|
Job-order costing |
Process costing |
A. |
Yes |
No |
B. |
Yes |
Yes |
C. |
No |
Yes |
D. |
No |
No |
A: A.
B: B.
C: C.
D: D.
|
A |
B |
Total |
Production volume |
500 |
1,000 |
|
Engineering costs incurred |
$2,000 |
$3,000 |
$5,000 |
Engineering costs per batch |
$800 |
$1,500 |
|
Batch size |
200 |
500 |
|
Total direct manufacturing labor hours |
750 |
1,400 |
2,150 |
Direct manufacturing labor hours/unit |
1.5 |
1.4 |
|
Assuming activity-based costing (ABC) is used, what is the engineering cost per unit for products A and B?
|
A |
B |
A. |
$3.49 |
$3.26 |
B. |
$1.60 |
$1.50 |
C. |
$10.00 |
$6.00 |
D. |
$4.00 |
$3.00 |
A: A.
B: B.
C: C.
D: D.
A: A breakeven situation.
B: An additional gain of $1,000 from further processing.
C: An overall loss of $1,000.
D: An additional gain of $2,000 from further processing.
A: Activity-based costing is useful for allocating marketing and distribution costs.
B: Activity-based costing is more likely to result in major differences from traditional costing systems if the firm manufactures only one product rather than multiple products.
C: In activity-based costing, cost drivers are what cause cost to be incurred.
D: Activity-based costing differs from traditional costing systems in that products are not cross-subsidized.
Generally the number of defective units (that is, those failing inspection) is below the normal tolerance limit of 4% of units inspected. Defective units have minimal value, and the company sells them without any further processing for whatever it can. Generally the amount collected equals, or slightly exceeds, the transportation cost. A summary of the manufacturing activity for department 2, in units for the current month, is presented below.
|
Physical flow (output units) |
Beginning inventory |
|
(60% complete with respect to conversion) |
20,000 |
Units transferred in from department 1 |
180,000 |
Total units to account for |
200,000 |
|
|
Units completed in department 2 during the month |
170,000 |
Units found to be defective at inspection |
5,000 |
Ending inventory |
|
(80% complete with respect to conversion) |
25,000 |
Total units accounted for |
200,000 |
The equivalent units for direct materials for the current month would be
A: 175,000 units.
B: 181,500 units.
C: 195,000 units.
D: 200,000 units.
A: Dual-rate allocation method.
B: Direct allocation method.
C: Step-down allocation method.
D: Reciprocal allocation method.
|
Job order costing |
Operations costing |
Process costing |
A. |
Auto repair |
Clothing manufacturing |
Oil refining |
B. |
Loan processing |
Drug manufacturing |
Custom printing |
C. |
Custom printing |
Paint manufacturing |
Paper manufacturing |
D. |
Engineering design |
Auto assembly |
Motion picture production |
A: A
B: B
C: C
D: D
A: Reduction in the costs of spoilage, reworked units, and scrap.
B: Lower book value and depreciation expense for factory equipment.
C: Increased working capital.
D: Stabilization of market share.
A: $200,000
B: $288,000
C: $368,000
D: $480,000
Direct labor hours |
21,000 |
Direct labor costs |
$110,000 |
Machine hours |
35,000 |
For a particular job, 1,500 direct labor hours were used. Using direct labor hours as the cost driver, what amount of overhead should be applied to this job?
A: $3,214
B: $5,357
C: $5,625
D: $7,500
March 1, balance |
$12,000 |
March 31, direct materials |
40,000 |
March 31, direct labor |
30,000 |
March 31, manufacturing overhead applied |
27,000 |
March 31, to finished goods |
(100,000) |
DJ Co. applies overhead at a predetermined rate of 90% of direct labor cost. Job No. 101, the only job still in process at the end of March, has been charged with manufacturing overhead of $2,250. What was the amount of direct materials charged to Job No. 101?
A: $2,250
B: $2,500
C: $4,250
D: $4,725
A: Erroneous internal handling of data.
B: Lack of sufficient documentation for computer processes.
C: Illogical programming commands.
D: Illogical uses of hardware.
A: String question language processing.
B: The “grandfather, father, son” method of record retention.
C: Electronic commerce.
D: Relational databases.
“Employee number that you entered is NOT assigned to an active employee. Please reenter.
What technique is the computer using?
A: Optical character recognition (OCR).
B: Check digit.
C: Validity check.
D: Field (format) check.
A: Control access to information system resources.
B: Restrict access to prevent installation of unauthorized utility software.
C: Detect the presence of viruses.
D: Monitor the separation of duties within applications.
A: Replacement of personal computers for user departments.
B: Identification of critical applications.
C: Physical security of warehouse facilities.
D: Cross-training of operating personnel.
A: Inventory subsidiary.
B: Cash disbursements.
C: Cash receipts.
D: Payroll transactions.
A: Employees can easily guess fellow employees’ passwords.
B: Employees are not required to change passwords.
C: Employees can circumvent procedures to segregate duties.
D: Employees are not required to take regular vacations.
19. A manufacturing company that wanted to be able to place material orders more efficiently most likely would utilize which of the following?
A: Electronic check presentment.
B: Electronic data interchange.
C: Automated clearinghouse.
D: Electronic funds transfer.
20. Which of the following statements is true regarding Transmission Control Protocol and Internet Protocol (TCP/IP)?
A: Every TCP/IP-supported transmission is an exchange of funds.
B: TCP/IP networks are limited to large mainframe computers.
C: Every site connected to a TCP/IP network has a unique address.
D: The actual physical connections among the various networks are limited to TCP/IP ports.
A: A greater level of control is necessary.
B: Additional computing resources are required.
C: Additional personnel are required.
D: Stored data are current only after the update process.
A: Location within the company that is most vulnerable to a disaster.
B: Location where a company can install data processing equipment on short notice.
C: Location that is equipped with a redundant hardware and software configuration.
D: Location that is considered too close to a potential disaster area.
|
Contribution margin |
Gross profit (margin) |
A. |
No |
Yes |
B. |
No |
No |
C. |
Yes |
No |
D. |
Yes |
Yes |
A: A.
B: B.
C: C.
D: D.
A: Plan to insure that there are sufficient funds available for the operating needs of the company.
B: Exercise that sets the long-range goals of the company including the consideration of external influences caused by others in the market.
C: Plan that coordinates and communicates a company’s plan for the coming year to all departments and divisions.
D: Plan that assesses the long-term needs of the company for plant and equipment purchases.
A: Materials.
B: Repairs and maintenance.
C: Direct labor.
D: Equipment depreciation.
A: Master budget.
B: Activity-based budget.
C: Zero-based budget.
D: Life-cycle budget.
A: Production manager.
B: Cost accounting manager.
C: Sales manager.
D: Purchasing manager.
29. Virgil Corp. uses a standard cost system. In May, Virgil purchased and used 17,500 pounds of materials at a cost of $70,000. The materials usage variance was $2,500 unfavorable and the standard materials allowed for May production was 17,000 pounds. What was the materials price variance for May?
A: $17,500 favorable.
B: $17,500 unfavorable.
C: $15,000 favorable.
D: $15,000 unfavorable.
|
Units |
Projected sales |
1,000 |
Beginning inventory |
85 |
Desired ending inventory |
100 |
Prior year beginning inventory |
200 |
A: 915
B: 1,015
C: 1,100
D: 1,215
31. The CPA reviewed the minutes of a board of directors’ meeting of LQR Corp., an audit client. An order for widget handles was outsourced to SDT Corp. because LQR could not fill the order. By having SDT produce the order, LQR was able to realize $100,000 in sales profits that otherwise would have been lost. The outsourcing added a cost of $10,000, but LQR was ahead by $90,000 when the order was completed. Which of the following statements is correct regarding LQR’s action?
A: The use of resource markets outside of LQR involves opportunity cost.
B: Accounting profit is total revenue minus explicit costs and implicit costs.
C: Implicit costs are not opportunity costs because they are internal costs.
D: Explicit costs are opportunity costs from purchasing widget handles from resource market.
|
Bags of potato chips |
Potatoes |
Actual June 1 inventory |
15,000 bags |
27,000 potatoes |
Desired June 30 inventory |
18,000 bags |
23,000 potatoes |
What number of units of raw material should Crisper plan to purchase?
A: 381,000
B: 389,000
C: 411,000
D: 419,000
A: $10,000 favorable.
B: $20,000 favorable.
C: $10,000 unfavorable.
D: $20,000 unfavorable.
34. Selected information concerning the operations of a company for the year ended December 31 is as follows:
Units produced |
20,000 |
Units sold |
18,000 |
Direct materials used |
$80,000 |
Direct labor incurred |
$40,000 |
Fixed factory overhead |
$50,000 |
Variable factory overhead |
$24,000 |
Fixed selling and administrative expenses |
$60,000 |
Variable selling and administrative expenses |
$9,000 |
Finished goods inventory under variable (direct) costing is equal to
A: $23,900
B: $19,400
C: $17,000
D: $14,400
A: Labor rate.
B: Labor usage.
C: Direct labor spending.
D: Indirect labor spending.
A: It does not consider the time value of money.
B: It is the time required to recover the investment and earn a profit.
C: It is a measure of how profitable one investment project is compared to another.
D: The salvage value of old equipment is ignored in the event of equipment replacement.
Initial cost |
$500,000 |
Life |
10 years |
Annual net cash inflows |
$200,000 |
Salvage value |
$100,000 |
If acquired, the machine will be depreciated using the straight-line method. The payback period for this investment is
A: 3.25 years.
B: 2.67 years.
C: 2.5 years.
D: 2 years.
38. An American importer expects to pay a British supplier 500,000 British pounds in three months. Which of the following hedges is best for the importer to fix the price in dollars?
A: Buying British pound call options.
B: Buying British pound put options.
C: Selling British pound put options.
D: Selling British pound call options.
|
Net cash flows |
Present value factor at 8% |
Year 1 |
$10,000 |
0.926 |
Year 2 |
15,000 |
0.857 |
Year 3 |
20,000 |
0.794 |
Year 4 |
27,000 |
0.735 |
What is the discounted payback period in years?
A: 3.10
B: 3.25
C: 2.90
D: 3.14
A: Decrease tax credits on the asset.
B: Decrease related working capital requirements.
C: Shorten the payback period.
D: Use accelerated, instead of straight-line depreciation.
Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.
Read moreEach paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.
Read moreThanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.
Read moreYour email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.
Read moreBy sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.
Read more