The amount of time between the development and the production of a product is
A. the product life cycle.
B. lead time.
C. production time.
D. value-added time.
The weighted average cost of capital approach to decision making is not directly
affected by the
A. value of the common stock.
B. current budget for capital expansion.
C. cost of debt outstanding.
D. proposed mix of debt, equity, and existing funds used to implement the project.
Data mining is used to
A. uncover quality problems.
B. study customer retention.
C. identify cost drivers.
D. all of the above.
Wyman Corporation
Wyman Corporation. has the following information for May:
All material is added at the start of the process and all finished products are transferred
out.
Refer to Wyman Corporation. Assume that weighted average process costing is used.
What is the cost per equivalent unit for material?
A. $0.99
B. $1.18
C. $1.64
D. $1.73
The use of separate variable and fixed overhead rates is better than a combined rate
because such a system
A. is less expensive to operate and maintain.
B. does not result in underapplied or overapplied overhead.
C. is more effective in assigning overhead costs to products.
D. is easier to develop.
The method of neglect handles spoilage that is
A. discrete and abnormal.
B. discrete and normal.
C. continuous and abnormal.
D. continuous and normal.
Discretionary activities in an organization are determined based on
A. organizational policies and managerial preferences.
B. the budgeted amount from the prior period.
C. the level of long-term investment.
D. an organization’s internal control.
In the pharmaceutical or food industries, quality control inspections would most likely
be viewed as
A. non-value-added activities.
B. business-value-added activities.
C. value-added-activities.
D. process-efficiency activities.
The master budget is a
A. static budget.
B. flexible budget.
C. qualitative expression of a prior goal.
D. qualitative expression of a future goal.
After service department costs have been allocated, what is the final step in
determining full product cost?
A. determine direct material cost
B. determine overhead application rates for revenue-producing areas
C. determine direct labor cost
D. determine total service department costs
Which of the following is more characteristic of a decentralized than a centralized
business structure?
A. The firm’s environment is stable.
B. There is little confidence in lower-level management to make decisions.
C. The firm grows very quickly.
D. The firm is relatively small.
All other factors equal, a large number is preferred to a smaller number for all capital
project evaluation measures except
A. net present value.
B. payback period.
C. internal rate of return.
D. profitability index.
Which of the following steps in the performance reward plan model comes before the
others listed?
A. set performance rewards
B. identify performance measures
C. determine reward
D. identify critical success factors
Austin Company
Austin Company has established a target rate of return of 15% for all divisions. For the
most recent year, Waterloo Division generated sales of $12,000,000 and expenses of
$9,000,000. Total assets at the beginning of the year were $7,000,000 and total assets at
the end of the year were $9,000,000.
Refer to Austin Company. In the most recent year, what was Waterloo Division’s
residual income?
A. $1,200,000
B. $1,650,000
C. $1,800,000
D. $1,950,000
Robertson Company.
Robertson Company uses a job-order costing system and the following information is
available from its records. The company has three jobs in process: #8, #12, and #15.
Direct material was requisitioned as follows for each job respectively: 25 percent, 30
percent, and 30 percent; the balance of the requisitions was considered indirect. Direct
labor hours per job are 2,800; 3,300; and 4,000; respectively. Indirect labor is $45,000.
Other actual overhead costs totaled $50,000.
Refer to Robertson Company. Assume the balance in Work in Process Inventory was
$21,500 on April 1 and $29,520 on April 30. The balance on April 30 represents one job
that contains direct material of $12,375. How many direct labor hours have been
worked on this job (rounded to the nearest hour)?
A. 802
B. 1,381
C. 1,805
D. 3,107
An automotive company has three divisions. One division manufactures new
replacements parts for automobiles, another rebuilds engines, and the third does repair
and overhaul work on a line of trucks. All three divisions use the services of a central
payroll department. The best method of allocating the cost of the payroll department to
the various operating divisions is
A. total labor hours incurred in the divisions.
B. value of production in the divisions.
C. direct labor costs incurred in the divisions.
D. machine hours used in the divisions.
Industrial Solutions Company
Industrial Solutions Company manufactures a cleaning solvent. The company employs
both skilled and unskilled workers. To produce one 55-gallon drum of solvent requires
Materials A and B as well as skilled labor and unskilled labor. The standard and actual
material and labor information is presented below:
Standard:
Material A: 30.25 gallons @ $1.25 per gallon
Material B: 24.75 gallons @ $2.00 per gallon
Skilled Labor: 4 hours @ $12 per hour
Unskilled Labor: 2 hours @ $ 7 per hour
Actual:
Material A: 10,716 gallons purchased and used @ $1.50 per gallon
Material B: 17,484 gallons purchased and used @ $1.90 per gallon
Skilled labor hours: 1,950 @ $11.90 per hour
Unskilled labor hours: 1,300 @ $7.15 per hour
During the current month Industrial Solutions Company manufactured 500 55-gallon
drums.
Round all answers to the nearest whole dollar.
Refer to Industrial Solutions Company. What is the labor mix variance?
A. $1,083 U
B. $2,588 U
C. $1,083 F
D. $2,588 F
In a production process with a machine constraint, if a quality control point is to be
established, it should be set up
A. within the machine’s processes.
B. directly after the machine has performed its functions.
C. immediately before the machine.
D. at the end of the production process.
How do differences in sales and production level affect net income computed under
absorption costing and variable costing?
Coolidge Company has the following collection pattern for its accounts receivable:
40 percent in the month of sale
50 percent in the month following the sale
8 percent in the second month following the sale
2 percent uncollectible
The company has recent credit sales as follows:
How much should the company expect to collect on its receivables in June?
The cooperative strategic planning, controlling, and problem solving activities
conducted by a company and its vendors and customers to generate efficient and
effective transfers of goods and services is referred to as
__________________________________________________.
When indirect labor is recorded for a job in process,
______________________________ is debited.
What is data mining and how is it used?
Outcomes that have resulted from past actions are also referred to as
____________________ indicators.
A method of product costing that develops an allowable product cost by estimating
what the market will pay for a product with specific characteristics is referred to as
______________________________.
What are five advantages that nonfinancial performance measures have over financial
performance measures