Quiz 1 & 2
Product costs that have become expenses can be found in
What is
COGS
In a job-order costing system, indirect labor cost is usually recorded as a debit to
What is
Manufacturing Overhead
A cost that would be included in product costs under both absorption costing and variable costing is:
What is
Variable manufacturing cost
In a flexible budget, what will happen to fixed costs as the activity level increases?
What is
The fixed cost per unit will decrease.
A joint product is
What is
One of several products produced from a common input.
A cost incurred in the past that is not relevant to any current decision is classified as a(n)
What is
A sunk cost
When closing over-applied manufacturing overhead to COGS, which of the following would happen?
What is
Gross Margin will increase.
The costing method that treats all fixed costs as period costs is:
Variable costing.
When using a flexible budget, a decrease in activity within the relevant range:
What is
Decrease total costs
Demand for a product is said to be elastic if a change in price has
What is
A substantial effect on the volume of units sold.
In a job order costing system that is based on machine-hours, which of the following formulas is correct?
What is
Predetermined overhead rate = Estimated Manufacturing overhead / Estimated machine-hours
If the degree of operating leverage is 4, then a one percent change in quantity sold should result in a four percent change in:
What is
Net operating income
Which of the following statements is NOT correct concerning the Manufacturing Overhead Budget?
A) The Manufacturing Overhead Budget shows only the variable portion of manufacturing overhead.
B) The Manufacturing Overhead Budget shows the expected cash disbursements for manufacturing overhead.
C) The Manufacturing Overhead Budget provides a schedule of all costs of production other than direct materials and labor costs.
D) The Manufacturing Overhead Budget is prepared after the Sales Budget.
What is
A) The Manufacturing Overhead Budget shows only the variable portion of manufacturing overhead.
Employee turnover percentage is an example of which performance measure category?
What is
Learning and Growth
The internal rate of return method assumes that a projects cash flows are reinvested at the:
What is
Internal rate of return.
Assigning manufacturing overhead to a specific job is NOT complicated by
What is -
Manufacturing overhead is incurred only to support some jobs.
What is an assumption underlying standard CVP analysis?
What is
In multiproduct companies, the sales mix is constant.
There are various budgets within the master budget. One of these budgets is the production budget. Which of the following BEST describes the production budget?
A) It details the required raw materials purchases.
B) It is calculated based on the sales budget and the desired ending inventory.
C) It details the required direct labor hours.
D) It summarizes the costs of producing units for the budget period.
What is
B) It is calculated based on the sales budget and the desired ending inventory.
The cost of labor time required to rework defective units would be classified as a(n):
What is
Internal failure cost
A company has unlimited funds to invest at its discount rate. The company should invest in all projects having
What is
A net present value greater than zero.