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The standard cost is how much a product should cost to manufacture

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The standard cost is how much a product should cost to manufacture;True or False: Please indicate whether each statement is true or false. (2 points per question);1. The standard cost is how much a product should cost to manufacture.;2. Because accountants have financial expertise, they are the only ones that are able to set standard costs for the production area.;3. An unfavorable cost variance occurs when budgeted cost at actual volumes exceeds actual cost.;4. A centralized business organization is one in which all major planning and operating decisions are made by top management.;5. The plant managers in a cost center can be held responsible for major differences between budgeted and actual costs in their plants.;6. Property tax expense for a department store's store equipment is an example of a direct expense.;7. Differential revenue is the amount of increase or decrease in revenue expected from a particular course of action as compared with an alternative.;8. The product cost concept includes all manufacturing costs plus selling and administrative expenses in the cost amount to which the markup is added to determine product price.;9. When a bottleneck occurs between two products, the company must determine the contribution margin for each product and manufacture the product that has the highest contribution margin per bottleneck hour.;10. Care must be taken involving capital investment decisions, since normally a long-term commitment of funds is involved and operations could be affected for many years.;11. Average rate of return equals average investment divided by estimated average annual income.;12. Managers depend on product costing to make decisions regarding continuing operations, advertising, and product mix.;13. The single plantwide overhead rate method is very expensive to apply.;14. In the just-in-time (JIT) philosophy, unexpected downtime is the result of unreliable processes.;15. In a just-in-time (JIT) system, the work in process account will show more transactions than in a traditional cost system.;Multiple Choice (2 points per question);16. If the actual quantity of direct materials used in producing a commodity differs from the standard quantity, the variance is termed;a. controllable variance;b. price variance;c. quantity variance;d. rate variance;17. The Joyner Corporation purchased and used 126,000 board feet of lumber in production, at a total cost of $1,449,000. Original production had been budgeted for 22,000 units with a standard material quantity of 5.5 board feet per unit and a standard price of $12 per board foot. Actual production was 23,000 units.;Compute the material price variance.;a. 63,000F;b. 63,000U;c. 6,000F;d. 6,000U;18. The standard factory overhead rate is $10 per direct labor hour ($8 for variable factory overhead and $2 for fixed factory overhead) based on 100% capacity of 30,000 direct labor hours. The standard cost and the actual cost of factory overhead for the production of 5,000 units during May were as follows;Standard: 25,000 hours at $10 $250,000;Actual: Variable factory overhead 202,500;Fixed factory overhead 60,000;What is the amount of the factory overhead volume variance?;a. $12,500 favorable;b. $10,000 unfavorable;c. $12,500 unfavorable;d. $10,000 favorable;19. Espinosa Corporation had $1,100,000 in invested assets, sales of $1,210,000, income from operations amounting to $242,000, and a desired minimum rate of return of 15%.;The profit margin for Espinosa is;a. 20%;b. 22%;c. 15%;d. 32%;20. Materials used by Bristol Company in producing Division C's product are currently purchased from outside suppliers at a cost of $10 per unit. However, the same materials are available from Division A. Division A has unused capacity and can produce the materials needed by Division C at a variable cost of $8.50 per unit. A transfer price of $9.50 per unit is negotiated and 30,000 units of material are transferred, with no reduction in Division A's current sales.;How much would Division C's income from operations increase?;a. $0;b. $90,000;c. $15,000;d. $60,000;21. The balanced scorecard measures;a. only financial information;b. only nonfinancial information;c. both financial and nonfinancial information;d. external and internal information;22. All of the following should be considered in a make or buy decision except;a. cost savings;b. quality issues with the supplier;c. future growth in the plant and other production opportunities;d. the supplier will make a profit that would no longer belong to the business;23. What cost concept used in applying the cost-plus approach to product pricing includes only desired profit in the "markup"?;a. Product cost concept;b. Variable cost concept;c. Sunk cost concept;d. Total cost concept

 

Paper#29240 | Written in 18-Jul-2015

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