1) The value chain is the sequence of business functions in which ________.
A) value is deducted from the products or services of an organization
B) producing and delivering the product or service is of prime importance
C) products and services are evaluated with respect to their value to the supply chain
D) usefulness is added to the products or services of an organization
2) Delinz Company can predict with virtual certainty the demand for its products.
Delinz’s sells 75 hams per week. Purchase-order lead time is 3 weeks and the
economic-order quantity is 150 hams. What is the reorder point?
A) 675 hams
B) 225 hams
C) 450 hams
D) 150 hams
3) The production-volume variance may also be referred to as the ________.
A) flexible-budget variance
B) denominator-level variance
C) spending variance
D) efficiency variance
4) The Fortise Corporation manufactures two types of vacuum cleaners, the Victor for
commercial building use and the House-Mate for residences. Budgeted and actual
operating data for the year 2015 were as follows:
What is the total flexible-budget variance in terms of the contribution margin?
A) $900,000 favorable
B) $850,000 favorable
C) $320,000 unfavorable
D) $360,000 unfavorable
5) The Fortise Corporation manufactures two types of vacuum cleaners, the Victor for
commercial building use and the House-Mate for residences. Budgeted and actual
operating data for the year 2015 were as follows:
What is the total static-budget variance in terms of the contribution margin?
A) $900,000 favorable
B) $850,000 favorable
C) $250,000 unfavorable
D) $450,000 unfavorable
6) If Carne Company were to sell 32,000 units, the total expected cost would be:
A) $75,000
B) $78,000
C) $80,000
D) $77,000
7) The flexible-budget variance for direct cost inputs can be further subdivided into a
________.
A) static-budget variance and a sales-volume variance
B) sales-volume variance and an efficiency variance
C) price variance and an efficiency variance
D) static-budget variance and a price variance
8) Audrey Auto Accessories manufactures plastic moldings for car seats. Its costing
system uses two cost categories, direct materials and conversion costs. Each product
must pass through Department A and Department B. Direct materials are added at the
beginning of production. Conversion costs are allocated evenly throughout production.
What were the equivalent units of direct materials and conversion costs, respectively, at
the end of February? Assume Audrey uses the weighted-average process costing
method.
A) 1,000; 930
B) 1,000; 1,000
C) 1,000; 900
D) 800; 700
9) ________ includes banking and short- and long-term financing, investments, and
cash management.
A) Risk management
B) Strategic planning
C) Controllership
D) Treasury management
10) When a normal costing system is used, clients using proportionately more full-time
employees than trainees will ________.
A) be overbilled for actual resources used
B) be underbilled for actual resources used
C) be billed accurately for actual resources used
D) result in an underallocation of direct costs
11) The actual information pertains to the month of September. As a part of the
budgeting process, Twilith Fencing Company developed the following static budget for
September. Twilith is in the process of preparing the flexible budget and understanding
the results.
The flexible budget will report ________ for variable costs.
A) $245,760
B) $360,000
C) $288,000
D) $384,000
12) Finished goods inventory would normally include ________.
A) direct materials in stock and awaiting use in the manufacturing process
B) goods partially worked on but not yet fully completed
C) goods fully completed but not yet sold
D) goods returned after being sold to be re-worked on further improvements and quality
13) As part of his job as cost analyst, Max Thompson collected the following
information concerning the operations of the Machining Department:
Required:
a.Use the high-low method to determine the estimating cost function with
machine-hours as the cost driver.
b.If June’s estimated machine-hours are 4,300, calculate the total estimated costs of the
Machining Department?
14) Autogas Corporation manufactures industrial-sized gas furnaces and uses budgeted
machine hours to allocate variable manufacturing overhead. The following information
relates to the company’s manufacturing overhead data:
What is the flexible-budget variance for variable manufacturing overhead?
A) $13,245 unfavorable
B) $35,715 unfavorable
C) $13,245 favorable
D) $35,715 favorable
15) A band of normal activity or volume in which specific cost-volume relationships are
maintained is referred to as the ________.
A) average range
B) cost-allocation range
C) cost driver range
D) relevant range