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Study Resources (Accounting)

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 4-8 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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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 5-3 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) 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 8-4 1) Which of the following estimation methods estimates cost functions by analyzing the relationship between inputs and outputs in physical terms? A) Industrial Engineering Method. B) Conference Method. C) Account Analysis Method. D) Quantitative Analysis Method. E) Mixed Approach Method. 2) Which of the following estimation methods is used by managers to estimate cost.
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11) The Ready Corporation reported the following information: Compute the budgeted indirect cost rate for each activity. A) $4,001; $45.10; $308; $5 B) $4,010; $50.25; $310; $6 C) $4,110; $51.50; $325; $7 D) $4,250; $52.50; $350; $8 E) $4,375; $58.50; $400; $9 12) The auditor at the Yarn Shoppe needs to determine whether it is beneficial to.
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Learning Objective 8-3 1) Which of the following is not a representation of a cause-and-effect relationship? A) A physical relationship between the level of activity and costs. B) Units of production are used as the activity that affects direct material costs. C) A contractual agreement. D) Knowledge of operations. E) A contract that fails to specify.
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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 6-3 1) The costing system that refines a costing system by identifying individual activities as the fundamental cost object is ________. A) cost hierarchy B) cost-allocation base C) refined-costing system D) activity-based costing system E) manager-based costing system 2) Determining costs of activity pools requires assigning costs accumulated in various account classifications to each of.
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Learning Objective 7-6 1) The reporting and assessment of revenues earned from customers and the costs incurred to earn those revenues is: A) price discount. B) whale curve. C) price markups. D) customer-cost hierarchy. E) customer-profitability analysis. 2) The reduction in selling price below list selling price to encourage customers to purchase more quantities is: A) price discount. B).
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Learning Objective 6-2 1) The costing system that reduces the use of broad averages for assigning the cost of resources to cost objects is the ________. A) job-costing system B) process-costing system C) product-costing system D) market-costing system E) refined-costing system 2) The growing demand for customized products, which has led managers to ________ the variety of.
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Learning Objective 7-1 1) Which of the following is not true about pricing decisions? A) Customers are an influence on demand and supply. B) Competitors are an influence on demand and supply. C) Costs are an influence on demand and supply. D) Managers price products based on supply and demand. E) Customers never have an influence.
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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) Companies operating in less competitive markets offer products or services that differ from each other. 12) The Nutcracker Company manufactures two types of bolts: Top Point, the premium bolt, and a less competitive bolt, Bottom Point. The managerial accountant uses activity-based costing system (ABC) to calculate the manufacturing cost of.
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Learning Objective 8-2 1) In a/an ________, the graph of total costs is not a straight line within the relevant range. A) cost object B) learning curve C) experience curve D) step cost function E) nonlinear cost function 2) A/an ________ is a function that measures how labor-hours per unit decline as units of production increase because.
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12) What are the first three categories of the customer-cost hierarchy? Why do managers want to analyze customer-level indirect costs? 13) Customer-Profitability Analysis for Consumer Banking Clients Retail Customer Code Customer-Level Operating Income Customer Revenue Customer- Level Operating Income Divided by Revenue Cumulative Customer-Level Operating Income   (1) (2) (3) (4) A $5,000,000 $25,000,000 ? $5,000,000 D 3,795,000 28,000,000 ? 7,500,000 C 2,250,000 15,000,000 ? 8,250,000 B 2,650,000 7,200,000 ? 9,100,000   13,695,000 75,200,000 ? 29,850,000 Required: Compute the Customer-Level Operating Income. .
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11) What should a managerial accountant consider if all or most of the indirect costs are identified as output unit-level costs? 12) When comparing the strategic and operational benefits of activity-based costing systems, what should managers understand about information technology? 13) What are some important considerations to managers that consider adopting the.
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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 7-4 1) The cost that, if eliminated, would reduce actual or perceived value or utility customers experience from using the product or service is ________. A) value-added cost B) locked-in cost C) designed-in cost D) conversion costs E) non-value added costs 2) Costs that have not yet been incurred but will be incurred in the.
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Learning Objective 7-3 1) The estimated price for a product or service that customers are willing to pay is: A) target price. B) listing price. C) selling price. D) strategic price. E) consumer price. 2) Market-based pricing starts with: A) target price. B) listing price. C) selling price. D) strategic price. E) consumer price. 3) To earn the target return on capital, the.
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Learning Objective 7-7 1) ________ spans the time from initial R&D on a product to when customer service and support is no longer offered for that product. A) Product life cycle B) Life-cycle budgeting C) Life-cycle costing D) Customer life-cycle costs E) Price discrimination 2) ________ tracks and accumulates business function costs across the entire value chain.
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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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11) Zell Company produces a special hammer for carpenters. The budgeted total cost in the indirect-cost pool is $75,000. The budgeted total quantity of cost allocation base is 30,000. What is the budgeted indirect cost rate? A) $10.00 B) $15.00 C) $20.00 D) $25.00 E) $30.00 12) The Monroe Company manufactures a special saddle. The budgeted.
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Learning Objective 7-8 1) The practice of charging different customers different prices for the same product or service is: A) job costing. B) product costing. C) price discrimination. D) product life-cycle. E) customer life-cycle. 2) Insensitivity of demand to price changes is called: A) price discrimination. B) demand inelasticity. C) predatory pricing. D) peak-load pricing. E) collusive pricing. 3) The practice of charging.
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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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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 5-1 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 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 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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Learning Objective 6-7 1) The method of management decision making that uses activity-based costing information to improve customer satisfaction and profitability is ________. A) job-cost management B) action-cost management C) project-cost management D) product-cost management E) activity-based management 2) Which of the following is not a decision that managerial accountants seek when they use activity-based management? A) Decisions.
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20) Rachel and Joey went to dinner and incurred the following costs: Joey's total dinner cost:$30.00 Rachel's total dinner cost:$21.00 Required: Compute the average cost of dinner. If they each pay the average cost of dinner, calculate the amount of Rachel's cross-subsidization to Joey. 21) What should managerial accountants understand when prices of their products.
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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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Learning Objective 6-5 1) In indirect cost pools, administrative costs are ________. A) direct costs B) batch-level costs C) output unit-level costs D) product-sustaining costs E) facility-sustaining costs 2) In indirect cost pools, design costs are ________. A) batch-level costs B) output unit-level costs C) product-sustaining costs D) direct costs E) facility-sustaining costs 3) In indirect cost pools, shipment setup costs are ________. 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 7-5 1) Target annual operating income divided by invested capital is ________. A) target price B) locked in costs C) target cost per unit D) target operating income per unit E) target rate of return on investment 2) Amarillo Manufacturing uses a 13% markup on the full unit cost of Product X to compute the.
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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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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) 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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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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Learning Objective 6-4 1) Which of the following is not a level in the cost hierarchy? A) Batch-level costs. B) Input-level unit costs. C) Output-unit level costs. D) Product-sustaining costs. E) Facility-sustaining costs. 2) Which of the following are costs of activities performed on each individual unit of a product or service? A) Batch-level costs. B) Input unit-level costs. C).
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Learning Objective 8-1 1) The horizontal axis is called the ________. A) a-axis B) b-axis C) x-axis D) y-axis E) z-axis 2) The vertical axis is called the ________. A) a-axis B) b-axis C) x-axis D) y-axis E) z-axis 3) The Parker Cellular Company is charged a total cost that changes in proportion to the number of minutes used. The number of minutes.
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7) The costs that influence prices a company can charge for its products is: A) product life-cycle costing. B) life-cycle budgeting. C) customer life-cycle costs. D) life-cycle costing. E) price discrimination. 8) In life-cycle budgeting, managers estimate the revenues and business function costs across the entire value chain from a product's initial R&D to its final.
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Learning Objective 6-6 1) Which of the following is not a sign of when an activity-based costing system would likely provide the manager with the most benefits? A) Significant amounts of indirect costs are allocated using only one or two cost pools. B) All or most indirect costs are identified as output unit-level.
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Learning Objective 7-2 1) The strategic decision designed to build long-run relationships with customers based on stable and predictable prices is ________. A) mid-run pricing B) cost-run pricing C) some-run pricing D) short-run pricing E) long-run pricing 2) To set long-run prices, managers calculate the ________ -cost of producing and selling a product. A) full B) small C) partial D) initial E).
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