MANAGERIAL ACCOUNTING

CHAP 01: COSTS BEHAVING BADLY

100

All of the following would be classified as product costs except:
A)	the cost of air-conditioning the factory foreman's office.
B)	depreciation on the machinery in the factory
C)	the cost of shipping units of product to one of the company's customers
D)	All of the above would be classified as product costs.

.

D) All of the above would be classified as manufacturing overhead.

200

All of the following would be classified as product costs except: A) the cost of air-conditioning the factory foreman's office. B) depreciation on the machinery in the factory. C) the cost of shipping units of product to one of the company's customers. D) All of the above would be classified as product costs.

C) the cost of shipping units of product to one of the company's customers.

300

Within the relevant range: A) both total variable costs and total fixed costs will remain constant. B) both total variable costs and total fixed costs fluctuate. C) fixed costs per unit will remain constant and variable costs per unit will fluctuate. D) variable costs per unit will remain constant and fixed costs per unit will fluctuate

D) variable costs per unit will remain constant and fixed costs per unit will fluctuate

400

Given the cost formula Y = $30,000 + $5X, total cost at an activity level of 16,000 units would be: [A]: 30000 [B]: 46000 [C]: 80000 [D]: 110000

[D]: 110000

500

5.: An analysis of a particular cost incurred in a factory revealed that the cost is averages $0.40 per machine-hour at an activity level of 20,000 machine hours and increases to an average of $0.50 per machine hour at an activity level of 16,000 machine hours. Assuming that this activity is within the relevant range, what is the total expected cost if the activity level is 17,300 machine hours? [A]: 1600 [B]: 6960 [C]: 8000 [D]: 9000

[C]: 8000

CHAP 02:JOB MY COSTS

100

In a job order cost system, the use of direct materials would be recorded as a debit to: [A]: Finished Goods inventory. [B]: Manufacturing Overhead. [C]: Raw materials Inventory [D]: Work jn process In Process Inventory

[D]: Work jn process

200

In a job-order cost system, indirect materials costs would be recorded as a debit to: [A]: Finished Goods. [B]: Manufacturing Overhead. [C]: Raw Materials. [D]: Work in Process

B]: Manufacturing Overhead.

300

8.: When there are batch-level or product-level costs, in comparison to a traditional cost system, an activity-based costing system ordinarily will shift costs from: [A]: low-volume to high-volume products. [B]: high-volume to low-volume products. [C]: standardized to specialized products. [D]: specialized to standardized products.

high-volume to low-volume products.

400

9.: If Manufacturing Overhead has a debit balance at the end of the period, then [A]: overhead has been underapplied. [B]: the overhead assigned to Work in Process Inventory is more than the overhead incurred. [C]: overhead has been overapplied. [D]: management must take corrective action

[A]: overhead has been underapplied.

500

Hutchins Company uses a predetermined overhead rate based on direct labor hours (DLHs) to apply manufacturing overhead to jobs. At the beginning of the year, the company estimated manufacturing overhead would be $200,000 and DLHs would be 20,000. The actual figures for the year were $215,000 for manufacturing overhead and 21,000 DLHs. The cost records for the year will show: [A]: overapplied overhead of $5,000. [B]: underapplied overhead of $5,000. [C]: overapplied overhead of $10,000. [D]: underapplied overhead of $10,000

B]: underapplied overhead of $5,000.

CHAP 03: EASY AS ABC

100

All of the following are examples of product-level activities except [A]: Advertising a product. [B]: Human resource management. [C]: Parts administration. [D]: Testing a protoype of a new product

[B]: Human resource management.

200

12.: All of the following are examples of batch-level activities except: [A]: Purchase order processing. [B]: Setting up equipment. [C]: the clerical activity associated with processing purchase orders to produce an order for a standard product. [D]: Installing seats in the custom Porsche we ordered.

[D]: Installing seats in the custom Porsche we ordered.

300

13.: Bangayan Company uses activity-based costing to determine the costs of its two products: A and B. The estimated total cost and expected activity for one of the company's three activity cost pools are as follows. The activity rate under the activity-based costing system for this activity is closest to: [A]: $4.00. [B]: $8.59. [C]: $18.00. [D]: $20.00.

[D]: $20.00.

400

The presence of any of the following factors would suggest a switch to ABC exceptwhen [A]: product lines differ greatly in volume. [B]: overhead costs constitute a minor portion of total costs. [C]: the manufacturing process has changed significantly. [D]: production managers are ignoring data provided by the existing system

[B]: overhead costs constitute a minor portion of total costs.

500

Windsor Co. incurs $1,050,000 of overhead costs each year in its three main departments, machining ($600,000), inspections ($300,000) and packing ($150,000). The machining department works 4,000 hours per year, there are 600 inspections per year, and the packing department packs 1,000 orders per year. Information about Windsor's two products is as follows: Machine hrs 1,000 3,000 Inspections 100 500 Packing 350 650 Direct Hours 1,700 1,800 If traditional costing based on direct labor hours is used, how much overhead is assigned to Product X this year? [A]: $252,501 [B]: $363,462 [C]: $510,000 [D]: $525,000

[C]: $510,000