1) Customer response time comprises of ________.
A) manufacturing cycle time and delivery time only
B) receipt time and manufacturing cycle time only
C) receipt time, manufacturing cycle time, and delivery time
D) manufacturing time and delivery time only
2) Marvelous Motors is a small motor supply outlet that sells motors to companies that
make various small motorized appliances. The fixed operating costs of the company are
$300,000 per year. The controlling shareholder, interested in product profitability and
pricing, wants all costs allocated to the motors and wants to review the company status
on a quarterly basis. The shareholder is trying to determine whether the costs should be
allocated each quarter based on the 25% of the annual fixed operating costs ($75,000)
or by using an annual forecast budget to allocate the costs. The following information is
provided for the operations of the company:
Required:
a.What amount of fixed operating costs are assigned to each motor by quarter when
actual sales are used as the allocation base and $75,000 is allocated?
b.How much fixed cost is recovered each quarter under requirement a.?
c.What amount of fixed operating costs are assigned to each motor by quarter when
forecast sales are used as the allocation base and the rate is calculated annually as part
of the budgetary process?
d.How much fixed cost is recovered each quarter under requirement c.?
e.Which method seems more appropriate in this case? Explain.
3) The best estimate of the total variable manufacturing cost per unit is:
A) $32.40
B) $44.80
C) $66.20
D) $21.40
4) An example of an allowable cost considered by U.S government contract is
________.
A) costs of economy-class airfares
B) costs of lobbying activities
C) costs of alcoholic beverages
D) costs of vacation for executives
5) Management by exception is a practice whereby managers focus more closely on
________.
A) a static budget
B) areas that are not operating as anticipated
C) activity-based costing
D) exceptional decision-making models
6) If unit outputs exceed the breakeven point ________.
A) there will be an increase in fixed costs
B) total sales revenue will exceed fixed costs
C) total sales revenue will exceed variable costs
D) there will be a profit
7) When the cost pools are homogeneous ________.
A) the number of needed cost pools will be more
B) the costs in the cost pool have a similar cause-and-effect or benefits-received
relationship with the cost-allocation base
C) managers should not allocate both variable costs and costs that are fixed in the
short-run
D) there will be a greater variety of cause-and-effect, benefits-received, or
fair-and-equitable
relationship with the cost-allocation base
8) Answer the following questions using the information below:
Nicolt Company produced 120,000 sport jackets during 2015 and 480,000 direct
manufacturing labor-hours were used at $2 per hour. The conversion costs were $1.2
per jackets produced.
What is the direct manufacturing labor partial productivity for Nicolt Company?
A) 0.25 unit per direct manufacturing labor-hour
B) 0.50 unit per direct manufacturing labor-hour
C) 4.00 unit per direct manufacturing labor-hour
D) 1.00 unit per direct manufacturing labor-hour
9) The conversion cost for December was:
A) $134,000
B) $109,000
C) $192,000
D) $129,000
10) A cost system determines the cost of a cost object by ________.
A) accumulating and then assigning costs
B) accumulating costs
C) assigning and then accumulating costs
D) assigning costs
11) Price discrimination is the practice of ________.
A) setting different prices for different products
B) charging different prices for quantity amounts
C) using variable costing for some products and full costing for other products when
setting prices
D) charging different prices to different customers or clients for the same products or
services
12) Which of the following statements concerning an organization’s strategy is true?
A) Strategy specifies how an organization matches its own capabilities with the
opportunities in the marketplace to accomplish its objectives.
B) Cost accountants formulate strategy in an organization since they have more inputs
about costs.
C) A good strategy will always overcome poor implementation.
D) Businesses usually follow one of two broad strategies: offering a quality product at a
high price, or offering a unique product or service priced lower than the competition.
13) Which of the following is a reason why top managers want lower-level managers to
participate in the budgeting process?
A) To benefit from their experience with the day-to-day aspects of running the business.
B) To reduce the time and cost expended in the budgeting process.
C) To ensure that they do not introduce any budgetary slack.
D) To ensure that the budgets are administered rigidly given the changing market
conditions.
14) The contribution margin for July is:
A) $534,600
B) $699,300
C) $359,900
D) $1,453,400
15) Favorable direct manufacturing labor efficiency variances are ________.
A) always credits
B) always debits
C) debited to the Work-in-Process Control account
D) debited to the Wages Payable Control account