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accounting mcq with A+ answers




Question;1. A product requires processing in two departments, the Baking Department and then the PackagingDepartment, before it is completed. Costs transferred out of the Baking Department will be transferred to:Cost of GoodsWork in ProcessPackaging Department.Finished Goods Inventory.Manufacturing Overhead.2. A process cost accounting system is most appropriate whenthe focus of attention is on a particular job or order.similar products are mass-produced.a variety of different products are produced, each one requiring different types of materials, labor, andoverhead.individual products are custom made to the specification of customers.3. In process cost accounting, manufacturing costs are summarized on aproduction cost report.manufacturing cost sheet.process order cost sheet.job order cost sheet.4. Which of these best reflects a distinguishing factor between a job order cost system and a process costsystem?The manufacturing cost elements included.The detail at which costs are calculated.The time period each covers.The number of work in process accounts.5. When manufacturing overhead costs are assigned to production in a process cost system, they are debited toa Manufacturing Overhead account.the Work in Process account.the Finished Goods Inventory account.Cost of Goods6. Which of the following would not appear as a debit in the Work in Process account of a second department ina two stage production process?Materials used.Overhead applied.Cost of products transferred out.Labor assigned.7. A characteristic of products that are mass-produced in a continuous fashion is thattheir costs are accumulated on job cost sheets.they are grouped in batches.Acctg 221 Exam 2 Review Guide Page 2they are produced at the time an order is received.the products are identical or very similar in nature.8. In Moyer Company, the Cutting Department had beginning work in process of 6,000 units, transferred out16,000 units, and had an ending work in process of 3,000 units. How many units were started by Moyer duringthe month?16,000.10,000.13,000.19,000.9. Hanker Company had the following department data on physical units:Work in process, beginning3,000Completed and transferred out 12,000Work in process, ending2,400Materials are added at the beginning of the process. What is the total number of equivalent units for materialsduring the period?12,600.14,400.2,400.9,00010. If beginning work in process is 4,000 units, ending work in process is 2,000 units, and the units accountedfor equals 12,000 units, what must units started into production be?10,000.16,000.14,000.8,000.11. The relevant range of activity refers to thegeographical areas where the company plans to operate.activity level where all costs are curvilinear.level of activity where all costs are constant.levels of activity over which the company expects to operate.12. An increase in the level of activity will have the following effects on unit costs for variable and fixed costs:Unit Variable Cost Unit Fixed CostIncreasesDecreasesIncreases2DecreasesAcctg 221 Exam 2 Review Guide Page 3RemainsconstantRemainsconstantDecreases13.RemainsconstantCost behavior analysis is astudy of how a firm's costsrelate tocompetitors'costs.respond to changes in the gross national product.relate to general price level changes.respond to changes in the level of business activity.14. Which of the following would be the least controllable fixed costs?Management training programsResearch and developmentProperty taxesRen15. If Whisper Wings Airlines cuts its domestic fares by 30%,a profit can be earned either by increasing the number of passengers or by decreasing variable costs.profit will increase by 30%.its fixed costs will decrease.a profit can only be earned by decreasing the number of flights.16. A mixed cost containsboth retailing and manufacturing costs.a variable element and a fixed element.both selling and administrative costs.both operating and nonoperating costs.17. Sutton Company produces flash drives for computers, which it sells for $20 each. The variable cost to makeeach flash drive is $13. During April, 700 drives were sold. Fixed costs for April were $2 per unit for a total of$1,400 for the month. How much is the monthly break-even level of sales in dollars for Sutton Company?$200$14,0003Acctg 221 Exam 2 Review Guide Page 4$8,400$4,00018. A company has total fixed costs of $160,000 and a contribution margin ratio of 20%. The total salesnecessary to break even are$640,000.$200,000.$180,000.$800,000.19. Keith Company produces flash drives for computers, which it sells for $20 each. Each flash drive costs $14of variable costs to make. During April, 1,000 drives were sold. Fixed costs for March were $2 per unit for atotal of $1,000 for the month. How much is the contribution margin ratio?70%80%30. Isakson Company has a contribution margin per unit of $21 and a contribution margin ratio of 60%. Howmuch is the selling price of each unit?$12.60Cannot be determined without more information.$52.50$35.0021. Small Tots Toys has actual sales of $400,000 and a break-even point of $300,000. How much is its marginof safety ratio?75%33%%133%22. Brown Company produces flash drives for computers, which it sells for $20 each. Each flash drive costs $6of variable costs to make. During March, 1,000 drives were sold. Fixed costs for March were $4.90 per unit fora total of $4,900 for the month. If variable costs decrease by 10%, what happens to the break-even level of unitsper month for Brown Company?It decreases about 35 units.It depends on the number of units the company expects to produce and sell.It is 10% higher than the original break-even point.It decreases about 14 units.23. The most common budget period is4Acctg 221 Exam 2 Review Guide Page 5six month.three months.24. Which of the following does not appear as a separate section on the cash budget?FinancingCash receiptsCash disbursementsCapital expenditures25. A master budget consists offinancial budgets and a long-term plan.interrelated financial budgets and operating interrelated long-term plan and operating budgets.all the accounting journals and ledgers used by a company.26. Which is true of budgets?They are voted on and approved by stockholders.There is a standard form and structure for budgets.They are used in performance evaluation.They are used in the planning, but not in the control, process.27. Which of the following statements about budget acceptance in an organization is true?Budgets have a greater chance of acceptance if all levels of management have provided input into thebudgeting process.The most widely accepted budget by the organization is the one prepared by top management.The most widely accepted budget by the organization is the one prepared by the department heads.Budgets are hardly ever accepted by anyone except top management.28. The financial budgets include thecash budget and the production budget and the budgeted balance sheet.budgeted balance sheet and the budgeted income budget and the selling and administrative expense budget.29. Crumine Company budgets on an annual basis for its fiscal year. The following beginning and endinginventory levels are planned for the fiscal year of July 1, 2012 to June 30, 2013:June 30, 2013 June 30, 2012Raw3,000 kilos2,000 kilos5Acctg 221 Exam 2 Review Guide Page 6MaterialsThree kilos of raw materials are needed to produce each unit of finished product. If Crumine plans to produce560,000 units during the 2012-2013 fiscal year, how many kilos of materials will the company need to purchasefor its production during the year?1,678,0001,681,0001,686,0001,680,00030. The direct materials budget shows:Desired ending direct72,000 poundsmaterialsTotal materials required108,000 poundsDirect materials purchases94,800 poundsThe total direct materials needed for production is36,000 pounds.13,200 pounds.202,800 pounds.22,800 pounds.31. Jacob Manufacturing is planning to sell 1,200 boxes of ceramic tile, with production estimated at 1,160boxes during May. Each box of tile requires 44 pounds of clay mix and a quarter hour of direct labor. Clay mixcosts $0.50 per pound and employees of the company are paid $15.00 per hour. Manufacturing overhead isapplied at a rate of 110% of direct labor costs. Jacob has 5,200 pounds of clay mix in beginning inventory andwants to have 6,000 pounds in ending inventory.What is the total amount to be budgeted for manufacturing overhead for the month?$19,800$4,785$4,950$19,14032. Davis Company has 12,000 units in beginning finished goods. The sales budget shows expected sales to be48,000 units. If the production budget shows that 56,000 units are required for production, what was the desiredending finished goods?20,00012,00036,0004,33. The following information is taken from the production budget forthe first quarter:Beginning inventory in units1,8006Acctg 221 Exam 2 Review Guide Page 7Sales budgeted for the quarterCapacity in units of productionfacility684,000708,000How many finished goods units should be produced during the quarter if the company desires 4,800 unitsavailable to start the next quarter?711,000688,800681,000687,00034. A static budget is not appropriate in evaluating a manager's effectiveness if a company hasplanned activity levels that match actual activity levels.substantial variable variable costs.substantial fixed costs.35.All of the following statements are correct about management by exception except itmeans that top management's review of a budget report is focused primarily on differences between actualresults and planned objectives.requires that there must be some guidelines for identifying an exception.means that management has to investigate every budget difference.enables top management to focus on problem areas that need attention.36. Which one of the following would be the same total amount on a flexible budget and a static budget if theactivity level is different for the two types of budgets?direct labor costvariable manufacturing overheadfixed manufacturing overheaddirect materials cost37. Under management by exception, which differences between planned and actual results should beinvestigated?controllable and noncontrollablematerial and controllableAll differences should be investigated.material and noncontrollable38.7Acctg 221 Exam 2 Review Guide Page 8The flexible budgetis a series of static budgets at different levels of prepared before the master relevant both within and outside the relevant range.eliminates the need for a master budget.39. If a company plans to sell 48,000 units of product but sells 60,000, the most appropriate comparison of thecost data associated with the sales will be by a budget based on60,000 units of activity.54,000 units of activity.48,000 units of activity.the original planned level of activity.40. The current controllable margin for Stern Division is $124,000. Its current operating assets are $400,000.The division is considering purchasing equipment for $120,000 that will increase annual controllable margin byan estimated $20,000. If the equipment is purchased, what will happen to the return on investment for SternDivision?a decrease of 7.2%an increase of 16.1%a decrease of 13.3%a decrease of 3.3%41. Kessler Industries is evaluating its Mountain division, an investment center. The division has a $90,000controllable margin and $600,000 of sales. How much will Kessler's average operating assets be when its returnon investment is 10%?$900,000$510,000$990,000$600,00042. If controllable margin is $600,000 and the average investment center operating assets are $2,000,000, thereturn on investment is.33%.3.33%.10%.30%.43. Kessler Company uses flexible budgets. At normal capacity of 16,000 units, budgeted manufacturingoverhead is: $64,000 variable and $180,000 fixed. If Kessler had actual overhead costs of $250,000 for 18,000units produced, what is the difference between actual and budgeted costs?$2,000 favorable$6,000 unfavorable8Acctg 221 Exam 2 Review Guide Page 9$8,000 favorable$2,000 unfavorable44. Center Industries had average operating assets of $4,000,000 and sales of $2,000,000 in 2012. If thecontrollable margin was $600,000, the ROI was50%60%30%15%45. If an investment center has generated a controllable margin of $150,000 and sales of $600,000, what is thereturn on investment for the investment center if average operating assets were $1,000,000 during the period?15%%45%60%


Paper#38924 | Written in 18-Jul-2015

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