question

If manufacturing overhead has been under-allocated during the? period, then which of the following is? true?

answer

The jobs produced during the period have been under-costed.

question

In the basic flow of inventory through a manufacturing? system, which of the following occurs second in the job costing? system?

answer

Work in process inventory

question

The? ________ is the hourly price charged to clients for professional labor.

answer

Billing Rate

question

Which of the following items could be an example of a cost? object?

answer

The Accounting Department, An international plant, and a manufacturing plant.

question

?A(n) ________ cost is one whose total amount changes in direct proportion to a change in volume.

answer

Variable

question

Which statement describes direct materials in a manufacturing? setting?

answer

Direct materials are used to determine total inventoriable product costs.

question

When making a decision to buy a new? computer, all of the following should be considered except

answer

Sunk Costs

question

Which of the following is an example of an industry that would use a process costing rather than a job costing system?

answer

Coca-Cola

question

To forecast total costs at a given level of? production, management would use which of the following? calculations?

answer

Total fixed cost? + (variable cost per unit times× total units? predicted)

question

A product support hotline would be considered

answer

Customer Service

question

Which of the following is not a way in which management can use job cost? information?

answer

Determining the balance in raw materials inventory

question

The first three steps to allocating manufacturing overhead are taken before the year begins and include all of the following

answer

1. estimating total manufacturing overhead costs for the coming year. 2. calculating the predetermined manufacturing overhead rate. 3. selecting an allocation base and estimating the total amount that will be used during the year.

question

A? ________ company's balance sheet reports just one inventory called? "Inventory."

answer

Merchandising

question

The cost of testing incoming raw materials from a supplier would be classified as? a(n) ________ cost.

answer

Appraisal

question

Using account? analysis, what type of cost is the monthly cost of a storage locker used for holding old? records?

answer

Fixed

question

When using the high-low ?method, what is the correct order of the following three? steps?

answer

1. Find The Slope 2. Find The Vertical Intercept 3. Write The Cost Equation

question

Which of the following is a result of cost? distortion?

answer

Overcosting of some products and undercosting of other products

question

On a Cost of Quality? report, which of the following cost items should be classified as an internal failure? cost?

answer

Net cost of scrap

question

Manufacturing overhead? (consisting of costs like factory? rent, factory? utilities, factory? maintenance, and other similar? costs) is usually what type of? cost?

answer

Mixed

question

When absorption costing is used and management bonuses are related to operating? income, managers are more likely to

answer

Increase inventory levels

question

ABC generally causes the least amount of cost distortion among products because indirect costs are allocated to the products based on

answer

Types of activities used by the products and the extent to which the activities are used

question

The use of which of the following costing systems is most likely to reduce cost distortion to a? minimum?

answer

Activity - Based costing

question

Which of the following costs is an example of a fixed? cost?

answer

Salary of plant manager

question

The benefits of adopting? ABC/ABM are higher for companies in competitive markets because

answer

ABM can pinpoint opportunities for cost savings.

question

Research and development would most likely be classified as a? ________ cost.

answer

Product level

question

Four basic steps are used in an ABC system. List the proper order of these? steps

answer

1. Identify the primary activities and estimate a total cost pool for each. 2. Select an allocation base for each activity. 3. Calculate an activity cost allocation rate for each activity. 4. Allocate the costs to the cost object using the activity cost allocation rates.

question

In deciding whether to? outsource, managers must consider

answer

Relevant fixed and variable components.

question

Fixed costs that continue to exist even after a product line is discontinued are called

answer

Unavoidable fixed costs

question

To find a? firm's operating leverage factor at a given level of? sales, you

answer

Divide the contribution margin by operating income.

question

Fixed costs that may be avoided in the future are referred to as

answer

Relevant costs

question

Which of the following describes the products and services of companies that are price??setters?

answer

They tend to be unique.

question

Which of the following is irrelevant when making a? decision?

answer

The cost of an asset that the company is considering replacing

question

By multiplying? ________ and then subtracting fixed? costs, managers can quickly forecast the operating income.

answer

projected sales revenue by the contribution margin ratio

question

CVP analysis assumes all of the following

answer

1. a change in volume is the only factor that affects costs. 2. the mix of products will not change. 3. revenues are linear throughout the relevant range.

question

The factor that restricts production or sale of a product is which of the? following?

answer

Constraint

question

Contribution margin ratio is computed by

answer

dividing contribution margin by sales revenue.

question

Managers should consider? ________ when making any sort of decision.

answer

revenues that differ among alternatives

question

A manager should always reject a special order if

answer

the special order price is less than the variable costs of the order.

question

All of the following are responsibility centers:

answer

Profit, Cost, and Investment centers

question

The convenience store that is responsible for its own? revenues, costs, and is owned by a national convenience store chain may be classified as? a(n)

answer

Profit Center

question

The four perspectives of the balanced scorecard include all of the following

answer

1. Financial 2. Customer 3. Internal Process 4. The learning and growth

question

The? ________ is a plan that shows the units to be sold and the projected selling price and is also the starting point in the budgeting process.

answer

Sales Budget

question

The? ________ is the optimum budget to managers that plan revenues and expenses at different sales volumes.

answer

The Flexible Budget

question

Which of the following budgets is a major part of the master budget and it focuses on the income statement and its supporting? schedules?

answer

Operating

question

A rolling budget is a budget that

answer

is continuously? updated, so that the next 12 months of operations are always budgeted.

question

Which of the following items is a component of a cash payments? budget?

answer

Cash Dividends

question

In which of the following company types does a manager use a sales? budget?

answer

Manufacturing, Merchandising, and Service

question

The number of warranty claims may be an example of the

answer

Internal Business Perspective

question

Management by? ________ is the practice that directs executive attention to large budget variances.

answer

Exception

question

Which of the following budgets usually shows separate sections for fixed and variable? costs?

answer

Operating expenses budget and manufacturing overhead budget

question

How does depreciation affect the calculation of a? project's payback? period?

answer

Depreciation does not affect the payback calculation.

question

At lean? companies, employees tend to be multi-skilled and crosstrained to perform a number of duties. These workers are held in high-esteem by management and are considered to be part of a team? effort, rather than a labor force to be controlled.? Consequently, this

answer

decreases the importance of direct labor standards

question

?A(n) ________ is a carefully predetermined cost that is usually expressed on a per unit basis.

answer

Standard Cost

question

Which of the following items would be considered a capital? asset?

answer

Construction of a new store building

question

The time value of money depends on which of the following? factors?

answer

1. Interest rate 2. Principal Amount 3. Number of Periods

question

The internal rate of return is which of the? following?

answer

The interest rate that makes the NPV of an investment equal to zero

question

A? company's purchasing department negotiates all of the purchasing contracts for raw materials. Which variance is most useful in assessing the performance of the purchasing? department?

answer

Direct materials price variance

question

Your hard work in college paid? off, quite? literally, and you received a graduate assistantship for your MBA program. The assistantship pays a stipend of $14,000 at the end of each of the next 2 years. Using an average discount rate of 22?%, the future value of your assistantship can be calculated by

answer

PV? = $14,000 ?(Annuity FV? factor, i? = 22?%, n? = 2)

question

A company would consider all of the following in computing the IRR of an? investmen

answer

1. Present Value Factors 2. predicted cash inflows over the life of the project. 3. the cost of the project.

question

You have been awarded a scholarship that will pay you $600 per semester at the end of each of the next 8 semesters that you earn a GPA of 3.5 or better. Using a discount rate of 55?% per? semester, which of the following is the correct calculation for determining the present value of the? scholarship?

answer

PV? = $600 times× ?(Annuity PV? factor, i ?= 55%, n? = 8)

question

Operating income formula

answer

Sales - cogs - operating expenses

question

Gross profit formula

answer

Revenue - cogs

question

Variable cost

answer

change in total as the volume goes up or down

question

Fixed cost

answer

stays constant in total cost over a wide range of activity levels

question

Process costing

answer

mass production, similar items, total costs are averaged over all units

question

Job costing

answer

unique, custom products or small batches, total costs are accumulated by jobs

question

Margin of safety

answer

the excess of current/expected sales over breakeven sales

question

Operating leverage

answer

The relative amount of fixed and variable costs that make up total cost

question

Irrelevant cost

answer

incurred/earned in the past & cannot be changed

question

Sunk costs

answer

costs that do not differ between alternatives

question

Flex budget

answer

Actual units x Sales price

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