Question;Managerial Accounting 8th Edition, Crosson Needles;60 Question;Question 1;Which of the following products probably would be manufactured using a job order costing system?;A. Paper;B. Baseball cards;C. Computer monitors;D. Company business cards;Question 2 of 20 5.0 Points;Applied overhead exceeds actual overhead when the;A. Overhead account has a credit balance.;B. journal entry to account for the difference involves a debit to Cost of Goods Sold.;C. Overhead account has a debit balance.;D. company has overspent in the overhead cost area.;Question 3 of 20 5.0 Points;The total of the dollar amounts on the job order cost cards that have not been completed would be equal to the;A. cost of goods completed.;B. balance in the Finished Goods Inventory account.;C. Cost of Goods Sold account.;D. balance in the Work in Process Inventory account.;Question 4 of 20 5.0 Points;The basic document for keeping track of costs in a job order costing system is a;A. job order cost card;B. labor time card.;C. process cost report.;D. materials requisition form.;Question 5 of 20 5.0 Points;When direct materials are issued from inventory to production under a job order costing system, an increase is recorded in;A. Overhead.;B. Work in Process Inventory.;C. Materials Inventory.;D. Finished Goods Inventory.;Question 6 of 20 5.0 Points;Unit costs for each job are computed by dividing;A. estimated total costs by planned units to be produced.;B. actual costs by actual units sold.;C. cost of materials, direct labor, and overhead by number of units produced.;D. estimated total costs by actual units produced.;Question 7 of 20 5.0 Points;In cost-plus contracts, the "plus" represents;A. sales price.;B. profit, based on the amount of costs incurred.;C. overapplied overhead costs.;D. the amount of any cost overruns.;Question 8 of 20 5.0 Points;The balance in the Work in Process Inventory account equals the;A. balance in the Finished Goods inventory account.;B. balance in the Cost of Goods Sold account.;C. total of the balances on the job order cost sheets of uncompleted jobs.;D. balance in the Overhead account.;Question 9 of 20 5.0 Points;Which of the following entities probably would use a process costing system?;A. An oil refinery;B. A yacht builder;C. A custom furniture company;D. A custom screw manufacturer;Question 10 of 20 5.0 Points;Process costing is applicable to production operations that;A. utilize several processes, departments, or work cells in a series.;B. do not assign overhead costs to operations.;C. produce large and unique machines.;D. are found in only a few industries.;Question 11 of 20 5.0 Points;Which of the following accurately describes a difference between job order and process costing systems?;A. In job order costing systems, overhead costs are treated as product;costs, whereas in process costing systems, overhead costs are treated as;period costs.;B. Job order costing systems do not need to assign costs to production;whereas process costing systems do.;C. In job order costing systems, costs are traced to products, whereas in process costing systems, a FIFO method may be used.;D. Since costs are assigned to products in a job order costing system;selling costs are treated as product costs in the job order costing;system, whereas they are treated as period costs in process costing;systems.;Question 12 of 20 5.0 Points;The reason for combining direct labor and overhead costs together and calling them "conversion costs" is that;A. they both are direct costs of production.;B. the equivalent unit amount for direct materials will be the same as;that for direct labor and overhead costs.;C. both types of costs usually are incurred uniformly throughout the production process.;D. the costs for direct labor and overhead are not accounted for separately.;Question 13 of 20 5.0 Points;Which of the following statements is true?;A. The Work in Process Inventory account is the focal point of process costing.;B. To compute unit costs using the FIFO costing method, total costs of;direct materials, direct labor, and overhead that have been accumulated;in the Work in Process Inventory account or accounts are divided by the;units worked on during the period.;C. Equivalent units usually are computed for direct materials and manufacturing overhead combined.;D. Labor costs are accounted for differently from manufacturing;overhead costs in a process costing system.;Question 14 of 20 5.0 Points;Equivalent units of production usually are determined for;A. direct materials only.;B. direct materials and conversion costs.;C. direct materials and direct labor costs only.;D. conversion costs only.;Question 15 of 20 5.0 Points;Measures of equivalent production are necessary in process costing because;A. job order costing procedures cannot be applied.;B. unit costs are computed by departments or processes at fixed time intervals.;C. perpetual inventories are not employed in process plants.;D. production methods are more complex than in job order costing systems.;Question 16 of 20 5.0 Points;Which of the following applies to process costing but NOT to job order costing?;A. Only one Work in Process Inventory account;B. Equivalent production units;C. Production of unique items;D. Multiple unit job order;Question 17 of 20 5.0 Points;An advantage of using the average costing method to process costing as opposed to the FIFO costing method is that it;A. is a little easier to work with.;B. is more accurate.;C. costs less to utilize.;D. requires little knowledge of process costing.;Question 18 of 20 5.0 Points;The;computation of equivalent units is exactly the same under the FIFO;costing method and the average costing method when there is no;A. ending work in process inventory.;B. ending finished goods inventory.;C. beginning finished goods inventory.;D. beginning work in process inventory.;Question 19 of 20 5.0 Points;To find cost per equivalent unit of production using the average costing method, the: amount of equivalent units is divided;A. by costs from the current period.;B. into costs from the current period.;C. into total costs to be accounted for.;D. by total costs to be accounted for.;Question 20 of 20 5.0 Points;Which;of the following statements about a department's costs per equivalent;unit calculated using the average costing method compared with a FIFO;costing method is true?;A. They could be higher or lower.;B. They would be the same.;C. They would be lower.;D. They would be higher.;Question 1 of 20 5.0 Points;Customer relations are usually part of;A. the supply chain.;B. the value chain.;C. both the value chain and the supply chain.;D. neither the value chain nor the supply chain.;Question 2 of 20 5.0 Points;Which of the following statements is true?;A. A company's value chain is not part of its supply chain.;B. A manufacturer's supply chain typically includes research and development and customer service.;C. A company's supply chain includes the value chains of its suppliers.;D. Your supplier's suppliers are part of your value chain.;Question 3 of 20 5.0 Points;Process value analysis (PVA) identifies all activities of a production and/or assembly operation for the purpose of;A. preparing budgets based on activity centers.;B. determining the value of the process.;C. replacing cost drivers used in cost assignment analyses with activities.;D. relating cost assignment to the activities that caused the cost to be incurred.;Question 4 of 20 5.0 Points;A nonvalue-adding activity is defined as a(n);A. administrative or support activity that adds overhead cost to the;product and increases its market value.;B. activity that adds cost to a product but does not increase its market value.;C. activity that adds no cost to the product but increases its market value.;D. wasteful but unavoidable production activity.;Question 5 of 20 5.0 Points;Product;unit costs computed using activity-based costing compared to product;unit costs computed using a traditional costing approach will;A. sometimes be the same.;B. always be higher.;C. always be the same.;D. always be lower.;Question 6 of 20 5.0 Points;A;framework for classifying value-adding and nonvalue-adding activities;according to the level at which their costs are incurred is called a;A. bill of activities.;B. full product cost.;C. value chain.;D. cost hierarchy.;Question 7 of 20 5.0 Points;Which;one of the four levels of the cost hierarchy would be used by a dress;manufacturer that uses activity-based management for sewing seams on a;garment?;A. Unit-level activity;B. Batch-level activity;C. Product-level activity;D. Facility-level activity;Question 8 of 20 5.0 Points;The initial step in achieving the efficiency of a just-in-time system is to;A. redesign the plant layout.;B. replace laborers with machines.;C. stop ordering materials for inventory.;D. identify products that are not profitable.;Question 9 of 20 5.0 Points;Backflush costing aims at reducing waste in the;A. accounting system.;B. cost of goods sold.;C. storage of raw materials.;D. production process.;Question 10 of 20 5.0 Points;The typical relationship between variable costs and volume may be described best as which of the following?;A. Costs increase in an erratic, unpredictable fashion with changes in volume.;B. Costs stay fairly constant with changes in volume.;C. Costs increase with changes in volume up to a certain point and then remain constant.;D. Costs increase in direct proportion to increases in volume.;Question 11 of 20 5.0 Points;The variable cost per unit __________ as the number of sales increase.;A. decreases;B. changes;C. remains constant;D. increases;Question 12 of 20 5.0 Points;The level of operating capacity that is needed to meet expected sales demand is called;A. practical capacity.;B. normal capacity.;C. ideal capacity.;D. excess capacity.;Question 13 of 20 5.0 Points;Theoretical capacity reduced by normal and anticipated work stoppages is called;A. practical capacity.;B. normal capacity.;C. ideal capacity.;D. excess capacity.;Question 14 of 20 5.0 Points;Theoretical capacity refers to;A. extra machinery and equipment kept on hand.;B. the maximum productive output possible.;C. an output level that allows for normal work stoppages.;D. the operating capacity that will meet expected sales demand.;Question 15 of 20 5.0 Points;The high-low method;A. calculates variable costs per unit by dividing the difference in the;high and low activity levels by the high and low costs.;B. assumes that the fixed portion of the mixed cost is the lowest;monthly cost incurred during the period under consideration.;C. allows differentiation between fixed and variable costs when dealing with mixed costs.;D. combines the fixed and variable portions of a cost to determine the total cost.;Question 16 of 20 5.0 Points;The equation for finding the breakeven point may be written as;A. S - VC - FC = 0.;B. VC - FC = S.;C. S + FC = VC.;D. S + VC + FC = 0.;Question 17 of 20 5.0 Points;The breakeven point is;A. where fixed and variable costs reach the upper level of the relevant range.;B. the level of activity where all fixed costs are recovered.;C. where total revenue equals total costs.;D. where fixed costs meet variable costs.;Question 18 of 20 5.0 Points;The equation that will provide the breakeven point in units (SP = selling price) is;A. BE units = (SP - VC) ? FC per unit.;B. VC per unit + FC = SP per unit x BE units.;C. BE units = FC ? CM per unit.;D. SP per unit ? VC per unit = FC ? BE units.;Question 19 of 20 5.0 Points;Contribution margin equals sales minus;A. cost of goods sold.;B. total costs.;C. fixed costs.;D. variable costs.;Question 20 of 20 5.0 Points;For;every unit that a company produces and sells above the breakeven point;its profitability is improved (ignoring taxes) by the unit's;A. gross margin.;B. selling price minus fixed cost.;C. variable cost.;D. contribution margin.;Question 1of 20 5.0 Points;A. control costs.;B. allocate costs more accurately.;C. replace subjective decision making.;D. compute the breakeven point.;Question 2 of 20 5.0 Points;A(n) __________ cost is synonymous with the product cost calculated in a conventional standard cost accounting system.;A. fixed;B. direct;C. joint;D. expected;Question 3 of 20 5.0 Points;An;expression of the hourly labor pay cost per function or job;classification that is expected to exist during the next accounting;period is the definition of a;A. direct labor time standard.;B. direct materials quantity standard.;C. direct labor rate standard.;D. variable overhead rate.;Question 4 of 20 5.0 Points;Multiplying the standard price of direct materials by the standard quantity for direct materials yields;A. the direct materials price variance.;B. the direct materials quantity variance.;C. the standard direct materials cost.;D. nothing, the two components should be added together.;Question 5 of 20 5.0 Points;Which;of the following provides an explanation of why the variable overhead;rate is separated from the fixed overhead rate in standard costing?;A. There is no justifiable reason, their separation is merely to simplify entries.;B. Both calculations divide by the same direct labor hours, but the;numerator is different for each calculation.;C. The variable overhead rate is calculated using actual direct labor;hours, whereas the fixed overhead rate is calculated using normal;capacity direct labor hours.;D. Different application bases are generally appropriate.;Question 6 of 20 5.0 Points;The primary difference between a fixed (static) budget and a flexible budget is that a fixed budget;A. cannot be changed after the period begins, whereas a flexible budget can be changed after the period begins.;B. is concerned only with future acquisitions of fixed assets, whereas a;flexible budget is concerned with expenses that vary with sales.;C.;is a plan for a single level of production, whereas a flexible budget;is several plans (one for each of several production levels).;D. includes only fixed costs, whereas a flexible budget includes only variable costs.;Question 7 of 20 5.0 Points;The formula used to compute budgeted total cost at any level of activity is presented in the;A. flexible budget.;B. performance report.;C. static budget.;D. cash flow forecast.;Question 8 of 20 5.0 Points;The;difference between the standard quantity allowed and the actual;quantity used multiplied by standard price is the equation for computing;the;A. direct labor efficiency variance.;B. direct materials price variance.;C. direct labor rate variance.;D. direct materials quantity variance.;Question 9 of 20 5.0 Points;The overhead variance is equal to the difference between;A. fixed overhead costs and flexible overhead costs.;B. estimated overhead rate and applied overhead rate.;C. actual overhead costs and variable overhead costs.;D. actual overhead costs and standard overhead costs.;Question 10 of 20 5.0 Points;A favorable fixed overhead volume variance for a manufacturing company could indicate;A. the creation of excess inventory.;B. the actual overhead exceeded the budgeted overhead.;C. sales exceeded production.;D. variable overhead costs were less than fixed overhead costs.;Question 11 of 20 5.0 Points;Irrelevant costs include costs that are;A. different among alternatives.;B. avoidable.;C. sunk.;D. opportunity costs.;Question 12 of 20 5.0 Points;The difference in total costs between two alternatives is referred to as the;A. direct cost.;B. incremental cost.;C. sunk cost.;D. opportunity cost.;Question 13 of 20 5.0 Points;The purpose of incremental analysis is to find the alternative;A. that contributes the most to operating income.;B. that brings in the most revenue.;C. with the lowest fixed costs.;D. with the fewest relevant costs.;Question 14 of 20 5.0 Points;In a special-order decision, which of the following costs would normally be irrelevant?;A. Packaging costs;B. Direct labor;C. Variable overhead;D. Fixed selling expenses;Question 15 of 20 5.0 Points;Avoidable costs are important for;A. product mix decisions.;B. sell or process-further decisions.;C. decisions to eliminate unprofitable segments.;D. pricing decisions for special orders.;Question 16 of 20 5.0 Points;Direct costs include;A. all product costs.;B. variable product costs.;C. some identifiable fixed costs and variable product costs.;D. some identifiable fixed costs.;Question 17 of 20 5.0 Points;As a general rule, a segment should not be eliminated if;A. the company is profitable.;B. its direct fixed costs exceed its contribution margin.;C. the segment's fixed costs equal its variable costs.;D. its contribution margin exceeds direct fixed costs.;Question 18 of 20 5.0 Points;The point at which products are separated in a joint production process is the;A. split-off point.;B. joint product point.;C. separation point.;D. breakeven point.;Question 19 of 20 5.0 Points;Relevant costs in a sell or process-further decision include;A. costs of additional processing.;B. both additional revenues and additional costs.;C. revenues after additional processing.;D. joint product costs.;Question 20 of 20 5.0 Points;The objective of the sell or process-further decision is to;A. maximize production.;B. maximize joint costs.;C. minimize processing.;D. maximize operating income.
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