Question 1

Question text

  In order to be useful to managers, management accounting reports:

Select one:

a. Should be prepared according to Generally Accepted Accounting Principals InIn

b. Should be prepared to meet the specific needs of decision makers

c. Should not be prepared prior to the end of a fiscal reporting period

d. Should be prepared according to the stated Institute of Management Accounting guidelines

Question 2

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Activity-based costing's primary benefit is that it provides:

Select one:

a. More precise cost data for internal decision-making purposes

b. All of the above

c. Data for external financial reporting purposes

d. Absolutely accurate product costing information InIn

Question 3

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As volume increases, which of the following statements is not ?

Select one:

a. Total fixed will remain the same.

b. Total variable costs will increase

c. Variable cost per unit will remain the same.

d. Average cost per unit will increase. 

Question 4

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Assume that the standard cost to make one finished unit includes 2 hour of direct labor at $8 per hour.  During April, 22,000 direct labor-hours were worked, 10,500 units of product were manufactured, and total direct labor cost was $170,000. What is the labor rate variance for April?

Select one:

a. $6,000 (U) InIn

b. $2,000 (U)

c. $6,000 (F)

d. $2,000 (F)

Question 5

 

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Costs are classified according to behavior on a(n):

Select one:

a. Contribution income statement 

b. Functional income statement

c. Abrams-Ingram cost grid

d. Statement of financial position

Question 6

 

Question text

Financial accounting is primarily focused on:

Select one:

a. Providing the Internal Revenue Service with information to determine the amount of taxes owed

b. Providing investors with useful information for valuing securities 

c. Providing managers with relevant information to help achieve organizational goals

d. Providing information for internal users

 

Question 7

 

Question text

For which of the following products would job order costing be least likely to be used?

 

Select one:

a. Textbook printing

b. Residential building

c. Mortgage loan processing

d. Newsprint paper Manufacturing 

Question 8

 

Question text

From a managerial accounting standpoint, which of the following areas of the Sarbanes-Oxley Act of 2002 (SOX) are most pertinent?

Select one:

a. External Auditing Standards

b. Codes of ethics for financial officers

c. Review of internal controls 

d. Penalties for fraud

Question 9

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Generally, the first of the following budgets to be prepared is the:

Select one:

a. Sales budget 

b. Operations budget

c. Cash budget

d. Purchases budget

Question 10

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George Company sells one product at a price of $20 per unit.  Variable expenses are 40 percent of sales, and fixed expenses are $20,000.  The sales dollars level required to break even are:

Select one:

a. $33,333 

b. $50,000

c. $12,000

d. $  2,500

Question 11

Question text

Just-in-time processing:

Select one:

a. Minimizes inventory storage and waiting time 

b. Is based on a just-in-case philosophy

c. All of the above

d. Results in a push approach

Question 12

Question text

Managerial accounting is primarily focused on:

Select one:

a. Providing creditors information on the status of their loans

b. Providing investors with useful information for valuing securities

c. Providing managers with relevant information to help achieve organizational goals 

d. Providing the Internal Revenue Service with information to determine the amount of taxes owed

Question 13

Question text

Managerial accounting must conform to which of the following standards?

Select one:

a. Generally Accepted Accounting Principles (GAAP)

b. Internal Revenue Service tax code

c. International Financial Reporting Standards (IFRS)

d. None of the above 

Question 14

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Number of employees is most appropriate as a cost driver for which of the following types of activity costs?

Select one:

a. Machining

b. Payroll 

c. Assembly

d. Purchasing

Question 15

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Over the short term, which type of costs is indifferent to activity level changes?

Select one:

a. Variable costs

b. Step costs

c. Mixed costs

d. Fixed  costs 

Question 16

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Partially completed goods that are in the process of being converted into a finish product are defined as:

Select one:

a. Operational inventories

 

b. Work-in-process inventories 

c. Conversion inventories

d. Raw materials inventories

Question 17

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Parts used in manufacturing digital cameras would best be classified as what type of cost?

Select one:

a. Mixed cost

b. Variable cost 

c. Step cost

d. Fixed cost

Question 18

 

Question text

Rozella's income statement is as follows:

 

Sales (10,000 units)

$120,000

Less variable costs

-  48,000

Contribution margin

$72,000

Less fixed costs

-  24,000

Net income

$  48,000

What is the unit contribution margin?

Select one:

a. $  2.40

b. $  7.20 

c. $12.00

d. $  4.80

Question 19

Question text

Rozella's income statement is as follows:

 

Sales (10,000 units)

$120,000

Less variable costs

-  48,000

Contribution margin

$72,000

Less fixed costs

-  24,000

Net income

$  48,000

What is the contribution margin ratio?

Select one:

a. 30 percent

b. 60 percent

  

c. 167 percent

d. 40 percent

Question 20

 

Question text

Rozella's income statement is as follows:

 

Sales (10,000 units)

$120,000

Less variable costs

-  48,000

Contribution margin

$72,000

Less fixed costs

-  24,000

Net income

$  48,000

 

If sales increase by 1,000 units, profits will:

Select one:

a. Increase by $7,200 

b. Increase by $4,800

c. Increase by $8,000

d. Increase by $12,000

Question 21

Question text

The contribution margin is:

Select one:

a. The difference between total revenue and total variable cost

b. Total sales minus total cost of goods sold

c. The difference between total sales and total cost of goods sold

d. The difference between sales price and total variable cost InIn

Question 22

 

Question text

The following information pertains to Oliver's 2011 operations:

 

Selling price per unit

$50

Variable costs per unit

$20

Total fixed costs

$100,000

The sales volume required to obtain a target pretax profit of $25,000 is:

Select one:

a. $250,000

b. $312,500

c. $125,000

d. $208,333 

Question 23

 

Question text

The following monthly data are available for the Wilson Company and its only product:

 

Unit selling price

$36

Unit variable expenses

$28

Total fixed expenses

$50,000

Actual sales for the month of March

7,000 units

 

The margin of safety for the company during March was:

Select one:

a. $  56,000

b. $    6,000

c. $  27,000 

d. $106,000

Question 24

Question text

The portion of each dollar that can be used to cover fixed costs and provide a profit is known as:

Select one:

a. Operating leverage InIn

b. Contribution margin ratio

c. Gross margin percent

d. Margin of safety

Question 25

 

Question text

The process of ensuring that results agree with plans is referred to as:

Select one:

a. Planning

b. Decision making

c. Organizing InIn

d. Controlling

Question 26

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The range of operations that falls within the capacity of the current level of fixed costs is referred to as the:

Select one:

a. Operating range

b. Linear average

c. Relevant range 

d. Marginal range

Question 27

Question text

Which factor listed below is a possible cause for unfavorable materials quantity variances?

Select one:

a. Producing output at 60% capacity rather than at 50%

b. Hiring cheap labor

c. Buying a new machine on which to produce the products

 

d. Using higher quality, but more costly materials than budgeted InIn

Question 28

 

Question text

Which of the following budgets tends to tie into all of the other budgets?

Select one:

a. The sales budget

b. The operating budget

c. The cash budget 

d. The purchasing budget

Question 29

Question text

Which of the following costs are treated as part of the cost of product?

Select one:

a. Insurance on the plant building and equipment InIn

b. All of the above are product costs

c. Wages of plant security guards

d. Depreciation on the kitchen sink in the plant cafeteria

Question 30

 

Question text

Which of the following departments would not be classified as a profit center?

Select one:

a. The automotive division of a large corporation

b. The men's shoe department of a department store

c. The accounting department of a large corporation 

d. The hardware department of a department store

Question 31

 

Question text

Which of the following factors describes a possible cause for an unfavorable materials price variance?

Select one:

a. Purchasing low quality materials

b. Vendors flooding the marketplace with their products

c. Making a long-term commitment with one vendor for a specific raw material

d. Last minute purchases 

Question 32

 

Question text

Which of the following inventories results in recording an expense when its asset account is reduced in the accounting system?

Select one:

a. Both A and B

b. Finished goods inventory 

c. Work in process

d. Raw materials

Question 33

 

Question text

Which of the following items is not typically considered in the development of the cash budget?

Select one:

a. Selling expenses

b. Administrative expenses

c. Depreciation Expense 

d. Purchases 

Question 34

Question text

Which of the following statements about sunk costs is true?

Select one:

a. Sunk costs are never relevant to decisions (except for tax considerations)

b. Sunk costs do not vary between decision alternatives

c. Sunk costs are the result of past decisions

d. All of the above 

Question 35

Question text

Who of the following individuals is most likely responsible for an unfavorable materials price variance?

Select one:

a. The supervisor of the accounting department

b. The personnel director

c. The purchasing agent 

d. The production supervisor

Question 36

Question text

Classify the total costs of each of the following as variable, fixed, mixed, or step. Sales volume is the cost driver. (10 points) 

Annual salary for the vice president of manufacturing

 

Overhead costs in the factory for incidental components such as small screws and rivets.

 

Salary of machine operator who is paid based on number of units produced on the machine

 

Keyboards purchased from a subcontract supplier in a computer assembly plant

 

Salaries of quality inspectors when each inspector can evaluate a maximum of 500 units per day

 

Water consumed by the plant, which is based on a flat fee plus actual consumption

 

Property taxes

 

Raw materials used in production

 

Electric power in a factory

 

Fire insurance on factory building

 

Question 37

Question text

Ames Company had the following costs for the past three years in which it produced 20,000, 24,000, and 30,000 units, respectively.  Identify which of the costs were variable, fixed, and mixed.

 

Year1

Year 2

Year 3

Direct Materials

$40,000

$48,000

$60,000

Utilities Expense

22,000

26,000

32,000

Property Taxes

6,000

6,000

6,000

Travel Expense

3,000

3,000

3,000

Direct Labor

30,000

36,000

45,000

Maintenance Expense

11,000

13,000

16,000

Utilities Expense

 

Direct Materials

 

Maintenance Expense

 

Direct Labor

 

Property Taxes

 

Question 38

Question text

Indicate whether each of the following costs incurred by a manufacturing are period or product costs. (10 points) 

Direct materials

 

Corporate jet operating expense

 

Advertising expense

 

Vice president for human resources salary

 

Manufacturing overhead

 

Vice president of manufacturing salary

 

Plant janitorial costs 

 

Depreciation on the sales office

 

Entertainment costs of vice president of manufacturing

 

Depreciation on the production equipment

 

Question 39

Question text

The budgeted sales of the Hokie Shop for the first seven months of 2014 are: (6 points)

Month Unit Sales

January 190,000

February 220,000

March 260,000

April 270,000

May 240,000

June 300,000

July 265,000

 

Beginning inventory for 2014 is 68,000 units. The budgeted inventory at the end of each month is 40 percent of units to be sold the following month. 

Required:

Prepare a budget in units only for each month, January through June.

 

Question 40

Complete

Question text

Alden, Inc., which uses a predetermined overhead rate based on direct labor hours, estimated total overhead for the year to be $10,000,000 and total direct labor hours to be 200,000 hours. Calculate Alden’s predetermined overhead rate. (5 points)

In March, Alden incurred actual overhead costs of $830,000 and used 18,000 hours.  How much was Alden’s over- or under-applied overhead for the month of March?

 

Not answered

Question 41

 

Question text

The following budgeted and actual volume and cost data are for January of this year: (12 points)

 

 

Budget

Actual

Volume

40,000

36,000

Budgeted manufacturing costs:

 

 

Variable costs per unit:

 

 

Direct materials

$30.00

 

Direct labor

15.00

 

Overhead

5.00

 

Total fixed overhead costs

$400,000

 

Actual manufacturing costs:

 

 

Direct materials

 

$1,160,000

Direct labor

 

580,000

Variable overhead

 

180,000

Fixed overhead

 

396,000

 

Prepare a static (40,000) budget analysis of production costs for January of this year. 

Prepare a flexible (36,000) budget analysis of production costs for January of this year

 

 

Question 42

 

Question text

Dakota Company has two divisions: North and South. For 2011, North had revenues of $200,000 and South had $600,000.  In the North Division, fixed expenses were $60,000 and variable expenses were $80,000.  In the South Division, fixed expenses were $280,000 and variable expenses were $150,000.  Common costs or unallocated common costs were $90,000. (16 points)

Prepare income statements for each division and the company totals in a format appropriate for segment reporting.

 Dokata Company North Division

Income Statement for the year 2011

 

 

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Status NEW Posted 04 Jul 2017 10:07 PM My Price 22.00

BSA----------- 52-----------2 W-----------eek----------- 10----------- Fi-----------nal----------- Ex-----------am-----------

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