1) neary co. produces three products x, y, and z from a joint process. each product may
be sold at the split-off point or processed further. additional processing requires no
special facilities, and production costs of further processing are entirely variable and
traceable to the products involved. last year all three products were processed beyond
split-off. joint production costs for the year were $80,000. sales values and costs needed
to evaluate neary’s production policy follow.
the amount of joint costs allocated to product z using the physical measure method is
(calculate all ratios and percentages to 4 decimal places, for example 33.3333%, and
round all dollar amounts to the nearest whole dollar):
a.$8,000
b.$32,000
c.$43,222
d.$14,000
e.$6,666
2) conrad, inc. recently lost a portion of its records in an office fire. the following
information was salvaged from the accounting records.
direct labor cost incurred during the period amounted to 1.5 times the factory overhead.
the cfo of fisher, inc. has asked you to recalculate the following accounts and to report
to him by the end of the day.
what is the amount of direct materials used?
a.$23,500
b.$28,500
c.$31,000
d.$36,000
3) a local pharmaceutical firm has just announced its discovery of a revolutionary new
drug for dieting. however, due to its deteriorating relationship with its union, the
unionized portions of the company’s employees have threatened to strike. in addition,
the company’s stock has started to drop due to the firm’s difficulty in paying off some of
its debt. in this example, what was the firm’s core competency(ies)?
a.its research and development
b.its human resources abilities
c.its financing activities
d.its operating activities
4) which one of the following process costing methods includes only current costs in
the calculations of cost per equivalent unit?
a.fifo method
b.lifo method
c.specific unit method
d.weighted-average method
e.moving-average method
5) assume the following information pertaining to cub company:
direct labor used is calculated to be:
a.$306,000
b.$26,000
c.$110,000
d.$84,000
e.$111,000
6) a boat, costing $108,000 and uninsured, was wrecked the very first day it was used. it
can either be disposed of for $11,000 cash and be replaced with a similar boat costing
$110,000, or rebuilt for $98,000 and be brand new as far as operating characteristics
and looks are concerned. a relevant cost analysis of the decision to replace the boat
shows:
a.a cost equivalence between the two decision options
b.an $11,000 net advantage associated with the decision to fix the old boat
c.a $1,000 cost advantage associated with the decision to fix the old boat
d.a $21,000 cost advantage associated with the decision to fix the old boat
e.a $2,000 cost advantage associated with the decision to purchase a new boat
7) a production cost report summarizes all except:
a.the physical units of a department
b.the equivalent units of a department
c.the costs incurred during the period
d.the costs assigned to both units completed and ending work-in-process inventories
e.all of the above are correct
8) cost-volume-profit (cvp) relationships that are curvilinear may be analyzed linearly
by considering only:
a.fixed and semi-variable costs
b.relevant fixed costs
c.relevant variable costs
d.a relevant range of volume
e.the multi-product/multi-service context
9) southern company packages and sells nuts in cans. pecans, cashews, brazil nuts,
hazelnuts, and peanuts are packaged individually as well in combinations and mixtures.
southern wants to package the nuts so that it can maximize its operating profit while
considering market demand. in addition, there are limited supplies for some types of
nuts. the technique that southern should employ is:
a.statistical analysis
b.correlation and regression analysis
c.discounted cash flow (dcf) analysis
d.transportation algorithms
e.linear programming
10) the following information was taken from the accounting records of elliott
manufacturing corp. unfortunately, some of the data were destroyed by a computer
malfunction.
selling and administrative expenses are calculated to be:
a.$4,000
b.$9,000
c.$11,000
d.$12,000
e.$16,000
11) manders manufacturing corporation uses the following model to determine its
product mix for metal (m) and scrap metal (s):
the above mathematical functions together constitute a(n):
a.simulation model
b.linear programming model
c.economic order quantity model
d.multivariate regression model
e.nonlinear optimization model
12) if a firm is following the cost leadership strategy, and overhead accounts are
complex, then the:
a.firm should use a process costing system
b.firm can use either a project or job costing system
c.traditional volume-based job costing will not usually provide the needed cost
accuracy
d.only recourse is to install a hybrid costing system
e.firm should attempt to collect only material and labor costs
13) abc company listed the following data for the current year:
assuming abc company applied overhead based on direct labor hours, the company’s
predetermined overhead rate for the year is:
a.$43.95 per direct labor hour
b.$15.50 per direct labor hour
c.$15.00 per direct labor hour
d.$14.28 per direct labor hour
e.$14.00 per direct labor hour
14) in deciding between alternative choices for a given situation, managers usually
employ a five-step process. which of the following is not a step in the decision-making
process?
a.evaluate performance
b.specify the criteria and identify the alternative actions
c.select and implement the best course of action
d.perform relevant and strategic cost analysis
e.review the audit report