Which of the following would typically be viewed as non-value-added activities?
A. yes yes yes no
B. no no no yes
C. no yes no yes
D. yes yes no yes
Epplin Company
The following information is provided for Epplin Company for the month of
September:
Refer to Epplin Company. What is the fixed spending variance?
A. $590 U
B. $590 F
C. $190 F
D. $190 U
For a CPA firm, how would the costs of continuing education for audit managers be
classified?
A. Yes No
B. No Yes
C. Yes Yes
D. No No
Pittsburg Company uses a standard cost accounting system. The following overhead
costs and production data are available for September:
The total applied manufacturing overhead for September should be
A. $195,000.
B. $197,000.
C. $197,500.
D. $199,500.
Patterson Company
The following information is for Patterson Company’s July production:
(Round all answers to the nearest dollar.)
Refer to Patterson Company. What is the material price variance (calculated at point of
purchase)?
A. $2,700 U
B. $2,700 F
C. $2,610 F
D. $2,610 U
A total quality system should be designed to promote a reorientation of thinking from
an emphasis on
A. internal quality improvements to an emphasis on external benchmarking.
B. the planning process to an emphasis on the performance evaluation process.
C. inspection to an emphasis on prevention.
D. process benchmarking to an emphasis on results benchmarking.
Process quality yield reflects the proportion of
A. time it takes to make a good unit.
B. good units to defective units.
C. total time spent to total time available.
D. total units produced that are good units.
The performance measurement system should encourage each manager to act in a
manner that
A. makes the manager’s units profits as high as possible.
B. most positively supports the organization’s mission and competitive strategies.
C. increases his/her performance reward in the form of profit sharing.
D. reduces the need for informational elements in support of the manager’s planning
function.
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 net realizable value at split-off, what amount of joint
processing cost is allocated to Product A (round to the nearest dollar)?
A. $706
B. $951
C. $700
D. $444
Which of the following is not a primary goal of a cost management system?
A. use cost drivers to develop product costs
B. improve understanding of activities
C. develop organizational strategies
D. measure performance
Which of the following would be considered a detector?
A. computer program
B. source document
C. variance report
D. all of the above
Harrah Manufacturing Company uses a standard cost system and prepared the
following budget at normal capacity for October:
Using the two-way analysis of overhead variances, what is the controllable variance for
October?
A. $ 3,000 F
B. $ 5,000 F
C. $ 9,000 F
D. $10,500 U
Duval Corporation
The Duval Corporation has recently evaluated a proposal to invest in cost-reducing
production technology. According to the evaluation, the project would require an initial
investment of $17,166 and would provide equal annual cost savings for five years.
Based on a 10 percent discount rate, the project generates a net present value of $1,788.
The project is not expected to have any salvage value at the end of its five-year life.
Refer to Duval Corporation. What is the project’s expected internal rate of return?
Present value tables or a financial calculator are required.
A. 10%
B. 11%
C. 13%
D. 14%
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 three-variance approach, what is the
efficiency variance?
A. $1,800 F
B. $1,800 U
C. $2,050 U
D. $2,550 F
Pearce Company
Pearce Company uses a standard cost system for its production process. Pearce
Company applies overhead based on direct labor hours. The following information is
available for July:
Refer to Pearce Company Using the four-variance approach, what is the variable
overhead spending variance?
A. $ 7,950 U
B. $ 25 F
C. $ 7,975 U
D. $10,590 U
The most visible embodiment of total quality management in the United States is
A. being awarded the Deming Prize.
B. achieving ISO 9000 certification.
C. meeting industry standards.
D. receiving the Baldrige Award.
Wholesome Wheat Corporation
Wholesome Wheat Corporation grows grain in rural areas of the South. The
corporation’s costs per bushel of grain (based on an average yield of 130 bushels per
acre) follow:
Wholesome Wheat Corporation defines direct material costs as seed, fertilizer, water,
and other chemicals. The variable overhead costs represent maintenance and repair
costs of machinery. The fixed overhead costs are completely comprised of depreciation
expense on machinery and real estate taxes.
Refer to Wholesome Wheat Corporation. Assume that the current date is March 15. On
this date, Wholesome Wheat Corporation must make a decision as to whether it is
financially better off to plant a certain farm to grain, leave the land idle (no income is
derived from idle land), or rent the land to another farmer for $50 per acre. Grain prices
have been severely depressed in recent years and Wholesome Wheat Corporation’s best
guess is that grain prices will be around $2.00 per bushel at the time the crop is ready
for harvest. What should the company do? Show calculations.
How has the increase in product variety affected the costs of American business?
Shown below are the totals from period budgets of Terrell Corporation for the current
year:
Required: Prepare a forecasted Income Statement for the current year:
Briefly discuss the restrictions and requirements on service organizations and
not-for-profits that relate to joint cost allocation.
Discuss briefly the three monetary measurement techniques of joint cost allocation.
A budget that is developed by both top management and operating personnel is referred
to as a(n) ______________________________.
Why may a JIT control system be useful in disclosing a firm’s inefficiencies and
problems?
When an organization attempts to ‘œadjust’ its profits to meet a specific target, it is
guilty of ______________________________.
An agreement involving two or more firms with complementary core competencies to
jointly contribute to the supply chain is referred to as a(n)
______________________________.
A ratio comparing the present value of a project’s net cash inflows to the project’s net
investment is referred to as the ____________________________________.