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1. Full costing a) Is the same as absorption cost...

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1. Full costing a) Is the same as absorption costing b) Considers fixed manufacturing overhead as part of the cost of inventory c) Often does not provide the information needed for C-V-P analysis d) All of the above 2. In full costing, when does fixed manufacturing overhead become an expense? a) In the period when other fixed costs are at the highest level b) In the period when the product is sold c) In the period when the expense is incurred d) When the controller decides that the expense should be recognized 3. Cary Company?s fixed manufacturing overhead costs totaled $220,000 and variable selling costs totaled $190,000. Under full costing, how should these costs be classified? Period cost product cost a) $190,000 $220,000 b) 410,000 $0 c) $0 $410,000 d) $220,000 $190,000 4. Data from the William Company for 2008 is as follows: Sales $20/unit Variable cost of goods sold ?? Fixed manufacturing overhead 92,000 Variable selling & administrative ?? Fixed selling & administrative 103,000 The company produced 148,000 units during the year and sold 120,000 units. Variable production costs and fixed costs have remained constant all year. Net income for the year was $900,000. What was the company?s contribution margin? a) $2,205,000 b) 1,305,000 c) 1,003,000 d) 1,095,000 5) If a company?s levels of fixed and variable costs remain unchanged from one year to the next, under which costing method is it possible for income to increase when sales decrease? a) variable costing b) full costing c) both variable and full costing d) neither variable nor full costing 6) Indirect costs occur when a) Resources are shared by more than one product or service. b) costs cannot be directly traced to products or services c) multiple departments share a piece of equipment d) all of the above 7. The overriding concern in forming a cost pool is to ensure that a) a)there are no variable costs in the cost pool b) b)the total amount in the cost pool is less than the direct costs for the product c) only costs which have been budgeted are included in the cost pool d) d)the costs in the pool are homogeneous or similar 8. An allocation base a) Is the minimum amount to be allocated to a cost object b) Coordinates the manufacturing overhead costs as they are incurred c) Will always be less than the variable costs for a product d) Relates the cost pool to the cost objectives 9. When activity based costing is implemented, the initial outcome is normally that: a) the cost of all products will be higher b) the cost of all products will be lower c) the cost of low volume products will be higher and the cost of high volume products will be lower d) the cost of low volume products will be lover and the cost of high volume products will be higher 10) Frio Company uses ABC costing. Which of the following is most likely to be the cost driver for the cost of ordering parts? a) Weight of parts ordered b) Direct labor cost c) Depreciation expense d) Number of orders placed 11) Yesteryear Gift Shop produces pottery figurines. Utility costs are allocated to products based on the amount of time spent on the pottery wheel. Utility costs of $3,000 per month are budgeted and the store anticipates spending, 7500 minutes on the pottery wheel each month. If a vase uses 18 minutes on the pottery wheel how much of the utility costs will be allocated to each vase? a) $72.00 b) $4.50 c) $45.00 d) $7.20 12) Sweeper Company produces brooms. Utility costs are allocated to products based on a percentage of material costs. Utility costs of $15,000 per month are budgeted and the store anticipates spending $30,000 in materials. If the company spends $8.50 per broom for materials, how much of the utility costs will be allocated to each broom? a) $4.25 b) $2.00 c) $17.00 d) $8.50 13) The Jefferson Supply Company experienced the following costs in 2007 Direct material $3.50/unit Direct labor $2.65/unit Manufacturing Overhead Costs Variable $1.50/unit Fixed $20,000 Selling & Administrative Cost Variable selling $2.25/unit Fixed selling $8,000 Fixed administrative $7,000 During the year the company manufactured 92,000 units and sold 85,000 units. If the Average selling price per unit was $19.50 what was the company?s contribution margin? a) $1,007,250 b) $824,500 c) $987,250 d) $789,500 14) The Crider Company experienced the following costs in 2007: Direct material $2.65/unit Direct labor $1.80/unit Manufacturing Overhead Costs Variable $3.25/unit Fixed $1.15/unit Selling & Administrative Cost Variable selling $94,000 Fixed selling $35,000 Fixed administrative $10,000 During the year the company manufactured 47,000 units and sold 40,000 units. The average unit product cost using full costing would be: a) $7.70 b) $9.70 c) $8.85 d) $10.85 15) Tyler?s Consulting Company has purchased a new $15,000 copier. This overhead cost will be shared by the purchasing, accounting, and information technology departments since those are the only departments which will be able to access the machine. The company has decided to allocate the cost based on the number of copies made by each department. The copier is estimated to provide 1 million copies over its life. Each division has estimated the number of copies which will be made in their department over the life of the copier. Purchasing 350,000 Accounting 200,000 Information tech 400,000 Note: Cost allocations are computed to 4 significant digits. How much overhead will be allocated each time a copy is made? a) $63.3333 b) $.0158 c) $66.6667 d) $.0150

 

Paper#4998 | Written in 18-Jul-2015

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