A large labor efficiency variance is prorated to which of the following at year-end?
A. no no no
B. no yes yes
C. yes no no
D. yes yes yes
Material is added at the beginning of a process in a process costing system. The
beginning Work in Process Inventory for the process was 30 percent complete as to
conversion costs. Using the FIFO method of costing, the number of equivalent units of
material for the process during this period is equal to the
A. beginning inventory this period for the process.
B. units started and completed this period in the process.
C. units started this period in the process plus the beginning Work in Process Inventory.
D. units started and completed this period plus the units in ending Work in Process
Inventory.
Bolton Company produced three joint products at a joint cost of $100,000. These
products were processed further and sold as follows:
The company has had an opportunity to sell at split-off directly to other processors. If
that alternative had been selected, sales would have been: A, $56,000; B, $28,000; and
C, $56,000.
The company expects to operate at the same level of production and sales in the
forthcoming year.
Required: Consider all the available information and assume that all costs incurred
after split-off are variable.
Which of the following can be used to indicate factors that slow down or cause
unnecessary work in a process?
A. activity analysis
B. total quality management
C. cost of quality
D. all of the above
The cash budget ignores all
A. dividend payments.
B. sales of capital assets.
C. noncash accounting accruals.
D. sales of common stock.
A company would most likely have an unfavorable labor rate variance and a favorable
labor efficiency variance if
A. the mix of workers used in the production process was more experienced than the
normal mix.
B. the mix of workers used in the production process was less experienced than the
normal mix.
C. workers from another part of the plant were used due to an extra heavy production
schedule.
D. the purchasing agent acquired very high quality material that resulted in less
spoilage.
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. Assume, for this question only, that the Computer
Chip Division is selling all that it can produce to external buyers for $50 per unit. How
would overall corporate profits be affected if it sells 4,000 units to the Computer
Division at $45? (Assume that the Computer Division can purchase the super chip from
an outside supplier for $45.)
A. no effect
B. $20,000 increase
C. $20,000 decrease
D. $90,000 increase
A fixed cost is relevant if it is
A. uncontrollable.
B. avoidable.
C. sunk.
D. a product cost.
Refer to Phelps Corporation. What are Phelps Corp.’s total annual ordering costs for
Material A?
A. $6,000
B. $600
C. $125
D. $1,000
The final figure in the Schedule of Cost of Goods Manufactured represents the
A. cost of goods sold for the period.
B. total cost of manufacturing for the period.
C. total cost of goods started and completed this period.
D. total cost of goods completed for the period.
The balanced scorecard perspective that addresses things that an organization needs to
do well to meet customer needs and expectations:
A. learning and growth perspective
B. internal business perspective
C. customer value perspective
D. financial perspective
The cost of abnormal losses (net of disposal costs) should be written off as
A. yes no
B. yes yes
C. no yes
D. no no
Which of the following types of employee compensation are tax-exempt?
A. contingent pay
B. profit sharing
C. cafeteria plans
D. stock appreciation rights
To avoid waste and maximize efficiency when transferring products among divisions in
a competitive economy, a large diversified corporation should base transfer prices on
A. variable cost.
B. market price.
C. full cost.
D. production cost.
If a company’s fixed costs were to increase, the effect on a profit-volume graph would
be that the
A. contribution margin line would shift upward parallel to the present line.
B. contribution margin line would shift downward parallel to the present line.
C. slope of the contribution margin line would be more pronounced (steeper).
D. slope of the contribution margin line would be less pronounced (flatter).
Two methods of allocating joint costs to individual products are
________________________________________ and
________________________________________.
Why is absorption costing not used for CVP analysis?
A cost that remains unchanged in total within the relevant range is known as a
____________________ cost.
Define the relevant range and explain its significance.
Discuss increased competition and improved problem solving skills as they relate to
benchmarking.
Discuss standard costing as used in conjunction with process costing.