Period costs include
A. yes no yes
B. no yes yes
C. no no no
D. yes yes yes
An effective control system functions before, during, and after an event. However, little
control is possible during the event for most
A. variable manufacturing costs.
B. variable period costs.
C. discretionary fixed costs.
D. committed fixed costs.
Cibolo Company
Cibolo Company has the following information available for March when 4,200 units
were produced (round answers to the nearest dollar).
Refer to Cibolo Company. What is the material price variance (based on quantity
purchased)?
A. $2,505 F
B. $2,505 F
C. $2,625 F
D. $2,625 F
Which service department cost allocation method assigns indirect costs to cost objects
after considering some of the interrelationships of the cost objects?
A. step method
B. indirect method
C. algebraic method
D. direct method
Process productivity is calculated as
A. total units divided by non-value-added processing time.
B. total units divided by value-added processing time.
C. value-added processing time divided by total units.
D. value-added processing divided by total time.
Which of the following would need to be allocated to a cost object?
A. direct material
B. direct labor
C. direct production costs
D. indirect production costs
Thibodeaux Tailors has gathered information on utility costs for the past year. The
controller has decided that utilities are a function of the hours worked during the month.
The following information is available and representative of the company’s utility costs:
If 1,425 hours are worked in a month, total utility cost (rounded to the nearest dollar)
using the high-low method should be
A. $947.
B. $954.
C. $959.
D. $976.
Horner Company
Horner Company manufactures a single product. Each unit sells for $15. The firm’s
projected costs are listed below:
Refer to Horner Company. What is Horner’s projected degree of operating leverage for
the current year?
A. 2.25
B. 1.80
C. 3.75
D. 1.67
Profit margin equals
A. income divided by sales.
B. incomes divided by average inventory.
C. income divided by average assets.
D. income divided by average stockholder’s equity.
Baker Company
Baker Company produces three products: A, B, and C from the same process. Joint
costs for this production run are $2,100.
If the products are processed further, Baker Company will incur the following disposal
costs upon sale: A, $3.00; B, $2.00; and C, $1.00.
Refer to Baker Company. Using a physical measurement method, what amount of joint
processing cost is allocated to Product A (round to the nearest dollar)?
A. $700
B. $679
C. $927
D. $494
Wright Company
Wright Company adds material at the start of production. The following production
information is available for September:
Refer to Wright Company. What are the equivalent units for conversion using the
weighted average method?
A. 120,000
B. 123,440
C. 128,360
D. 130,000
Using a single performance evaluation criterion for an investment center
A. is most effective because a manager can concentrate on a single goal.
B. can result in manipulation of the performance measure.
C. allows multinational investment centers’ performances to be equitably compared.
D. is only appropriate if the criterion is non-monetary.
Andersen Corporation
Andersen Corporation has the following information for the current month:
All materials are added at the start of the production process. Andersen Corporation
inspects goods at 75 percent completion as to conversion.
Refer to Andersen Corporation. Assume that the costs per EUP for material and
conversion are $2.00 and $2.25, respectively. Using FIFO, what is the total cost
assigned to the transferred-out units (rounded to the nearest dollar)?
A. $344,938
B. $365,875
C. $376,938
D. $378,625
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 four-variance approach, what is the variable
overhead efficiency variance?
A. $ 250 U
B. $ 250 F
C. $1,800 U
D. $1,800 F
Wimberley Company
Wimberley Company has the following information available for December when 3,500
units were produced (round answers to the nearest dollar).
Refer to Wimberley Company. What is the material quantity variance?
A. $2,250 F
B. $2,250 U
C. $225 F
D. $2,475 U
If a firm produces more units than it sells, absorption costing, relative to variable
costing, will result in
A. higher income and assets.
B. higher income but lower assets.
C. lower income but higher assets.
D. lower income and assets.
____ is a characteristic of a company that is best suited for open-book management.
A. Large size
B. Decentralized management
C. Centralized management
D. Service-oriented
The method of cost accounting that lends itself to break-even analysis is
A. variable.
B. standard.
C. absolute.
D. absorption.
If two or more products share a common process before they are separated, the joint
costs should be assigned in a manner that
A. assigns a proportionate amount of the total cost to each product on a quantitative
basis.
B. maximizes total earnings.
C. minimizes variations in unit production costs.
D. does not introduce an element of estimation into the process of accumulating costs
for each product.
Projected sales price minus a reasonable profit equals
A. the standard cost.
B. contribution margin.
C. projected Cost of Goods Sold.
D. target cost.