Reference no: EM133239447
1. The role of management accounting does not normally include the function of:
a. product costing.
b. decision making.
c. Cash management.
d. Planning and control.
2. The role of financial management does not include the responsibility for:
a. compliance with accounting standards
b. corporate finance.
c. treasury management
d. risk management.
3. Managerial accounting does not encompass
a. calculating product cost
b. calculating earnings per share (EPS)
c. determining cost behaviour
d. profit planning
4. An example of qualitative data is:
a. product cost
b. customer satisfaction
c. net income
d. inventory cost
5. Product and service costing information is prepared for
a. manufacturing companies with inventory
b. merchandising companies
c. service providers
d. all of above
6. Manufacturing costs typically consist of
a. direct materials, direct labor, and manufacturing overhead
b. production and shipping costs
c. direct materials, direct labor, and administrative costs
d. direct materials, direct labor, marketing and administrative costs
7. As production increases within the relevant range,
a. variable costs will vary on a per unit basis
b. variable costs will vary in total
c. fixed costs will not vary in total
d. fixed and variable cost stay the same in total
8. You are given the cost and volume information below:
Volume Cost
1 unit $ 15
10 units $150
100 units $1500
What type of a cost is given?
a. fixed cost
b. variable cost
c. step cost
d. mixed cost
9. Which of the following statements regarding graphs of fixed and variable costs is true?
a. Variable costs can be represented by a straight line where costs are the same for each data point.
b. Fixed costs can be represented by a straight line starting at the origin and continuing through each data point.
c. Variable costs are zero when production is equal to zero.
d. Fixed and Variable costs are curvilinear form above zero on the "Y" axis.
10. Calculate the prime cost from the following information:
Direct material purchased: $ 100,000
Direct material consumed: $ 90,000
Direct labor: $ 60,000
Direct expenses: $ 20,000
Manufacturing overheads: $ 30,000
(a) $ 180,000
(b) $ 200,000
(c) $ 170,000
(d) $ 210,000
11. Altamount manufacturers have three product lines - A, B, and C.
A B C Total
Sales 10,000 9,000 12, 000 31,000
Variable costs 4,500 7,000 6,000 17,500
Contribution Margin 5,500 2,000 6,000 13,500
Fixed costs 3,500 6,000 3,000 12,500
Net income 2,000 (4,000) 3,000 1,000
Product line B appears unprofitable, and management is considering discontinuing the line. How would the discontinuation of Product line B affect net income?
a. increase by $4,000
b. decrease by $4,000
c. increase by $2,000
d. decrease by $2,000
e. increase by $6,000
12. Crazy Novelties manufactures key chains for college bookstores. During 2003, the company had the following costs:
Direct materials used $31,000
Direct labor $18,000
Factory rent $12,000
Equipment deprecation- factory $ 2,000
Equipment depreciation- office $ 750
Marketing expense $ 2,500
Administrative expenses $40,000
35,000 units produced were in 2003. What is the product cost per unit?
a. approximately $1.24
b. $1.80
c. approximately $3.04
d. $1.40
e. approximately $1.82
14. The Cape Cod Cotton Candy Company had the following information available regarding last year's operations:
Sales (100,000 units): $200,000
Variable costs : $100,000
Contribution margin: $100,000
Fixed costs: $ 50,000
Net Income: $ 50,000
If sales were to increase by 200 units, what would be the effect on net income?
a. $400 increase
b. $200 increase
c. $150 increase
d. $100 increase
e. $200 loss
15. Conversion cost includes cost of converting..........into........
(a) Raw material, WIP
(b) Raw material, Finished goods
(c) WIP, Finished goods
(d) Finished goods, Saleable goods