Reference no: EM131801985
1
Which of the following are the internal decision makers of a company?
Vendors
Managers
Shareholders
Customers
2
Which of following statements is true?
Managerial accounting focuses on historical transactions.
Financial accounting focuses on future data.
Management accounting focuses on relevant data.
Managerial accounting uses the cash basis for recording transactions.
3
The focus of management accounting is on
tax preparation.
external reporting.
internal reporting.
auditing.
4
Which of the following statements is false?
Financial accounting helps investors make decisions.
Financial accounting provides sufficient information for managers to effectively plan and control operations.
Financial accounting reports help creditors make decisions.
Financial accounting provides external reports.
5
Which of the following employees is most likely to only use financial accounting information?
Vice president of plant operations
Product manager
Plant manager
Bank loan officer
6
Inventoriable product costs for a product are described by which of the following?
A. Inventoriable product costs are narrower in scope than total costs.
B. Inventoriable product costs include all costs of the value chain.
C. Inventoriable product costs consist of direct materials, direct labor, and manufacturing overhead.
D. Both A and C are correct.
7
Inventoriable product costs are best described by which of the following statements?
A. They are expensed on the income statement when incurred.
B. They include marketing and distribution costs.
C. They are used for external reporting purposes.
D. Both A and C are correct.
8
Which of the following is an example of a period cost when manufacturing products?
Depreciation expense on factory equipment
Advertising expense
Indirect materials used in the factory
Property taxes on the plant
9
Manufacturing overhead costs for a product include
direct material.
operating expenses.
indirect manufacturing costs.
prime costs.
10
When do inventoriable costs become expenses?
When direct materials are purchased
When the manufacturing process begins
When the manufacturing process is completed
None of the above
11
A ________ is used to accumulate the costs of a job.
labor time record
materials inventory requisition form
bill of materials
job cost record
12
The ________ substantiates the balance of the raw materials inventory account shown on the company's balance sheet.
bill of materials
raw materials records
materials requisition
labor time record
13
Which of the following is a document that accumulates job costs?
Bill of materials
A job cost record
Labor time record
Production schedule
14
An internal request for raw materials calls for a ________ to be completed.
materials requisition
bill of materials
purchase order
labor time record
15
In the flow of costs, which of the following comes second?
Cost of goods sold
Finished goods inventory
Work in process inventory
Raw materials inventory
16
The five steps of the process costing procedure are scrambled below. Which of the following places the steps in the correct order?
Assign total costs to units completed and to units in ending WIP inventory.
Summarize total costs to account for.
Compute the cost per equivalent unit.
Summarize the flow of physical units.
Compute output in terms of equivalent units.
The correct order for these steps is:
3, 1, 4, 2, 5.
5, 3, 1, 4, 2.
2, 4, 5, 1, 3.
4, 5, 2, 3, 1.
17
For which of the following do you prepare calculations for equivalent units?
Both direct labor and manufacturing overhead
Both direct materials and conversion costs
Both direct labor and direct materials
Neither direct materials nor conversion costs
18
The five steps of the process costing procedure are scrambled below. Which of the following places the steps in the correct order?
Assign total costs to units completed and to units in ending WIP inventory.
Summarize total costs to account for.
Compute the cost per equivalent unit.
Summarize the flow of physical units.
Compute output in terms of equivalent units.
3, 1, 4, 2, 5.
5, 3, 1, 4, 2.
2, 4, 5, 1, 3.
4, 5, 2, 3, 1.
19
In a department, 26,000 units are completed and transferred out, and 7,400 remain in ending WIP at 65% complete. If an equivalent unit costs $9.00 for direct materials, what is the value of materials transferred out?
$43,290
$167,400
$66,600
$234,000
20
In Step 1 of the process costing procedure, the "total units accounted for" is the sum of
the units completed and transferred out plus the units in ending WIP.
the units in ending WIP plus the units started in production during the month.
the units in beginning WIP plus the units in ending WIP.
the units in beginning WIP plus the units completed and transferred out.
21
Machine set-up would most likely be classified as a ________ cost.
batch-level
unit-level
product-level
facility-level
22
Molding and sanding each unit of a product would most likely be classified as a ________ cost.
unit-level
batch-level
product-level
facility-level
23
Four basic steps are used in an ABC system. Select the correct order of these steps below:
Identify the primary activities and estimate a total cost pool for each.
Allocate the costs to the cost object using the activity cost allocation rates.
Select an allocation base for each activity.
Calculate an activity cost allocation rate for each activity.
c, a, b, d
a, c, d, b
b, a, c, d
a, d, c, b
24
Using factory utilities would most likely be classified as a ________ cost.
unit-level
batch-level
facility-level
product-level
25
When a company has established separate manufacturing overhead rates for each department, it is using
departmental overhead rates.
cost distortion.
a plantwide overhead rate.
none of the above.
26
Total fixed costs for Taylor Incorporated are $240,000. Total costs, including both fixed and variable, are $500,000 if 125,000 units are produced. The variable cost per unit is
$5.92/unit.
$2.08/unit.
$4.00/unit.
$1.92/unit.
27
Variable costs are described by which of the following statements?
They vary per unit of output.
They are fixed in total.
They are fixed per unit and vary in total.
They decrease per unit as production volume increases.
28
Total fixed costs for Green Planes Inc. are $120,000. Total costs, including both fixed and variable, are $600,000 if 150,000 units are produced. The total variable costs at a level of 220,000 units would be
$409,091.
$176,000.
$880,000.
$704,000.
29
Total fixed costs for Randolph Manufacturing are $754,000. Total costs, including both fixed and variable, are $1,000,000 if 150,000 units are produced. The variable cost per unit is
$6.67/unit.
$5.03/unit.
$11.69/unit.
$1.64/unit.
30
Which of the following is a fixed cost?
Direct materials cost
Direct labor cost
Straight-line depreciation expense
Sales commissions expense
31
Contribution margin ratio is computed by
dividing contribution margin by operating income.
dividing contribution margin by sales revenue.
dividing sales revenue by contribution margin.
dividing operating income by contribution margin.
32
Which of the following represents the excess of the selling price per unit of a product over the variable cost of obtaining and selling each unit?
Gross margin
Operating income
Net income
Unit contribution margin
33
By multiplying ________ and then subtracting fixed costs, managers can quickly forecast the operating income.
projected sales units by the contribution margin ratio
projected sales revenue by the contribution margin ratio
projected sales revenue by the unit contribution margin
projected sales units by the variable cost ratio
34
Electric Jet Skis operates a jet ski rental business. Assume the jet skis rent for $55 per 6 hours. The variable costs are $33 per six-hour rental, and its fixed costs are $80,000 each month. What is the contribution margin ratio?
40%
60%
250%
22%
35
Mom and Pop's Ice Cream Shoppe sells ice cream cones for $5per customer. Variable costs are $2.25 per cone. Fixed costs are $3,000 per month. What is the company's contribution margin per ice cream cone?
$2.25
$2.75
$0.55
$1.82