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Managerial Accounting
Final Exam Cumulative
31
Accounting
05/04/2012

Additional Accounting Flashcards

 


 

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Term

Cotter pins and lubricants used irregularly in a production process are classified as

A. miscellaneous expense

B. direct materials

C. indirect materials

D. nonmaterial materials

Definition
C. indirect materials
Term

Which of the following is NOT classified as Direct Labor?

A. Bottlers of beer in a brewery

B. Copy machine operators at a copyC. Wages of supervisors shop

C. Wages of supervisors

D. Bakers in a Bakery

Definition

C. Wages of supervisors

 

Term

Which one of the following is an example of a period cost?


A. a change in benefits for the union workers who work in the New York Plant of a Fortune 1000 manufacturer


B. Workers' compensation insurance on factory workers' wages allocated to the factory


C. A box cost associated with computers


D. A manager's salary for work that is done in the corporate office

Definition

D. A manager's salary for work that is done in the corporate office 

Term

Managerial accounting does NOT encompass

A. calculating product cost

B. calculating earnings per share

C. determining cost behavior

D. profit planning

Definition
B. Calculating Earnings Per Share
Term

Use the following information to answer this question:

[image]

Assume direct materials used is $1,500,000. Total manufacturing cost equal:

A. $3,090,000

B. $3,081,000

C. $2,790,000

D. $3,720,000

Definition
A. $3,090,000
Term

If manufacturing overhead has a credit balance at the end of a period, then

A. overhead has been underapplied

B. the overhead assigned to work in process inventory is less than the overhead incurred

C. overhead has been overapplied

D. management must take corrective action

Definition
C. overhead has been overapplied
Term

An important feature of a job order cost system is that each job

A. must be similar to previous jobs completed

B. has its own distinguising characteristics

C. must be completed before a new job is accepted

D. consists of one unit of output

Definition
B. has its own distinguising characteristics
Term

If manufacturing overhead has been overapplied during the year, the adjusting entry at the end of the year will show a

A. debit to manufacturing overhead

B. credit to finished goods inventory

C. debit to cost of goods cold

D. credit to work in process inventory

Definition
A. debit to manufacturing overhead
Term

Kinny company applies overhead on the basis of 150% of direct labor cost. Job No. 176 is charged with $50,000 of direct material costs and $60,000 of manufacturing overhead. The total manufacturing costs for Job No. 176 is

A. $110,000

B. $200,000

C. $150,000

D. $135,000

Definition
C. $150,000
Term

Barnes Company applies overhead on the basis of machine hours. Given the following data, compute overhead applied and the under- or overapplication of overhead for the period:

[image]

  $1,400,000 applied and $30,000 overapplied
   
$1,500,000 applied and $30,000 overapplied      
$1,400,000 applied and $30,000 underapplied       
$1,430,000 applied and neither under- nor overapplied
Definition
C. $1,400,000 applied and $30,000 underapplied
Term

A process cost system would be used by all of the following except a(n)


chemical company.      
  advertising company.       
oil company.      
computer chip company.
Definition
B. advertising company.
Term

In a process cost system, unit costs are determined using a


numerator of costs of each job.      
  denominator of units produced during the period.
    
denominator of units produced for the job.      
denominator of units produced for the day.
Definition
  denominator of units produced during the period.
Term

Equivalent units of production are a measure of


  units completed and transferred out.      
units transferred out.      
units in ending work in process.      
the work done in a period expressed in fully completed units.
Definition
D. the work done in a period expressed in fully completed units.
Term

In the production cost report, the total

physical units accounted for equals the costs accounted for.      
physical units accounted for equals the units to be accounted for.      
costs charged equals the units to be accounted for. 0%    
costs accounted for equals the costs of the units started into production.
Definition
physical units accounted for equals the units to be accounted for.
Term

Reed Manufacturing has recently tried to improve its analysis for its manufacturing process. Units started into production equaled 6,000 and ending work in process equaled 400 units. Reed had no beginning work in process inventory. Conversion costs are applied equally throughout production, and materials are applied at the beginning of the process. How much is the materials cost per unit if ending work in process was 25% complete and total materials costs equaled $60,000?

$10.00   [image]    
$10.53      
  $37.50      
$9.38


Definition

 

C. $37.50

 

Term

Value-added activities


increase the worth of a product or service to customers.      
involve resource usage and related costs that customers are willing to pay for.      
are the activities of actually manufacturing a product or performing a service.      
[image]  all of these answers.
Definition
D. all of these answers.
Term

A well-designed activity-based costing system starts with


identifying the activity-cost pools. 0%    
computing the activity-based overhead rate.      
assigning manufacturing overhead costs for each activity cost pool to products.      
analyzing the activities performed to manufacture a product.
Definition
D. analyzing the activities performed to manufacture a product.
Term

Non-value-added activities


  should be reduced or eliminated.      
involve resource usage customers are willing to pay for.      
increase both the cost and market value of a product.      
cannot be differentiated from value-added activities.
Definition
A. should be reduced or eliminated.
Term

Which best describes the flow of overhead costs in an activity-based costing system?


Overhead costs → direct labor cost or hours → products      
  Overhead costs → products      
Overhead costs → activity cost pools → cost drivers → products      
Overhead costs → machine hours → products

Definition
Overhead costs → activity cost pools → cost drivers → products
Term

A company incurs $1,800,000 of overhead each year in three departments: Processing, Packaging, and Testing. The company performs 800 processing transactions, 200,000 packaging transactions, and 2,000 tests per year in producing 400,000 drums of oil and 600,000 drums of sludge. The following data are available:


[image]

The amount of overhead assigned to sludge is


$900,000.      
$828,750.       
$971,250.      
$690,000.
Definition

A. $900,000.
Term

In using the high-low method, the fixed cost

is determined by subtracting the total cost at the high level of activity from the total cost at the low activity level.      
is determined by adding the total variable cost to the total cost at the low activity level.      
is determined before the total variable cost.      
may be determined by subtracting the total variable cost from either the total cost at the low or high activity level.

Definition
D. may be determined by subtracting the total variable cost from either the total cost at the low or high activity level.
Term

CVP analysis does not consider


level of activity.      
fixed cost per unit.      
variable cost per unit.      
sales mix.

Definition
fixed cost per unit.
Term

A mixed cost contains


  a variable element and a fixed element.      
both selling and administrative costs.      
both retailing and manufacturing costs.      
both operating and nonoperating costs.
Definition
A. a variable element and a fixed element.
Term

Forms, Inc. wants to sell a sufficient quantity of products to earn a profit of $40,000. If the unit sales price is $10, unit variable cost is $8, and total fixed costs are $80,000, how many units must be sold to earn income of $40,000?


60,000 units      
40,000 units      
15,000 units      
600,000 units

Definition
A. 60,000 units
Term

If a company had a contribution margin of $500,000 and a contribution margin ratio of 40%, total variable costs must have been


$750,000.      
$300,000.      
$1,250,000.      
$200,000.  

Definition
A. $750,000.
Term

The contribution margin ratio is


  sales divided by contribution margin. 0%    
sales divided by fixed expenses.      
sales divided by variable expenses.      
contribution margin divided by sales.

Definition
D. contribution margin divided by sales.
Term

If the degree of operating leverage is 4, then a one percent change in quantity sold should result in a four percent change in:


unit contribution margin      
revenue      
variable expense      
net operating income

Definition
4. net operating income
Term

In 2008, McDougal sold 3,000 units at $500 each. Variable expenses were $350 per unit, and fixed expenses were $195,000. The same variable expenses per unit and fixed expenses are expected for 2009. If McDougal cuts selling price by 4%, what is McDougal's break-even point in units for 2009?

1,300      
1,354      
1,440      
1,500  


Definition
D. 1,500
Term

ye Company can sell all the units it can produce of either Plain or Fancy but not both. Plain has a unit contribution margin of $96 and takes two machine hours to make and Fancy has a unit contribution margin of $120 and takes three machine hours to make. There are 2,400 machine hours available to manufacture a product. What should Dye do?

Make Fancy which creates $24 more profit per unit than Plain does.      
  Make Plain which creates $8 more profit per machine hour than Fancy does.      
Make Plain because more units can be made and sold than Fancy.      
The same total profits exist regardless of which product is made.


Definition
  Make Plain which creates $8 more profit per machine hour than Fancy does.
Term

Jermaine's Vittles can produce and sell only one of the following two products:


[image]

The company has oven capacity of 600 hours. How much will contribution margin be if it produces only the most profitable product?


$6,000      
$8,000      
$9,000       
$12,000
Definition
C. $9,000
Term
Definition