ACC 102 Final Review

Question 1 of 100

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Product costs for a manufacturing company consists of direct materials, direct labor and overhead

Select one of the following:

  • True
  • False

Question 2 of 100

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Period cost and product cost are synonymous terms.

Select one of the following:

  • True
  • False

Question 3 of 100

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For a manufactured product, all costs are incurred to get the product ready for sale are included in the inventory value of the product.

Select one of the following:

  • True
  • False

Question 4 of 100

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Period costs are not considered when costing products for inventory.

Select one of the following:

  • True
  • False

Question 5 of 100

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The two primary types of cost behavior are fixed and variable.

Select one of the following:

  • True
  • False

Question 6 of 100

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Direct materials are the only materials in a product.

Select one of the following:

  • True
  • False

Question 7 of 100

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Wages of machine operators and other workers involved in actually shaping the product are classified as direct labor costs.

Select one of the following:

  • True
  • False

Question 8 of 100

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(Direct Materials + Direct Labor + Overhead) / Total Number of Units Produced = Product Unit Cost

Select one of the following:

  • True
  • False

Question 9 of 100

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At the end of an accounting period, the balance in the Finished Goods Inventory account is made up of the costs of products completed but not sold as of that d ate.

Select one of the following:

  • True
  • False

Question 10 of 100

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Under activity-based costing (ABC), a product's unit cost may include assigned overhead from several cost pools

Select one of the following:

  • True
  • False

Question 11 of 100

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Which of the following is not included in the purchase cost of merchandise inventory?

Select one of the following:

  • purchase discounts

  • overhead costs

  • freight-in costs

  • purchase returns and allowances

Question 12 of 100

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An example of a period cost is

Select one of the following:

  • advertising costs

  • indirect materials

  • product design costs

  • direct materials

Question 13 of 100

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Which of the following is a typical example of a variable cost?

Select one of the following:

  • sales commissions

  • rent

  • depreciation

  • salaries

Question 14 of 100

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Materials and supplies that cannot be traced conveniently to specific products are called

Select one of the following:

  • indirect materials

  • raw materials

  • minor materials

  • direct materials

Question 15 of 100

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When a company calculates its product unit cost using estimated costs, it is using which cost measurement method?

Select one of the following:

  • standard costing

  • actual costing

  • full costing

  • normal costing

Question 16 of 100

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Maintenance on factory building

Select one of the following:

  • (OH) Overhead

  • (DL) Direct Labor

  • (DM) Direct Materials

Question 17 of 100

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Cream

Select one of the following:

  • (DL) Direct Labor

  • (OH) Overhead

  • (DM) Direct Materials

Question 18 of 100

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In a process costing system, each product is assigned is the assigned the same amount of costs.

Select one of the following:

  • True
  • False

Question 19 of 100

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Companies that produce custom-made products usually use a process costing system.

Select one of the following:

  • True
  • False

Question 20 of 100

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The typical product costing system in a factory incorporates parts of both job order costing and process costing to create a hybrid system.

Select one of the following:

  • True
  • False

Question 21 of 100

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In a job order costing system, when the goods are sold, the Cost of Goods Sold account is increased, and the Finished Goods Inventory account is decreased for the selling price of the goods sold.

Select one of the following:

  • True
  • False

Question 22 of 100

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A zero balance in Finished Goods Inventory at the start of the period means all previously completed products have shipped

Select one of the following:

  • True
  • False

Question 23 of 100

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In a job order costing system, indirect labor costs are transferred to the Overhead account by increasing the Factory payroll account and decreasing the Overhead account.

Select one of the following:

  • True
  • False

Question 24 of 100

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In a job order costing system, when supplies are issued from inventory to production, the Overhead account is increased.

Select one of the following:

  • True
  • False

Question 25 of 100

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In a job order costing system, indirect labor costs incurred are charged to the Work in Process Inventory account.

Select one of the following:

  • True
  • False

Question 26 of 100

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To prepare financial statements at the end of the accounting period, the actual overhead cost for the period and the estimated overhead that was applied during the period must be reconciled in both job order and process costing systems.

Select one of the following:

  • True
  • False

Question 27 of 100

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If applied overhead exceeds actual overhead, cost of good sold must be reduced by the amount of the overcharge in a job costing system.

Select one of the following:

  • True
  • False

Question 28 of 100

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Job costing and process costing are systems of

Select one of the following:

  • inventory costing

  • cost flow assumptions

  • product costing

  • product pricing

Question 29 of 100

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Product costs appear on the income statement in the form of

Select one of the following:

  • cost of goods sold

  • material inventory

  • sales commissions

  • none of these

Question 30 of 100

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A company should use process costing rather than job order costing if

Select one of the following:

  • production is only partially completed during the accounting period

  • the produce is produced in bathes only as orders are received

  • the product is composted of mass-produced homogenous units

  • the product goes through several stages of production

Question 31 of 100

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Which of the following characteristics applies to process costing, but does not apply to job order costing?

Select one of the following:

  • the need for averaging

  • the use of equivalent units

  • separate, identifiable jobs

  • the use of predetermined overhead rates

Question 32 of 100

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The basic document for keeping track of costs in a job order costing system is a

Select one of the following:

  • job order cost card

  • labor time card

  • process cost report

  • materials requisition form

Question 33 of 100

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Cost behavior is defined as the manner in which cost respond to changes in volume or activity.

Select one of the following:

  • True
  • False

Question 34 of 100

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Total variable and fixed costs will be the same regardless of how many units are produced.

Select one of the following:

  • True
  • False

Question 35 of 100

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Fixed costs always remain constant.

Select one of the following:

  • True
  • False

Question 36 of 100

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Normal capacity is the average annual level of operating capacity needed to meet expected sales demand, adjusted for seasonal changes and industry and economic cycles.

Select one of the following:

  • True
  • False

Question 37 of 100

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Regression analysis can be performed using one or more activities to predict costs.

Select one of the following:

  • True
  • False

Question 38 of 100

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Cost-volume profit analysis assumes a constant sales mix.

Select one of the following:

  • True
  • False

Question 39 of 100

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The contribution margin equals total fixed costs at the breakeven point.

Select one of the following:

  • True
  • False

Question 40 of 100

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If revenue was $120,000,000, variable costs were $90,000,000, and fixed costs were $15,000,000, then the contribution margin ratio was 25%.

Select one of the following:

  • True
  • False

Question 41 of 100

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If targeted sales are 12,000 units, the sales price/unit is $70, fixed costs are #130,000, and variable costs are $40/unit, then planned profit must be $230,000.

Select one of the following:

  • True
  • False

Question 42 of 100

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For profit planning purposes, the following equation is used: Target Sales Units = (FC + P) divided by CM per Unit.

Select one of the following:

  • True
  • False

Question 43 of 100

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Which of the following statements most accurately explains the behavior of costs?

Select one of the following:

  • there is no norm; rather costs can be fixed, variable or a combination of both

  • the majority of costs are variable per unit of production

  • the majority of costs are fixed per unit of production

  • costs can be fixed or variable, but usually not a combination of both

Question 44 of 100

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An insurance company pays its employees a commission of 6% on each sale. What is the proper classification of the cost of sales commissions?

Select one of the following:

  • constant cost

  • variable cost

  • mixed cost

  • fixed cost

Question 45 of 100

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Suppose a company rents a building for $250,000/year for the purpose of manufacturing between 80,000 and 140,000 units (the relevant range of activity). The rental cost per unit of production will __________________ as production levels increase.

Select one of the following:

  • behave in a nonlinear fashion

  • increase

  • decrease

  • remain fixed

Question 46 of 100

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When fixed costs are $18,000 and the contribution margin per unit is $4, the breakeven point is

Select one of the following:

  • 4,500 units

  • 2,230 units

  • $22,300

  • $72,000

Question 47 of 100

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If the contribution margin on a new product line is $15, fixed costs are $165,000, and the total market for the product is 22,000 units, then the breakeven analysis would recommend that the company.

Select one of the following:

  • abandon the new product line

  • decrease the sales price per unit

  • increase the fixed costs (such as advertising) to lower the breakeven units

  • adopt the new product line

Question 48 of 100

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Identify the following as fixed costs (FC), variable costs (VC), or mixed costs (MC):

Direct Materials

Select one of the following:

  • FC

  • VC

  • MC

Question 49 of 100

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Identify the following as fixed costs (FC), variable costs (VC), or mixed costs (MC):

Electricity

Select one of the following:

  • FC

  • VC

  • MC

Question 50 of 100

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Identify the following as fixed costs (FC), variable costs (VC), or mixed costs (MC):

Factory building rent

Select one of the following:

  • FC

  • VC

  • MC

Question 51 of 100

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Identify the following as fixed costs (FC), variable costs (VC), or mixed costs (MC):

Advertising Expense

Select one of the following:

  • FC

  • VC

  • MC

Question 52 of 100

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Identify the following as fixed costs (FC), variable costs (VC), or mixed costs (MC):

Shipping Expense

Select one of the following:

  • FC

  • VC

  • MC

Question 53 of 100

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Identify the following as fixed costs (FC), variable costs (VC), or mixed costs (MC):

Insurance on the factory building

Select one of the following:

  • FC

  • VC

  • MC

Question 54 of 100

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Identify the following as fixed costs (FC), variable costs (VC), or mixed costs (MC):

Costs of Good Sold

Select one of the following:

  • FC

  • VC

  • MC

Question 55 of 100

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A performance management and evaluation system is mainly utilized to account for and report on financial performance.

Select one of the following:

  • True
  • False

Question 56 of 100

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A performance management and evaluation system allows a company to identify how well it is doing, where it is going, and what improvements will make it more profitable.

Select one of the following:

  • True
  • False

Question 57 of 100

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A responsibility center whose manager is held accountable for both revenues and costs and for the resulting operating income is called a profit center.

Select one of the following:

  • True
  • False

Question 58 of 100

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A flexible budget is derived by multiplying actual unit output by the standard unit costs.

Select one of the following:

  • True
  • False

Question 59 of 100

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When calculating ROI, assets invested represent the average of the beginning and ending asset balances for a given period.

Select one of the following:

  • True
  • False

Question 60 of 100

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How effective a performance management and evaluation system is depends on how well the goals of the entire compare coordinated rather than on how well the goals of responsibility centers, managers, and the entire organizations will be well coordinated.

Select one of the following:

  • True
  • False

Question 61 of 100

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Tying compensation incentives to performance targets decreases the likelihood that the goals of responsibility centers, managers, and the entire organization will be well coordinated.

Select one of the following:

  • True
  • False

Question 62 of 100

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Incentive awards are utilized mainly to encourage long-term performance.

Select one of the following:

  • True
  • False

Question 63 of 100

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A manager can improve the economic value of an investment center by decreasing assets.

Select one of the following:

  • True
  • False

Question 64 of 100

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Cost of capital is the maximum desired rate of return on a particular investment.

Select one of the following:

  • True
  • False

Question 65 of 100

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A performance management and evaluation system is a set of procedure that account for and report on

Select one of the following:

  • qualitative performance

  • quantitative performance

  • employee performance

  • qualitative and quantitative performance

Question 66 of 100

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Which of the following is an example of a performance measurement?

Select one of the following:

  • product quality

  • number of customer complaints

  • customer satisfaction

  • all of these choices

Question 67 of 100

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The manager of Center A is responsible for generating cash inflows and incurring costs with the goal of making money for the company. The manager has no responsibility for assets. What type of responsibility center is Center A.

Select one of the following:

  • cost center

  • discretionary cost center

  • profit center

  • revenue center

Question 68 of 100

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In developing performance measures, management must consider which of the following?

Select one of the following:

  • how should we measure?

  • how can managers monitor financial performance?

  • what should we measure?

  • all of these choices.

Question 69 of 100

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Budgeting is the process of identifying, gathering, summarizing, and communicating financial and nonfinancial information about an organization's future activities.

Select one of the following:

  • True
  • False

Question 70 of 100

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A budget can contain nonfinancial information.

Select one of the following:

  • True
  • False

Question 71 of 100

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Participating budgeting involves only personnel at top levels of the organization.

Select one of the following:

  • True
  • False

Question 72 of 100

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The short-term plan or budget involves every part of the enterprise and is much more detailed than the long-term plan.

Select one of the following:

  • True
  • False

Question 73 of 100

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Projected financial statements are the final product of the budgeting process.

Select one of the following:

  • True
  • False

Question 74 of 100

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Operating budgets are plans used in daily operations.

Select one of the following:

  • True
  • False

Question 75 of 100

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The direct materials purchases budget reflect both the quantity and cost of direct materials purchases.

Select one of the following:

  • True
  • False

Question 76 of 100

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The overhead budget must be separate into variable and fixed cost segments.

Select one of the following:

  • True
  • False

Question 77 of 100

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The direct labor budget is needed to prepare the production budget.

Select one of the following:

  • True
  • False

Question 78 of 100

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A company seeks to have as much cash as possible on hand. Cash budgeting helps to accomplish this.

Select one of the following:

  • True
  • False

Question 79 of 100

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A company seeks to have as much cash as possible on hand. Cash budgeting helps to accomplish this.

Select one of the following:

  • True
  • False

Question 80 of 100

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A company seeks to have as much cash as possible on hand. Cash budgeting helps to accomplish this.

Select one of the following:

  • True
  • False

Question 81 of 100

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Budgets

Select one of the following:

  • should contain both revenues and expenses

  • contain as much information as possible

  • are presented in dollars only; nondollar data should be excluded

  • are synonymous with managing an organization

Question 82 of 100

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Which type of budgeting utilizes employes at all levels of the company?

Select one of the following:

  • group budgeting

  • selective budgeting

  • target budgeting

  • participative budgeting

Question 83 of 100

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A master budget is a compilation of forecasts for the coming year or operating cycle by various departments or functions within an organization. What is the most basic forecast made in a master budget?

Select one of the following:

  • sales forecast

  • production forecast

  • labor forecast

  • materials forecast

Question 84 of 100

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A master budget is a compilation of forecasts for the coming year or operating cycle by various departments or functions within an organization. What is the most basic forecast made in a master budget?

Select one of the following:

  • sales forecast

  • production forecast

  • labor forecast

  • materials forecast

Question 85 of 100

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The first budget to be prepared when making a master budget is the

Select one of the following:

  • sales budget

  • production budget

  • cash budget

  • direct labor budget

Question 86 of 100

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Which of the following would most likely be considered a short-term goal?

Select one of the following:

  • modernization and expansion of the plant

  • a product line change

  • a unit sales forecast

  • a marketing plan to gain a higher percentage of control of the market in five years.

Question 87 of 100

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Once standard costs for direct materials, direct labor and variable and fixed overhead have been developed, a total standard unit cost can be determined over time.

Select one of the following:

  • True
  • False

Question 88 of 100

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Variance analysis involves computing the difference between standard and actual costs.

Select one of the following:

  • True
  • False

Question 89 of 100

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The final step in variance analysis is determining the cause of the variance.

Select one of the following:

  • True
  • False

Question 90 of 100

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The flexible budget formula is an equation that determines unexpected costs at any level of output.

Select one of the following:

  • True
  • False

Question 91 of 100

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The "flex" in the flexible budget formula occurs in the variable cost segment.

Select one of the following:

  • True
  • False

Question 92 of 100

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Another name for a flexible budget is a variable budget.

Select one of the following:

  • True
  • False

Question 93 of 100

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Comparing "what did happen" with "what should have happened" aids in the performance evaluation of a company.

Select one of the following:

  • True
  • False

Question 94 of 100

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A production manager usually is responsible for direct material used and direct labor hours used.

Select one of the following:

  • True
  • False

Question 95 of 100

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It is not necessary to provide an area on the performance report for a manager's reasons for variances.

Select one of the following:

  • True
  • False

Question 96 of 100

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Variance analysis includes all of the following except:

Select one of the following:

  • taking corrective action

  • investigating all variances

  • developing performance measures to track activities causing the variance

  • identification of the cause

Question 97 of 100

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A summary of expected costs for a range of activity levels that is geared to changes in the level of productive output is the definition of a

Select one of the following:

  • continuous budget

  • flexible budget

  • master budget

  • period budget

Question 98 of 100

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The primary difference between a fixed (static) budget and a flexible budget is that a fixed budget

Select one of the following:

  • cannot be change after the period begins, whereas a flexible budget can be changed after the period ends

  • is concerned only with future acquisitions of fixed assets, whereas a flexible budget is concerned with expenses that vary with sales.

  • is a plan for a simple level of production, whereas a flexible budget is several plans (one for each of several production levels)

  • includes only fixed costs, whereas a flexible budget includes only variable costs

Question 99 of 100

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If a company's flexible budget formula is $9.50 per unit plus $68,550, what would be the total budget for evaluating operating performance if 23,850 units were sold and 28,460 units were produced.

Select one of the following:

  • $295,125

  • $338,920

  • $309,985

  • $226,575

Question 100 of 100

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A flexible budget is most useful

Select one of the following:

  • for budgeting and planning purposes

  • when actual output equals budget output

  • as a cost control tool to help evaluate performance

  • when a product's cost structure includes variable costs only

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ACC 102 Final Review

smjackson7
Quiz by , created over 2 years ago

ACC 102 Final Review

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Created by smjackson7 over 2 years ago
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