Archives: Quiz

In evaluating the performance of a profit center manager, he/she should be evaluated on a. all revenues and costs that can be traced directly to the unit. b. all revenues and costs under his/her control. c. the variable costs and […]

Wyatt Corporation Wyatt Corporation has the following standard costs associated with the manufacture and sale of one of its products: Refer to Wyatt Corporation. The volume variance under absorption costing is a. $8,000 F. b. $4,000 F. c. $4,000 U. […]

Triumph Division of Traveling Fantasies, is evaluated based on residual income generated. In the most recent year, the Triumph Division generated a residual income of $2,000,000 and net income of $5,000,000. The target rate of return for all divisions of […]

A ____ is a document that reflects the revenues and/or costs that are under the control of a particular manager. a. quality audit report b. responsibility report c. performance evaluation report d. project report Actual fixed overhead minus budgeted fixed […]

The margin of safety would be negative if a company(‘s) a. was presently operating at a volume that is below the break-even point. b. present fixed costs were less than its contribution margin. c. variable costs exceeded its fixed costs. […]

Beasley Company Beasley Company prepared a cash budget by quarters for the upcoming year. Missing data amounts are indicated with question marks or lower case letters; these lower case letters will be referred to in the questions that follow. Beasley […]

In the Du Pont model, profit margin is a ratio of a. income to sales. b. income to assets. c. sales to income. d. sales to assets. Transfer pricing is primarily incurred in a. foreign corporations exporting their products. b. […]

Carter Corporation has a target return of 15%. If a prospective investment has an estimated return on investment of 20%, and a residual income of $10,000, what is the estimated cost of the investment? a. $200,000 b. $ 66,667 c. […]

Quality inspection points should a. precede bottlenecks. b. follow bottlenecks. c. be placed at the end of all production processes. d. be placed at random points in the manufacturing process. For financial reporting to the IRS and other external users, […]

Which of the following statements about job-order cost sheets is true? a. All job-order cost sheets serve as the general ledger control account for Work in Process Inventory. b. Job-order cost sheets can serve as subsidiary ledger information for both […]

Putnam Company Below is an income statement for Putnam Company: Refer to Putnam Company. What is Putnam’s degree of operating leverage? a. 1.33 b. 2.00 c. 3.00 d. 4.00 An important focus in product life cycle costing is a. the […]

Stillwater Corporation The following information is available for Stillwater Corporation for the current year: All materials are added at the start of production. Refer to Stillwater Corporation. Using FIFO, what are equivalent units for material? a. 75,000 b. 72,500 c. […]

Brewer Corporation would like to institute an activity-based costing system to allocate overhead to its products. The company’s Shipping Department incurs costs of $750,000 per year and has nine employees. The Shipping Department has determined that three major activities that […]

The economic production run quantity directly affects the a. order point for raw material inventories. b. safety stock for finished goods inventory. c. level of finished goods inventory. d. lead time for producing finished goods inventory. Griffith Corporation Griffith Corporation […]

Of the following, which is the best reason for using activity-based costing? a. to keep better track of overhead costs b. to more accurately assign overhead costs to cost pools so that these costs are better controlled c. to better […]

A process map a. should indicate only value-added activities. b. is also known as a detailed flowchart. c. should indicate only those steps/processes that are obvious in the production of goods/services. d. is also known as a value chart. Austin […]

The Pareto principle is important to consider when an organization is a. assessing whether to employ activity-based costing versus attribute-based costing. b. evaluating the number of activities that are value-added versus those that are non-value-added. c. deciding whether to offer […]

McCoy Corporation McCoy Corporation sells a product for $21 per unit, and the standard cost card for the product shows the following costs: Refer to McCoy Corporation. McCoy received a special order for 1,200 units of the product. The only […]

Moore Company. Moore Company uses a job-order costing system and the following information is available from its records. The company has three jobs in process: #6, #9, and #13. Direct material was requisitioned as follows for each job respectively: 30 […]

In a typical (conservative assumptions) after-tax discounted cash flow analysis, depreciation expense is assumed to accrue at a. the beginning of the period. b. the middle of the period. c. the end of the period. d. irregular intervals over the […]

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 labor rate variance? a. $875 F b. $865 F c. $865 […]

When a firm adopts the just-in-time method of management, a. employees are retrained on different equipment, but the plant layout generally remains unchanged. b. new machinery and equipment must be purchased from franchised JIT dealers. c. machinery and equipment are […]

A value chart indicates a. all steps in a process and the time it takes for them to be completed. b. the value-added steps in a process and the time it takes for them to be completed. c. the time […]

A project has an initial cost of $100,000 and generates a present value of net cash inflows of $120,000. What is the project’s profitability index? a. .20 b. 1.20 c. .80 d. 5.00 One major difference between financial and management […]

When computing variances from standard costs, the difference between actual and standard price multiplied by actual quantity used yields a a. combined price-quantity variance. b. price variance. c. quantity variance. d. mix variance. Disclosing detailed financial information to all employees […]

In deciding whether an organization will keep an old machine or purchase a new machine, a manager would ignorethe a. estimated disposal value of the old machine. b. acquisition cost of the old machine. c. operating costs of the new […]

Which of the following statements about management or financial accounting is false? a. Financial accounting must follow GAAP. b. Management accounting is not subject to regulatory reporting standards. c. Both management and financial accounting are subject to mandatory recordkeeping requirements. […]

If r is the discount rate, the formula [1/(1 + r)] refers to the a. future value interest factor associated with r for one period. b. present value of some future cash flow. c. present value interest factor associated with […]

Which of the following capital budgeting techniques has been criticized because it fails to consider investment profitability? a. payback method b. accounting rate of return c. net present value method d. internal rate of return Wimberley Company Wimberley Company has […]

Shiny Floors Company Shiny Floors Company produces four floor cleaners from the same process: C, D, E, and G. Joint product costs are $9,000. (Round all answers to the nearest dollar.) If Shiny Floors sells the products after further processing, […]

The balanced scorecard perspective that focuses on using a firm’s intellectual capital to adapt to the needs of the market through product or service innovations is the: a. learning and growth perspective b. internal business perspective c. customer value perspective […]

Which of the following is subtracted from weighted average EUP to derive FIFO EUP? a. beginning WIP EUP completed in current period b. beginning WIP EUP produced in prior period c. ending WIP EUP not completed d. ending WIP EUP […]

The most accurate method for allocating service department costs is the a. step method. b. direct method. c. algebraic method. d. none of the above. Grant Corporation The following information is available for Grant Corporation for the current month: All […]

Which of the following capital expenditure planning and control techniques has been criticized because it might mistakenly imply that earnings are reinvested at the rate of return earned by the investment? a. payback method b. accounting rate of return c. […]

If the discount rate that is used to evaluate a project is equal to the project’s internal rate of return, the project’s ____ is zero. a. profitability index b. internal rate of return c. present value of the investment d. […]

Global competition has forced American industry to a. seek increased governmental regulation. b. improve product quality and customer service. c. narrow product lines. d. decrease its social responsibility. In joint-product costing and analysis, which of the following costs is relevant […]

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 […]

A firm estimates that it will sell 100,000 units of its sole product in the coming period. It projects the sales price at $40 per unit, the CM ratio at 60 percent, and profit at $500,000. What is the firm […]

Romano Company The following information pertains to Romano Company for September: Romano Company applies overhead for Job #323 at 140 percent of direct labor cost and at 150 percent of direct labor cost for Jobs #325 and #401. The total […]

A company would be reducing its discretionary costs if it a. fired a production supervisor. b. closed its research and development department. c. successfully negotiated a reduction in its factory rent. d. reduced its direct labor costs by hiring temporary […]

Laws that require additional punishment for repeat offenders (three strikes laws) most often violate the Eighth Amendment prohibition on cruel and unusual punishment. The right to travel from one state to another is protected by the Due Process Clause of […]

The Supreme Court has held that burning an American flag is protected by the First Amendment if it is done as a political expression. In Griswold v. Connecticut, 381 U.S. 479 (1965), the Court invalidated a law that made it […]

The Court upheld a state law on statutory rape involving minors that applied to men but not to women. The Supreme Court has held that drug testing of new mothers by a state hospital to detect criminal activity, which was […]

Advertising is protected by the First Amendment unless it is false and misleading. The Constitution is the supreme law of the land because it says that it is. Answer: TRUE The federal government has the power to spend for the […]

Juvenile cases are not subject to due process requirements. In the Slaughter-House Cases, the Court held that the Privileges and Immunities Clause of the Fourteenth Amendment did not incorporate any of the Bill of Rights. Answer: TRUE The Due Process […]

On a bank reconciliation, bank service charges for the month are added to the cash balance per the company records. In general, retained earnings represents accumulated earnings of the corporation less dividends paid. Answer: T The par value of stock […]

The current ratio is found by dividing current assets by ____________________. An advantage of financing with debt rather than stock is that interest expense is ____________________ for tax purposes. Answer: deductible Sales discounts decrease the cost of inventory acquired. Answer: […]

When reconciling a bank account, the company has to prepare an adjusting entry for outstanding checks. Cost of goods sold is equal to beginning inventory plus the net cost of purchases minus _____. Answer: ending inventory A company’s records indicate […]

The interest rate used to calculate interest expense in the effective interest method of amortization is equal to the market rate of interest at the time the bonds are issued. The foundation of the internal control system is the control […]

FASB allows companies to use different depreciation methods so they can capture declining service potential of an operating asset. Refer to Cabana Club. Identify three specific expenses that might be accrued as a result of adjusting journal entries. Show what […]