1) The Standards of Ethical Conduct for management accountants include concepts
related to ________.
A) competence, performance, diligence, and reporting
B) competence, confidentiality, integrity, and credibility
C) experience, diligence, reporting, and objectivity
D) diligence, objectivity, conflicts of interest, and credibility
2) Axelia Corporation has two divisions, Refining and Extraction. The company’s
primary product is Luboil Oil. Each division’s costs are provided below:
The Refining Division has been operating at a capacity of 40,000 barrels a day and
usually purchases 25,000 barrels of oil from the Extraction Division and 15,000 barrels
from other suppliers at $60 per barrel.
What is the transfer price per barrel from the Extraction Division to the Refining
Division, assuming the method used to place a value on each barrel of oil is 180% of
variable costs?
A) $12.60
B) $21.60
C) $72.00
D) $130.00
3) Green Energy Inc. produces fertilizer and distributes the product by using his tanker
trucks. Green Energy uses budgeted fleet hours to allocate variable manufacturing
overhead. The following information relates to the company’s manufacturing overhead
data:
What is the budgeted variable overhead cost rate per output unit?
A) $120.00
B) $122.50
C) $123.69
D) $121.00
4) Syosis Company uses the high-low method to estimate its cost function. The
information for 2015 is provided below:
What is the constant for the estimated cost equation?
A) $220,000
B) $300,000
C) $100,000
D) $0
5) Demizio Valley Orchards, Inc. (DVO), developed standard costs for direct material
and direct labor. In 2015, DVO estimated the following standard costs for one of their
most well loved products, the DVO classic Grandma’s large apple pie which had a
brown sugar coating on the top of the crust as well as including cranberry and mince
ingredients in addition to the apples.
During September, DVO produced and sold 1,100 pies using 2,300 pounds of direct
materials at an average cost per pound of $6.00 and 200 direct labor hours at an average
wage of $13.25 per hour.
The direct labor flexible-budget variance during September is ________.
A) $210.00 favorable
B) $210.00 unfavorable
C) $250.00 favorable
D) $250.00 unfavorable
6) Following a strategy of product differentiation, Arseniq Company makes a high-end
Appliance, XT15. Arseniq presents the following data for the years 2014 and 2015:
Arseniq produces no defective units but it wants to reduce direct materials usage per
unit of XT15. Manufacturing conversion costs in each year depend on production
capacity defined in terms of XT15 units that can be produced. Selling and
customer-service costs depend on the number of customers that the customer and
service functions are designed to support. Arseniq had 140 customers in 2014 and 145
customers in 2015.
What is the revenue effect of the growth component?
A) $2,625,000 F
B) $1,250,000 U
C) $2,625,000 U
D) $1,250,000 F
7) Market-based transfer prices are helpful when ________.
A) the product is specialized
B) the internal product is different from the products available externally in terms of its
quality
C) the interdependencies of subunits are minimal
D) the markets are not perfectly competitive
8) In markets that are not perfectly competitive, ________.
A) the selling division will not have any unused capacity
B) companies can increase their capacity utilization only by decreasing their prices
C) minimum transfer price will equal the incremental cost per unit incurred up to the
point of transfer
D) the opportunity cost will equal the minimum contribution margin
9) Eddy Corporation has provided the following production and total cost data for two
levels of monthly production volume. The company produces a single product.
The best estimate of the total variable manufacturing cost per unit is:
A) $22.90
B) $119.80
C) $142.70
D) $97.10
10) Cost tracing is ________.
A) the assignment of direct costs to the chosen cost object
B) a function of cost allocation
C) the process of tracking both direct and indirect costs associated with a cost object
D) the process of determining the actual cost of the cost object