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Learning Objective 5-2 1) A company that implements process costing with zero beginning and zero ending work-in-process inventory has: A) no units are started and fully completed within the accounting period. B) all units are started and fully completed within the accounting period. C) all units are started and partially completed after the accounting.
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Appendix Chapter 2 1) Which of the following methods is not used to reduce the undesirable affects of absorption costing? A) Focus on careful planning and budgeting of inventory amounts. B) Incorporate carrying charges for inventory in the internal accounting system. C) Place greater weight on reporting performance over longer periods. D) Include only financial.
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11) In the normal-costing system, managers understand that manufacturing costs of a job are available much later compared to the actual-costing system. 12) An advantage of the actual-costing system is that at the end of the year, actual costs incurred equal the allocated costs in normal-costing systems. 13) What are the circumstances.
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18) Explain why the time-frame is important to managers that implement decisions about indirect-cost rates. 19) What is a challenge to managers when they implement job-costing systems? 20) Why do managers have problems when they compute the actual indirect-cost rates when they use the normal costing system on a weekly or monthly.
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Appendix Chapter 4 1) The step-down method is also the: A) reciprocal method. B) indirect method. C) engineering method. D) budgeted overhead method. E) sequential allocation method. 2) The service department is also professionally known as the: A) support department. B) internal department. C) operating department. D) international department. E) manufacturing department. 3) Material-handling labor costs are included as part of the ________.
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11) A criterion for allocating some costs is the cost object's ________ ________ ________ costs allocated to it. A) ability to find B) ability to bear C) cost-allocation rate D) direct-costing system E) indirect-costing system 12) Most managers believe that the ideal cost-allocation base is the ________ ________ of the indirect costs, since there is a.
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12) Karen is a managerial accountant at a manufacturing company. She uses manufacturing process costing to assign costs to products and services. Write a short summary and explain how the manufacturing process is different compared to a job-costing system. 13) Clothes Manufacturing, Inc. manufactures clothes and distributes them to various buyers..
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Learning Objective 3-2 1) The term that is used to identify the quantity of output sold at which total revenues equal total costs and that quantity of output sold that results in $0 operating income is: A) contribution margin. B) breakeven point (BEP). C) contribution margin per unit. D) contribution margin percentage. E) contribution income statement. 2).
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14) The Studio Furniture Company manufactures leather recliners. In February, the firm's Assembly Division started production of 50,000 leather recliners. During the month, the firm completed 55,000 chairs, and transferred them to the Finishing Department. The firm ended the month with 10,000 chairs in ending inventory. There were 15,000 chairs.
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Learning Objective 5-1 1) There are distinct, identifiable units of a product or service in the: A) job-costing system. B) product-costing system. C) process-costing system. D) inventory-costing system. E) weighted-average costing system. 2) Masses of identical or similar units of a product or service are in: A) job-costing systems. B) product-costing systems. C) process-costing systems. D) inventory-costing systems. E) weighted-average costing systems. 3).
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Learning Objective 3-8 1) In the airline industry, an example of output is: A) passenger miles. B) room-nights occupied. C) patient days. D) student credit-hours. E) telephone call center hours. 2) In the hotel/motel industry, an example of a measure of output is: A) passenger miles. B) room-nights occupied. C) patient days. D) student credit-hours. E) telephone call center hours. 3) An example.
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11) The Tree Shoppe reported the following information: Budgeted revenues$10,000 Breakeven revenues4,000 Budgeted sales (in units)35 Breakeven sales (in units)15 Required: Compute the margin of safety percentage at the Tree Shoppe. A) 20% B) 30% C) 40% D) 50% E) 60% 12) Organizations that have a low margin of safety have an increased risk of loss. 13) A more comprehensive approach to recognizing.
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Learning Objective 6-1 1) The costing system that broadly averages or spreads the cost of resources uniformly to cost objects when individual products or services use those resources in nonuniform ways is ________. A) direct costing B) service costing C) indirect costing D) variable-rate costing E) peanut-butter costing 2) Peanut-butter costing ________. A) is not used to spread.
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11) It is easier for managerial accountants to estimate the degree of completion for direct-material costs than for conversion costs because quantities of direct materials in completed and partially-completed units are more accurately measured. 12) Managerial accountants estimate the degree of completion easier for direct material costs compared to conversion.
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Learning Objective 5-5 1) The system that blends characteristics from both job-costing and process-costing systems is a: A) job-costing system. B) hybrid-costing system. C) process-costing system. D) operation-costing system. E) manufactured-costing system. 2) Which of the following is not true about operation-costing systems? A) Uses work orders that specify the needed direct materials. B) Product costs are compiled for.
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Learning Objective 5-4 1) The process-costing method that assumes the earliest equivalent units in work in process are completed first is: A) unit of output method. B) physical unit method. C) work in process method. D) last in, first out (LIFO). E) first in, first out (FIFO). 2) Equivalent-unit and cost-per-equivalent-unit calculations under the weighted-average process-costing method.
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Learning Objective 5-6 1) The juncture in a joint-production process when two or more products become separately identifiable is known as: A) the common point. B) the spinoff point. C) the splitoff point. D) the production point. E) the manufacturing point. 2) The costs of a production process that yields multiple products simultaneously are: A) zero costs. B) joint.
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Learning Objective 3-3 1) Which of the following is true about net income? A) Income targets are expressed in terms of operating income. B) Income targets are expressed in terms of net income. C) Income targets are not expressed in terms of net income. D) Managers always ignore the effect of net income on income.
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Appendix Chapter 3 1) A ________ ________ describes the likelihood or the probability, that each of the mutually exclusive and collectively exhaustive set of events will occur. A) sales mix B) unit mix C) weighted average D) distributed method E) probability distribution 2) When the outcomes are measured in monetary terms, expected value is often called: A) unknown.
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Learning Objective 3-5 1) ________ ________ is a "what-if" technique that managers use to examine how an outcome will change if the original predicted data are not achieved or if an underlying assumption changes. A) Electronic Spreadsheet B) Weighted average C) Manufacturing option D) Electronic analysis E) Sensitivity analysis 2) Managers understand that the margin of safety.
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Learning Objective 4-7 1) Which approach is known for spreading the underallocated overhead or overallocated overhead among ending work-in-process inventory, finished goods inventory, and cost of goods sold? A) Proration. B) Adjusted allocation-rate. C) Numerator reason. D) Denominator reason. E) Write-off to cost of goods sold. 2) The approach that restates all overhead entries in the general.
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13) The manager at Puppet and Doll Factory reported 50,000 units of direct materials in the processing division. All direct materials are placed in the processing at the beginning of the process and conversion costs occur evenly during the process. The managerial accountant uses the weighted-average costing method and their.
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Learning Objective 4-5 1) When do managers compute the budgeted indirect-cost rate? A) Daily. B) Monthly. C) Annually. D) Quarterly. E) Semi-annually. 2) A difference between costing a job with normal costing and actual costing is that normal costing uses which of the following cost rates? A) Budgeted real-cost rates. B) Budgeted direct-cost rates. C) Budgeted actual-cost rates. D) Budgeted indirect-cost.
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Learning Objective 3-9 1) Managers compute gross margin as: A) sales revenue less variable costs. B) sales revenue less cost of goods sold. C) contribution margin less fixed costs. D) contribution margin less variable costs. E) contribution margin plus cost of goods sold. 2) Managers confuse gross margin and contribution margin in merchandising companies because: A) cost of.
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11) Managerial accountants find operation costing useful in cost management because operation costing focuses on control of physical processes, or operations, of a given production system. 12) In process-costing systems, all product units in any work order are assumed to consume identical amounts of conversion costs of a particular operation. 13) Sally.
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11) The advantage of the direct and step-down method is that they are simple to compute and understand relative to the reciprocal method. 12) Managers are not required to know the complete reciprocated costs of a support department for decisions about whether to outsource all the services that the support department.
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11) In 2012, Alan's Seafood Supply Manufacturing uses machine-hours as the only overhead cost-allocation base. The accountant reported the following information: EstimatedActual Manufacturing overhead costs$225,000$250,000 Machine-hours50,00055,000 Using job costing, compute the 2012 actual indirect cost rate. A) $3.85 per machine hour B) $3.95 per machine hour C) $4.45 per machine hour D) $4.54 per machine hour E) $4.85 per.
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Learning Objective 3-1 1) The term(s) used to describe the behavior and relationship among elements as changes occur in units sold, selling price, variable cost per unit, or fixed costs of product is: A) event. B) revenues. C) probability. D) contribution. E) cost volume profit analysis (CVP). 2) The difference between total revenues and total variable costs.
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Learning Objective 4-3 1) Managers that decide on whether or not to bid on a project or how much to bid on a project is an example of which step in the five-step decision-making process? A) Step 1: Identify the problems with uncertainties. B) Step 2: Obtain information. C) Step 3: Make predictions about.
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11) Sara's Accounting Service provides assistance to individuals and groups in the community to help them with their accounting needs. For each item listed below, identify the type category of source documents that her individual clients use to authorize a journal entry in the job-costing system. a.direct materials purchased b.direct materials used c.direct.
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Learning Objective 4-4 1) The original record that supports journal entries in an accounting system is the: A) job sheet. B) direct costs. C) indirect costs. D) source document. E) direct materials. 2) The source document that managers use for direct manufacturing labor, which contains information about the amount of labor time used for a specific job.
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Learning Objective 3-6 1) Sally's Optimist Club promotes optimism to the youth in Virginia. If the club has a degree of operating leverage of 3.0 and the sales increase by 25%, then: A) total variable costs will increase by 75%. B) total variable costs will increase by 50%. C) total variable costs will not.
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Learning Objective 4-6 1) Under normal costing, managers compute the amount of manufacturing overhead costs allocated to individual jobs based on the budgeted rate multiplied by the actual quantity used of the allocation base. This is known as: A) account payable control. B) work-in-process control. C) manufacturing overhead allocated. D) budgeted manufacturing overhead rate. E) manufacturing.
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Learning Objective 3-7 1) For any given total quantity of units sold, as the sales mix shifts toward units with lower contribution margins, operating income will be: A) lower. B) higher. C) consistent. D) parallel. E) does not change. 2) When there is a shift in the sales mix to lower-contribution-margin products, the breakeven quantity: A) levels. B) increases. C).
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Learning Objective 4-8 1) Managers try to use a variation of ________ costs; and, they use budgeted rates to assign ________ costs. A) normal; direct B) abnormal; indirect C) periodic; indirect D) frequent; variable E) normal; indirect 2) Managers compute the budgeted indirect cost rate as: A) budgeted variable labor hours / budgeted direct-labor. B) budgeted variable-labor costs /.
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10) The Flannigan Factory was recently formed to product a specialized part that forms and essential part to go on a refrigerator. The direct materials are added at the start of the production process while conversion costs are added uniformly throughout the production process. December is Flannigan's first month of.
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Learning Objective 4-2 1) Which of the following is not a concern to a manager that utilizes the process-costing system? A) Per-unit cost is average unit cost applied to similar product. B) Allocates all of the product costs, including materials and labor. C) The cost object is known as a unit or multiple units.
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Learning Objective 4-1 1) Anything for which a measurement of costs is desired is a: A) cost object. B) cost assignment. C) cost tracing. D) cost pooling. E) cost allocation. 2) The iMac computer, or the service cost of repairing an iMac computer, are examples of: A) cost objects. B) cost assignments. C) direct costs of a cost object. D) indirect.
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Learning Objective 3-4 1) Which of the following is not correct about CVP analysis? A) Managers estimate the predicted profitability of choices. B) Useful to managers because they calculate units that need to be sold to breakeven. C) Managers make strategic decisions about selling prices and operating income. D) Managers make decisions about choosing additional.
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Learning Objective 5-3 1) What is the first step of process costing? A) Summarize the flow of physical units of output. B) Compute output in terms of equivalent units. C) Summarize total costs to account for. D) Compute cost per equivalent unit. E) Assign total costs to units completed and to units in ending work in.
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13) List the seven steps that managers in manufacturing, merchandising, and service sectors use to assign costs to individual jobs. 14) Write a short essay and discuss how managers track direct manufacturing labor and control manufacturing overhead costs with enhancements in information technology. .
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