A performance report that identifies the amount of employee downtime is a financial
accounting report.
a. True
b. False
Answer:
Common allocation bases are
a. direct labor dollars, direct labor hours, direct material dollars
b. direct labor dollars, direct labor hours, machine hours
c. direct labor dollars, direct labor hours, machine dollars
d. machine dollars, direct labor dollars, direct labor hours
Answer:
If the price paid per unit differs from the standard price per unit for direct materials, the
variance is a
a. variable variance
b. controllable variance
c. price variance
d. volume variance
Answer:
Adams Company is a manufacturing company that has worked on several production
jobs during the first quarter of the year. Below is a list of all the jobs for the quarter:
Jobs 356, 357, 358, and 359 were completed. Jobs 356 and 357 were sold at a profit of
$500 on each job.
What is the balance of Sales for Adams Company at the end of the first quarter?
a. $1,685
b. $2,685
c. $1,000
d. $685
Answer:
Stryker Industries received an offer from an exporter for 15,000 units of product at
$17.50 per unit. The acceptance of the offer will not affect normal production or
domestic sales prices. The following data is available:
What is the amount of income or loss from acceptance of the offer?
a. $97,500 income
b. $94,500 loss
c. $37,500 income
d. $37,500 loss
Answer:
The following is a list of various costs of producing T-shirts. Classify each cost as either
a variable, fixed, or mixed cost for units produced and sold.
(a) Ink used for screen printing
(b) Warehouse rent of $8,000 per month plus $0.50 per square foot of storage used
(c) Thread
(d) Electricity costs of $0.038 per kilowatt-hour
(e) Janitorial costs of $4,000 per month
(f) Advertising costs of $12,000 per month
(g) Accounting salaries
(h) Color dyes for producing different colors of T-shirts
(i) Salary of the production supervisor
(j) Straight-line depreciation on sewing machines
(k) Salaries of internal pattern designers
(l) Hourly wages of sewing machine operators
(m) Property taxes on factory, building, and equipment
(n) Cotton and polyester cloth
(o) Maintenance costs with sewing machine company (the cost is $2,000 per year plus
$0.001 for each machine hour of use.)
Answer:
The data required for determining the break-even point for a business are the total
estimated fixed costs for a period, stated as a percentage of net sales.
a. True
b. False
Answer:
During the period, labor costs incurred on account amounted to $175,000, including
$150,000 for production orders and $25,000 for general factory use. Factory overhead
applied to production was $32,000. The entry to record the actual factory overhead
costs incurred is
a. Accounts Payable Factory Overhead 25,000
25,000
b. Factory Overhead Accounts Payable 32,000
32,000
c. Work in Process Wages Payable 25,000
25,000
d. Factory Overhead Wages Payable 25,000
25,000
Answer:
Number of purchase requisitions
An activity base is used to charge service department expenses. Match the following
activity bases with the appropriate department (a-h).
a. Purchasing
b. Payroll accounting
c. Human resources
d. Maintenance
e. Information systems
f. Marketing
g. President’s Office
h. Transportation
Answer:
Preventive machine maintenance
Identity the following by their type of quality cost.
a. Preventive costs
b. Appraisal costs
c. Internal failure costs
d. External failure costs
Answer:
The Waterfall Company sells a product for $150 per unit. The variable cost is $80 per
unit, and fixed costs are $270,000.
Determine the (a) break-even point in sales units, and (b) break-even points in sales
units if the company desires a target profit of $36,000. Round your answer to the
nearest whole number.
Answer:
The methods of evaluating capital investment proposals can be grouped into two
general categories that can be referred to as (1) average rate of return and (2) cash
payback methods.
a. True
b. False
Answer:
The standard factory overhead rate is $10 per direct labor hour ($8 for variable factory
overhead and $2 for fixed factory overhead) based on 100% of normal capacity of
30,000 direct labor hours. The standard cost and the actual cost of factory overhead for
the production of 5,000 units during May were as follows:
What is the amount of the variable factory overhead controllable variance?
a. $10,000 favorable
b. $2,500 unfavorable
c. $10,000 unfavorable
d. $2,500 favorable
Answer:
The Ramapo Company produces two products, Blinks and Dinks. They are
manufactured in two departments, Fabrication and Assembly. Data for the products
and departments are listed below.
All of the machine hours take place in the Fabrication department, which has an
estimated overhead of $84,000. All of the labor hours take place in the Assembly
department, which has an estimated total overhead of $72,000.
The Ramapo Company uses a single overhead rate to apply all overhead costs. What
would the single plantwide rate be if it was based on machine hours instead of labor
hours?
a. $9.00 per machine hour
b. $19.50 per machine hour
c. $7.43 per machine hour
d. $4.00 per machine hour
Answer:
Possible result of using an inappropriate overhead allocation method
Match the definitions that follow with the term (a’“e) it defines.
a. Opportunity cost
b. Sunk cost
c. Theory of constraints
d. Differential analysis
e. Product cost distortion
Answer: