Reference no: EM13491285

Ending inventory value with respect to absorption costing and variable costing:
A) is less using variable costing
B) is more using variable costing
C) is the same
D) none of the above

The professional designation for the accountant that prepares reports that are used by parties external to the corporation is:
A) C.P.A.
B) C.M.A.
C) C.F.A.
D) C.L.U.

Montson, Inc. produces a product requiring three square feet at $6 per square foot. If the desired ending inventory is $18,000 and the beginning inventory is $36,000, how many units must Montson produce to make direct materials purchases $54,000?
A) 3,000
B) 4,000
C) 1,000
D) cannot tell from data given

In order to determine the overhead volume variance you need the overhead flexible budget and the overhead applied to the units produced.
True
False

Anson produces a product that requires 10 standard sq. ft. of plywood at $4 per sq.ft. If Anson produces 300 units and uses 3,100 sq. ft., the material price variance is:
A) $12,400
B) $12,000
C) unable to tell from the data given
D) none of the above

Generally speaking, the hurdle rate impounds the risk of the firm.
True
False

Ending inventory value with respect to absorption costing and variable costing:
A) is more using absorption costing
B) is less using absorption costing
C) is the same
D) none of the above

The I.M.A. publishes generally accepted accounting principles.
True
False

Activity based costing assists in the development of appropriate overhead costs.
True
False

In order to determine the controllable overhead variance, you need the overhead application rate.
True
False

The internal rate of return (IRR) is calculated from the undiscounted cash flows.
True
False

How many equivalent units of conversion costs are in 20,000 physical units of product 10% complete?
A) 200
B) 2,000
C) 20,000
D) cannot be determined from data given

Direct Labor and Overhead are conversion costs.
True
False

If production is less than sales, the net income with respect to absorption costing and variable costing:
A) is the same
B) variable costing yields higher net income
C) variable costing yields lower net income
D) none of the above

If Ezra collects 80% of its credit sales in the month of the sale and 20% in the month after the sale, how much will Ezra collect in March on a $220,000 credit sale in January?
A) $176,000
B) $44,000
C) $88,000
D) none of the above

Tex's applies an overhead rate of $10/unit based on 200 units. If Tex's produces 210 units and has a flexible overhead budget of $1,900, the overhead volume variance is:
A) 200 favorable
B) 200 unfavorable
C) 100 favorable
D) 100 unfavorable

In order to determine the overhead volume variance you need actual overhead costs.
True
False

A discount factor
A) is the reverse of compounding future cash flows.
B) performs the reverse function of discounting interest rate.
C) All of the above
D) None of the above

If production levels are greater than anticipated, overhead will be under or over absorbed.
A) Over
B) Under

Colly, Inc. pays 20% of the cost of purchases in the month purchased and 60% in the month after and 20% in the month after that, how much cash will be disbursed in the month after a $108,000 purchase.
A) $64,800
B) $21,600
C) $43,200
D) none of the above

As production levels decrease the fixed cost per unit:
A) decreases
B) increases
C) stays the same
D) none of the above

Even though there is a slight change in the sales mix, the breakeven point is the same.
True
False

The human resources department would likely have a flexible budget.
True
False

Variable costing is not GAAP.
True
False

Direct Materials and Direct Labor are prime costs.
True
False

An example of a period cost is:
A) direct labor
B) direct materials
C) salesperson's commission
D) none of the above

As the sales mix changes, so does the breakeven point.
True
False

Hooks produces a product that requires 10 standard sq. ft./unit at a standard price of $6 per sq. ft. The actual cost per unit is:
A) $60
B) $50
C) unable to tell from the data
D) none of the above

If production exceeds sales, the net income with respect to absorption costing and variable costing.
A) is the same
B) lower under absorption
C) higher under absorption
D) higher under variable

A merchandising firm's balance sheet reflects inventory of:
A) raw materials
B) work in process
C) finished goods
D) none of the above

For capital budgeting purposes, an asset's depreciable life is
A) always equal to the time horizon of an evaluation.
B) equal to the asset's useful life.
C) equal to the asset's economic life.
D) none of the above

As production levels increase the variable cost per unit:
A) increases
B) decreases
C) stays the same
D) none of the above

There is a fixed cost element in ending inventory using the variable costing approach.
True
False

If there are no units in finished goods ending inventory and cost of goods manufactured is less than cost of goods sold, then there must be units in:
A) finished goods beginning inventory
B) work in process ending inventory
C) work in process beginning inventory
D) none of the above

Lines, Inc. applies overhead at the standard rate of $20/units, based on anticipated production of 2,000 units. If Line's actual overhead is $41,000, the overhead volume variance is:
A) 1,000 favorable
B) 1,000 unfavorable
C) cannot tell from data given
D) none of the above

A budget is an integral part of the planning process.
True
False

Overhead costs, in general, are:
A) variable
B) fixed
C) semi variable
D) none of the above

The present value of cash flow allows an individual to assess
A) the value of a present cash flow.
B) the value of a stream of cash flows in terms of the best alternative.
C) Both A and B
D) Neither A nor B

Overhead costs are inventoriable costs.
True
False

If the sales price is $10/unit and, what are the variable costs per unit to give a contribution margin of $6.
A) $4
B) $6
C) $10
D) none of the above

The direct materials purchases budget is the first budget developed.
True
False

Which of the following companies is in all likelihood, a process coster.
A) paint manufacturer
B) chair manufacturer
C) boat manufacturer
D) none of the above

the advertising department would likely have a static budget
true
false

If production equals sales and there are no beginning or ending inventories:
A) variable costing gives a higher net income than absorption costing
B) variable costing gives a lower net income than absorption costing
C) net income is the same under each assumption
D) none of the above

The simple payback method ignores the time value of money.
True
False

Most likely, the management accountant will report to the:
A) C.E.O.
B) C.F.O.
C) Chief Legal Officer
D) Marketing Director

Total fixed costs increase as production increases.
True
False

Activity based costing assists in the development of a standard for direct labor.
True
False

If actual overhead costs are more than applied overhead costs, cost of goods sold will be understated.
True
False

Salvage value
A) in theory, is equal to the present value of the future cash flows of the asset.
B) should not be used to justify marginal investments.
C) is the best prediction of what an asset could be sold for at the end of the time horizon.
D) All of the above
E) None of the above

The chief auditor has a dotted line relationship with the Board of Directors.
True
False

A surrogate term for equivalent unit is "work done" on a physical unit.
True
False

The capital expenditures budget is tied closely to the:
A) Sales budget
B) Purchases budget
C) Cash receipts budget
D) Cash expenditures budget

The budgeted balance sheet is the last budget to be prepared.
True
False