On a CVP graph, the total cost line intersects the y-axis at zero.
When multiple labor categories are used, the financial effect of using a different mix of
workers in a production process is referred to as a labor yield variance.
Plantwide overhead rates provide a more accurate computation of factory overhead
than departmental overhead rates
A decision that must be made at split-off is to sell a product or process it further.
Downsizing often results in one-time charges against income.
There is an inverse relationship between degree of operating leverage and the margin of
safety.
The internal business perspective of the balanced scorecard addresses the things that an
organization needs to do well to meet customer needs and expectations.
In an activity-based costing system overhead costs are first recorded in activity center
pools before being recorded in a general ledger
Specifications for materials are compiled on a bill of materials.
A key concept underlying cost driver analysis is that
A. all cost drivers identified should be used for cost accumulation.
B. the cost of measuring a driver does not exceed the benefits of using it.
C. only costs occurring at the unit-level should be assigned to products or services.
D. organizational/facility costs are non-value-added and should never be assigned to
products or services.
Which of the following indicates the mission being pursued by a subunit that is
A. save harvest
B. build save
C. harvest build
D. build harvest
A ____ system of production control is paced by product demand.
A. EOQ
B. ABC
C. push
D. pull
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 per equivalent unit for material using
weighted average?
A. $1.72
B. $1.62
C. $1.77
D. $2.07
For a CPA firm, how would the wages of staff auditors be classified?
A. Yes No
B. No Yes
C. Yes Yes
D. No No
Refer to Calhoun Corporation. What would be the total annual carrying costs assuming
the carrying cost per unit is $0.20?
A. $1,000
B. $600
C. $100
D. $1,100
In a multiple-product firm, the product that has the highest contribution margin per unit
will
A. generate more profit for each $1 of sales than the other products.
B. have the highest contribution margin ratio.
C. generate the most profit for each unit sold.
D. have the lowest variable costs per unit.
Chambers Company
Chambers Company produces two products from a joint process: X and Z. Joint
processing costs for this production cycle are $8,000.
If X and Z are processed further, no disposal costs will be incurred or such costs will be
borne by the buyer.
Refer to Chambers Company. Using approximated net realizable value at split-off, what
amount of joint processing cost is allocated to Product Z (round to the nearest dollar)?
A. $2,796
B. $4,910
C. $4,000
D. $2,390
Corporate taxes and tariffs are particular transfer-pricing concerns of
A. investment centers.
B. multinational corporations.
C. division managers.
D. domestic corporations involved in importing foreign goods.
Marathon Manufacturing Company uses a standard cost system. Overhead cost
information for January is as follows:
What is the total overhead variance?
A. $1,200 F
B. $1,200 U
C. $1,400 F
D. $1,400 U
Office Systems Corporation
Office Systems Corporation manufactures and sells various high-tech office automation
products. Two divisions of Office Systems Corporation are the Computer Chip Division
and the Computer Division. The Computer Chip Division manufactures one product, a
‘super chip,” that can be used by both the Computer Division and other external
customers. The following information is available on this month’s operations in the
Computer Chip Division:
Presently, the Computer Division purchases no chips from the Computer Chips
Division, but instead pays $45 to an external supplier for the 4,000 chips it needs each
month.
Refer to Office Systems Corporation. If a transfer between the two divisions is arranged
next period at a price (on 4,000 units of super chips) of $40, total profits in the
Computer Chip division will
A. rise by $20,000 compared to the prior period.
B. drop by $40,000 compared to the prior period.
C. drop by $20,000 compared to the prior period.
D. rise by $80,000 compared to the prior period.
Wyatt Corporation
Wyatt Corporation has the following standard costs associated with the manufacture
and sale of one of its products:
Refer to Wyatt Corporation. Based on variable costing, the income before income taxes
for the year was
A. $570,600.
B. $560,000.
C. $562,600.
D. $547,500.
Life-cycle costing is especially important in which of the following types of
companies?
A. yes yes yes yes
B. no yes yes no
C. yes no no yes
D. yes no yes yes
Which of the following statements is true regarding by-products or scrap?
A. Process costing is the only method that should result in by-products or scrap.
B. Job order costing systems will never have by-products or scrap.
C. Job order costing systems may have instances where by-products or scrap result
from the production process.
D. Process costing will never have by-products or scrap from the production process.
At its present level of operations, a small manufacturing firm has total variable costs
equal to 75 percent of sales and total fixed costs equal to 15 percent of sales. Based on
variable costing, if sales change by $1.00, income will change by
A. $0.25.
B. $0.10.
C. $0.75.
D. can’t be determined from the information given.
The time value of money is explicitly recognized through the process of
A. interpolating.
B. discounting.
C. annuitizing.
D. budgeting.
The Jewelry Division of Genuine Gems Company is considering an investment in a
new project. The project has an estimated cost of $1,000,000. If Genuine Gems
Company has a target rate of return of 12%, how large does the return on investment on
this project need to be to generate $150,000 of residual income?
A. 15%
B. 12%
C. 25%
D. 27%
Finding acceptable alternatives to higher cost items or not spending money for goods
and services is referred to as ________________________________.
Three types of transfer prices are _________________________,
_________________________, and ____________________.
The starting point for any master budget is the _________________________.
If it is assumed that managers act to maximize the value of the firm, what can also be
assumed about the existing mix of capital components relative to the set of all viable
alternative mixes of capital components?
What items affect comparability of different divisions within the same company on the
basis of EVA, ROI and RI?
The rate of return specified as the lowest acceptable return on an investment is referred
to as the ________________________________.
Moore Company
Moore Company produces three products from the same process and incurs joint
processing costs of $3,000.
Disposal costs for the products if they are processed further are:
M, $3.00; N, $5.50; Q, $1.00.
Refer to Moore Company. What amount of joint processing cost is allocated to the three
products using net realizable value at split-off?