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Study Resources (Accounting)

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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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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6.2   Questions 1) Company XYZ  is a small company with limited expertise with information technology.  Company XYZ has a contract with Company ZZ.  Company ZZ handles all of Company XYZ's information technology needs.  For Company XYZ, this is an example of ________. A) joint costs B) joint decision making C) outsourcing D) technology transfer 2) Which.
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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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11) A small appliance manufacturer is deciding whether to accept or reject a special order for 1,750 appliances.  There is sufficient capacity available for the special order.  What is relevant information for the decision whether to accept or reject the special order? A) the cost of the parts for the 1,750.
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11) When absorption costing is used for the income statement, the difference between sales and ________ is gross margin. A) manufacturing cost of goods sold B) selling expenses C) selling and administrative expenses D) variable expenses 12) Wyoming Company has the following data about its only product: Direct materials used$270,000 Direct labor180,000 Indirect manufacturing?fixed130,000 Selling and administrative?fixed150,000 Indirect manufacturing?variable120,000 Selling and.
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6.4   Questions 1) ________ is the item that restricts or constrains the production or sale of a product. A) A limiting factor B) A scarce resource C) Floor space D) All of the above 2) When a company has scarce resources, managers should emphasize the product that has ________. A) highest contribution margin per unit B) highest selling.
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27) Colbert Company has the following information about its only product: Direct materials used$9,000 Direct labor17,000 Variable factory overhead13,000 Fixed factory overhead8,000 Variable selling and administrative expenses22,000 Fixed selling and administrative expenses11,000 Units produced and sold10,000 Selling price per unit$20 Required: A) Prepare an income statement using the contribution approach. B) Prepare an income statement using the absorption approach. .
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21) The split-off point is the juncture in manufacturing where the joint products become individually identifiable. 22) Examples of joint products include chemicals, lumber and flour. 23) The relevant information for a sell or process further decision for joint products includes the costs incurred before the split-off point. 24) It is profitable to.
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21) When managers are making a decision regarding adding or dropping a product, ethical considerations may also be influential. 22) Freedom Company has three departments.  Data for the most recent year are presented below: Dept. X            Dept. Y            Dept. Z Sales$400$200$80 Variable expenses1285234 Unavoidable fixed expenses965212 Avoidable fixed expenses11610454 Required: A) Compute the operating income for Freedom Company. B) Compute the.
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11) Bird Company manufactures a part for its production cycle.  The costs per unit for 38,000 units of the part are as follows: Direct materials$3.00 Direct labor5.00 Variable factory overhead4.00 Fixed factory overhead4.00 Total costs$16.00 The fixed factory overhead costs are unavoidable.  Assume no other use for the facilities.  What is the highest price Bird Company.
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11) Precise but irrelevant information may still be useful 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.
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11) When deciding whether to add or delete a department, managers should keep the department as long as ________ from the department exceeds ________. A) contribution margin; variable costs B) contribution margin; common costs C) contribution margin; avoidable fixed costs D) contribution margin; unavoidable fixed costs 12) In deciding whether to add or delete a.
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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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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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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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11) Superbowl Corporation manufactures two products, Footballs and Helmets.  The following annual information was gathered: Footballs           Helmets Retail price per unit$54.00$33.00 Merchandise cost per unit43.0027.00 Total annual fixed costs are $25,000.  Assume Superbowl Corporation can sell either 8,000 footballs or 18,000 helmets at full capacity.  Which product should Superbowl Corporation sell to maximize profits? A) Footballs.
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5.2   Questions 1) ________ is (are) defined as any method used for making a choice. A) A decision model B) An implementation model C) Relevant costs D) The prediction model 2) If perfectly accurate and relevant information is not available for decision making, the accountant should consider using information that is ________. A) precise but irrelevant B) imprecise.
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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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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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6.3   Questions 1) ________ costs will not continue if an ongoing operation is changed or deleted. A) Avoidable B) Common C) Differential D) Incremental 2) ________ costs are costs that continue even if an operation is halted. A) Differential B) Sunk C) Unavoidable D) Avoidable 3) Riverside Industries has three product lines: A, B and C.  The following information is available: Product.
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11) With perfect competition, marginal revenue is the additional revenue resulting from the sale of an additional unit. 12) In perfect competition, the marginal revenue curve is a vertical line equal to the price per unit at all volumes of sales. 13) In perfect competition, the profit-maximizing volume is the quantity at.
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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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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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5.8   Questions 1) The product strategy in which companies first determine the price at which they can sell a new product and then design a product that can be produced at a low enough cost to provide an adequate profit margin is referred to as ________. A) full costing B) target costing C) predatory.
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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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6.5   Questions 1) ________ is(are) an example of joint products. A) Flour B) Chemicals C) Products of petroleum refining D) All of the above 2) Manufacturing costs incurred after the split-off point are known as ________ costs. A) joint B) product C) split-off D) separable 3) The ________ is the juncture in manufacturing where the joint products become individually identifiable. A) joint.
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21) Match Company produces a part that is used in the manufacture of one of its products.  The costs associated with the production of 5,000 units of this part are as follows: Direct materials$108,000 Direct labor156,000 Variable factory overhead72,000 Fixed factory overhead168,000 Total costs$504,000 Of the fixed factory overhead costs, $72,000 are avoidable.  Today Company has.
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5.6   Questions 1) Predatory pricing occurs when a firm sets ________. A) prices below their competitors' prices B) prices so low that competitors are driven out of the market C) different prices for different customers for the same product or service D) uniform prices 2) Discriminatory pricing occurs when a firm sets ________. A) prices below their.
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11) Sue Company is considering the production of a new product.  Sue Company has the following data available: Expected product life4 years Expected sales(units) over product life2,000 Variable production costs$42 per unit Variable selling costs$16 per unit Annual fixed production costs$15,000 Annual fixed selling costs$5,000 Research and development costs$184,000 Selling price$200 per unit What is the expected profit of.
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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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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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5.5   Questions 1) ________ is the additional cost resulting from producing and selling one additional unit. A) Marginal cost B) Common cost C) Opportunity cost D) Target cost 2) Price elasticity measures the ________. A) amount customers are willing to pay for a product or service B) effect of price changes on sales volume C) number of units a.
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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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5.3   Questions 1) Under absorption costing, all ________ costs are product or inventoriable costs. A) direct and indirect manufacturing B) direct manufacturing C) indirect manufacturing D) selling and administrative 2) Under absorption costing, product costs include direct manufacturing costs and ________. A) variable selling and administrative expenses B) indirect manufacturing costs?variable costs only C) indirect manufacturing costs?fixed costs only D).
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  6.1   Questions 1) The key to determining the financial difference between two alternative courses of action is to identify the ________. A) opportunity cost of one alternative B) joint cost of both alternatives C) differential costs and revenues D) joint cost of one alternative 2) The term opportunity cost applies to a resource that a company.
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5.4   Questions 1) Which item is usually NOT important to special order decisions? A) affect of special order on regular business B) whether idle capacity is available C) antitrust issues concerning price discrimination D) all are important 2) Missouri Company has a current production capacity level of 200,000 units per month.  At this level of production,.
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21) Oregon Company has the following data about its only product: Direct materials used$500,000 Direct labor180,000 Indirect manufacturing?fixed100,000 Selling and administrative?fixed150,000 Indirect manufacturing?variable120,000 Selling and administrative?variable60,000 Selling price(per unit)75 Units produced and sold20,000 Oregon Company uses the contribution approach.  What is the contribution margin? A) $450,000 B) $550,000 C) $640,000 D) $700,000 22) Mexico Company has the following data about its only product: Direct materials.
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11) Tucson Corporation has a joint process that produces three products: X, Y and Z.   Each product may be sold at split-off or processed further and then sold.  Joint-processing costs for a year amount to $100,000.  Other data follows: Sales ValueSeparable ProcessingSales Value Product      at Split-Off     Costs after Split-Off     at Completion X$128,000$16,000$160,000 Y75,00026,00099,000 Z32,60020,00050,000 Processing Product X beyond 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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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) 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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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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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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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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5.7   Questions 1) The total of all manufacturing costs plus the total of all selling and administrative costs is equal to ________. A) marginal cost B) target cost C) full cost D) contribution cost 2) Which is NOT a popular markup formula for pricing? A) as a percentage of total manufacturing costs plus total selling and administrative.
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28) Georgia Company has been producing and selling 100,000 units per year.  They have excess capacity.  The following budget was prepared for the next year: Selling price per unit$12.50 Direct materials per unit5.00 Direct labor per unit3.00 Variable overhead per unit1.00 Variable selling and administrative per unit0.25 Total fixed overhead costs$80,000 Total fixed selling and administrative35,000 Required: A) Prepare.
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