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Study Resources (Accounting)

2.6   Questions 1) ________ is the excess of sales over the cost of goods sold. A) Gross margin B) Contribution-margin ratio C) Variable-cost ratio D) Contribution margin 2) Contribution margin is equal to ________. A) sales minus variable costs B) sales minus fixed costs C) sales minus variable production costs D) sales minus production costs 3) The following information is available.
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4.2   Questions 1) What types of firms need cost accounting? A) manufacturing firms and service organizations B) service organizations and nonprofit organizations C) manufacturing firms and nonprofit organizations D) manufacturing firms, service organizations, and nonprofit organizations 2) Which statement is FALSE? A) A cost may be defined as a sacrifice or giving up of resources for a.
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2.8   Questions 1) Company TTT has the following information available: Total fixed costs$84,000 Targeted after-tax net income$18,000 Contribution margin per unit$6.20 Tax rate40% How many units must be sold to achieve the targeted after-tax net income? A) 14,223 B) 17,853 C) 18,387 D) 21,504 2) The Forever Memories Company has the following information available: Targeted after-tax net income$67,500 Total fixed costs$370,000 Contribution margin per.
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21) Presented below is the production data for six months of the year showing the mixed costs incurred by Brooklyn Company. Month               Cost             Units July$7,5004,000 August11,2509,500 September11,5009,000 October11,70010,500 November13,50012,000 December12,85010,000 Brooklyn Company uses the high-low method to analyze mixed costs.  The predicted total cost at an operating level of 10,000 units is ________. A) $11,725 B) $11,800 C) $12,000 D) $12,500 22) The high-low method.
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1.7   Questions 1) Which company has NOT engaged in accounting fraud in the past ten years? A) Enron B) Tyco C) Adelphia D) Smucker Quality Beverages Inc. 2) What do Certified Management Accountants and Certified Public Accountants have in common? A) Both groups are licensed to practice by state licensing agencies. B) Both groups follow codes of conduct. C).
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19) A manufacturing company has identified several costs. Indicate whether each of the following costs is an Inventoriable cost(I) or a Period cost(P): ________ 1. depreciation on factory equipment ________ 2. depreciation on treasurer's desk ________ 3. direct materials ________ 4. factory supplies ________ 5. indirect labor ________ 6. repairs expense?factory ________ 7. office supplies ________ 8. advertising.
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2.2   Questions 1) When analyzing costs, accountants should think of variable costs on a ________ basis and fixed costs on a ________ basis. A) total; total B) per-unit; per-unit C) total; per-unit D) per-unit; total 2) As sales volume decreases in the relevant range, fixed costs per unit ________, but total fixed costs ________. A) increase; do.
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4.8   Questions 1) ________ is the process of comparing products against the best industry standards. A) Activity-based costing B) Continuous process improvements C) Benchmarking D) GPK 2) A(n) ________ is the cost of an activity that cannot be eliminated without affecting a product's value to the customer. A) inventoriable cost B) unallocated cost C) value-added cost D) non-value-added cost 3) ________.
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11) In a manufacturing company, unsold, partially complete products are called work-in-process inventory. 12) In a manufacturing company, product costs appear on either the balance sheet or income statement, but not both. 13) Period costs become expenses during a future period. 14) A merchandising company has raw materials inventory. 15) For a merchandising firm,.
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3.5   Questions 1) To estimate or approximate cost functions, managers have a broad selection of methods that do NOT include ________. A) engineering analysis B) account analysis C) sales mix analysis D) visual fit method 2) ________ and ________ rely on a logical analysis of the cost environment instead of an explicit analysis of prior cost.
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4.7   Questions 1) ________ is a name for a system that first accumulates indirect resource costs for each of the activities of an organization and then assigns the cost of each activity to the cost objects that require that activity. A) Activity-based management B) Activity-based costing C) Cost accounting D) Activity-based allocation 2) Which of the.
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21) Committed fixed costs can be altered by management if management decides that different levels of spending are desirable. 22) Companies can recover fixed capacity costs when demand falls during an economic downturn. 23) Discretionary fixed costs have direct relationships with levels of capacity or output activity. 24) Managers cannot eliminate discretionary fixed.
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11) Storing inventories and transporting incomplete products in a plant are examples of value-added activities. 12) Companies try to maximize non-value-added costs. 13) Benchmarking is the continuous process of comparing products to the average industry standards. 14) A reason more organizations are adopting activity-based costing systems is the complexity of manufacturing operations. 15) List.
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2.5   Questions 1) The ________ is the change in total results under a new condition, in comparison with some given or known condition. A) incremental effect B) detrimental effect C) conditional effect D) exclusive effect 2) Gokey Company has a contribution-margin ratio of 0.30.  Targeted net income is $76,800 and targeted sales volume in dollars is.
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11) In a corporate setting, a mortgage payment would be identified as a ________. A) purely variable cost B) discretionary fixed cost C) committed fixed cost D) mixed cost 12) A lump sum amount of money set aside for research and development would be called a ________. A) purely variable cost B) discretionary fixed cost C) committed fixed.
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51) The high-low method uses estimated cost data to approximate the cost function. 52) Least-squares regression provides statistical information about the reliability of its cost estimates. 53) In a regression analysis, the constant from the linear cost function is a measure of reliability. 54) If regression analysis is used when measuring cost behavior,.
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21) What are four situations that create pressures for unethical behavior as summarized in Financial Executive? 22) Marjorie is a cost accountant in a large publicly held company.  She believes other employees in her company are engaged in unethical behavior.  She has evidence from the accounting records that suggests senior executives.
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5.1   Questions 1) Historical or past information can have an indirect bearing on a decision because ________. A) the past can be changed B) it can help predict the future C) past decisions are always good decisions D) none of the above 2) In the decision-making process, the accountant's primary role is ________. A) making the decision B).
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3.3   Questions 1) When managers graph a linear cost function with one cost driver, the intercept represents the ________ cost and the slope represents the ________ cost. A) variable; fixed B) fixed; variable C) fixed; mixed D) variable; mixed 2) A cause and effect relationship between a ________ and a ________ is desirable in order to.
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11) Managers apply two criteria to obtain accurate and useful cost functions.  These criteria are ________. A) plausibility and believability B) plausibility and reliability C) reliability and validity D) believability and plausibility 12) In relation to a cost function, the term reliability means ________. A) whether the costs and activities can be easily observed B) whether the.
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11) Depreciation expense on assembly equipment is an example of a direct cost for a manufactured product. 12) Costs that can be allocated to a cost object are called direct costs. 13) Cost allocation is used to assign direct costs to cost objects. 14) Most cost allocation bases are not cost drivers. 15) A.
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3.1   Questions 1) Many organizations use a linear relationship with a single cost driver to describe a cost even though the cost may have multiple cost drivers.  Why? A) This approach is easier and less expensive. B) The cost of developing a more complex function is greater than the benefit. C) Cost estimates from.
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2.1   Questions 1) To predict costs and manage them on a day-to-day basis, managers must identify: A) cost of resources used B) cost drivers C) key activities and resources used to perform activities D) all of the above 2) Cost drivers are ________. A) the different functions in the value chain B) different types of functional areas in.
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3.2   Questions 1) The fixed costs required to achieve a desired level of production or to provide a desired level of service, while maintaining product or service attributes, are ________. A) discretionary fixed costs B) mixed costs C) capacity costs D) cost-reducing costs 2) ________ arise as a result of strategic decisions about the scale and.
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11) In a manufacturing firm, the finished goods inventory account is only found on the balance sheet. 12) A manufacturer has three types of inventory that include direct materials inventory, work in process inventory and merchandise inventory. 13) The Palin Company manufactures several products. The Palin Company has gathered the followinginformation for.
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59) The EEE Company has obtained the following data: Month            Indirect Production Costs         Direct Labor Hours July$92,0954,900 August105,0565,480 September81,8023,700 October99,4004,400 November109,7946,000 December97,4043,900 Required: A) Using the high-low method, determine the cost function for the above data.  Round to two decimal places. B) If direct labor hours equal 10,000, what are the total expected indirect production costs? 60) AAA Electric Company used least squares.
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4.6   Questions 1) 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) direct materials used plus direct labor plus indirect production costs C) direct materials used plus direct labor D) direct materials used plus direct labor.
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2.7   Questions 1) ________ is the relative proportions or combinations of quantities of different products that comprise total sales. A) Sales mix B) Constant mix C) Fluctuating mix D) Variable cost ratio 2) Assume the following facts for two products, Zip and Zap: Zip        Zap           Sales mix3 units1 unit Selling price per unit$21.60$28.80 Variable costs per unit$14.40$16.80 If total fixed costs.
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11) ________ contain elements of both fixed and variable cost behavior. A) Committed fixed costs B) Discretionary fixed costs C) Capacity costs D) Mixed costs 12) The cost of using the telephone, which involves a flat rate per month plus a fee for every local and long-distance call would be a ________ cost. A) step B) fixed C).
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4.9   Questions 1) In designing an activity-based costing system, what is the first step? A) collecting data about costs B) determining the relationships among cost objects, activities, and resources C) determining the key components of the activity-based costing system D) calculating the costs of the product 2) Which of the following is NOT a valid step.
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2.3   Questions 1) The level of sales at which revenues equal expenses and net income is zero is called the ________. A) margin of safety B) contribution margin C) break-even point D) point of no return 2) Hot Company, a producer of salsa, has the following information: Income tax rate30% Selling price per unit$8.00 Variable cost per unit$3.00 Total fixed.
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4.4   Questions 1) Which purpose of cost allocation usually dominates most business situations? A) to justify costs or obtain reimbursement B) to compute income and asset valuations for financial reporting C) to give feedback for performance evaluation D) to predict the economic effects of strategic and operational control decisions 2) Which is NOT a purpose of.
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11) According to the IMA's Statement of Ethical Professional Practice, the standard of credibility requires ________. A) mitigating actual conflicts of interest B) maintaining an appropriate level of professional expertise by continually developing knowledge and skills C) communicating information fairly and objectively D) performing professional duties in accordance with relevant laws, regulations and technical.
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4.5   Questions 1) When determining the product cost of a manufactured product, ________. A) direct material costs include minor items such as tacks or glue B) direct labor costs may not include employee benefits C) indirect production costs may include selling costs D) there may be no direct labor costs 2) In a merchandising company, ________. A).
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11) If the contribution margin per unit increases, what is the effect on the break-even point?  (Assume no other changes.) A) The break-even point increases. B) The break-even point decreases. C) The break-even point remains the same. D) The break-even point will be zero. 12) Company XX has the following information available: Selling price per unit$100 Variable.
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31) 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) fixed cost; variable cost D) mixed cost; dependent 32) When examining the output from regression analysis, the cost driver is the.
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28) Identify the following planned costs as: (A) purely variable costs (B) discretionary fixed costs (C) committed fixed costs (D) mixed costs (E) step costs ________ 1. Mortgage payment on factory building. ________ 2. Electricity used in operating equipment.  The utility company charges a base rate of $100 per month plus $0.10 per hour. ________ 3. A lump.
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11) Which of the following statements about highly leveraged companies is true? A) Fixed costs are high and variable costs are low. B) Large changes in sales volume result in larger changes in net income. C) There is more risk with highly leveraged companies. D) All of these answers are correct. 12) What is the.
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  4.1   Questions 1) What type of users need detailed cost information about products or services? A) creditors B) investors C) managers D) government regulators 2) What type of users need aggregate cost information about products or services? A) managers B) external users C) factory supervisors D) internal users 3) A cost management system provides ________. A) measures of inventory value and cost.
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31) The equation for the income statement is: 32) Wildwood Corporation produces one product.  Total fixed costs are $500,000. The unit selling price is $68.50 and the unit variable cost is $50.95. Required: A) Compute the contribution margin per unit. B) Compute the contribution-margin ratio. C) Compute the break-even point in units. D) Compute the break-even volume.
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2.4   Questions 1) The horizontal axis on the cost-volume-profit graph is the ________. A) dollars of cost B) sales volume in units C) dollars of revenue D) net income 2) The vertical axis on the cost-volume-profit graph is the ________. A) dollars of cost B) sales volume in units C) dollars of revenue D) dollars of cost and revenue 3) Which.
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4.3   Questions 1) Which of these costs is NOT an indirect production cost for a manufactured chair? A) rental cost of factory building B) depreciation expense on factory equipment C) cost of legal staff to identify legal issues associated with the chair D) salary of factory supervisor 2) Which of the following costs is a direct.
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11) Account analysis and engineering analysis will remain the ________ methods of measuring cost behavior because the other methods ________. A) secondary; are more objective B) secondary; are more accurate C) primary; require more past cost data D) primary; are too difficult to work with 12) Which statement is FALSE regarding the high-low method to.
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3.4   Questions 1) Activity analysis is used to ________. A) identify relevant costs for decision making B) classify costs C) identify an appropriate cost driver D) predict future costs 2) The process of identifying appropriate cost drivers and their effects on the costs of making a product or providing a service is called ________. A) account analysis B).
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