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Selling price per unit$225 Sales$360,000 Direct materials used$176,000 Direct labor$100,000 Variable factory overhead$44,000 Fixed factory overhead$80,000 Variable selling and administrative expenses$20,000 Fixed selling and administrative expenses$10,000 Ending inventory, Direct Materials0 Ending inventory, Work-in-process0 Ending inventory, Finished Goods400 units Under variable costing, the variable manufacturing cost of goods sold is ________. A) $256,000 B) $272,000 C) $320,000 D) $360,000 12) Iowa Company reported the following information about.
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11.8   Questions 1) The best way to reconcile any conflict between capital budgeting models and performance evaluation is to use the ________ for both capital budgeting decisions and performance evaluation. A) payback period model B) accounting rate of return model C) real options model D) discounted cash flow model 2) Managers who are evaluated based on.
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14.1   Questions 1) Three types of costs are accumulated on job-cost records that include direct materials, ________ and ________. A) direct labor; actual factory overhead B) direct labor; applied factory overhead C) variable factory overhead; fixed factory overhead D) direct labor; budgeted factory overhead 2) The ________ system is better suited for a single physical unit.
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12.4   Questions 1) When determining product cost, the last step in the traditional approach to cost allocation is ________. A) divide costs in each producing department into direct costs and indirect costs B) trace direct costs to products C) select cost pools and cost allocation bases in each production department and assign indirect department.
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11.2   Questions 1) ________ shows the financial consequences that would occur if actual cash flows differ from expected cash flows. A) Discount analysis B) Interest rate analysis C) Sensitivity analysis D) Budgeting 2) The "break-even" cash flow for an investment project is the point at which ________. A) the present value of the variable cost of future.
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12.7   Questions 1) Companies routinely allocate joint product costs to products for purposes of ________. A) inventory valuation B) income determination C) decision-making such as further processing of joint products D) inventory valuation and income determination 2) ________ costs relate to more than one product and cannot be separately identified with an individual product. A) Common B) Bundle C).
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13.6   Questions 1) An unfavorable production volume variance ________ manufacturing costs on the ________ income statement. A) decreases; variable costing B) increases; variable costing C) decreases; absorption costing D) increases; absorption costing 2) The production volume variance is the difference between ________. A) expected fixed overhead costs and actual fixed overhead costs B) expected fixed overhead costs and.
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  13.1   Questions 1) The two key items in determining the budgeted factory overhead application rate are total budgeted factory overhead costs and ________. A) actual amount of the cost driver B) total actual factory overhead costs C) budgeted amount of cost driver D) total estimated factory overhead costs 2) The budgeted factory overhead rate is computed.
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11.4   Questions 1) Which is NOT a relevant cash inflow or cash outflow when using the net present value method?  (Ignore income taxes.) A) depreciation expense in future periods B) future disposal value of a long-term asset C) future operating cash inflows D) acquisition cost of new equipment at time zero 2) In the net present.
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11) Panthers Company reported the following information about the production and sale of its only product during the first month of operations: Selling price per unit$225.00 Sales$315,000 Direct materials used$160,000 Direct labor$100,000 Variable factory overhead$60,000 Fixed factory overhead$80,000 Variable selling and administrative expenses$20,000 Fixed selling and administrative expenses$30,000 Production volume variance0 Ending inventory, Direct Materials0 Ending inventory, Work-in-process0 Ending inventory, Finished Goods600.
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14.6   Questions 1) In process costing, a company has some unfinished units at the end of the accounting period.  ________ units are the number of completed units that could have been produced from the inputs used to create the unfinished units. A) Physical B) Convertible C) Fully-complete D) Equivalent 2) Clumsy Company produces plastic cups in.
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11) In practice, companies often inappropriately allocate fixed cost pools for service departments to producing departments on the basis of ________ instead of ________. A) budgeted costs; actual costs B) actual costs; budgeted costs C) capacity used; capacity available D) capacity available; capacity used 12) Samuel Company has two production departments called Mixing and Finishing. .
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11) When the actual production volume exceeds the expected production volume, the production volume variance is favorable. 12) There is no production volume variance when expected production volume equals actual production volume. 13) An unfavorable production volume variance decreases the manufacturing costs shown on the income statement. 14) Most companies consider production volume.
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6) St. Luke's Hospital uses a job-order costing system for all patients who have surgery.  The following information is available: Budgeted indirect costs?pre-operating room$84,000 Budgeted indirect costs?operating room$66,000 Budgeted indirect costs?surgery recovery floor$600,000 Budgeted nursing hours?pre-operating room4,000 Budgeted nursing hours?operating room1,000 Budgeted nursing hours?surgery recovery floor7,500 The cost driver for all indirect costs is nursing hours.  The.
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11) Kevin Company has two service departments, Maintenance and Personnel.  Kevin Company also hastwo production departments, Mixing and Finishing.  Maintenance costs are allocated based on square footage while personnel costs are allocated based on number of employees.  The following information has been gathered for the current year: Maintenance    Personnel      Mixing     Finishing Direct costs$126,000$84,000$105,000$175,000 Square footage8004001,6001,200 Number of.
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21) Christian Industries Inc. reported the following information about the production and sale of its only product during the first month of operations: Selling price per unit$97.50 Sales$117,000 Direct materials used$37,500 Direct labor$63,000 Variable factory overhead$25,500 Fixed factory overhead? Variable selling and administrative expenses$4,500 Fixed selling and administrative expenses$7,500 Gross profit$45,000 Ending inventory, Direct Materials0 Ending inventory, Work-in-process0 Ending inventory, Finished Goods1,200.
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21) As the minimum required rate of return increases for an investment project, the net present value of the project ________. A) increases B) does not change C) decreases D) becomes positive 22) When evaluating an investment project, the higher the minimum desired rate of return, the ________ the present value of each ________ cash.
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21) In job-order costing, the journal entry to record actual factory overhead costs incurred would include a credit to Factory Department Overhead Control. 22) In job-order costing, the journal entry to record the completion of units in process would include a debit to Finished Goods Inventory. 23) In job-order costing, the journal.
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21) Tardy Company has two service departments, Maintenance and Personnel.  Tardy Company also has two production departments, Mixing and Finishing.  Maintenance costs are allocated based on square footage while personnel costs are allocated based on number of employees.  The following information has been gathered for the current year: Maintenance    Personnel      Mixing    Finishing Direct costs$50,400$35,000$42,000$70,000 Square footage1,6008003,2002,400 Number.
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6) Two common methods for comparing alternative investments are the total project approach and the conversion approach. 7) The total project approach to investments can be used to compare any number of projects. 8) The differential approach to investments can be used to compare any number of projects. 9) Generally, the most difficult.
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12.1   Questions 1) For costs that accountants cannot directly trace to products or services, accountants use ________ or ________. A) cost-allocation methods; leave costs unallocated B) cost-budgeting methods; ignore remaining costs C) sensitivity analysis; financial planning models D) financial planning models; post-audits 2) For external financial reporting, only ________ costs are assigned to products or services. .
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6) The following information was gathered for the Gophers Company: Budgeted direct labor hours31,000 Actual direct labor hours32,400 Budgeted factory overhead$147,250 Actual factory overhead$149,980 Assume the cost driver for factory overhead costs is direct labor hours.  What is the amount of overapplied or underapplied overhead? A) $2,730 underapplied B) $2,730 overapplied C) $3,920 underapplied D) $3,920 overapplied 7) The immediate.
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12.5   Questions 1) Assume the cost object is customers.  It is important to directly trace or allocate costs associated with customer actions to ________ instead of ________. A) producing departments; service departments B) service departments; producing departments C) products; producing departments D) customers; producing departments 2) Assume the cost object is customers.  Why should indirect costs.
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11) Helen Company uses a job-order costing system and has the following data available: Beginning direct-materials inventory$26,000 Beginning work-in-process inventory64,000 Beginning finished goods inventory58,000 Direct materials purchased on account148,000 Direct materials requisitioned82,000 Direct labor cost incurred130,000 Factory overhead incurred146,000 Cost of goods completed292,000 Cost of goods sold256,000 Overhead application rate(based on direct labor cost)125% The journal entry to record the cost.
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11) Kings Company had the following information: Budgeted factory overhead$75,000 Actual factory overhead$80,000 Budgeted direct labor hours20,000 Actual direct labor hours21,000 Assume the cost driver for factory overhead costs is direct labor hours and a job uses 2,000 direct labor hours.  What amount of factory overhead is applied to the job? A) $7,140 B) $7,500 C) $7,600 D) $8,000 12).
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21) The relative-sales-value method of allocating joint costs requires a common physical unit for measuring the output of each product. 22) Joint cost allocations should be ignored for decisions such as selling a joint product at the split-off point or processing it further. 23) Joint costs are allocated to main products but.
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26) Bruce Company uses job-order costing.  The company has gathered the following data: Direct materials purchased for cash$30,000 Direct materials requisitioned$25,000 Direct labor costs incurred$45,000 Factory overhead costs incurred$30,000 Cost of goods completed$90,000 Cost of goods sold$85,000 Sales for cash$150,000 Factory overhead applied? Factory overhead costs are applied at 90% of direct labor costs. Required: A) Prepare the required journal entries.
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14.2   Questions 1) In a job-order system, accountants apply factory overhead costs to Work-in-process Inventory by using ________. A) actual overhead costs B) budgeted value chain costs C) budgeted overhead rates D) actual overhead rates 2) Actual factory overhead costs are Depreciation expense--equipment of $1,000 and Depreciation expense--computers of $2,000.  Job-order costing is used.  The journal.
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13.5   Questions 1) A direct-costing income statement has a subtotal for ________ whereas an absorption-costing income statement has a subtotal for ________. A) gross profit; contribution margin B) contribution margin; gross profit C) variable expenses; fixed expenses D) fixed expenses; variable expenses 2) Product costs for absorption costing include direct materials, direct labor and ________. A) fixed.
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11.5   Questions 1) When considering the cash operating inflows resulting from an investment, taxes will ________. A) reduce the amount of the cash inflows by the tax rate B) reduce the amount of the cash inflows by (1 minus the tax rate) C) increase the amount of the cash inflows by the tax rate D).
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12.3   Questions 1) The direct method of allocating service department costs to producing departments ignores ________. A) services provided by producing departments to service departments B) services provided by user departments to service departments C) services provided by service departments to other service departments D) services provided by producing departments to other producing departments 2) The.
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14.5   Questions 1) ________ is the system that applies costs to similar products that are mass-produced in continuous fashion through a series of production processes. A) Job-order costing B) JIT costing C) Activity-based costing D) Process costing 2) Which output would NOT use a process costing system? A) flour B) glass C) toothpaste D) building 3) Which statement regarding process costing.
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11) The centerpiece of a job-order costing system is the balanced scorecard. 12) Process costing averages costs over large numbers of nearly identical products. 13) Two extremes of product-costing are job-order costing and normal costing. 14) The construction and printing industries normally use job-order costing. 15) Companies that use job-order costing normally have uniform.
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12.6   Questions 1) The preferred cost allocation base for central corporate support costs is ________. A) sales B) cost of goods sold C) total assets D) usage 2) Examples of central corporate support costs do NOT include ________. A) president's salary B) public relations costs C) company-wide advertising costs D) costs of janitorial services 3) If a company allocates costs of.
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13.4   Questions 1) Variable costing considers fixed manufacturing overhead costs as a(n) ________. A) inventoriable cost B) product cost C) future cost D) immediate expense 2) When the variable costing method is used, fixed factory overhead appears on the income statement as a ________. A) component of cost of goods sold B) component of cost of goods sold.
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25) Oklahoma Company has obtained the following data for the first year of operations: Sales$2,868,750 Direct materials and labor$1,125,000 Variable manufacturing overhead$431,250 Fixed manufacturing overhead$656,250 Variable selling expenses$337,500 Fixed selling expenses$131,250 Variable selling expenses(per unit)$3.00 Units produced125,000 Units sold112,500 Units expected to be produced125,000 Required: A)  Using variable costing, prepare an income statement for the first year of operations.  Assume budgeted fixed.
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21) In an absorption-costing income statement, revenue less variable manufacturing costs is equal to the gross margin. 22) Kirk Company gathered the following information for the year ended December 31, 2015: Units produced45,000 Units expected to be produced45,000 Units sold43,200 Direct labor$137,200 Direct materials used$126,400 Fixed selling and administrative expenses$51,000 Variable selling and administrative expenses$58,000 Fixed manufacturing overhead$83,250 Variable manufacturing.
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16) The proration method of disposing of an overhead variance prorates the variance among three accounts that include Direct Materials Inventory, Work-in-Process Inventory and Finished Goods Inventory. 17) The immediate write-off method of disposing of underapplied overhead subtracts the dollar amount from Cost of Goods Sold. 18) The proration method of disposing.
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11.7   Questions 1) The time it will take to recoup in the form of cash inflows the initial dollars invested in an investment project is called the ________. A) recovery period B) accounting rate of return C) internal return period D) payback period 2) Which of the following statements about the payback model is FALSE? A) The.
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13.3   Questions 1) To determine the cost of a manufactured product, a normal costing system uses ________. A) actual direct material, actual direct labor and actual overhead B) applied direct material, applied direct labor and applied overhead C) applied direct material, applied direct labor and actual overhead D) actual direct materials, actual direct labor and.
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12.2   Questions 1) Variable costs of service departments are allocated to user departments using ________ cost rates instead of ________ cost rates. A) actual; budgeted B) budgeted; actual C) long-range; short-range D) short-range; long-range 2) Budgeted cost rates are used for allocating variable costs of service departments to user departments because ________. A) it protects user departments.
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11) Fudge Company manufactures three products from a joint process.  Joint costs for the year amounted to $250,000.  The following data was available: Product                  Units Produced         Sales Value at Split-off X5,000$70,000 Y3,000$30,000 Z2,000$100,000 Assume the relative-sales-value method of allocating joint costs is used.  What amount of joint costs is allocated to Product Y? A) $30,000 B) $37,500 C) $75,000 D) $250,000 12).
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14.3   Questions 1) Activity-based costing systems increase product costing accuracy because it focuses on the ________ between the work performed and the consumption of resources. A) link B) bond C) cause-and-effect relationship D) weak relationship 2) One of the primary purposes of an activity-based costing system is to ________. A) focus on quality improvements in the production.
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13.7   Questions 1) Why do companies use variable costing for internal financial statements? A) Production volume variance does not affect variable costing income but it does affect absorption costing income. B) Variable costing does not create an incentive to produce additional unneeded units to increase net income. C) A sales-oriented company wants to track.
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