. $31.00
Stillwater Corporation
The following information is available for Stillwater Corporation for the current year:
All materials are added at the start of production.
Refer to Stillwater Corporation. What is the cost assigned to normal spoilage using
weighted average?
A. $31,000
B. $15,500
C. $30,850
D. None of the responses are correct
If normal spoilage is detected at an inspection point within the process (rather than at
the end), the cost of that spoilage should be
A. included with the cost of the units sold during the period.
B. included with the cost of the units completed in that department during the period.
C. allocated to ending work in process units and units transferred out based on their
relative values.
D. allocated to the good units that have passed the inspection point.
The split-off point is the point at which
A. output is first identifiable as individual products.
B. joint costs are allocated to joint products.
C. some products may first be sold.
D. all of the above.
How will a favorable volume variance affect net income under each of the following
methods?
A. reduce no effect
B. reduce increase
C. increase no effect
D. increase reduce
Collins Company uses 12,000 units of a part in its production process. The costs to
make a part are: direct material, $15; direct labor, $27; variable overhead, $15; and
applied fixed overhead, $32. Eichholtz has received a quote of $60 from a potential
supplier for this part. If Collins buys the part, 75 percent of the applied fixed overhead
would continue. Collins Company would be better off by
A. $30,000 to manufacture the part.
B. $348,000 to buy the part.
C. $60,000 to buy the part.
D. $216,000 to manufacture the part.
To make game playing successful, the employees must be able to
A. mine data.
B. form strategic alliances.
C. win.
D. use ERP.
Crafton Corporation applies overhead at the rate of 70 percent of direct labor. Crafton
incurred $450,000 of direct labor during the current year. Crafton incurred actual
overhead of $367,000.
(a) Compute the amount of under- or overapplied overhead for Crafton Corporation for
the current year
(b) Prepare the necessary journal entry to dispose of the under- or overapplied overhead
(assuming that the amount is immaterial).
The following information is available from the Ryan Company:
Assuming that Ryan uses a three-way analysis of overhead variances, what is the
overhead spending variance?
A. $ 750 F
B. $ 750 U
C. $ 950 F
D. $1,500 U
When actual performance varies from the budgeted performance, managers will be
more likely to revise future budgets if the variances were
A. controllable rather than uncontrollable.
B. uncontrollable rather than controllable.
C. favorable rather than unfavorable.
D. small.
Since overhead costs are indirect costs,
A. they require some process of allocation.
B. they can be easily traced to production.
C. a predetermined overhead rate is not advantageous.
D. they cannot be allocated.
Standard costs
A. are estimates of costs attainable only under the most ideal conditions.
B. are difficult to use with a process costing system.
C. can, if properly used, help motivate employees.
D. require that significant unfavorable variances be investigated, but do not require that
significant favorable variances be investigated.
A hybrid costing system combines characteristics of
A. job order and standard costing systems.
B. job order and process costing systems.
C. process and standard costing systems.
D. job order and normal costing systems.