| June 4, 2016

Question 1

Although depreciation is always a period cost in a merchandising firm, it can be a product cost in a manufacturing firm.



Question 2

Even departmental overhead rates will not correctly assign overhead costs in situations where a company has a range of products that differ in volume, lot size, or complexity of production.



Question 3

An increase in the number of units sold will decrease the break-even point.



Question 4

Fixed cost per unit increases as activity decreases and decreases as activity increases.



Question 5

The usual starting point in budgeting is to make a forecast of cash receipts and cash disbursements.



Question 6

Which of the following comparisons best isolates the impact that changes in prices of inputs and outputs have on performance?

a. static planning budget and flexible budget

b. static planning budget and actual results

c. flexible budget and actual results

d. master budget and static planning budget

Question 7

If the actual labor hours worked exceed the standard labor hours allowed, what type of variance will occur?

a. Favorable labor efficiency variance.

b. Favorable labor rate variance.

c. Unfavorable labor efficiency variance.

d. Unfavorable labor rate variance.

Question 8

Which of the following performance measures will decrease if there is an increase in the accounts receivable?

Return on Investment Residual Income

A) Yes Yes

B) No Yes

C) Yes No

D) No No





Question 9

Which of the following will not result in an increase in return on investment (ROI), assuming other factors remain the same?

a. A reduction in expenses.

b. An increase in net operating income.

c. An increase in operating assets.

d. An increase in sales.

Question 10

Lyons Company consists of two divisions, A and B. Lyons Company reported a contribution margin of $50,000 for Division A, and had a contribution margin ratio of 30% in Division B, when sales in Division B were $200,000. Net operating income for the company was $25,000 and traceable fixed expenses were $40,000. Lyons Company’s common fixed expenses were:

a. $85,000

b. $70,000

c. $45,000

d. $40,000

Question 11

The PDQ Company makes collections on credit sales according to the following schedule:

25% in month of sale

70% in month following sale

4% in second month following sale

1% uncollectible

The following sales have been budgeted:

Month Sales

April $100,000

May $120,000

June $110,000

Cash collections in June would be:

a. $113,400

b. $110,000

c. $111,000

d. $115,500

Question 12

Misemer Corporation is developing standards for its products. One product requires an input that is purchased for $57.00 per kilogram from the supplier. By paying cash, the company gets a discount of 8% off this purchase price. Shipping costs from the supplier’s warehouse amount to $3.60 per kilogram. Receiving costs are $0.26 per kilogram. The standard price per kilogram of this input should be:

a. $57.70

b. $56.30

c. $65.42

d. $57.00

Question 13

Vodopich Corporation has provided the following data from its activity-based costing system:

Activity Cost Pool Total Cost Total Activity

Assembly $698,950.00 35,000 machine-hours

Processing orders $85,101.00 1,900 orders

Inspection $107,440.00 1,580 inspection-hours

Data concerning the company’s product P58Z appear below:

Annual unit production and sales 400

Annual machine-hours 1,000

Annual number of orders 90

Annual inspection-hours 30

Direct material cost $34.78 per unit

Direct labor cost $23.52 per unit

According to the activity-based costing system, the unit product cost of product P58Z is closest to:

a. $113.33 per unit

b. $58.30 per unit

c. $123.40 per unit

d. $118.30 per unit

Question 14

Green Company’s costs for the month of August were as follows: direct materials, $27,000; direct labor, $34,000; selling, $14,000; administrative, $12,000; and manufacturing overhead, $44,000. The beginning work in process inventory was $16,000 and the ending work in process inventory was $9,000. What was the cost of goods manufactured for the month?

a. $105,000

b. $132,000

c. $138,000

d. $112,000

Question 15

Placek Hospital bases its budgets on patient-visits. The hospital’s static budget for October appears below:

Budgeted number of patient visits 6,800

Budgeted variable overhead costs:

Supplies $2.60 per patient visit $17,680

Laundry $5.60 per patient visit $38,080

Total variable overhead cost $55,760

Budgeted fixed overhead costs:

Wages and salaries $21,080

Occupancy costs $44,880

Total fixed overhead costs $65,960

Total budgeted overhead costs $121,720

The total overhead cost at an activity level of 7,700 patient-visits per month should be:

a. $129,550

b. $121,720

c. $129,100

d. $137,830

Question 16

Carver Company produces a product which sells for $30. Variable manufacturing costs are $15 per unit. Fixed manufacturing costs are $5 per unit based on the current level of activity, and fixed selling and administrative costs are $4 per unit. A selling commission of 10% of the selling price is paid on each unit sold. The contribution margin per unit is:

a. $3

b. $15

c. $8

d. $12

Question 17

The following materials standards have been established for a particular product:

Standard quantity per unit of output 5.1 grams

Standard price $11.95 per gram

The following data pertain to operations concerning the product for the last month:

Actual materials purchased 6,800 grams

Actual cost of materials purchased $86,360

Actual materials used in production 6,300 grams

Actual output

1,000 units

What is the materials quantity variance for the month?

a. $15,240 U

b. $6,350 U

c. $14,340 U

d. $5,975 U

Question 18

What is the most important concept you have learned from this course? Will you be able to use this in your current job or in the future. How?

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