Variances are labeled as
a. Avoidable or unavoidable.
b. Favorable or unfavorable.
c. Positive or negative.
d. Committed or discretionary.
Milsaps Company produces sportsmen’s digital scales. In preparing the current budget,
Milsaps’ controller estimates a total of $300,000 in direct materials cost, $220,000 in
direct labor cost, and $330,000 in manufacturing overhead costs. Since much of the
production process requires skilled workers to assemble the scales, direct labor cost is
used as the overhead application base. At the end of the period, Milsaps reported actual
results as follows: direct materials cost of $290,000, direct labor cost of $210,000, and
manufacturing overhead cost $310,000. a. What is Milsaps’ predetermined overhead
rate for the year?
b. How much manufacturing overhead did Milsaps apply during the year?
c. What is the journal entry to close overhead if the amount is considered to be
insignificant?
The payback period of a project that produces even cash flows each year is calculated
by dividing
a. Net initial investment by the projected annual cash flow.
b. Gross initial investment by the projected annual cash flow.
c. Net initial investment by the projected annual cash inflows.
d. Gross initial investment by the projected annual cash inflows.
Terra Mesa Manufacturing uses a job order cost system to account for its production of
specialty patio furniture. At the beginning of June, Terra Mesa had one job in Work in
Process, job A75. The costs incurred to date on job A75 are as follows:
During June, Terra Mesa added the following costs for direct materials and direct labor
to job A75:
Job A75 was competed on June 30. What is the cost of job A75?
a. $39,135
b. $44,910
c. $42,831
d. $26,010
Logan ‘s, Inc. has the following production and cost data for two of its products, Basic
and Supreme:
A total of 40,000 hours is available each period for the production of the two products
The demand for both products is strong and Logan is not sure it can fill all orders
expected to be received. Required: a. Ignoring qualitative issues, for which of the two
products should Logan focus on filling orders first? b. List three alternatives that Logan
should consider in order to produce more units within the 40,000 hours?
Most companies monitor their performance
a. Monthly.
b. Weekly.
c. Daily.
d. All of these answer choices are correct.
According to the theory of constraints, which of the following is not a step required to
maximize and improve the performance of a value chain?
a. Identify the constraint.
b. Decide how to exploit the constraint.
c. Elevate the performance of the constraint.
d. All of these answer choices are required steps.
The leading professional organization for managerial accountants is
a.The American Institute of Managerial Accountants.
b.The Society of American Management Accountants.
c.The Institute of Management Accountants.
d.The National Society of Management Accountants.
Which of the following is not a standard of the IMA statement of ethical professional
practice?
a.Competence
b.Integrity
c.Credibility
d.Independence
Which of the following types of entities would probably use a process costing system?
a. Oil refiner
b. Construction company
c. Airplane manufacturer
d. CPA firm
Which of the following documents is used to release direct materials from the
storeroom to the factory floor?
a. Materials requisition slip
b. Job cost sheet
c. Bill of materials
d. Application sheet
Two calculations can be made to measure customer profitability: customer net profit
and customer profit margin.
Required:
a. What is the formula for customer net profit?
b. What is the formula for customer profit margin?
On an organizational chart, from bottom to top, which of the following is the order of
responsibility centers?
a. Cost, profit, investment
b. Cost, investment, profit
c. Profit, cost, investment
d. Profit, investment, cost