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Study Resources (Accounting)

5.2   Questions 1) When managers make decisions, the decision process used has the following steps in the order of occurrence: A) Historical and Other Information, Prediction Model, Prediction, Decision Model, Decision, Implementation, Feedback B) Historical and Other Information, Decision Model, Prediction Method, Implementation, Decision, Feedback C) Historical and Other Information, Decision Model, Prediction Method,.
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19) Pilot Bank uses activity-based costing. Pilot Bank has the following activities, traceable costs, and cost drivers: Activities            Traceable Costs   Cost Drivers Open new accounts$40,0001,000 accounts Process deposits$72,000360,000 deposits Process withdrawals$100,000200,000 withdrawals The above activities are used by Downtown branch and North branch as follows: Activities           Downtown       North Open new accounts200400 Process deposits40,00020,000 Process withdrawals15,00018,000 Required: A) Compute the new account cost assigned to the.
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15) Gonzalez Company has no beginning and ending inventories, and reports the following data about its only product: Direct materials used$300,000 Direct labor$80,000 Fixed indirect manufacturing$100,000 Fixed selling and administrative$190,000 Variable indirect manufacturing$20,000 Variable selling and administrative$90,000 Selling price(per unit)$50 Units produced and sold10,000 Gonzalez Company uses the absorption approach to prepare the income statement. What is the gross.
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11) Precise but irrelevant information is worthless for decision making. 12) The degree to which information is relevant or precise often depends on the degree to which it is qualitative or quantitative. 13) Accountants are sometimes forced to trade relevant information for accurate information. 14) Imprecise but relevant information can be useful. 15) Qualitative.
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31) Margaret Company has been producing and selling 100,000 units per year. They have excess capacity, and there are no beginning and ending inventories. The following budget was prepared for the next year: Selling price per unit$11.00 Direct materials per unit$5.00 Direct labor per unit$3.00 Variable manufacturing overhead per unit$1.00 Variable selling and administrative per.
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  5.1   Questions 1) Historical or past information has no ________ bearing on a decision made by management. Historical or past information can have a(n) ________ bearing on a decision made by management. A) indirect; direct B) direct; indirect C) measurable; material D) material; significant 2) Relevant information refers to ________ that will differ among the alternative.
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18) The following information is available for Kinsner Corporation: Total fixed costs$313,500 Variable costs per unit$99 Selling price per unit$154 If management has a targeted net income of $46,200, then the number of units that must be sold is ________. A) 2,036 units B) 2,336 units C) 5,700 units D) 6,540 units 19) The following information is available for.
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  3.1   Questions 1) Managers can influence the amount of fixed and variable costs in a firm through decisions about ________. A) product attributes B) capacity level C) amount of high technology equipment used for manufacturing products D) all of the above 2) The use of high technology equipment to manufacture products instead of highly skilled labor.
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11) The following data points are available. This is an example of a ________ cost. UnitsCosts 600$560 650$565 800$580 900$590 A) variable B) fixed C) mixed D) none of the above 12) A car lease payment is computed based solely on the number of miles driven. This is an example of a ________. A) variable cost B) mixed cost C) step cost D) stair.
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54) Sandler Company manufactures electronic devices. The company is considering three cost drivers for measuring maintenance costs in the factory. The following cost functions have been estimated using each cost driver: Cost Driver                     Cost Function       R2 1. X = number of partsY = $20,000 + $5XR2 = 0.40 2. X = number of labor hoursY.
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65) In a linear cost function estimated by regression analysis, the constant or intercept measures variable cost per unit of the cost driver. 66) In regression analysis, a lower coefficient of determination is better than a higher one. 67) The Penquin Company has obtained the following data: Month         Indirect Production Costs      Direct Labor Hours July$92,0954,900 August$105,0565,480 September$80,0003,000 October$99,4004,400 November$110,0006,000 December$97,4043,900 Required: A) Using.
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13) Process maps are used ________. A) to make investment decisions regarding capital assets B) as a guide for strategic decisions C) as a tool for managers to understand operations D) for operational control 14) Slocum Company has determined the following information about a new product. The manufacturing process used for the product is very.
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2) If fixed production costs are not allocated to manufactured products, this conveys the idea that ________. A) fixed costs are not necessary to manufacture a product. B) fixed costs are necessary to manufacture a product. C) variable costs are less important than fixed costs to manufacture a product. D) fixed costs are more.
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14) When examining the output from regression analysis, with one independent variable, the variable cost measure is labeled the ________ by most computer programs. A) coefficient of determination B) X coefficient C) standard error of estimate D) constant or intercept 15) When examining the output from regression analysis, the goodness of fit measure is labeled.
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7) When estimating a cost function, we assess reliability using ________. A) visual inspection B) plausible relationships C) goodness of fit D) intuition 8) A linear cost function is estimated over the relevant range of 0 to 1,000 orders. The equation estimated is: Y = $25,000 + $89X where Y equals the total order-processing cost.
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11) Which of the following is NOT a period expense in a merchandising firm? A) Selling Expense B) Administrative Expenses C) R&D Expenses D) Cost of Goods Sold 12) Period costs include selling and administrative expenses. 13) In a manufacturing company, unsold, fully complete products are called Work-In-Process Inventory. 14) Period costs become expenses during a future.
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14) In perfect competition, the marginal revenue curve is a vertical line equal to the price per unit at all volumes of sales. 15) In perfect competition, the profit-maximizing volume is the quantity at which the difference between the sales price and marginal cost is at its greatest. 16) In imperfect competition,.
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5) Fixed indirect production costs affect the calculation of ________ on the absorption income statement. Fixed indirect production costs do NOT affect the calculation of ________ on the contribution income statement. A) contribution margin; gross margin B) gross margin; contribution margin C) operating income; gross margin D) contribution margin; operating income 6) Variable administrative expenses.
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16) In a special order decision, which of the following costs are usually irrelevant to the decision? A) variable manufacturing costs B) fixed manufacturing costs C) variable selling costs D) variable indirect production costs 17) Surly Company makes small boats. The company produces and sells 5,500 boats per year at a selling price of $160.
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24) A disadvantage of engineering analysis which is used to estimate cost functions is ________. A) it fails to produce a cost function B) it is a costly process C) it is not acceptable under Generally Accepted Accounting Principles D) it cannot be used with mixed costs 25) In order to estimate cost functions using.
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12) Unallocated costs ________. A) are not recorded in the cost accounting system B) do not have cost drivers that can be used to relate the costs to cost objects C) have a direct relationship to a cost object D) have an identifiable relationship with a cost object 13) Companies must assign all nonproduction costs.
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44) In the linear cost function derived from regression analysis, the cost driver is the ________ variable and the cost to be explained is the ________ variable. A) dependent; independent B) independent; dependent C) intercept; dependent D) constant; independent 45) The Rumler Company used regression analysis to predict the annual cost of utilities. The results.
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37) Stefanko Manufacturing has prepared the following income statement: Sales$450,000 Cost of goods sold200,000 Gross margin250,000 Operating expenses196,000 Operating income$54,000 According to company records, $100,000 of Cost of Goods Sold and $100,000 of Operating Expenses are fixed. Required: A) Compute the contribution margin. B) Compute the contribution margin ratio. C) Compute the break-even point in sales dollars. 38) Bruder Company produces.
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27) The following information is available for Trump Corporation: Total fixed costs$300,000 Variable costs per unit$100 Selling price per unit$200 If total fixed costs increased to $600,000, then the break-even volume in dollars would increase by ________. A) 10.0% B) 50.0% C) 100% D) 200% 28) Assume Unicorn Company has the following information available: Selling price per unit$100 Variable cost per.
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6) All of the following can be sources of benchmarks EXCEPT for ________. A) competitors B) organization itself C) organizations with dissimilar processes D) organizations with similar processes 7) A hospital radiology department has the following activities: Activity Number     Activity Description 1Repair X-ray equipment 2Taking X-ray with X-ray equipment 3Wait time between patients 4Repeating an X-ray because the X-ray technician forgot.
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25) Schaefer Company has no beginning and ending inventories, and reports the following data about its only product: Direct materials used$200,000 Direct labor$80,000 Fixed indirect manufacturing$100,000 Fixed selling and administrative$150,000 Variable indirect manufacturing$20,000 Variable selling and administrative$60,000 Selling price(per unit)$50 Units produced and sold10,000 Schaefer Company uses the contribution approach to prepare the income statement. What is the contribution.
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11) Investors need more detailed information about products or services than managers. 12) An example of a strategic management decision is the establishment of a pricing policy for a new product. 4.2   Questions 1) A product such as Sure-Fine Graham Crackers, and a customer such as an Internet customer, are both examples of.
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4.9   Questions 1) In designing an activity-based cost accounting system, what is the first step? A) Collect data about costs and the physical flow of the cost-driver units. B) Determine the relationships among cost objects, activities, and resources. C) Determine the key components of the activity-based cost accounting system. D) Calculate and interpret the new.
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4) In perfect competition, all firms charge the same market price. The only decision for managers is ________. A) how to minimize costs B) how to maximize average revenue C) how much to produce D) how to minimize marginal costs 5) ________ is the additional cost resulting from producing and selling one additional unit. A) Marginal.
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6) Missouri Company has a current production capacity level of 200,000 units per month. At this level of production, variable costs are $0.60 per unit and fixed costs are $0.50 per unit. Current monthly sales are 173,000 units. Gates Company has contacted Missouri Company about purchasing 20,000 units at $1.00.
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31) Companies can reduce or eliminate committed fixed costs when demand falls during an economic downturn. 32) Volume-driven costs can be easily traced to products or services. 33) Managers cannot eliminate discretionary fixed costs. 34) The use of high-technology methods rather than labor in manufacturing products usually means a much greater fixed-cost component.
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13) A manufacturer has three types of inventory that include Raw Materials Inventory, Work-In-Process Inventory and Merchandise Inventory. 14) The McCain Company manufactures several products. The McCain Company has gathered the following information for the year ended December 31, 2015: Sales$110,000 Direct materials used$10,700 Fixed indirect production costs$10,900 Variable indirect production costs$7,900 Fixed direct labor$10,300 Variable direct.
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9) Cost accounting is that part of the cost management system that measures costs for the sole purpose of financial reporting. 10) A cost is a sacrifice of resources for a particular purpose. 11) A cost object is anything for which a separate measurement of costs is desired. 12) Customers, departments and territories.
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  4.1   Questions 1) To support managers' decisions, accountants develop cost management systems that are ________. A) also used by external users such as investors and lenders B) computer programs with specialized accounting language C) a collection of tools and techniques that identify how decisions affect costs D) composed of at least 400 cost pools 2) External.
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17) Consider the following linear mixed-cost function: Y = $120,000 + $2.70X Where: Y = total annual maintenance cost X = number of patient-days What does the $120,000 represent? A) variable cost per patient-day B) total variable cost C) fixed cost per patient-day D) total fixed cost 18) Consider the following linear mixed-cost function: Y = $110,000 + $5.50X Where: Y.
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4) To estimate the monthly maintenance cost for the maintenance department in a hospital, the following monthly costs are available: Monthly Expense                              Costs Supervisor Salary Expense$3,000 Depreciation Expense—Maintenance Equipment$5,000 Repairs Expense—Maintenance Equipment$5,000 Supplies Expense$7,000 Wages Expense—Maintenance Workers$10,000 The Supervisor Salary Expense and the Depreciation Expense are fixed costs. The remaining expenses are variable costs. There are 1,000 patient.
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69) Using activity analysis, Arnoldson Company has identified the appropriate cost driver for maintenance costs in a factory as the number of machine hours. The maintenance costs have been observed as follows within the relevant range of 5,000 to 8,000 machine-hours. Month     Maintenance Cost   Machine Hours January$7,9005,600 February$8,5007,100 March$7,4005,000 April$8,2006,500 May$9,1007,300 June$9,8008,000 July$7,8006,200 Required: 1. Estimate the cost function using the high-low.
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4.5   Questions 1) Merchandising and manufacturing companies account for ________ in the same way. A) design expenses B) customer service expenses C) selling expenses D) all of the above 2) A merchandising firm has ________ inventory account(s). A manufacturing firm has ________ inventory account(s). A) one; three B) three; one C) two; three D) three; three 3) Factory overhead does NOT.
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2.9   Questions 1) Seidner Company has the following information available: Total fixed costs$80,000 Targeted after-tax net income$18,000 Contribution margin per unit$2.00 Tax rate40% How many units must be sold to achieve the targeted after-tax net income? A) 45,400 B) 49,000 C) 55,000 D) 62,500 2) The Todd Dolhun Company has the following information available: Targeted after-tax net income$120,000 Total fixed costs$300,000 Contribution margin per.
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2.8   Questions 1) Which statement is FALSE? A) Each different sales-mix of products has a different break-even point. B) Changes in the sales-mix of products sold affects a company's net operating profit. C) Changes in the sales-mix of products sold affects a company's contribution margin. D) If the sales-mix of products sold changes, the break-even.
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34) The following data has been assembled for Robert Company. Use the high-low method. Month         Cost       Hours January$24,4002,000 February$39,0002,200 March$35,2802,750 April$36,4003,500 May$40,0004,000 The cost function is ________ where Y = Total cost and X = Number of hours. A) Y = $3,600 + $10.40X B) Y = $8,800 + $7.80X C) Y = $21,360 + $1.52X D) Y = $26,672 + $1.84X 35) The.
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3) Sandler Company has identified the following activities related to indirect production costs: Activity              Activity Costs    Cost Drivers Machine Setup$180,0001,500 setup hours Materials Handling$50,00012,500 pounds of materials Electric Power$20,00020,000 kilowatt hours Sandler Company has obtained the following data concerning two products: Product A     Product B Number of units produced4,00020,000 Direct materials cost$20,000$25,000 Direct labor cost$12,000$20,000 Number of setup hours100120 Pounds of materials used5001,500 Kilowatt-hours1,0002,000 Using activity-based.
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21) In an economic downturn, a company could temporarily reduce or eliminate a(n) ________. A) property taxes on factory building B) insurance on factory building C) lease payments on computers in corporate headquarters D) public relations department 22) Only major changes in the scale or scope of operations can change ________ in future periods. Managers.
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2) Henricks Company has the following information available: Revenue$500,000 Variable production costs$100,000 Fixed production costs$100,000 Variable selling costs$50,000 Fixed selling costs$50,000 What is the gross margin and net income? A) $200,000; $200,000 B) $250,000; $150,000 C) $300,000; $200,000 D) $400,000: $200,000 3) ________ is the excess of sales over the cost of goods sold. A) Gross margin B) Contribution-margin ratio C) Variable-cost ratio D) Contribution.
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3) A merchandising firm reports ________ as a current asset on the balance sheet. A) Raw Materials Inventory B) Finished Goods Inventory C) Work-in-Process Inventory D) Merchandise Inventory 4) The computation for Cost of Goods Manufactured on the income statement is ________. (Assume there are no Work-In-Process Inventories.) A) direct materials used plus direct production costs B).
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3) Today, in most manufacturing companies, workers oversee automated production processes that produce many different products. With respect to the products manufactured, the labor costs are considered to be ________. A) direct labor costs B) indirect production costs C) direct production costs D) period costs 4) To assign indirect costs to cost objects, which of.
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