Beasley Company
Beasley Company prepared a cash budget by quarters for the upcoming year. Missing
data amounts are indicated with question marks or lower case letters; these lower case
letters will be referred to in the questions that follow.
Beasley requires a minimum balance of $10,000 to start a quarter.
All data are in thousands.
Beasley Corporation
Cash Budget
Refer to Beasley Company. The borrowing required during the first quarter to meet the
minimum cash balance (item b) is:
a. $0
b. $7
c. $10
d. $ 3
The following information is given for the Corn and Oats Divisions of Wholesome
Grains Corporation.
The ____ prohibits companies from pricing products at different amounts unless these
differences reflect differences in the cost to manufacture, sell, or distribute the products.
a. Internal Revenue Service
b. Governmental Accounting Office
c. Sherman Antitrust Act
d. Robinson-Patman Act
Non-value-added activities that are necessary to businesses, but notcosts that customers
are willing to pay for are known as
a. business-value-added activities.
b. long-term variable activities.
c. short-term variable activities.
d. superior business activities.
The return on investment (ROI) ratio measures
a. only asset turnover.
b. only earnings as a percent of sales.
c. both asset turnover and earnings as a percent of sales.
d. asset turnover and earnings as a percent of sales, correcting for the effects of differing
depreciation methods.
The economic order quantity is not affected by the
a. estimate of the annual material consumption.
b. cost of insuring a unit of inventory for a year.
c. cost of purchase-order forms.
d. safety stock level.
An income statement is prepared as an internal report. Under which of the following
methods would the term contribution margin appear?
a. no no
b. no yes
c. yes no
d. yes yes
It isleastlikely that a production budget revision would cause a revision in the
a. capital budget.
b. cash budget.
c. purchases budget.
d. pro forma balance sheet.
Williams Company
Williams Company has a job-order costing system and an overhead application rate of
120 percent of direct labor cost. Job #63 is charged with direct material of $12,000 and
overhead of $7,200. Job #64 has direct material of $2,000 and direct labor of $9,000.
Refer to Williams Company. What amount of direct labor cost has been charged to Job
#63?
a. $ 6,000
b. $ 7,200
c. $ 8,640
d. $14,400
Fischer Company makes small metal containers. The company began October with 300
containers in process that were 35 percent complete as to material and 45 percent
complete as to conversion costs. During the month, 6,000 containers were started. At
month end, 1,900 containers were still in process (40 percent complete as to material
and 75 percent complete as to conversion costs). Using the weighted average method,
what are the equivalent units for conversion costs?
a. 4,265
b. 5,590
c. 5,825
d. 6,300
On a balanced scorecard, which of the following would be most appropriate to measure
innovation:
a. Rapid time-to-market of new products
b. Corporate financial profits
c. On-time delivery
d. Manufacturing cycle efficiency
TriCities Corporation
TriCities Corporation adds material at the start to its production process and has the
following information available for August:
Refer to TriCities Corporation. Compute the number of units started and completed in
August.
a. 29,500
b. 34,500
c. 36,500
d. 39,000
EUP calculations for standard process costing are the same as
a. the EUP calculations for weighted average process costing.
b. the EUP calculations for FIFO process costing.
c. LIFO inventory costing for merchandise.
d. the EUP calculations for LIFO process costing.
Commodore Company
Commodore Company uses a standard cost system for its production process and
applies overhead based on direct labor hours. The following information is available for
September when Commodore produced 5,000 units:
Refer to Commodore Company. Using the two-variance approach, what is the
controllable variance?
a. $4,075 U
b. $4,075 F
c. $4,575 U
d. $4,575 F
Projected sales price minus a reasonable profit equals
a. the standard cost.
b. contribution margin.
c. projected Cost of Goods Sold.
d. target cost.
____ is a way of teaching accounting concepts to financially unsophisticated
employees.
a. Data mining
b. Open-book management
c. Game playing
d. BPR
Managing constraints is a process of
a. backflush costing.
b. design for manufacturability.
c. just-in-time redesign.
d. continuous improvement.
The fixed overhead application rate is a function of a predetermined activity level. If
standard hours allowed for good output equal the predetermined activity level for a
given period, the volume variance will be
a. zero.
b. favorable.
c. unfavorable.
d. either favorable or unfavorable, depending on the budgeted overhead.
Which of the following pay plans encourages the improvement of the overall company’s
well-being?
a. monthly salary
b. cafeteria plan
c. profit sharing
d. pensions
Which ethical standard is violated by an accountant who accepts a gift from a client
a. Credibility
b. Confidentiality
c. Competence
d. Integrity
A functional classification of costs would classify “depreciation on office equipment” as
a
a. product cost.
b. general and administrative expense.
c. selling expense.
d. variable cost.
The process of ____ occurs when equipment is programmed to stop when a certain
situation arises.
a. throughput
b. automation
c. backflushing
d. information sharing
In activity-based costing, cost reduction efforts are directed at specific
a. cost categories.
b. cost pools.
c. processes.
d. cost drivers.
Consider the following three product costing alternatives: process costing, job order
costing, and standard costing. Which of these can be used in conjunction with variable
costing?
a. job order costing
b. standard costing
c. process costing
d. all of them
Jacksonville Company uses a job-order costing system. During May, the following
costs appeared in the Work in Process Inventory account:
Jacksonville Company applies overhead on the basis of direct labor cost. There was
only one job left in Work in Process at the end of May which contained $6,300 of
overhead. What amount of direct material was included in this job?
a. $ 7,200
b. $ 9,000
c. $11,160
d. $11,790
External factors that cause the achievement of company goals are the
a. annual budget.
b. industry price and cost structure.
c. talents possessed by its managers.
d. board of directors.
Which of the following is not associated with absorption costing?
a. functional format
b. gross margin
c. period costs
d. contribution margin
A project under consideration by Radisson Corporation would require a working capital
investment of $200,000. The working capital would be liquidated at the end of the
project’s 10-year life. If Radisson Corporation has an after-tax cost of capital of 10
percent and a marginal tax rate of 30 percent, what is the present value of the working
capital cash flow expected to be received in year 10? Present value tables or a
financial calculator are required.
a. $36,868
b. $77,100
c. $53,970
d. $23,130
A reasonable measure of efficiency relies on
a. qualitative measures of inputs and outputs.
b. a match of inputs in one period with outputs in subsequent periods.
c. a causal relationship between inputs and outputs.
d. a ratio of planned output to actual output.
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 that next month’s costs and levels of
operations in the Computer and Computer Chip Divisions are similar to this month.
What is the minimum of the transfer price range for a possible transfer of the super chip
from one division to the other?
a. $50
b. $45
c. $20
d. $35
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. If Job #15 is completed and transferred, what is the
balance in Work in Process Inventory at the end of the period if overhead is applied at
the end of the period?
a. $191,925
b. $201,888
c. $205,284
d. $208,908
The pro forma income statement is not a component of the
a. master budget.
b. financial budgets.
c. operating budgets.
d. capital budget.
Favorable variances are represented by credit balances in the overhead account.
On a CVP graph, the total variable cost line intersects the y-axis at zero.
The way in which authority and responsibility are distributed in an organization is
___________________________________.
An activity that does not increase the value of a product for a customer is referred to as
a _________________________ activity.
List and explain the four perspective of the balanced scorecard (BSC).
What is continuous improvement? How does it relate to total quality management?
When multiple products are produced and sold, a change in the sales price of one
product may cause a change in the sales mix of the firm.
Adams Corporation manufactures a certain product by mixing three kinds of materials
in large batches. The blend master has the responsibility for maintaining the quality of
the product, and this often requires altering the proportions of the various ingredients.
Standard costs are used to provide material control information. The standard material
inputs per batch are:
The finished product is packed in 50-pound boxes; the standard material cost of each
box is, therefore, $3.61.
During January, the following materials were put in process:
Inventories in process totaled 5,000 pounds at the beginning of the month and 8,000
pounds at the end of the month. It is assumed that these inventories consisted of
materials in their standard proportions. Finished output during January amounted to
4,100 boxes.
Required:Compute the total material quantity variance for the month and break it down
into mix and yield components.
Define a strategic alliance.
Unfavorablevariances are represented by debit balances in the overhead account.
When multiple labor categories are used, the financial effect of using a different mix of
workers in a production process is referred to as a labor yield variance.
Discuss underapplied and overapplied overhead and its disposition at the end of the
period.
Why should predetermined overhead rates be used?
What are three reasons that overhead must be allocated to products?