Reference no: EM13743283

Part 1:

Question 1: The principle managers follow when they only investigate significant departures from the plan is commonly known as ?

• Small amounts don't matter
• Only materials and labor deserve attention
• Management by exception
• Exceptional costs yield exception results 2.

Question 2: A company has a cost that is $2.00 per unit at a volume of 12,000 units and $2.00 per unit at a volume of 16,000 units. What type of cost is this?

• Fixed
• Variable
• Sunk
• Incremental

Question 3: Which of the following is not a manufacturing cost?

• Manufacturing overhead
• Direct materials
• Direct labor
• Administrative expenses

Question 4: A form used to accumulate the cost of producing an item is called a(n)?

• Job-cost sheet
• Material requisition
• Balance sheet
• Invoice

Question 5: Why do we compute equivalent units differently for raw materials and conversion costs?

• Raw materials are more difficult to count
• Conversion costs are more difficult to count
• They are introduced into the process at different times
• None of the above

Question 6: The Freedom Corporation's painting department had a beginning inventory of 580 units, which had direct material costs of $22,715. During June, 9,290 units were started and costs of $1,268,085 were incurred for direct material. Ending inventory consists of 1,000 units, which are 35% complete with respect to direct material. What is the cost per equivalent unit for direct material?

• $40.00
• $137.00
• $140.00
• $159.00

Question 7: Regression analysis

• Uses all the available data points to estimate a cost equation
• Can be performed by many spreadsheet programs
• Provides an equation that can be used to estimate total costs at different levels
• All of the above

Question 8: Beaudreaux Motors is operating at its break-even point of 16,000 units. Which of the following statements is not true?

• The amount of the company's total costs equals the amount of its revenues.
• The company's fixed costs equal its variable costs.
• The company's profit equals zero.
• Assuming no other changes, if the company sold more units, it would earn a profit.

Question 9: Which of the following is treated as a product cost in variable costing?

• Sales commissions
• Administrative salaries
• Fixed manufacturing overhead
• Direct labor

Question 10: When the number of units sold is equal to the number of units produced, net income using full costing will be

• Greater than net income under variable costing
• Equal to net income using variable costing
• Less than income using variable costing
• None of the above

Question 11: A major problem with cost-plus contracts is that they?

• Are not acceptable under GAAP.
• Cause the supplier to take significant financial risks.
• Require the supplier to use variable costing.
• Create an incentive to allocate as much cost as possible to the goods produced under the cost-plus contract.

Question 12: Which of the following is not generally true when a company compares ABC and traditional costing?

• ABC uses more cost drivers
• ABC allocates cost based solely on production volume
• ABC is more expensive
• ABC is less likely to undercost complex, low volume products

Question 13: Which of the following is never considered in incremental analysis?

• Incremental revenues
• Sunk costs
• Incremental profit
• Differential costs

Part 2:

Question 1: Two or more products that result from common inputs are called

• Split products
• Joint products
• Combination products
• Common products

Question 2:  Target costing

• Starts with the features a customer wants and what they will pay for them.
• Is used after the product is designed.
• Focuses on including all features in a product that a customer may want.
• All of the above.

Question 3: When deciding to accept or reject a special order, which of the following costs would most likely not be relevant?

• The wages of direct labor to make the order.
• Depreciation on the machinery used to make the order.
• The raw material used to make the order.
• The electricity used to run the machine to make the order.

Question 4: Present value techniques:

• Ignore cash flows that will occur more than ten years in the future.
• Are a way of converting future dollars into equivalent current dollars.
• Provide more conservative results than similar time value of money computations.
• Treat dollars received today the same as dollars received in the future.

Question 5: The internal rate of return

• Takes into account the time value of money.
• Is the rate of return that equates the present value of future cash flows to the initial investment.
• Both a and b
• Neither a nor b

Question 6: A method of budget preparation that requires all budgeted amounts to be justified by the department, even if the amounts were supported in prior periods, is called?

• Variance budgeting.
• Flexible budgeting.
• Current period budgeting.
• Zero base budgeting.

Question 7: The cash budget alerts management to all of the following except?

• Stockouts will cause customer dissatisfaction
• The cash balance will be very low
• Excess cash will be available for investment
• Significant capital acquisitions are planned

Question 8: The standard cost is?

• Same as actual cost
• The cost that should have been incurred to produce an item or service
• Useful only to manufacturing firms
• Calculated after production is completed

Question 9: Which of the following are components of a direct labor variance?

• Rate and efficiency
• Attainable and ideal
• Price and quantity
• Volume and controllable

Question 10: A subunit that has responsibility for controlling cost but not revenues is a(n) ?

• Profit center.
• Cost center.
• Investment center.
• Business center.

Question 11: Which of the following is not an advantage of decentralization for a company?

• Subunit managers have better information.
• Subunit managers will act to benefit the organization as a whole.
• Subunit managers can respond quicker to changing circumstances.
• Subunit managers can receive training to move into top level management positions.

Question 12: Asset turnover is a measure of

• How quickly a company is moving its inventory.
• How quickly a company is turning it accounts receivable into cash.
• The overall efficiency with which the company uses its assets to generate revenues.
• How rapidly the market believes the company will grow.