Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
The top management at Amore Corp, a manufacturer of computer games, is attempting
to recover from a flood that destroyed some of their accounting records. The main
computer system was also severely damaged. The following information was salvaged:
What were the sales for the Beta Division (a)?
A) $7,777,778
B) $154,000
C) $12,727,273
D) $252,000
Which of the following statements best define strategy?
A) It describes how an organization can create value for its customers while
differentiating itself from
its competitors.
B) It is an organization's ability to achieve lower costs relative to competitors through
productivity and efficiency improvements, elimination of waste, and tight cost control.
C) It is an organization's ability to offer products or services its customers perceive to
be superior and unique relative to the products or services of its competitors.
D) It describes how an organization motivates its employees to work for more hours
without any increase in their wages.
Direct material cost is an example of ________.
A) conversion costs
B) discretionary costs
C) engineered costs
D) downsized costs
Which of the following functions represents the least total cost assuming the number of
units is equal in each case?
A) y = 180 + 9X
B) y = 90 + 5X
C) y = 90 + 9X
D) y = 180 + 5X
Which of the following statements best define joint products?
A) When one product has a high total sales value compared with the total sales value of
other products of the process, that product is called a joint product.
B) Product of a joint production process that have the same sales value compared with
the total sales value of the by products is called a joint product.
C) When one product has a low total sales value compared with the total sales value of
other products of the process, that product is called a joint product.
D) When a joint production process yields two or more products with high total sales
values relative to the total sales values of other products, those products are called joint
products.
Sherry and John Enterprises are using the kaizen approach to budgeting for 2018. The
budgeted income statement for January 2018 is as follows:
Under the kaizen approach, cost of goods sold and variable operating expenses are
budgeted to decline by 1% per month.
What is the budgeted operating income for March 2018?
A) -$18,100
B) $396,550
C) -$59,403
D) $683,100
The degree to which a predetermined objective or target is met is known as ________.
A) efficiency
B) variance
C) effectiveness
D) marking
Better Products Company manufactures insulation and applies manufacturing overhead
costs to production at a budgeted indirect-cost rate of $18 per direct labor-hour. The
following data are obtained from the accounting records for October 2018:
The actual amount of manufacturing overhead costs incurred in October 2018 totals
________.
A) $277,500
B) $116,000
C) $162,000
D) $123,000
Which of the following can be used to determine markup percentage in the case of
cost-plus pricing?
A) Target annual operating income / Invested capital
B) Estimated annual dividend / Invested capital
C) Target sales revenue / Target annual operating income
D) Estimated annual dividend / Target annual operating income
Altec Services Corporation has relevant costs of $46 per unit to manufacture 1,050
units of Part A. A current supplier offers to make Part A for $33 per unit. Alternatively,
the company can rent out the capacity for $30,000. If capacity is constrained, the
opportunity cost of buying Part A from the supplier is ________.
A) $0
B) $13,650
C) $43,650
D) $30,000
J & S Manufacturing expects to produce and sell 13,000 units of Big, its only product,
for $20 each. Direct material cost is $3 per unit, direct labor cost is $14 per unit, and
variable manufacturing overhead is $10 per unit. Fixed manufacturing overhead is
$26,000 in total. Variable selling and administrative expenses are $3 per unit, and fixed
selling and administrative costs are $3,000 in total. According to generally accepted
accounting principles, inventoriable cost per unit of Big would be ________.
A) $17.00 per unit
B) $20.00 per unit
C) $29.00 per unit
D) $27.00 per unit
Which of the following best defines standard costing?
A) It is the same as actual costing but done in real time.
B) It is a system that traces direct cost to output by multiplying actual process or rates
by actual quantities of inputs + allocates overhead by on the basis of actual quantities of
the allocation base used.
C) It is a system that traces direct costs to output produced by multiplying the standard
prices or rates by the standard quantities of inputs allowed for the actual output
produced.
D) It is a system that allocates overhead costs on the basis of standard overhead cost
rates times the actual quantities of the allocation based used.
Match each of the following items with one or more of the denominator-level capacity
concepts by putting the appropriate letter(s) by each item:
a. Theoretical capacity
b. Practical capacity
c. Normal capacity utilization
d. Master-budget capacity utilization
1. Reduces theoretical capacity by considering unavoidable operating interruptions
2. Producing at full efficiency all the time
3. Measures capacity levels in terms of demand
4. Level of capacity utilization that satisfies average customer demand over a period
5. Does not allow for plant maintenance
6. Engineering and human resource factors are important when estimating capacity
7. Level of capacity utilization that managers expect for the current budget period
8. Ideal goal of capacity utilization
9. Takes into account seasonal, cyclical, and trend factors
10. Measures capacity levels in terms of what a plant can supply
Goldfarb's Book and Music Store has two service departments, Warehouse and Data
Center. Warehouse Department costs of $350,000 are allocated on the basis of budgeted
warehouse-hours. Data Center Department costs of $100,000 are allocated based on the
number of computer log-on hours. The costs of operating departments Music and Books
are $112,500 and $135,000, respectively. Data on budgeted warehouse-hours and
number of computer log-on hours are as follows:
Production
Support Departments Departments
Using the direct method, what amount of Warehouse Department costs will be allocated to
Department Books? (Do not round any intermediary calculations.)
A) $143,657
B) $206,343
C) $135,000
D) $170,679
At the Wild Cat Group Company, the cost of the library and information center has
always been charged to the various departments based upon number of employees.
Recently, opinions gathered from the department managers indicate that the number of
engineers within a department might be a better predictor of library and information
center costs.
Total library and information center costs are $213,000.
Department A B C
Number of employees 180 520 150
Number of engineers 10 60 35
If the number of employees is considered the cost driver, what amount of library and
information center costs will be allocated to Department A? (Round any intermediary
calculations to two decimal places and your final answer to the nearest dollar.)
A) $42,377
B) $44,730
C) $20,286
D) $130,306
Which of the following is a true statement of energy costs?
A) Energy costs are not controllable
B) Strategies to reduce energy costs will not impact variable cost budgets.
C) Energy costs are a fixed cost of doing business for a manufacturer.
D) Energy costs are a growing component of variable overhead costs.
If the unit level of inventory increases during an accounting period, then ________.
A) less operating income will be reported under absorption costing than variable
costing
B) more operating income will be reported under absorption costing than variable
costing
C) operating income will be the same under absorption costing and variable costing
D) the exact effect on operating income cannot be determined
The Berkel Corporation manufactures Widgets, Gizmos, and Turnbols from a joint
process. June production is 10,000 widgets; 13,500 gizmos; and 15,000 turnbols.
Respective per unit selling prices at split-off are $95, $60, and $20. Joint costs up to the
split-off point are $187,500. What amount of joint costs will be allocated to the
Turnbols? (Do not round any intermediary calculations.)
A) $27,306
B) $17,066
C) $73,726
D) $86,468
Which of the following statements is true of costs and pricing decisions?
A) Companies get profit from selling products only when they are the price makers.
B) Companies supply products as long as the price the customer is willing to pay for its
products exceeds the price that is charged by the competitor.
C) Companies supply products as long as there is a demand for the product in the
market regardless of the price at which the products are sold.
D) Companies supply products as long as the revenues from selling the additional units
exceed the cost of producing them.
Flexible-budget variance = $260,000 (F); sales-volume variance = $350,000 (U);
sales-mix variance = $320,000 (F); calculate the static-budget variance.
A) $90,000 (U)
B) $320,000 (U)
C) $320,000 (F)
D) $290,000 (F)
Autocratic Company provided the following information:
Budgeted input 90,500 gallons
Actual input 88,700 gallons
Budgeted production 45,000 units
Actual production 46,000 units
What is the partial productivity ratio?
A) 2.01 units per gallon
B) 0.5 units per gallon
C) 0.52 units per gallon
D) 1.93 units per gallon
Ways to "produce for inventory" that result in increasing operating income include
________.
A) switching production to products that absorb the least amounts of fixed
manufacturing costs
B) delaying items that absorb the greatest amount of fixed manufacturing costs
C) switching production to products that absorb the most amounts of fixed
manufacturing costs
D) undervaluing ending inventory by not recording certain costs that have been
incurred
Hammond and Jarrett provide tax consulting for estates and trusts. Their job-costing
system has a single direct-cost category (professional labor) and a single indirect-cost
pool (research support). The indirect-cost pool contains all the costs except direct
personnel costs. All budgeted indirect costs are allocated to individual jobs using actual
professional labor-hours.
Required:
a. Discuss the reasons a consulting firm might use a normal costing system rather than
an actual costing system.
b. What might be some reasons for the firm to change from a one-pool to a
multiple-pool allocation concept?
Which of the following statements is true about activity-based budgeting?
A) activity-based budgeting estimates total costs more accurately than cost-based
budgeting
B) activity-based budgeting provides more detailed information than cost-based
budgeting
C) activity-based budgeting is cheaper than cost-based budgeting
D) activity-based budgeting is simpler to implement than cost-based budgeting
Capity Tea Products has an exclusive contract with British Distributors. Calamine and
Capity are two brands of teas that are imported and sold to retail outlets. The following
information is provided for the month of March:
Budgeted and actual fixed corporate-sustaining costs are $1,850 and $2,300, respectively.
For the contribution margin, what is the total flexible-budget variance?
A) $840 favorable
B) $206 favorable
C) $634 favorable
D) $634 unfavorable
The net present value method assumes that project cash flows can be reinvested at the
company's ________.
A) internal rate of return
B) required rate of return
C) growth rate
D) accounting rate of return
Chem Manufacturing Company processes direct materials up to the split-off point
where two products (X and Y) are obtained and sold. The following information was
collected for the month of November:
Direct materials processed: 10,200 gallons (10,200 gallons yield 9500 gallons of good
product and 700 gallons of shrinkage)
The cost of purchasing 10,200 gallons of direct materials and processing it up to the
split-off point to yield a total of 9500 gallons of good products was $1,050,000.
The beginning inventories totaled 35 gallons for X and 400 gallons for Y. Ending inventory
amounts reflected 565 gallons of Product X and 1,515,000 gallons of Product Y. October
costs per unit were the same as November.
Using the physical-volume method, what is Product X's approximate gross-margin
percentage? (Round all intermediary calculations two decimal places.)
A) 63%
B) 56%
C) 171%
D) 68%
When 25,000 units are produced, fixed costs are $21.00 per unit. Therefore, when
20,000 units are produced, fixed costs will ________.
A) increase to $26.25 per unit
B) remain at $21.00 per unit
C) decrease to $16.80 per unit
D) total $420,000
Which of the following statements shows a difference between simple regression and
multiple regression?
A) Simple regression uses more than one dependent and independent variables, whereas
multiple regression uses only one dependent and independent variable.
B) Simple regression uses only the independent variables, whereas multiple regression
uses only dependent variables.
C) Simple regression uses only one dependent and one independent variable, whereas
multiple regression uses one dependent and more than one independent variable.
D) Simple regression uses only one dependent variable and more than one independent
variables, whereas multiple regression uses more than one dependent variable and only
one independent variable.
Which of the following denotes minimum transfer price?
A) Minimum transfer price = Incremental cost per unit incurred up to the point of
transfer + Opportunity cost per unit to the selling subunit
B) Minimum transfer price = Total cost per unit incurred up to the point of transfer +
Sunk cost per unit to the selling subunit
C) Minimum transfer price = Current cost per unit incurred up to the point of transfer +
Historical cost per unit to the selling subunit
D) Minimum transfer price = Variable cost per unit incurred up to the point of transfer +
Fixed cost per unit to the selling subunit
Russo Corporation manufactured 17,000 air conditioners during November. The
overhead cost-allocation rate is $35.50 per machine-hour. The following variable
overhead data pertain to November:
What is the variable overhead efficiency variance?
A) $6,212.50 favorable
B) $6,212.50 unfavorable
C) $4,750.00 favorable
D) $4,750.00 unfavorable
Which of the methods of allocating joint costs usually is considered the simplest to
implement?
A) estimated net realizable value
B) constant gross-margin percentage NRV
C) sales value at split-off
D) physical measures
