Reference no: EM131442877
Assignment
Part 1
1.
The focus of management accounting is on
tax preparation.
external reporting.
internal reporting.
auditing.
2.
________ is designed to meet the needs of internal decision makers.
Tax accounting
Managerial accounting
Financial accounting
Audit accounting
3.
The primary goal of managerial accounting is to provide information to
internal decision makers.
shareholders.
creditors.
both shareholders and creditors.
4.
The primary goal of financial accounting is to provide information for
governmental regulators.
creditors.
potential investors.
all of the above.
5.
Which of the following are the internal decision makers of a company?
Vendors
Managers
Shareholders
Customers
6.
Inventoriable product costs for a manufactured product include
the costs of direct materials, direct labor, and manufacturing overhead.
marketing and research and development costs.
the costs of direct materials and direct labor only.
none of the above.
7.
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
8.
Manufacturers consider selling and administrative costs to be
period costs.
conversion costs.
inventoriable costs.
prime costs.
9.
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
10.
Which of the following is an example of an inventoriable cost when manufacturing products?
Depreciation on office equipment
Depreciation on store building
Sales salaries expenses
Depreciation on factory equipment
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.
Which of these documents informs the storeroom to send specific materials to the factory floor?
Receiving report
Bill of materials
Purchase order
Materials requisition
13.
In the flow of costs, which of the following comes first?
Cost of goods sold
Finished goods inventory
Work in process inventory
Raw materials inventory
14.
In the flow of costs, which of the following comes last?
Finished goods inventory
Cost of goods sold
Raw materials inventory
Work in process inventory
15.
When used, raw materials
would be classified as direct materials.
would be classified as direct labor.
would be classified as indirect materials.
The answer cannot be determined with the information provided.
16.
The first step in the five-step process for costing procedure is
compute output in terms of equivalent units.
summarize total costs to account for.
compute the cost per equivalent unit.
summarize the flow of physical units.
17.
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.
18.
How is the cost per equivalent unit computed?
Total equivalent units divided by total costs to account for
Total costs to account for divided by total equivalent units
Costs in beginning WIP inventory divided by equivalent units in beginning WIP
Costs added to production during the month divided by equivalent units in ending WIP
19.
Which item would appear last on a production cost report?
Cost of goods finished for the month
Total costs accounted for
Beginning WIP inventory, if any
Ending WIP inventory, if any
20.
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
21.
When calculating a departmental overhead rate, what should the numerator be?
Total estimated amount of the departmental allocation base
Total estimated departmental overhead cost pool
Total estimated amount of manufacturing overhead for the factory
Actual quantity of the departmental allocation base used by the job
22.
Which of the following condition(s) favors using departmental overhead rates in place of a plantwide overhead rate?
A. Different departments incur different amounts and types of manufacturing overhead.
B. Different jobs or products use the departments to a different extent.
C. Both A and B.
D. Neither A or B.
23.
What will the use of departmental overhead rates generally result in?
The use of a separate cost allocation base for each department in the factory
The use of a single cost allocation base
The use of a single overhead cost pool for the factory
The use of separate cost allocation base for each activity in the factory
24.
Using factory utilities would most likely be classified as a ________ cost.
unit-level
batch-level
facility-level
product-level
25.
In ABC, how is the activity allocation rate computed?
The total estimated activity allocation base is divided by the total estimated activity cost pool.
The total estimated activity cost pool is divided by the total estimated activity allocation base.
The total estimated activity allocation base is multiplied by the total estimated activity cost pool.
You take the total estimated activity allocation base and subtract the total estimated total activity. cost pool.
26.
A(n) ________ cost is a cost whose total amount changes in direct proportion to a change in volume.
variable
fixed
mixed
irrelevant
27.
Which of the following costs is an example of a fixed cost?
Sales commissions
Salary of the plant manager
Direct materials
Delivery costs
28.
With respect to total variable costs, which of the following statements is true?
They will remain the same as production levels change within the relevant range.
They will decrease as production decreases within the relevant range.
They will decrease as production increases within the relevant range.
They will increase as production decreases within the relevant range.
29.
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.
30.
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.
31.
Total contribution margin less total fixed expenses equals
contribution margin ratio.
operating income.
gross profit.
sales revenue.
32.
The unit contribution margin is computed by
subtracting the variable cost per unit from the sales price per unit.
dividing the sales revenue by variable cost per unit.
dividing the variable cost per unit by the sales revenue.
subtracting the sales price per unit from the variable cost per unit.
33.
Dairy Days Ice Cream sells ice cream cones for $4 per customer. Variable costs are $3 per cone. Fixed costs are $2,500 per month. What is Dairy Days' contribution margin per ice cream cone?
$1.00
$3.00
$0.25
$4.00
34.
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
35.
Electric Jet Skis operates a Jet Ski rental business. Assume the jet skis rent for $55 for 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 per six-hour jet ski rental?
$33.00
$0.40
$22.00
$2.50
Part 2
1.
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
2.
Which of the following people or groups would be least likely to receive detailed managerial accounting reports?
CEO
Plant managers
Current shareholders
Sales territory managers
3.
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.
4.
Where would period costs be found on the financial statements?
Under current assets on the balance sheet
Under current liabilities on the balance sheet
As operating expenses on the income statement in the period incurred
As operating expenses on the income statement for a previous period
5.
Which of the following costs include all costs associated with production of a product?
Inventoriable
Direct
Mixed
Overhead
6.
Manufacturing overhead costs for a product include
direct material.
operating expenses.
indirect manufacturing costs.
prime costs.
7.
Certain materials used in a manufacturing plant cannot be traced to a specific unit. What are these materials called?
General materials
Direct materials
Indirect materials
Finished materials
8.
When direct materials are requisitioned, they flow directly into
cost of goods sold.
finished goods inventory.
work in process inventory.
manufacturing overhead.
9.
In the flow of costs, which of the following comes third?
Finished goods inventory
Cost of goods sold
Raw materials inventory
Work in process inventory
10.
The five steps of the process costing procedure are scrambled below. Which of the following places the steps in the correct order?
1. Assign total costs to units completed and to units in ending WIP inventory.
2. Summarize total costs to account for.
3. Compute the cost per equivalent unit.
4. Summarize the flow of physical units.
5. 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.
11.
On a production cost report, which of the following cost(s) appear?
A. Beginning work in process
B. Costs added during the period
C. Total operating costs during the period
D. Both A and B are included on a production cost report.
12.
When calculating the total amount of manufacturing overhead to allocate to a particular job, the company would multiply each departmental overhead rate by ________ and then ________ together the allocated amounts from each department.
the actual amount of the departmental allocation based used by the job; multiply
the actual amount of the plantwide allocation based used by the job; add
the actual amount of the departmental allocation based used by the job; add
the actual amount of the plantwide allocation based used by the job; multiply
13.
In using an ABC system, all of the following steps are performed before the company's year begins except:
identify the primary activities and estimate a total cost pool for each.
select an allocation base for each activity.
allocate the costs to the cost object using the activity cost allocation rates.
calculate an activity cost allocation rate for each activity.
14.
Four basic steps are used in an ABC system. Select the correct order of these steps below:
a. Identify the primary activities and estimate a total cost pool for each.
b. Allocate the costs to the cost object using the activity cost allocation rates.
c. Select an allocation base for each activity.
d. 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
15.
The use of which of the following costing systems is most likely to reduce cost distortion to a minimum?
Plantwide overhead rate
Departmental overhead allocation rates
Traditional costing system
Activity-based costing
16.
Which of the following is a fixed cost?
Direct materials cost
Direct labor cost
Straight-line depreciation expense
Sales commissions expense
17.
Renting a scooter and paying $30 per day plus $.20 per mile driven is an example of what type of cost?
Mixed cost
Fixed cost
Conversion cost
Variable cost
18.
Total fixed costs for Diamond Enterprises are $800,000. Total costs, including both fixed and variable, are $890,000 if 120,000 units are produced. The fixed cost per unit at 200,000 units would be
$4.00/unit.
$7.42/unit.
$4.45/unit.
$0.45/unit.
19.
Total fixed costs for Toys and Trinkets Incorporated are $88,000. Total costs, including both fixed and variable, are $155,000 if 268,000 units are produced. The total variable costs at a level of 275,000 units would be
$68,750.
$159,049.
$90,299.
$151,055.
20.
CVP analysis assumes all of the following except
the mix of products will not change.
revenues are linear throughout the relevant range.
inventory levels will increase.
a change in volume is the only factor that affects costs.
21.
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.
22.
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%