Specifications for materials are compiled on a purchase requisition.
The amount of raw materials that must be purchased can be computed by the following
formula: Ending inventory + Materials required – Beginning inventory.
When considering risk, a manager will often use a judgmental method of risk
adjustment.
On a CVP graph, the total revenue line intersects the y-axis at zero.
If underapplied factory overhead is immaterial, the account is closed by a credit to Cost
of Goods Sold.
In an internal transfer, the buying division records the transaction by
A. debiting Accounts Receivable.
B. crediting Accounts Payable.
C. debiting Intracompany Cost of Goods Sold.
D. crediting Inventory.
Buckingham Company
Buckingham Company uses a standard cost system for its production process and
applies overhead based on direct labor hours. The following information is available for
May when Buckingham produced 4,500 units:
Refer to Buckingham Company. Using the four-variance approach, what is the variable
overhead efficiency variance?
A. $2,187 U
B. $9,937 F
C. $2,187 F
D. $2,937 F
Actual fixed overhead minus budgeted fixed overhead equals the
A. fixed overhead volume variance.
B. fixed overhead spending variance.
C. noncontrollable variance.
D. controllable variance.
Chapman Company
Chapman Company uses a job-order costing system. At the beginning of March, the
company had two jobs in process with the following costs:
Chapman pays its workers $8.50 per hour and applies overhead on a direct labor hour
basis.
Refer to Chapman Company. What is the overhead application rate per direct labor
hour?
A. $ 0.50
B. $ 2.00
C. $ 4.25
D. $30.00
The FIFO method of process costing will produce the same cost of goods transferred
out amount as the weighted average method when
A. the goods produced are homogeneous.
B. there is no beginning Work in Process Inventory.
C. there is no ending Work in Process Inventory.
D. beginning and ending Work in Process Inventories are each 50 percent complete.
When the cost of lost units must be assigned, and those same units must be included in
an equivalent unit schedule, these units are considered
A. normal and discrete.
B. normal and continuous.
C. abnormal and discrete.
D. abnormal and continuous.
Riggs Company uses a FIFO process costing system. The company had 5,000 units that
were 60 percent complete as to conversion costs at the beginning of the month. The
company started 22,000 units this period and had 7,000 units in ending Work in Process
Inventory that were 35 percent complete as to conversion costs. What are equivalent
units for material, if material is added at the beginning of the process?
A. 18,000
B. 22,000
C. 25,000
D. 27,000
Bartling Company transferred 5,500 units to Finished Goods Inventory during October.
On October 1, the company had 300 units on hand (40 percent complete as to both
material and conversion costs). On October 31, the company had 800 units (10 percent
complete as to material and 20 percent complete as to conversion costs). The number of
units started and completed during October was:
A. 5,200.
B. 5,380.
C. 5,500.
D. 6,300.
The connection of two or more flexible manufacturing systems via a host computer and
a networking information system is known as
A. yes yes
B. yes no
C. no no
D. no yes
Top management can preserve the autonomy of division managers and encourage an
optimal level of internal transactions by
A. selecting performance evaluation measures that are consistent with the achievement
of overall corporate goals.
B. selecting division managers who are most concerned about their individual
performance.
C. prescribing transfer prices between segments.
D. setting up all organizational units as revenue centers.
The study of the differences between a current and a proposed cost management
system is referred to as _________________________.
The costing method that excludes beginning work in process inventory from the
computation of equivalent units is the ________ method.
The proportion of good units resulting from activities is referred to as
________________________________________.
What are the three primary goals of the just-in-time (JIT) philosophy?
An operation whose exact nature cannot be observed is referred to as a(n)
_________________________.
An organizational unit that provides specific tasks for other internal units is referred to
as a(n) ______________________________.
A function or activity in which an organization seeks to excel above its competitors is a
______________________________.
When indirect materials are added to a job, the ______________________________
account is debited.
What is the relationship between scarce resources and an organization’s production
capacity?