Management compares the costs of undertaking a quality improvement program to the
costs of continuing without the quality improvement program.
Generally, all transactions are recorded in a special journal as well as the general
journal.
Total fixed costs can change from one relevant range to another.
In the cash receipts journal, the Other Accounts CR column is used when a transaction
involves a credit entry that is not listed in the headings (columns) of the cash receipts
journal.
Indirect costs allocated to products using activity-based costing are more accurate than
traditional allocation systems.
Under process costing, the total production costs incurred in each process must be split
between the units that have been completed in that process and transferred to the next
process and the ________.
A) Finished Goods Inventory if it is the first process
B) units not completed and remaining in Work-in-Process Inventory for that department
C) Cost of Goods Sold when the units are sold
D) Work-in-Process Inventory of the previous department when there are no sales
Given the following information, determine the cost of goods manufactured.
A) $390,000
B) $503,000
C) $282,000
D) $188,000
Which of the following is an example of a storage device in an accounting information
system?
A) monitor
B) network
C) printer
D) server
What are the two basic components of a computerized accounting information system?
A) sales journal and purchase journal
B) hardware and software
C) cash payments journal and cash receipts journal
D) network and cloud computing
Anthony Products manufactures a line of desk chairs. Anthony’s production operations
are divided into two departments – Department 1 and Department 2. The company uses
a process costing system. Anthony incurred the following costs during the year to
produce 25,700 chairs:
If Anthony sells 22,600 chairs during the year, what will be the cost per chair produced?
(Round your answer to two decimal places.)
A) $33.60
B) $38.21
C) $44.77
D) $50.91
Lewis Marine Company manufactures special metallic materials and decorative fittings
for luxury yachts that require highly skilled labor. Lewis uses standard costs to prepare
its flexible budget. For the first quarter of the year, direct materials and direct labor
standards for one of their popular products were as follows:
Direct materials: 4 pounds per unit; $6 per pound
Direct labor: 4 hours per unit; $17 per hour
During the first quarter, Lewis produced 4,000 units of this product. Actual direct
materials and direct labor costs were $66,000 and $328,000, respectively.
For the purpose of preparing the flexible budget, what is the total standard direct labor
cost at a production volume of 4,000 units?
A) $68,000
B) $66,000
C) $272,000
D) $328,000
Clapton Corporation is considering an investment in new equipment costing $918,000.
The equipment will be depreciated on a straight-line basis over a ten-year life and is
expected to have a residual value of $98,000. The equipment is expected to generate net
cash flows of $152,000 for each of the first five years and $116,000 for each of the last
five years. What is the accounting rate of return associated with the equipment
investment? (Round your answer to two decimal places.)
A) 10.95%
B) 11.34%
C) 9.05%
D) 10.24%
________ are costs incurred after the company delivers poor-quality goods or services
to customers and then has to make things right with the customer.
A) Prevention costs
B) Appraisal costs
C) Internal failure costs
D) External failure costs
Viva, Inc. has provided the following information for the year:
How much is the cost of goods sold?
A) $184,000
B) $1,275,000
C) $1,261,000
D) $1,247,000
Which of the following would be considered a direct labor cost for a manufacturing
company?
A) wages of the assembly line staff
B) wages of the factory janitors
C) wages of the factory manager
D) salaries of the internal auditors
Which of the following statements is true of the budgeting process?
A) If a company carefully plans for its future, there will be no need to make
modifications during the budget period.
B) It is a continuous process that encourages communication.
C) It shows the actual performance of the business.
D) Managers and employees are motivated to accept the budget’s goals because they
enjoy having their work monitored and evaluated.