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ACC 349 Final Exam




ACC/349 Final Exam;1) What is the best way to handle manufacturing overhead costs in order to get the most timely job cost information?;A. The company should add actual manufacturing overhead costs to jobs as soon as the overhead costs are incurred.;B. The company should determine an allocation rate as soon as the actual costs are known, and then apply manufacturing overhead to jobs.;C. The company should apply overhead using an estimated rate throughout the year. D. The company should account for only the direct production costs.;2) At the end of the year, manufacturing overhead has been overapplied. What occurred to create this situation?;A. The company incurred more manufacturing overhead costs than the manufacturing overhead assigned to jobs;B. The actual manufacturing overhead costs were less than the manufacturing overhead assigned to jobs;C. The company incurred more total job costs than the amount budgeted for the job;D. Estimated manufacturing overhead was less than actual manufacturing overhead costs;3) Luca Company overapplied manufacturing overhead during 2006. Which one of the following is part of the year end entry to dispose of the overapplied amount assuming the amount is material;A. A decrease to work in process inventory;B. A decrease to applied overhead;C. An increase to finished goods;D. An increase to cost of goods sold;4) Which of the following would be accounted for using a job order cost system?;A. The production of textbooks;B. The production of town homes;C. The pasteurization of milk;D. The production of cans of spinach;5) Which one of the following is NEVER part of recording the issuance of raw materials in a job order cost system?;A. Debit Manufacturing Overhead;B. Debit Finished Goods Inventory;C. Debit Work in Process Inventory;D. Credit Raw Materials Inventory;Finished Goods Inventory is debited when goods are transferred from work in process to finished goods, not when raw materials are issued for a job.;6. What is unique about the flow of costs in a job order cost system?;A. It involves accumulating material, labor, and manufacturing overhead costs as they are incurred in order to determine the job cost;B. Each job is costed separately in a Work in Process subsidiary ledger;C. Job costs cannot be measured until all overhead costs are determined;D. There are no costs remaining in Work in Process at year end;7) Which one of the following costs would be included in manufacturing overhead of a lawn mower manufacturer?;A. The cost of the fuel lines that run from the motor to the gas tank;B. The cost of the wheels;C. Depreciation on the testing equipment;D. The wages earned by motor assemblers;Depreciation on testing equipment would be included in manufacturing overhead because it is indirectly associated with the finished product.;8) What broad functions do the management of an organization perform?;A. Planning, directing, and controlling;B. Directing, manufacturing, and controlling;C. Planning, directing, and selling;D. Planning, manufacturing, and controlling;9) Which of the following represents the correct order in which inventories are reported on a manufacturer?s balance sheet?;A. Work in process, finished goods raw materials;B. Raw materials, work in process, finished goods;C. Finished goods, work in process, raw materials;D. Work in process, raw materials, finished goods;10) In traditional costing systems, overhead is generally applied based on;A. machine hours;B. direct labor;C. direct material dollars;D. units of production;11) An activity that has a direct cause-effect relationship with the resources consumed is a(n);A. overhead rate;B. product activity;C. cost driver;D. cost pool;12) A well-designed activity-based costing system starts with;A. computing the activity-based overhead rate;B. analyzing the activities performed to manufacture a product;C. identifying the activity-cost pools;D. assigning manufacturing overhead costs for each activity cost pool to products;13) Which of the following factors would suggest a switch to activity-based costing?;A. Overhead costs constitute a significant portion of total costs;B. Production managers use data provided by the existing system.;C. Product lines similar in volume and manufacturing complexity;D. The manufacturing process has been stable;14) All of the following statements are correct EXCEPT that;A. the objective of installing ABC in service firms is different than it is in a manufacturing firm;B. the general approach to identifying activities and activity cost pools is the same in a service company as in a manufacturing company;C. activity-based costing has been widely adopted in service industries;D. a larger proportion of overhead costs are company-wide costs in service industries;15) What sometimes makes implementation of activity-based costing difficult in service industries is;A. identifying activities, activity cost plus, and cost drivers;B. attempting to reduce or eliminate nonvalue-added activities;C. the labeling of activities as value-added;D. that a larger proportion of overhead costs are company-wide costs;16) One of Astro Company's activity cost pools is machine setups, with estimated overhead of $150,000. Astro produces sparklers (400 setups) and lighters (600 setups). How much of the machine setup cost pool should be assigned to sparklers?;A. $60,000;B. $90,000;C. $150,000;D. $75,000;17) Poodle Company manufactures two products, Mini A and Maxi B. Poodle's overhead costs consist of setting up machines, $800,000, machining, $1,800,000, and inspecting, $600,000. Information on the two products is;Mini A;Maxi B;Direct labor hours;15,000;25,000;Machine setups;600;400;Machine hours;24,000;26,000;Inspections;800;700;Overhead applied to Mini A using activity-based costing is;A. $1,536,000;B. $1,664,000;C. $1,920,000;D. $1,200,000;18) Poodle Company manufactures two products, Mini A and Maxi B. Poodle's overhead costs consist of setting up machines, $800,000, machining, $1,800,000, and inspecting, $600,000. Information on the two products is;Mini A;Maxi B;Direct labor hours;15,000;25,000;Machine setups;600;400;Machine hours;24,000;26,000;Inspections;800;700;Overhead applied to Maxi B using activity-based costing is;A. $1,536,000;B. $1,664,000;C. $2,000,000;D. $1,280,000;19) Seran Company has contacted Truckel Inc. with an offer to sell it 5,000 of the wickets for $18 each. If Truckel makes the wickets, variable costs are $11 per unit. Fixed costs are $12 per unit, however, $5 per unit is avoidable. Should Truckel make or buy the wickets?;A. Buy, savings = $10,000;B. Make, savings = $20,000;C. Make, savings = $10,000;D. Buy, savings = $25,000;20) Rosen, Inc. has 10,000 obsolete calculators, which are carried in inventory at a cost of $20,000. If the calculators are scrapped, they can be sold for $1.10 each (for parts). If they are repackaged, at a cost of $15,000, they could be sold to toy stores for $2.50 per unit. What alternative should be chosen, and why?;A. Repackage, revenue is $5,000 greater than cost;B. Scrap, incremental loss is $9,000;C. Repackage, receive profit of $10,000;D. Scrap, profit is $1,000 greater;21) The cost to produce Part A was $10 per unit in 2005. During 2006, it has increased to $11 per unit. In 2006, Supplier Company has offered to supply Part A for $9 per unit. For the make-or-buy decision;A. incremental costs are $1 per unit;B. net relevant costs are $1 per unit;C. differential costs are $2 per unit;D. incremental revenues are $2 per unit;22) Hartley, Inc. has one product with a selling price per unit of $200, the unit variable cost is $75, and the total monthly fixed costs are $300,000. How much is Hartley?s contribution margin ratio?;A. 37.5%;B. 150%;C. 266.6%;D. 62.5%.;23. Which statement describes a fixed cost?;A. The amount per unit varies depending on the activity level;B. It varies in total at every level of activity;C. It remains the same per unit regardless of activity level;D. Its total varies proportionally to the level of activity;24) Disney?s variable costs are 30% of sales. The company is contemplating an advertising campaign that will cost $22,000. If sales are expected to increase $40,000, by how much will the company's net income increase?;A. $28,000;B. $18,000;C. $6,000;D. $12,000;25) Variable costing;A. is required under GAAP;B. is used for external reporting purposes;C. is also known as full costing;D. treats fixed manufacturing overhead as a period cost;26) Which cost is NOT charged to the product under variable costing?;A. Direct labor;B. Direct materials;C. Fixed manufacturing overhead;D. Variable manufacturing overhead;27) Orbach Company sells its product for $40 per unit. During 2005, it produced 60,000 units and sold 50,000 units (there was no beginning inventory). Costs per unit are: direct materials $10, direct labor $6, and variable overhead $2. Fixed costs are: $480,000 manufacturing overhead, and $60,000 selling and administrative expenses. The per unit manufacturing cost under absorption costing is;A. $18;B. $16;C. $27;D. $26;28) Which of the following is NOT considered an advantage of using standard costs?;A. Standard costs can be useful in setting prices for finished goods;B. Standard costs can reduce clerical costs;C. Standard costs can make employees "cost-conscious.;D. Standard costs can be used as a means of finding fault with performance;29) The difference between a budget and a standard is that;A. a budget expresses management's plans, while a standard reflects what actually happened;B. standards are excluded from the cost accounting system, whereas budgets are generally incorporated into the cost accounting system;C. a budget expresses a total amount while a standard expresses a unit amount;D. a budget expresses what costs were, while a standard expresses what costs should be;30) If a company is concerned with the potential negative effects of establishing standards, they should;A. offer wage incentives to those meeting standards;B. set tight standards in order to motivate people;C. not employ any standards;D. set loose standards that are easy to fulfill;31) The per-unit standards for direct materials are 2 gallons at $4 per gallon. Last month, 11,200 gallons of direct materials that actually cost $42,400 were used to produce 6,000 units of product. The direct materials quantity variance for last month was


Paper#79292 | Written in 18-Jul-2015

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