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ACC 102 Final Review

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ACC 102 Final Review
smjackson7
Quiz by smjackson7, updated more than 1 year ago
smjackson7
Created by smjackson7 almost 10 years ago
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Resource summary

Question 1

Question
Product costs for a manufacturing company consists of direct materials, direct labor and overhead
Answer
  • True
  • False

Question 2

Question
Period cost and product cost are synonymous terms.
Answer
  • True
  • False

Question 3

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

Question 4

Question
Period costs are not considered when costing products for inventory.
Answer
  • True
  • False

Question 5

Question
The two primary types of cost behavior are fixed and variable.
Answer
  • True
  • False

Question 6

Question
Direct materials are the only materials in a product.
Answer
  • True
  • False

Question 7

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

Question 8

Question
(Direct Materials + Direct Labor + Overhead) / Total Number of Units Produced = Product Unit Cost
Answer
  • True
  • False

Question 9

Question
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.
Answer
  • True
  • False

Question 10

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

Question 11

Question
Which of the following is not included in the purchase cost of merchandise inventory?
Answer
  • purchase discounts
  • overhead costs
  • freight-in costs
  • purchase returns and allowances

Question 12

Question
An example of a period cost is
Answer
  • advertising costs
  • indirect materials
  • product design costs
  • direct materials

Question 13

Question
Which of the following is a typical example of a variable cost?
Answer
  • sales commissions
  • rent
  • depreciation
  • salaries

Question 14

Question
Materials and supplies that cannot be traced conveniently to specific products are called
Answer
  • indirect materials
  • raw materials
  • minor materials
  • direct materials

Question 15

Question
When a company calculates its product unit cost using estimated costs, it is using which cost measurement method?
Answer
  • standard costing
  • actual costing
  • full costing
  • normal costing

Question 16

Question
Maintenance on factory building
Answer
  • (OH) Overhead
  • (DL) Direct Labor
  • (DM) Direct Materials

Question 17

Question
Cream
Answer
  • (DL) Direct Labor
  • (OH) Overhead
  • (DM) Direct Materials

Question 18

Question
In a process costing system, each product is assigned is the assigned the same amount of costs.
Answer
  • True
  • False

Question 19

Question
Companies that produce custom-made products usually use a process costing system.
Answer
  • True
  • False

Question 20

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

Question 21

Question
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.
Answer
  • True
  • False

Question 22

Question
A zero balance in Finished Goods Inventory at the start of the period means all previously completed products have shipped
Answer
  • True
  • False

Question 23

Question
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.
Answer
  • True
  • False

Question 24

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

Question 25

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

Question 26

Question
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.
Answer
  • True
  • False

Question 27

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

Question 28

Question
Job costing and process costing are systems of
Answer
  • inventory costing
  • cost flow assumptions
  • product costing
  • product pricing

Question 29

Question
Product costs appear on the income statement in the form of
Answer
  • cost of goods sold
  • material inventory
  • sales commissions
  • none of these

Question 30

Question
A company should use process costing rather than job order costing if
Answer
  • 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

Question
Which of the following characteristics applies to process costing, but does not apply to job order costing?
Answer
  • the need for averaging
  • the use of equivalent units
  • separate, identifiable jobs
  • the use of predetermined overhead rates

Question 32

Question
The basic document for keeping track of costs in a job order costing system is a
Answer
  • job order cost card
  • labor time card
  • process cost report
  • materials requisition form

Question 33

Question
Cost behavior is defined as the manner in which cost respond to changes in volume or activity.
Answer
  • True
  • False

Question 34

Question
Total variable and fixed costs will be the same regardless of how many units are produced.
Answer
  • True
  • False

Question 35

Question
Fixed costs always remain constant.
Answer
  • True
  • False

Question 36

Question
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.
Answer
  • True
  • False

Question 37

Question
Regression analysis can be performed using one or more activities to predict costs.
Answer
  • True
  • False

Question 38

Question
Cost-volume profit analysis assumes a constant sales mix.
Answer
  • True
  • False

Question 39

Question
The contribution margin equals total fixed costs at the breakeven point.
Answer
  • True
  • False

Question 40

Question
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%.
Answer
  • True
  • False

Question 41

Question
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.
Answer
  • True
  • False

Question 42

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

Question 43

Question
Which of the following statements most accurately explains the behavior of costs?
Answer
  • 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

Question
An insurance company pays its employees a commission of 6% on each sale. What is the proper classification of the cost of sales commissions?
Answer
  • constant cost
  • variable cost
  • mixed cost
  • fixed cost

Question 45

Question
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.
Answer
  • behave in a nonlinear fashion
  • increase
  • decrease
  • remain fixed

Question 46

Question
When fixed costs are $18,000 and the contribution margin per unit is $4, the breakeven point is
Answer
  • 4,500 units
  • 2,230 units
  • $22,300
  • $72,000

Question 47

Question
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.
Answer
  • 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

Question
Identify the following as fixed costs (FC), variable costs (VC), or mixed costs (MC): Direct Materials
Answer
  • FC
  • VC
  • MC

Question 49

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

Question 50

Question
Identify the following as fixed costs (FC), variable costs (VC), or mixed costs (MC): Factory building rent
Answer
  • FC
  • VC
  • MC

Question 51

Question
Identify the following as fixed costs (FC), variable costs (VC), or mixed costs (MC): Advertising Expense
Answer
  • FC
  • VC
  • MC

Question 52

Question
Identify the following as fixed costs (FC), variable costs (VC), or mixed costs (MC): Shipping Expense
Answer
  • FC
  • VC
  • MC

Question 53

Question
Identify the following as fixed costs (FC), variable costs (VC), or mixed costs (MC): Insurance on the factory building
Answer
  • FC
  • VC
  • MC

Question 54

Question
Identify the following as fixed costs (FC), variable costs (VC), or mixed costs (MC): Costs of Good Sold
Answer
  • FC
  • VC
  • MC

Question 55

Question
A performance management and evaluation system is mainly utilized to account for and report on financial performance.
Answer
  • True
  • False

Question 56

Question
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.
Answer
  • True
  • False

Question 57

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

Question 58

Question
A flexible budget is derived by multiplying actual unit output by the standard unit costs.
Answer
  • True
  • False

Question 59

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

Question 60

Question
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.
Answer
  • True
  • False

Question 61

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

Question 62

Question
Incentive awards are utilized mainly to encourage long-term performance.
Answer
  • True
  • False

Question 63

Question
A manager can improve the economic value of an investment center by decreasing assets.
Answer
  • True
  • False

Question 64

Question
Cost of capital is the maximum desired rate of return on a particular investment.
Answer
  • True
  • False

Question 65

Question
A performance management and evaluation system is a set of procedure that account for and report on
Answer
  • qualitative performance
  • quantitative performance
  • employee performance
  • qualitative and quantitative performance

Question 66

Question
Which of the following is an example of a performance measurement?
Answer
  • product quality
  • number of customer complaints
  • customer satisfaction
  • all of these choices

Question 67

Question
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.
Answer
  • cost center
  • discretionary cost center
  • profit center
  • revenue center

Question 68

Question
In developing performance measures, management must consider which of the following?
Answer
  • how should we measure?
  • how can managers monitor financial performance?
  • what should we measure?
  • all of these choices.

Question 69

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

Question 70

Question
A budget can contain nonfinancial information.
Answer
  • True
  • False

Question 71

Question
Participating budgeting involves only personnel at top levels of the organization.
Answer
  • True
  • False

Question 72

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

Question 73

Question
Projected financial statements are the final product of the budgeting process.
Answer
  • True
  • False

Question 74

Question
Operating budgets are plans used in daily operations.
Answer
  • True
  • False

Question 75

Question
The direct materials purchases budget reflect both the quantity and cost of direct materials purchases.
Answer
  • True
  • False

Question 76

Question
The overhead budget must be separate into variable and fixed cost segments.
Answer
  • True
  • False

Question 77

Question
The direct labor budget is needed to prepare the production budget.
Answer
  • True
  • False

Question 78

Question
A company seeks to have as much cash as possible on hand. Cash budgeting helps to accomplish this.
Answer
  • True
  • False

Question 79

Question
A company seeks to have as much cash as possible on hand. Cash budgeting helps to accomplish this.
Answer
  • True
  • False

Question 80

Question
A company seeks to have as much cash as possible on hand. Cash budgeting helps to accomplish this.
Answer
  • True
  • False

Question 81

Question
Budgets
Answer
  • 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

Question
Which type of budgeting utilizes employes at all levels of the company?
Answer
  • group budgeting
  • selective budgeting
  • target budgeting
  • participative budgeting

Question 83

Question
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?
Answer
  • sales forecast
  • production forecast
  • labor forecast
  • materials forecast

Question 84

Question
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?
Answer
  • sales forecast
  • production forecast
  • labor forecast
  • materials forecast

Question 85

Question
The first budget to be prepared when making a master budget is the
Answer
  • sales budget
  • production budget
  • cash budget
  • direct labor budget

Question 86

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

Question
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.
Answer
  • True
  • False

Question 88

Question
Variance analysis involves computing the difference between standard and actual costs.
Answer
  • True
  • False

Question 89

Question
The final step in variance analysis is determining the cause of the variance.
Answer
  • True
  • False

Question 90

Question
The flexible budget formula is an equation that determines unexpected costs at any level of output.
Answer
  • True
  • False

Question 91

Question
The "flex" in the flexible budget formula occurs in the variable cost segment.
Answer
  • True
  • False

Question 92

Question
Another name for a flexible budget is a variable budget.
Answer
  • True
  • False

Question 93

Question
Comparing "what did happen" with "what should have happened" aids in the performance evaluation of a company.
Answer
  • True
  • False

Question 94

Question
A production manager usually is responsible for direct material used and direct labor hours used.
Answer
  • True
  • False

Question 95

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

Question 96

Question
Variance analysis includes all of the following except:
Answer
  • taking corrective action
  • investigating all variances
  • developing performance measures to track activities causing the variance
  • identification of the cause

Question 97

Question
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
Answer
  • continuous budget
  • flexible budget
  • master budget
  • period budget

Question 98

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

Question
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.
Answer
  • $295,125
  • $338,920
  • $309,985
  • $226,575

Question 100

Question
A flexible budget is most useful
Answer
  • 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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