1) a time ticket:
a.shows the time an employee worked on each job, the pay rate, and the total cost
chargeable to each job
b.shows the time that a department’s employees worked on all jobs, the pay rate of each
employee, and the total cost chargeable to each job
c.shows the time an employee worked on each job and the total cost chargeable to each
job only
d.shows the time an employee worked on each job only
e.none of the above
2) lyman company has the opportunity to increase annual credit sales $100,000 by
selling to a new, riskier group of customers. the expenses of collecting credit sales are
expected to be 15 percent of credit sales. the company’s manufacturing and selling
expenses are 70% of sales, and its effective tax rate is 40%. if lyman should accept this
opportunity, the company’s after-tax profits would increase by:
a.$9,000
b.$10,000
c.$10,200
d.$14,400
e.some amount other than those given above
3) net realizable value (nrv) of a product is:
a.split-off cost – profit margin – additional processing and selling cost
b.profit at split-off + additional processing and selling cost
c.ultimate sales value – additional processing and selling cost
d.ultimate sales value + additional processing and selling cost
e.cost allocation plus separable cost
4) an overhead cost that can be traced directly to either a service or production
department:
a.is called a “flow through” cost
b.requires less allocation effort
c.is charged directly to that department
d.must be variable
e.must be fixed
5) the competitive strategy of differentiation requires that a product or service must be:
a.always readily available
b.price competitive
c.produced at the lowest possible cost
d.unique in some important way, in terms of features, innovation, service or quality
e.marketed in different ways to different groups
6) which of the following is not normally associated with activity-based costing?
a.activity cost pools
b.multiple cost drivers
c.reduction of non-value-adding costs
d.high direct labor costs relative to manufacturing overhead costs
e.improved decision-making and pricing
7) the journal entry to record finished product units would include a debit to:
a.work-in-process inventory
b.accrued payroll
c.factory overhead
d.materials inventory
e.finished goods inventory
8) calculating the margin of safety (mos) measure will help a firm answer which of the
following questions?
a.will we break even?
b.are we using our debt wisely?
c.how much will profits change if sales change?
d.how much profit will we earn?
e.how much revenue can we lose before we drop below the breakeven point?
9) badour inc. is a job-order manufacturer. the company uses a predetermined overhead
rate based on direct labor hours to apply overhead to individual jobs. for the current
year, estimated direct labor hours were 114,000 and estimated factory overhead was
$695,400. the following information was for september. job x was completed during
september, while job y was started but not finished.
the underapplied or overapplied overhead for september is:
a.$2,750 underapplied
b.$2,750 overapplied
c.$920 overapplied
d.$920 underapplied
e.$1,450 underapplied
10) sustainability is the balancing of short and long term goals in all three dimensions
of the company’s performance. those three areas are:
a.economic, social, and environmental
b.economic, social, and financial
c.economic, environmental, and political
d.social, environmental, and financial
11) neary co. produces three products x, y, and z from a joint process. each product may
be sold at the split-off point or processed further. additional processing requires no
special facilities, and production costs of further processing are entirely variable and
traceable to the products involved. last year all three products were processed beyond
split-off. joint production costs for the year were $80,000. sales values and costs needed
to evaluate neary’s production policy follow.
the amount of joint costs allocated to product y using the physical measure method is
(calculate all ratios and percentages to 4 decimal places, for example 33.3333%, and
round all dollar amounts to the nearest whole dollar):
a.$22,876
b.$44,300
c.$18,500
d.$16,000
e.$32,000
