Which of the following statements is true for a firm that uses variable costing?
A. The cost of a unit of product changes because of changes in the number of units
manufactured.
B. Profits fluctuate with sales.
C. An idle facility variation is calculated.
D. None of the above.
The standard cost card contains quantities and costs for
A. direct material only.
B. direct labor only.
C. direct material and direct labor only.
D. direct material, direct labor, and overhead.
In a decentralized company in which divisions may buy goods from one another, the
transfer pricing system should be designed primarily to
A. increase the consolidated value of inventory.
B. allow division managers to buy from outsiders.
C. minimize the degree of autonomy of division managers.
D. aid in the appraisal and motivation of managerial performance.
Feedback is reflected in which component of a management control system?
A. sensor
B. assessor
C. effector
D. detector
An outlier is
A. something that happens outside the organization that does not affect production.
B. always used in analyzing a mixed cost.
C. something that happens inside the organization that does not affect production.
D. typically not used in analyzing a mixed cost.
A long-term plan that fulfills the goals and objectives of an organization is known as
a(n)
A. management style.
B. strategy.
C. mission statement.
D. operational mission.
Products at Conroy Manufacturing are sent through two production departments:
Fabricating and Finishing. Overhead is applied to products in the Fabricating
Department based on 150 percent of direct labor cost and $18 per machine hour in
Finishing. The following information is available about Job #297:
What is the total cost of Job #297?
A. $2,647
B. $3,005
C. $3,093
D. $3,203
Mobile Company
Mobile Company is a manufacturer of electronic components. The following
manufacturing information is available for the month of May:
Refer to Mobile Company. What is the process quality yield?
A. 50%
B. 75%
C. 80%
D. 125%
Athmer Corporation
Athmer Corporation sells a product for $18 per unit, and the standard cost card for the
product shows the following costs:
Refer to Athmer Corporation. Assume that Athmer has sufficient idle capacity to
produce the 1,000 units. If Athmer wants to increase its operating profit by $5,600,
what would it charge as a per-unit selling price?
A. $18.00
B. $10.00
C. $11.00
D. $16.60
Dillman Company manufactures custom-built conveyor systems for factory and
commercial operations. The cost accountant for Dillman Company is in the process of
educating a new employee, Jerry Cole about the job-order costing system that Dillman
Company uses. (The system is based on normal costs; overhead is applied based on
direct labor cost and rounded to the next whole dollar.) The following job-order cost
records are available for July:
To explain the missing job number, the cost accountant informed Jerry that Job #668
had been completed in June. The accountant also told Jerry that Job #667 was the only
job in process at the beginning of July. At that time, the job had been assigned $4,300
for direct material and $900 for direct labor. At the end of July, Job #671 had not been
completed; all other jobs were complete. The cost accountant asked Jerry several
questions to determine whether he understood the job-order costing system.
Required: Help Jerry answer the following questions:
