Accounting Multiple Choice Questions Quiz

| July 29, 2018

1. In a process cost system, the cost attributable to abnormal losses that occur due to unexpected circumstances, such as machine operator error, should be assigned to:a. Ending work-in-process inventory.b. Cost of goods manufactured and ending work-in-process inventory, in the ratio of units worked on, during the period to units remaining in work-in-process inventory.c. A separate loss account, in order to highlight production inefficiencies.d. Cost of good manufactured (transferred out).1. In a process cost system, how is the unit cost affected in a production cost report when materials are added in a department, subsequent to the first department; and the added materials result in additional units?a. It causes an increase in the preceding department’s unit cost that necessitates an adjustment of the transferred-in unit cost.b. It causes a decrease in the preceding department’s unit cost that necessitates an adjustment of the transferred-in unit cost.c. It causes an increase in the preceding department’s unit cost, but does not necessitate an adjustment of the transferred-in unit cost.d. It causes a decrease in the preceding department’s unit cost, but does not necessitate an adjustment of the transferred-in unit cost.1. Under which of the following conditions will the first-in, first-out method of process costing produce the same cost-of-goods-manufactured amount as the average cost method?a. When goods produced are homogeneous in nature.b. When there is no beginning inventory.c. When there is no ending inventory.d. When beginning and ending inventories are each fifty percent complete.1. Each of the following is a method by which to allocate joint costs, except:a. Chemical analysis.b. Relative sales value.c. Relative weight, volume, or linear measure.d. Relative marketing costs.Which of the following is most likely to be accounted for as a by-product?a. Heating oil resulting from processing crude oil at a refinery.b. Cream resulting from processing raw milk at a dairy.c. Sawdust resulting from processing lumber at a lumber mill.d. Ground beef resulting from processing beef at a meat packer.A budget that adds a new month at the end of the budget when a month is completed, resulting in a budget that is always one year in advance, is a:a. Flexible budget.b. Static budget.c. Continuous budget.d. Capital budget.1. Consider the following budgets:(1) Direct materials.(2) Income statement.(3) Production.(4) Cost-of-goods-sold.In what order should these budgets be prepared?a. 2, 3, 1, 4b. 3, 4, 1, 2c. 1, 3, 4, 2d. 3, 1, 4, 21. If a company uses a two-variance analysis for overhead variances, and uses a predetermined rate for absorbing manufacturing overhead, the volume variance is the:a. Underapplied or overapplied variable cost element of overhead.b. Underapplied or overapplied fixed cost element of overhead.c. Difference in budgeted costs and actual costs of fixed overhead items.d. Difference in budgeted costs and actual costs of variable overhead items.1. There are several advantages to using activity-based costing. Which of the following is one of these advantages?a. Services not performed in a department are allocated a portion of the cost of operating that department.b. Each department can choose the activity-base that relates best to its cost.c. Simplified costing is time-consuming and expensive to administer.d. Activity-based rates are much less time-consuming to prepare.1. Which of the following is the best example of a non-financial performance measure for the internal business process perspective of a professional baseball teams balanced scorecard?a. Number of repeat season ticket holders.b. Winloss record.c. Revenue from team apparel.d. Number of top minor league prospects.1. All of the operating expenses in a professional firm are:a. Overhead costs.b. Period costs.c. Labor costs.d. Product costs.1. The practice of taking overhead costs that were previously in a single indirect cost pool, and separating them into a number of homogeneous cost pools with separate cost drivers for each pool is:a. Peanut-butter costing.b. Process costing.c. Activities-based costing.d. Job costing.1. Which of the following is a more descriptive term of the type of cost accounting often called direct costing?a. Prime costing.b. Out-of-pocket costing.c. Variable costing.d. Relevant costing.1. Which of the following would cause the break-even point to change?a. Sales increased.b. Fixed costs increased, due to addition to physical plant.c. Total variable costs increased as a function of higher production.d. Total production decreased.1. Absorption cost is required by:a. Federal income taxes.b. External reports but not income taxes.c. Both external and income tax reports.d. Neither external nor income tax reports.The excess of revenue over variable costs; including manufacturing, selling, and administrative, is called:a. Gross margin.b. Manufacturing margin.c. Contribution margin.d. Segment margin.1. The difference in cost between two alternatives, such as the choice to make a component part of a final product, instead of buying the part from an outside supplier, is called:a. Variable cost.b. Differential cost.c. Product cost.d. Indirect cost.

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