1) process costing is not intended to help determine
a.departmental cost flows
b.product costs
c.profitability of products
d.profitability of product mix
2) crown co. can produce two types of lamps, the enlightner and foglighter. the data on
the two lamp models are as follows:
it takes one machine hour to produce each product. total fixed costs for the manufacture
of both products are $90,000. demand is high enough for either product to keep the
plant operating at maximum capacity.
assuming that sales mix remains constant in dollars, what is the breakeven point in
dollars? (round intermediate calculations to 4 decimal places and final answer up to the
nearest whole number.)
a.$244,765
b.$306,513
c.$118,365
d.$945,667
e.$288,735
3) the tee box is a golf shop inside the clubhouse of a north carolina golf course. derek
dunlop, owner of the tee box, was deciding how much shelf space to devote to four
different golf ball types. derek had a maximum front shelf space of fifteen feet to devote
to the four golf ball types. he wanted a minimum of three feet and a maximum of seven
feet of front shelf for each golf ball type. appropriate data on the four ball types follow:
the daily contribution per foot of front shelf space for straight is calculated to be:
a.$190.00
b.$140.00
c.$120.00
d.$130.00
e.$170.00
4) in terms of strategic cost management for not-for-profit organizations, which of the
following is false?
a.not-for-profit organizations can benefit from strategic cost management since they
must prove their effectiveness and efficiency to a number of different stakeholders
b.the balanced scorecard can be used to measure the organization’s performance
c.value chain analysis can be used for analyzing the organization’s product design,
product testing, advertising, and production processes
d.swot analysis is most helpful for non-profit organizations when it deals with the
organization’s competitive threats, opportunities, and critical success factors
5) a measure of research and development on the balanced scorecard could include:
a.market share
b.number of new products
c.sales growth
d.cash flows
6) randall company manufactures products to customer specifications. a job costing
system is used to accumulate production costs. factory overhead cost was applied at
125% of direct labor cost. selected data concerning the past year’s operation of the
company are presented below.
the amount of underapplied or overapplied overhead is:
a.$60,000 overapplied
b.$60,000 underapplied
c.$10,000 overapplied
d.$10,000 underapplied
e.$0
7) zippy company has a product which it currently sells in the market for $50 per unit.
zippy has developed a new feature which, if added to the existing product, will allow
zippy to receive a price of $65 per unit. the cost of adding this new feature is $26,000
and zippy expects to sell 1,600 units over the next year. what is the effect on operating
income of adding the feature to the product?
a.$2,000 increase in operating income
b.$3,000 decrease in operating income
c.$3,500 increase in operating income
d.$4,000 decrease in operating income
e.$2,000 decrease in operating income
8) which of the following is the percentage by which average time (or total time) falls
from previous levels as output doubles?
a.learning speed
b.learning curve
c.learning analysis
d.learning average
e.learning rate
9) giddings pharmaceutical company is a maker of drugs for high blood pressure and
uses a process costing system. the following information pertains to the final
department of giddings’s blockbuster drug called solcax.
giddings calculates separate costs of spoilage by computing both normal and abnormal
spoiled units. normal spoilage costs are reallocated to good units and abnormal spoilage
costs are charged as a loss. the units of solcax that are spoiled are the result of defects
not discovered before inspection of finished units. materials are added at the beginning
of the process. using the weighted-average method, answer the following question:
what are the unit conversion costs?
a.$2.15
b.$2.36
c.$2.50
d.$2.75
10) cost/volume/profit (cvp) analysis is a technique available to management to
understand better the interrelationships of several factors that combine to determine a
firm’s profit. as with many such techniques, the accountant oversimplifies the real world
by making assumptions. which of the following is not a major assumption underlying
cvp analysis?
a.all costs incurred by a firm can be separated into their fixed and variable components
b.the product selling price per unit is affected by changes in volume levels
c.operating efficiency and employee productivity are constant at all volume levels
d.in multi-product situations, the sales mix changes as volume changes
e.total costs vary only with changes in sales volume
11) a truck, costing $25,000 and uninsured, was wrecked the very first day it was used.
it can either be disposed of for $5,000 cash and be replaced with a similar truck costing
$27,000, or rebuilt for $20,000 and be brand new as far as operating characteristics and
looks are concerned. the best choice provides a net cost savings of:
a.$2,000
b.$5,000
c.$7,000
d.$12,000
e.some other amount
12) harrington corporation produces three products, a, b, and c. pertinent information on
these products is as follows:
there are 150 direct labor hours available. machine-hour capacity allows 100 anchor
bolts, only; 50 bearings, only; 40 casters, only; or any combination of the three that
does not exceed the capacity.
the machine-hour constraint for harrington’s linear program is:
a.the same as the labor-hour constraint
b.a + 2b + 2.5c 100
c.indeterminable from the data given
d.a + b + c 190
e.100a + 50b + 40c 19,000
13) budgeting provides all of the following except:
a.a means to communicate the organization’s short-term goals to its employees
b.support for management functions of planning and coordinating activities of the
organization
c.a means to anticipate problems
d.an ethical framework for decision-making
e.a basis for motivating employee behavior
14) which one of the following process costing methods combines both current and
prior costs in determining cost per equivalent unit?
a.fifo method
b.lifo method
c.specific unit method
d.weighted-average method
e.moving-average method
15) everlast co. manufactures a variety of drill bits. the company’s plant is partially
automated. the budget for the year includes $432,000 payroll for 4,800 direct
labor-hours. listed below is cost driver information used in the product-costing system:
a current product order has the following requirements:
using abc, how much other overhead is assigned to the order?
a.$8,000
b.$9,960
c.$11,108
d.$19,200
e.$45,992
16) a company using a volume-based overhead assignment (allocation) method will
tend to:
a.overstate the cost of low volume products
b.understate the cost of low volume products
c.understate the cost of high volume products
d.understate the cost of all products
e.either understate or overstate the cost of high volume products depending on the
specific manufacturing factors involved
17) consistency between goals of the firm and the goals of its employees is referred to
as:
a.goal optimization
b.goal conformance
c.goal congruence
d.goal internalization
e.goal compensation