1) The cash flow statement includes ________.
A) cash discount on sales
B) cash outflow towards insurance premium
C) sales revenues of the organization
D) interest accrued on an investment
2) Many manufacturing, marketing, and design problems require employees with
multiple skills; therefore, teams are used and the members have the added
encouragement of ________.
A) individual incentives
B) management incentives
C) morale incentives
D) team incentives
3) Ralph was in the process of completing the quarterly planning for the purchasing
department when a major computer malfunction lost most of his data. For direct
material XXX he was able to recover the following:
Ralph purchases at the EOQ quantity level.
Required:
Determine the annual demand, the cost of placing an order, the annual carrying cost of
one unit, and the economic order quantity.
4) Stefan Ceramics is in the business of selling ceramic vases. It has two departments
molding and finishing. Molding department purchases tungsten carbide and produces
ceramic vases out of it. Ceramic Vases are then transferred to finishing department,
which designs it as per the requirement of the customers.
During the month of July, molding department purchased 500 kgs of tungsten carbide at
$60 per kg. It started manufacture of 4,000 vases and completed and transferred 3,200
vases during the month. It has 800 vases in the process at the end of the month. It
incurred direct labor charges of $1,000 and other manufacturing costs of $500, which
included electricity costs of $200. Stefan had no inventory of tungsten carbide at the
end of the month. It also had no beginning inventory of vases. The ending inventory
was 50% complete in respect of conversion costs.
What is the total conversion costs for the month of July?
A) $1,700
B) $1,500
C) $1,300
D) $1,000
5) ________ describes the flow of goods, services, and information from the purchase
of materials to the delivery of products to consumers, regardless of whether those
activities occur in the same organization or with other organizations.
A) Supply chain
B) Production process
C) Quality control
D) Customer relationship management
6) In the merchandising sector ________.
A) only variable costs are subtracted to determine gross margin
B) fixed overhead costs are subtracted to determine gross margin
C) fixed overhead costs are subtracted to determine contribution margin
D) all operating costs are subtracted to determine contribution margin
7) Sky High sells helicopters. During the current year, 100 helicopters were sold
resulting in $820,000 of
sales revenue, $250,000 of variable costs, and $342,000 of fixed costs. The number of
helicopters that must be sold to achieve $300,000 of operating income is ________.
A) 113 units
B) 102 units
C) 96 units
D) 100 units
8) If manufacturing machines are breaking down more than expected, this will
contribute to a(n) ________.
A) favorable direct manufacturing labor price variance
B) unfavorable direct manufacturing labor price variance
C) favorable direct manufacturing labor efficiency variance
D) unfavorable direct manufacturing labor efficiency variance
9) Demizio Valley Orchards, Inc. (DVO), developed standard costs for direct material
and direct labor. In 2015, DVO estimated the following standard costs for one of their
most well loved products, the DVO classic Grandma’s large apple pie which had a
brown sugar coating on the top of the crust as well as including cranberry and mince
ingredients in addition to the apples.
During September, DVO produced and sold 1,100 pies using 2,300 pounds of direct
materials at an average cost per pound of $6.00 and 200 direct labor hours at an average
wage of $13.25 per hour.
The direct material price variance during September is ________.
A) $575 favorable
B) $575 unfavorable
C) $50.00 unfavorable
D) $50.00 favorable
10) Roiann and Dennett Law Office employs 12 full-time attorneys and 10
paraprofessionals. Direct and indirect costs are applied on a professional labor-hour
basis that includes both attorney and paraprofessional hours. Following is information
for 2014:
How much should the client be billed in an actual costing system if 200 professional
labor-hours are used?
A) $5,000
B) $6,960
C) $7,480
D) $6,400
11) A local accounting firm employs 20 full-time professionals. The budgeted annual
compensation per employee is $40,500. The average chargeable time is 500 hours per
client annually. All professional labor costs are included in a single direct-cost category
and are allocated to jobs on a per-hour basis.
Other costs are included in a single indirect-cost pool, allocated according to
professional labor-hours. Budgeted indirect costs for the year are $787,500, and the
firm expects to have 90 clients during the coming year.
If ten clients are lost and the workforce stays at 20 employees, then the direct labor cost
rate per hour:
A) $18.00 per hour
B) $17.50 per hour
C) $20.25 per hour
D) $15.00 per hour
12) Madzinga’s Draperies manufactures curtains. A certain window requires the
following:
During the second quarter, the company made 1,500 curtains and used 14,000 square
yards of fabric costing $68,600. Direct labor totaled 7,600 hours for $79,800.
Required:
a.Compute the direct materials price and efficiency variances for the quarter.
b.Compute the direct manufacturing labor price and efficiency variances for the quarter.
13) The actual information pertains to the third quarter. As part of the budgeting
process, the Duck Decoy Department of Paralith Incorporated had developed the
following static budget for the third quarter. Duck Decoy is in the process of preparing
the flexible budget and understanding the results.
The flexible-budget variance for variable costs is ________.
A) $30,000 favorable
B) $31,000 unfavorable
C) $30,000 unfavorable
D) $48,000 favorable