Archives: Quiz

In a manufacturing company, ________. A) inventoriable costs only become an expense when the company sells the inventory B) inventoriable costs become an expense as soon as the company finishes manufacturing the product C) there is only one inventory account […]

Garcia Company has two service departments, Maintenance and Human Resources. Garcia Company also has two production departments, Mixing and Finishing. Maintenance costs are allocated based on square footage while Human Resources costs are allocated based on number of employees. The […]

The methods to approximate cost functions are not ________; managers frequently use two or more together to avoid ________ in measuring cost behavior. A) the same; duplication B) mutually exclusive; errors C) complementary; errors D) similar; duplication Which of the […]

Service departments in organizations exist to support ________. A) other service departments and customers only B) producing departments and suppliers only C) other service departments, producing departments and customers D) producing departments and customers only The following information is available […]

In general, many more costs are direct costs instead of indirect costs when the cost object is a ________ instead of a(n) ________. A) product; department B) product; activity C) product; resource D) department; product Biden Company manufactures small jewelry […]

If a company allocates costs of central services to products based on sales, ________ should be used as the allocation base. A) actual usage B) estimated usage C) actual sales D) budgeted sales A manager has several forecasts of sales […]

Worbel Company has variable costs of $5 per unit and a selling price of $10 per unit. Fixed costs are $100,000. Planned unit sales for 2015 are 25,000 units. Actual unit sales for 2014 were 22,000. What is the margin […]

Which statement about TQM is FALSE? A) TQM focuses on product quality. B) TQM minimizes costs by maximizing quality. C) TQM focuses on the prevention of defects and on customer satisfaction D) Management accountants have no role in the application […]

The sales price is $30 per unit, the contribution margin is $8 per unit and total fixed costs are $32,000. What is the break-even point in units? A) 857 B) 1,200 C) 2,000 D) 4,000 Wendell Company has the following […]

The limited liability of stockholders in a corporation means that ________. A) the company’s creditors cannot seek payment from the stockholders as individuals if the corporation cannot pay its debt B) the company’s creditors cannot receive more than the face […]

A hotel has the following organizational goal: Increase employee satisfaction. Which one of the following is the best performance measure of the organizational goal? A) number of new employees trained B) turnover rate of hotel employees C) overall rating on […]

In a job-order system, which of the following statements is TRUE? A) The Work-in-Process Inventory account is increased by the actual factory overhead costs incurred for a job. B) The Work-in-Process Inventory account is increased by the applied factory overhead […]

Buddy Company manufactures a part for its production cycle. The costs per unit for 5,000 units of the part are as follows: Per Unit Direct materials $3.00 Direct labor 5.00 Variable factory overhead 4.00 Fixed factory overhead 4.00 Total costs […]

Which of the following costs is a variable cost? A) rental expense for factory building for manufacturer of electronics B) lease cost for factory machine for manufacturer of electronics C) fuel for airplane for airline D) depreciation expense of airplane […]

Wetzel Company has the following information available for the past quarter: Division A Division B Division C Sales $250,000 $400,000 $350,000 Variable expenses 52% 30% 40% Fixed expenses controllable by division manager $60,000 $200,000 $175,000 Fixed expenses controllable by others […]

Historical or past information can have an indirect bearing on a manager’s decision because ________. A) the past decision resulted in a favorable outcome B) it can help predict the future C) the past decision resulted in a bonus for […]

Each value chain function should focus on activities that ________. A) create profits for the seller B) create bonuses for top management C) create higher stock prices for the company’s stock D) create value for the customer When preparing segmented […]

If the actual volume of production differs from the expected volume of production, the fixed overhead costs used for budgeting and product costing are ________. A) the same B) different C) indeterminate D) changing over the accounting period Investigating the […]

The Corrao Company reports the following information: Sales for the year ended December 31, 2012 $106,950 Gross profit for the year ended December 31, 2012 $45,150 Net income for the year ended December 31, 2012 $7,300 Total Current Assets, December […]

To apply the budgeted overhead costs to a job, the budgeted overhead rate is multiplied by the ________. A) actual production in units B) expected production in units C) actual amount of cost driver used by the job D) expected […]

A company is considering two investment projects. If they use the total project approach and the differential approach, both approaches produce ________. A) different answers B) similar answers C) the same answer D) not enough information is given to make […]

Toto Company has the following data available: Sales for the year ended December 31, 2012 $106,950 Gross profit for the year ended December 31, 2012 $45,150 Net income for the year ended December 31, 2012 $7,300 Total Current Assets, December […]

Jimmy Industries Inc. reported the following information about the production and sale of its only product during the first month of operations: Selling price per unit $65.00 Sales $78,000 Direct materials used $25,000 Direct labor $42,000 Variable factory overhead $17,000 […]

A transfer price exists when two segments of the same organization sell ________. A) a product to the same customer B) a product to each other C) a product in a foreign country D) the same service to customers In […]

Campbell Company gathered the following information for the year ended December 31, 2015: Units produced 45,000 Units expected to be produced 45,000 Units sold 43,200 Direct labor $137,200 Direct materials used $126,400 Fixed selling and administrative expenses $51,000 Variable selling […]

The main qualities of accounting information that make accounting information useful for decision making are ________ and ________. A) relevance; reliability B) relevance; comparability C) consistency; comparability D) relevance; faithful representation Who provides assurance to external users about the reliability […]

In job-order costing, the journal entry to record the transfer of completed goods from the production area would include a Credit to ________. A) Cost of Goods Sold B) Finished Goods Inventory C) Factory Department Overhead Control D) Work-In-Process Inventory […]

In a make-or-buy decision for a part for a product, which of the following qualitative factors play a role? A) quality of purchased part B) credit terms offered by supplier of part C) timeliness of delivery of purchased part by […]

Dooley Company has the following information available for variable overhead costs. Direct labor hours are the cost driver for variable overhead costs. Actual variable overhead costs $4,700 Standard variable overhead costs $1.20 per hour Actual direct labor hours 3,750 hours […]

Reasons for the post-audit of an investment project do NOT include ________. A) ensuring that the investment expenditures are proceeding on time and within budget B) providing information for improving future predictions of cash flows C) evaluating the continuation of […]

When managers make decisions, the accountant’s primary role is ________. A) making the decision B) providing information that may be useful to the manager C) uncertain because it depends on the decision being made D) uncertain because it depends on […]

A hotel has the following organizational goal: Increase employee satisfaction. Which one of the following is the best performance measure of the organizational goal? A) number of new employees trained B) turnover rate of hotel employees C) overall rating on […]

How can a company avoid lying by employees when preparing a budget? A) reward good budget forecasts B) reward good performance against the budget C) reward good budget forecasts and reward good performance against the budget D) reward good recipes […]

Listed below are selected accounts for Dentice Corporation: December 31, 2013 December 31, 2014 Accounts Receivable $20,000 $40,000 Inventory $70,000 $30,000 Accounts Payable $20,000 $88,000 Wages payable $22,000 $1,000 For the year ended December 31, 2014, net income was $50,000 […]

In perfect competition, the profit-maximizing volume is the quantity at which ________. A) marginal cost equals price B) contribution margin equals fixed cost C) marginal revenue equals price D) price exceeds marginal cost When allocating service department costs to producing […]

Division AA does not have excess capacity to produce Product XX. The division can sell Product XX for $10 per unit outside the company. Variable costs are $6 per unit. Division BB wants to purchase Product XX from Division AA […]

The cash paid to purchase equipment is included in the ________ section of the statement of cash flows. A) operating B) investing C) financing D) noncash Which of the following statements about depreciation is FALSE? A) Depreciation does not generate […]

What is the final step in the four-step process to allocate indirect costs to cost objects? A) Accumulate indirect costs for a period of time in a cost pool. B) Select an allocation base for each cost pool. C) Multiply […]

A company is trying to decide which product to manufacture. The following information is available: Costs Product A Product B Direct Materials 1 $2.00 per unit $2.20 per unit Direct Materials 2 $1.25 per unit $1.50 per unit Direct Materials […]

Sharpie Company has variable costs of 75% of total revenues and fixed costs of $40 million per year. What is the break-even point in dollars? A) $40 million B) $53.33 million C) $100 million D) $160 million Marketing is the […]

Todd Company has two production departments called Assembly and Finishing. The maintenance department serves both production departments. Maintenance costs are allocated based on labor hours. Budgeted fixed costs for the maintenance department are $30,000. Budgeted variable costs for the maintenance […]

A unit of ending inventory has a cost of $100 per unit. The selling price per unit is $200. The replacement cost per unit is $90. What value is reported for this inventory on the balance sheet? A) $90 B) […]

Juan Company’s after-tax operating income was $882 million. Average total assets were $5,900 million and average total stockholders’ equity was $4,050 million. Juan Company’s cost of capital was 10%. Juan Company uses total assets as the measure of invested capital. […]

The following data points are available. This is an example of a ________ cost. Units Costs 600 $560 650 $565 800 $580 900 $590 A) variable B) fixed C) mixed D) none of the above According to the Financial Executives […]

Which of the following is an example of using cost information for operational control? A) determination of Cost of Goods Sold for the income statement B) identification of capital assets to acquire for expansion purposes C) selection of value-chain function […]

Jensen Company produces dolls. Each doll sells for $20.00. Variable costs are $14.00 per unit. If the break-even volume in dollars is $1,446,000, then the total fixed costs for the period are ________. A) $361,500 B) $433,800 C) $516,425 D) […]

Unfavorable variances ________ represent bad decisions made by managers. A) always B) sometimes C) never D) none of the above Managers’ incentives for performance are defined as the ________. A) relationship between cost and perceived benefit B) relationship between goal […]

The following information was gathered for all the products made by the Ringaling Company: Budgeted direct labor hours 31,000 Actual direct labor hours 32,400 Budgeted factory overhead costs $147,250 Actual factory overhead costs $149,980 Assume the cost driver for factory […]

The Bombard Company reports the following information: Sales for the year ended December 31, 2012 $106,950 Gross profit for the year ended December 31, 2012 $45,150 Net income for the year ended December 31, 2012 $10,300 Total Current Assets, December […]

Franklin Company uses activity-based costing, and normally produces 1,000,000 units per month. At this level of production, the costs per unit are as follows: Direct materials used $14 Direct labor $6 Variable indirect production $1 Setup costs $3 For 1,000,000 […]