Marketing costs include expenditures for sales commissions (2% of sales dollars) and
shipping costs (20 cents per unit) are variable marketing costs and considered to be
which of the following?
A.customer-level activities.
B.facility-level activities.
C.product-level activities.
D.unit-level activities.
What is often the most difficult aspect of budgeting?
A.forecasting sales because it involves considerable subjectivity.
B.forecasting sales because it involves considerable objectivity.
C.forecasting production requirements because it involves considerable subjectivity.
D.forecasting production requirements because it involves considerable objectivity.
In process costing, what is the equation for determining average unit cost?
A.Total Manufacturing Cost Incurred during the Period divided by Total Units
Produced during the period.
B.Average Manufacturing Cost Incurred during the Period divided by Total Units
Produced during the period.
C.Total Manufacturing Cost Incurred during the Period divided by Average Units
Produced during the period.
D.Average Manufacturing Cost Incurred during the Period divided by Average Units
Produced during the period.
Using activity-based costing to analyze customer profitability requires the analyst to
determine the cost to maintain customers, which includes such activities as
A.billing customers
B.follow up calls
C.process returns
D.run advertising campaigns
Calculate break-even when a company’s selling price per unit is $15, variable costs per
unit are $8, fixed costs for the year are $70,000.
A.8,750 units
B.4,667 units
C.7,000 units
D.10,000 units
Java Gourmet Coffee
Java Gourmet Coffee reports the following data for April 2010 where 200,000 pounds
of roasted gourmet coffee beans were actually produced (note: standard costs do not
allow for any wastage), Actual:
Standard:
Refer to Java Gourmet Coffee. Calculate the direct labor efficiency variance.
A.$11,000 F
B.$9,000 U
C.$20,000 U
D.$9,500 U
Effective divisional incentive compensation plans must induce individual behavior
compatible with increasing which of the following?
A.firm’s wealth.
B.suppliers’ wealth.
C.customers’ wealth.
D.employees’ agency wealth.
The yield variance is the portion of the efficiency variance that is not a
A.match variance.
B.mix variance.
C.quantity variance.
D.price variance.
When using differential analysis to determine when to add or drop parts of operations,
if the differential revenue from the sale of a product exceeds the differential costs
required to provide the product for sale, then
A.the product generates losses and the firm should discontinue its production.
B.the product generates losses and the firm should continue its production.
C.the product generates profits and the firm should discontinue its production.
D.the product generates profits and the firm should continue its production.
For financial reporting purposes, how are fixed manufacturing costs treated?
A.Included in the value of inventory.
B.Not included in the value of inventory.
C.Treated the same as in managerial accounting.
D.Not reported.
How are overhead costs accumulated in an activity-based costing system?
A.in a single, plant-wide pool.
B.by departments.
C.in pools established by identified cost drivers.
D.in facility-level activities.
Describe the three major manufacturing cost categories.
Describe the similarities among and the differences between product costing in service
organizations and manufacturing companies.
Explain how you might analyze a capital budgeting decision where the cash flow data
are nominal (including expected inflation of, say, 5 percent per year) but the quoted
cost of capital of 11 percent per year is real (excluding anticipated inflation).
Hightown Company uses a predetermined overhead rate for applying overhead cost to
products. Rates for the current year follow:
Variable Overhead Rate: $2.50 per unit
Fixed Overhead Rate: $5.00 per unit
Actual overhead costs:
The company expected to produce 125,000 units during the year, but only produced
120,000.
REQUIRED:
Use this information to answer the following question(s):
The following output of overhead on direct labor hours was obtained using regression
analysis:
The company is planning to operate at a level that would call for 3,000 direct labor
hours to be utilized for the coming year.
Refer to the above data; use the regression output to write out the overhead cost
equation.
Explain the linkages among the four balanced scorecard perspectives.
Leman Suitcase Company
The Leman Suitcase Company is trying to decide which independent variable would be
a better predictor of advertising expense. The following regressions were run using
sales dollars and units sold as the independent variables.
Regression Analysis #1
Dependent variable – Advertising Expense
Independent variable – Sales Dollars
Regression Analysis #2
Dependent variable – Advertising Expense
Independent variable – Units Sold
Refer to the Leman Suitcase Company. Using units sold as the independent variable,
what would be the prediction of advertising expense if 4,000 units are expected to be
sold?