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Accounting exam

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Question;1.;Management accounting is primarily;concerned with which of the following?;A) Following GAAP.;B) Producing information for management.;C) Preparing a full set of financial;statements for external users.;D) Preparing tax returns for submission to;the Internal Revenue Service;2.;The management of the flow of materials;from the supplier through production to distribution to the customer is known;as;A) strategic cost management;B) firm value chain;C) industrial value chain;D) supply chain management;3.;When is the cost of manufacturing equipment;recognized as an expense on the income statement?;A) when selling expense is recognized;B) when cost of goods sold is recognized;C) Never since the expense is a non cash;charge;D) when the equipment is depreciated;4.;The certification sponsored by the;Institute of Management Accountants that emphasizes economics, finance, and;management, financial accounting and reporting, management reporting, and;decision analysis is;A) the CPA;B) the CIA;C) none of the above;D) the CMA;5.;Which of the following costs would be;classified as an indirect cost in the manufacturing of custom built dining;tables?;A) the cost of the table base;B) the cost of the person assembling the;table;C) the cost of the table legs;D) the cost of the rent on the;manufacturing facility;6.;The grease used to maintain the production;equipment in working order is an example of which of the following?;A) indirect material;B) indirect labor;C) direct material;D) direct labor;7.;Which of the following is a product cost?;A) insurance on the office buildings;B) depreciation of the production;facilities;C) depreciation of the salesmen's cars;D) advertising expenditures;8.;The salary of the vice-president of finance;would be classified as which of the following?;A) manufacturing overhead;B) selling and administrative costs;C) direct materials;D) direct labor;9.;Which of the following is a period cost?;A) direct labor;B) property taxes on the office building;C) property taxes on the production;facilities;D) the production supervisor's salary;10.;An UNEXPECTED increase in sales and;production volume will (most likely) result in;A) an indeterminate impact on overhead;B) underapplied overhead;C) overapplied overhead;D) have no effect on applied overhead;11.;Figure 2-2;Cost of goods manufactured;$470,000;Beginning work in process;60,000;Beginning finished goods inventory;105,000;Direct materials;75,000;Direct labor;160,000;Manufacturing overhead;215,000;Cost of goods sold;445,000;Refer to Figure 2-2. The cost of ending;work in process would be;A) $45,000;B) $130,000;C) $40,000;D) $105,000;12.;Figure 2-2;Cost of goods manufactured;$470,000;Beginning work in process;60,000;Beginning finished goods inventory;105,000;Direct materials;75,000;Direct labor;160,000;Manufacturing overhead;215,000;Cost of goods sold;445,000;Refer to Figure 2-2. The cost of ending;finished goods inventory would be;A) $40,000;B) $105,000;C) $130,000;D) $45,000;13.;Figure 2-3;Sales;$340,000;Direct materials inventory, 1/1;20,000;Direct materials inventory, 12/31;5,500;Direct materials purchases;95,000;Direct labor;52,500;Manufacturing overhead;49,500;Selling and administrative expenses;55,000;Cost of goods manufactured;?;Cost of goods sold;?;Work in process, 1/1;26,000;Work in process, 12/31;32,500;Finished goods inventory, 1/1;40,000;Finished goods inventory, 12/31;60,000;Income before income taxes;?;Refer to Figure 2-3. Income before taxes;would be;A) $155,000;B) $340,000;C) $100,000;D) $128,500;14.;The past year's sales were $540,000 for the;Max Company. The gross margin for the same year was $155,000 and cost of goods;manufactured was $350,000. If beginning finished goods inventory was $50,000;ending finished goods inventory must have been;A) $385,000;B) $35,000;C) $15,000;D) $50,000;15.;Fixed costs;A) in total, decrease as activity decreases;B) in total, remain constant within a;relevant range;C) in total, increase as activity increases;D) on a per unit basis, are constant as;activity increases or decreases;16.;Which of the following best describes the;term ?relevant range.?;A) The relevant range pertains to a single;unit of product.;B) The relevant range is the range of;output over which cost assumptions are valid.;C) The relevant range refers to the range;of fixed costs present in an organization.;D) The relevant range is the same for all;products a company may produce.;17.;As the level of activity increases, what;happens to fixed cost?;A) increases per unit;B) increases in total;C) decrease in total;D) decreases per unit;18.;In January, 5,000 units were manufactured;at a unit cost of $5. At this level of activity, variable costs are 40 percent;of total unit costs. The following month, the company planned to manufacture;4,500 units. If cost behavior patterns remain unchanged in February;A) total fixed costs will decrease;B) total cost per unit will increase;C) variable cost per unit will decrease;D) total variable cost will remain;unchanged;19.;The following information was available;about supplies cost for the first three months of the year;Month;Production Volume;Supplies Cost;January;12,000;$ 80,000;February;23,000;140,000;March;27,000;164,000;Using the high-low method, an estimate of;supplies cost at 20,000 units of production would beA) $112,000;B) $130,400;C) $124,800;D) $96,000;20.;Figure 3-4;The following information is available for electricity;costs for the first six months of the year;Month;Production Volume;Electricity Cost;January;2,800;$2,925;February;5,600;5,526;March;6,200;5,980;April;3,500;3,620;May;2,300;2,470;June;4,500;4,450;Refer to Figure 3-4. Using the high-low;method, an estimate of the fixed cost for electricity would be;A) $3,510;B) $4,225;C) $3,900;D) $400;21.;Based on regression results, ABC Company;has a constant of $10,000 and an X coefficient of $4. At what level of the;activity cost drivers will total cost be $22,000?;A) 5,500 units;B) 3,000 units;C) 10,000 units;D) 3,250 units;22.;Ritchie Company adjusts cost of goods sold;when overhead is over- or underapplied. The predetermined overhead rate for the;year is $2 per direct labor hour. Estimated direct labor hours were 20,000.;Actual direct labor hours were 25,000 and actual overhead cost was $55,000.;What is the adjustment to cost of goods sold?;A) Overhead is overapplied by $15,000, therefore;subtract this amount from cost of goods sold.;B) Overhead is overapplied by $5,000;therefore subtract this amount from cost of goods sold.;C) Overhead is underapplied by $15,000;therefore add this amount to cost of goods sold.;D) Overhead is underapplied by $5,000;therefore add this amount to cost of goods sold.;23.;An activity-based costing system uses which;of the following procedures?;A) Overhead costs are traced to activities;then costs are traced to products.;B) Overhead costs are traced directly to;products.;C) All overhead costs are expensed as;incurred.;D) Overhead costs are traced to;departments, then costs are traced to products.;24.;Which of the following would be more likely;to use job-order costing rather than process costing?;A) steel mill;B) soap manufacturer;C) professional painter/artist;D) check processing department in a bank;25.;The following information pertains to Job;No. 15;Job No. 15;Direct materials;$1,000;Direct labor;$2,000;Manufacturing overhead is applied at 60;percent of direct labor cost.;If 100 units were produced in Job No. 15;the unit cost of Job No. 15 would beA) $48;B) none of the above;C) $12;D) $30;E) $42;26.;The job-order cost sheets of incomplete;jobs are the subsidiary ledger of which account?;A) finished goods inventory;B) work in process;C) accounts receivable;D) raw materials inventory;27.;In a job-order cost system, the amount of;overhead cost applied to a job that remains incomplete at the end of a period;is part of which of the following at the end of the period?;A) finished goods inventory;B) work in process;C) overhead control;D) raw materials inventory;28.;For the accounting period just ended, Abway;Company's actual overhead costs equaled estimated overhead. Actual direct labor;hours exceeded estimated direct labor hours used to calculate the predetermined;overhead rate. If overhead is applied using the predetermined overhead rate;then overhead would be;A) Overhead cannot be determined from the;information given.;B) overapplied;C) underapplied;D) $-0-;29.;As goods are completed, the cost of the;goods is transferred from;A) overhead to finished goods inventory;B) finished goods inventory to cost of;goods sold;C) work in process to finished goods;inventory;D) work in process to cost of goods sold;30.;Figure 6-10;Alana Company had the following three jobs;in process at the end of September.;Job;No. 4;Job;No. 5;Job No. 6;Direct materials;$ 64,000;$ 36,000;$50,000;Direct labor;$128,000;$106,000;$80,000;Machine hours;2,400;1,600;2,000;Alana uses a predetermined overhead rate of;$20 per machine hour to apply overhead.;All three jobs were started during;September. Job No. 5 and Job No. 6 were completed during the month, and Job No.;6 was sold on September 20.;There were no beginning inventory balances.;Refer to Figure 6-10. Alana's cost of goods;sold for September would be;A) $170,000;B) $130,000;C) $-0-;D) $344,000;31.;The following information pertains to;Raymond Company;Selling price per unit;$1,000;Variable cost per unit;$700;Fixed costs;$900,000;If the firm wants to earn $400,000 in;before-tax profit, contribution margin must equalA) $1,300,000;B) $1,440,000;C) $900,000;D) $1,340,000;32.;The following information pertains to Barth;Company;Sales price per unit;$80;Variable cost per unit;$55;Total fixed costs;$200,000;Before-tax income;$80,000;Unit sales for the company must have beenA);11,200;B) 8,000;C) 5,091;D) 3,500;33.;Last year Luchen Company had a net loss of;$8,000 (before tax). The company sells one product with a selling price of $80;and a variable cost per unit of $60. This year the company would like to earn a;before-tax profit of $40,000. How many additional units must the company sell;this year than it sold last year? Assume that the tax rate is 40 percent.;A) 5,400 units;B) 2,400 units;C) 2,000 units;D) 400 units;34.;Figure 11-2;Selling price per unit;$400;Variable manufacturing costs per unit;$100;Fixed manufacturing costs per unit;$80;Variable selling costs per unit;$60;Fixed selling costs per unit;$40;Expected production and sales;1,800 units;Refer to Figure 11-2. The contribution;margin ratio is;A) 60%;B) 30%;C) 70%;D) 40%;35.;Figure 11-4;The following information was extracted;from the accounting records of MVA Corporation;Selling price per unit;$60;Variable cost per unit;$20;Total fixed costs;$480,000;Refer to Figure 11-4. If MVA's tax rate is;40 percent, how many units must be sold to earn an after-tax profit of $96,000?;A) 14,400;B) 16,000;C) 32,000;D) 28,800;36.;Figure 11-5;Sales;$540,000;Variable costs;$378,000;Fixed costs;$120,000;Expected production and sales in units;40,000 units;Refer to Figure 11-5. The break-even point;in sales dollars is;A) $112,500;B) $498,000;C) $171,429;D) $400,000;37.;Inktomi sells software over the internet.;The CEO has been quoted, ?Next to the federal government, we?re one of the few;companies allowed to print money. We have no marginal costs. Wahoo.? Inktomi?s;cost structure (probably) results in a relatively;A) Low contribution margin ratio and high;degree of operating leverage.;B) High contribution margin ratio and high;degree of operating leverage.;C) Low contribution margin ratio and low;degree of operating leverage.;D) High contribution margin ratio and low;degree of operating leverage.;38.;As you are probably aware, 2008 was an;unexpectedly bad year for business. For many firms this (probably) resulted in;factory overhead being;A) overapplied;B) impossible to calculate;C) was 2008 a bad business year? I had no;idea.;D) underapplied;39.;Which of the following does not pertain to;job order costing?;A) Applying the applied sales expense to;job order cost sheets.;B) Applying the applied overhead to the job;order cost sheets.;C) Calculating the cost of goods;manufactured when the job is compete.;D) Applying direct material cost to the job;order cost sheets.;40.;Assuming all other things are the same;variable costs per unit would_______if there is a decrease in the break-even;point.;A) remain the same;B) increase;C) party wildly;D) decrease;41.;When goods are completed on the factory;floor, typically there is an increase in which of the following accounts;A) Work in Process;B) Cost of Goods Sold;C) Finished Goods;D) Sales Revenue;42.;The Tristan Corporation whose contribution;margin ratio is 30%, broke even at a sales level of $120,000. What level of;sales would yield an after-tax profit of $72,000? Assume a tax rate of 40%.;A) $360,000;B) $560,000;C) $520,000;D) $36,000;43.;Anish Company produces pins for business;fraternities. The company is considering;decreasing its print and radio advertising on college campuses by $20,000 next;year. The company is also considering;lowering the selling price to stimulate demand, and expects sales to double;next year. What will be the result of;these actions taken together?;A) Decrease the unit contribution margin;decrease the contribution margin ratio, decrease the fixed costs;B) Decrease the unit variable costs;increase the fixed costs, no change in contribution margin ratio;C) Increase the unit contribution margin;decrease the contribution margin ratio, decrease the breakeven point;D) Decrease the unit contribution margin;decrease the fixed costs, increase the contribution margin ratio;44.;A company offers tours of spectacular;tourist destinations such as Nebraska and Kansas. The tours usually have between 5 and 50;people on them. For each person who;goes on the trip, the company incurs $10 per day in food cost, $50 per day in;lodging, and $25 per day in entrance admissions and fees. Also, the company incurs a certain total cost;per day for transportation, regardless of whether the tour is full or not. On the last tour, the total cost to the;company per person per day was $100.;There were 30 people on the tour.;If the next tour has 20 people, what will be the cost per person per;day?;A) $107.50;B) $66.66;C) $150.00;D) $110.00;45.;I.M. Greedy and Company have collected the;following information;Cost to buy on unit $24;Production costs per unit;Direct Materials $11;Direct Labor $8;Variable Manufacturing Overhead $1;Total Fixed Manufacturing Overhead $180,000;What level of production is needed for;Strait to be indifferent between making or buying the part, assuming it can;eliminate $130,000 of fixed costs if it buys the unit?;A) 0 units;B) 45,000 units;C) 12,500 units;D) 32,500 units;46.;In 2008 Joe?s Oyster house broke even at;50,000 oysters a year and sold 80,000 oysters for the year. Joe sold some;equipment which caused fixed costs to decrease and unit variable costs to;increase. Sales remained at 80,000 oysters for the year and the break-even;sales level remained unchanged at 50,000 units. All other variables remain;unchanged. In that case, in 2009;A) Profit would decrease;B) Profit would increase.;C) Fixed costs per unit would remain;unchanged;D) Profit would remain unchanged;47.;Provided a single cost allocation base is;used within a factory, jobs are typically overcosted if;A) jobs require more employees;B) jobs consume relatively more of the base;C) jobs consume proportionately less of the;base;D) Jobs require more travel between the two;parties;48.;Assuming all other things are the same;which cost is mostly likely to increase if a firm decides to increase;automation and decrease direct labor?;A) Fixed cost per unit;B) Variable cost per unit;C) Direct material cost per unit;D) Total variable cost

 

Paper#42897 | Written in 18-Jul-2015

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