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The Manilla Company has provided the following data for the month of August:
a.
b.
$144,000
$99,000
c.
$154,000
d.
$231,000
3.
An office equipment firm is examining customer service costs. Data for the most recent year is given
below:
Using the high-low method, predict the cost for 200 service requests.
a.
$15,164
b.
$5,700
c.
$9,464
d.
$13,845
4.
a.
departments.
b.
processes.
c.
products.
d.
activities.
5.
The following information pertains to Manassas Company for the month of September:
Overhead is applied for Job 456 at 140% of direct labor cost and at 150% for Job 458 and Job 502.
The total cost of Jobs 456 and 458 are identical. What amount of material belongs to Job 458?
a.
$5,670
b.
$3,200
c.
$1,400
d.
$1,500
6.
a.
work-in-process department.
b.
c.
d.
7.
The Roma Company produces three products from the same process: Alene, Halene, and Palene.
Joint costs for this production run are $2,100.
a.
b.
Puerto Mont Company has the following budgeted data for a merchandising firm:
Assuming there was inventory on hand of $70,000 (at cost) on January 1, the desired ending inventory
(at cost) for the month of February would be:
a.
$180,000
b.
$300,000
c.
$240,000
d.
$160,000
9.
During the month, 4,500 units are produced, 4,000 units were the denominator capacity, and 10,000
direct labor hours were worked. What is the fixed overhead volume variance?
a.
$39,500 F
b.
$10,000 F
c.
d.
$0
$7,000 U
10.
a.
b.
$40,000
c.
d.
$4,800
$8,000
$72,000
11.
Prior to installing a JIT system, machine hours were used at Thompson Inc. to allocate maintenance
costs to Product A and Product B. Maintenance costs totaled $150,000 per year. The machine hours
used and quantity produced are as follows:
After JIT is implemented, two manufacturing cells were created and cell workers were trained to
perform maintenance. Total maintenance costs still amounted to $150,000, but now the maintenance
costs traceable to each cell amount to:
The maintenance cost per unit of Product A after JIT would be:
a.
b.
c.
d.
12.
The Ropo Company has developed cost formulas for the drivers of the following production activity:
a.
$245,200
b.
$225,800
c.
$1,655,430
d.
$2,221,100
13.
At the beginning of 2005, Peterson Company installed a JIT purchasing and manufacturing system.
The following information has been gathered about one of the company's products:
a.
b.
c.
d.
14.
Ramallah Corporation, reported the following operating costs and environmental quality costs for the
past four years. Assume that all environmental quality costs are variable and that all changes in the
quality cost ratios are due to an environmental cost reduction program.
What would be the impact on profit if environmental quality costs were reduced to two percent of
operating costs in 2005 instead of 15 percent?
a.
$559
b.
$731
c.
$520
d.
$0
15.
a.
16.
a.
17.
What are the variable costs per unit if the targeted before tax profit is $70,000?
a.
b.
c.
d.
18.
Assume that Product C is discontinued and the extra space is devoted to the production of Product A.
Product A production is increased to 500 units per year, but the selling price on all units of A is reduced
to $7.00 Assuming everything else remains the same as the original data, annual profits will:
a.
increase by $1,900
b.
increase by $100
c.
increase by $560
d.
decrease by $2,000
19.
Goshen Company is planning to introduce a new product. The following information has been found:
The company requires a 20% rate of return on investment on all products. Assuming that the company
uses a cost-plus approach to pricing, the markup on the variable costs would come closest to:
a.
72.9%.
b.
20.0%.
c.
77.8%.
d.
52.1%.
20.
The company uses a required rate of return of 10% and depreciates equipment using the straight-line
method. The net present value for the investment is:
a.
$15,636
b.
$24,000
c.
$45,636
d.
$60,000
21.
Singapore Company sells 20,000 pocket calculators evenly throughout the year. The cost of carrying
one unit in inventory for one year is $4 and the ordering cost is $64 per order. What is the ordering
cost if the quantity ordered is 1,000?
d.
a.
$1,000
b.
$4,064
c.
$1,280
$64,000
22.
23.
The focus of an activity based cost management system is to assign costs to organizational units and
hold unit managers responsible for controlling costs.
True
False
24.
25.
An activity inventory is a list of the nonfinancial and financial information items that describe individual
activities.
True
False
26.
27.
In order to equitably allocate costs in a process costing system, dissimilar products are restated in
terms of equivalent units by weighting the number of units produced by their market values.
True
False
28.
The net realizable value for joint products is computed as selling price at split-off minus allocated joint
processing costs.
True
False
29.
True
False
30.
31.
32.
33.
Activity selection decreases the time and resources required by different activities.
True
False
34.
35.
As preventive and appraisal costs increase, internal failure costs are expected to increase.
36.
The measurement of the productivity of several inputs at a time is called partial productivity
measurement.
True
False
37.
Lean manufacturing is an approach designed to eliminate waste and maximize customer value.
True
False
38.
A single product is sold for $15 per unit. Last year, the company's sales revenue was $225,000 and its
net income was $18,000. If fixed costs totaled $72,000 for the year, the break-even point is 12,000
units.
True
False
39.
40.
41.
When using the Net Present Value method to evaluate investment projects, a project would be
rejected if the discount rate does not equal the required rate of return.
True
False
42.
The objective of the economic order quantity is to minimize ordering costs and maximize purchase
discounts.
True
False