Solved by verified expert :1 Reno Corporation uses a predetermined overhead application rate of $.30 per direct labor hour. During the year it incurred $345,000 dollars of actual overhead, but it planned to incur $360,000 of overhead. The company applied $363,000 of overhead during the year. How many direct labor hours did the company plan to incur? 1,150,000 1,190,000 1,200,000 1,210,0002. For its most recent fiscal year, a firm reported that its contribution margin was equal to 40 percent of sales and that its net income amounted to 10 percent of sales. If its fixed costs for the year were $60,000, how much were sales?$150,000 $200,000 $600,000 can’t be determined from the information given3. At its present level of operations, a small manufacturing firm has total variable costs equal to 75 percent of sales and total fixed costs equal to 15 percent of sales. Based on variable costing, if sales change by $1.00, income will change by _______.$0.25 $0.10 $0.75 can’t be determined from the information given4. At the end of the last fiscal year, Roberts Company had the following account balances:Overapplied overhead $ 6,000Cost of Goods Sold $980,000Work in Process Inventory $ 38,000Finished Goods Inventory $ 82,000If the most common treatment of assigning overapplied overhead were used, the final balance in Cost of Goods Sold is _______. $974,000 $974,660 $985,340 $986,0005. Strong Products has no Work in Process or Finished Goods inventories at the close of business on December 31, 20X4. The balances of Strong Products’ accounts as of December 31, 20X4, are as follows:Cost of goods sold–unadjusted $2,040,000Selling & administrative expenses 900,000Sales 3,600,000Manufacturing overhead control 700,000Manufacturing overhead applied 648,000Pretax income for 20X4 is ______. $608,000 $660,000 $712,000 undeterminable from the information given6. Long Company transferred 5,500 units to Finished Goods Inventory during September. On September 1, the company had 300 units on hand (40 percent complete as to both material and conversion costs). On June 30, the company had 800 units (10 percent complete as to material and 20 percent complete as to conversion costs). The number of units started and completed during September was _______. 5,200 5,380 5,500 6,3007. Green Company started 9,000 units in February. The company transferred out 7,000 finished units and ended the period with 3,500 units that were 40 percent complete as to both material and conversion costs. Beginning Work in Process Inventory units were _______. 500 600 1,500 2,0008. Taylor Company uses a weighted average process costing system and started 30,000 units this month. Taylor had 12,000 units that were 20 percent complete as to conversion costs in beginning Work in Process Inventory and 3,000 units that were 40 percent complete as to conversion costs in ending Work in Process Inventory. What are equivalent units for conversion costs?37,800 40,200 40,800 42,0009. Actual fixed overhead is $33,300 (12,000 machine hours) and fixed overhead was estimated at $34,000 when the predetermined rate of $3.00 per machine hour was set. If 11,500 standard hours were allowed for actual production, applied fixed overhead is _______. $33,300 $34,000 $34,500 not determinable without knowing the actual number of units produced10. A company has estimated its economic order quantity for Part A at 2,400 units for the coming year. If ordering costs are $200 and carrying costs are $.50 per unit per year, what is the estimated total annual usage? 6,000 units 28,800 units 7,200 units 2,400 units11. Modern management accounting can be characterized by its _______. flexibility standardization complexity precision12. Which of the following is not a valid method for determining product cost? arbitrary assignment direct measurement systematic allocation cost-benefit measurement13. Cost accounting is necessitated by _______. the high degree of conversion found in certain businesses regulatory requirements for manufacturing companies management’s need to be aware of all production activities management’s need for information to be used for planning and controlling activities14. A long-term plan that fulfills the goals and objectives of an organization is known as a(n) ______. management style strategy mission statement operational mission15. The world has essentially become smaller because of _______. improved technology trade agreements better communications systems all of the above16. The value chain _______. reflects the production of goods within an organizational context is concerned with upstream suppliers, but not downstream customers results when all non-value-added activities are eliminated from a production process is the foundation of strategic resource management17. A managerial accountant who communicates information objectively is exercising which of the following standards? objectivity integrity competence confidentiality18. Period costs _______. are generally expensed in the same period in which they are incurred are always variable costs remain unchanged over a given period of time are associated with the periodic inventory method19. Which of the following would need to be allocated to a cost object? direct material direct labor direct production costs indirect production costs20. Conversion cost does not include _______. direct labor direct material factory depreciation supervisors’ salaries21. Which of the following is not a reason to use predetermined overhead rates? to overcome the problems of assigning overhead to diverse types of products to compensate for fluctuations in monthly overhead costs to provide a means for assigning overhead during the period rather than at the end of the period to smooth out the amount of overhead cost assigned to products when monthly production activity differs22. In the formula y = a + bX, a represents ______. mixed cost variable cost total cost fixed cost23. All other things being equal, if actual cost per unit is greater than budgeted cost per unit, variable overhead will be _______. overapplied the same as fixed overhead underapplied applied to Finished Goods24. Which of the following could not be used in job order costing? standards an average cost per unit for all jobs normal costing overhead allocation based on the job’s direct labor hours25. A credit to Work in Process Inventory represents _______. work still in process raw material put into production the application of overhead to production the transfer of completed items to Finished Goods Inventory26. Total manufacturing costs for the year plus beginning Work in Process Inventory cost equals _______. cost of goods manufactured in the year ending Work in Process Inventory total manufacturing costs to account for cost of goods available for sale27. Which of the following would be least likely to be supported by subsidiary accounts or ledgers in a company that employs a job order costing system? Work in Process Inventory Raw Material Inventory Accounts Payable Supplies Inventory28. The source document that records the amount of raw material that has been requested by production is the _______. job order cost sheet bill of lading interoffice memo material requisition29. A material requisition form should show all of the following information except _______. job number quantity required unit cost purchase order number30. The cost of abnormal continuous losses is _______. considered a product cost absorbed by all units in ending inventory and transferred out on an equivalent unit basis written off as a loss on an equivalent unit basis absorbed by all units past the inspection point31. When the cost of lost units must be assigned, and those same units must be included in an equivalent unit schedule, these units are considered ______. normal and discrete normal and continuous abnormal and discrete abnormal and continuous32. A continuous loss _______. occurs unevenly throughout a process never occurs during the production process always occurs at the same place in a production process occurs evenly throughout the production process33. A primary purpose of using a standard cost system is _______. to make things easier for managers in the production facility to provide a distinct measure of cost control to minimize the cost per unit of production b and c are correct34. Standard costs may be used for _______. product costing planning controlling all of the above35. A bill of material does not include _______. quantity of component inputs price of component inputs quality of component inputs type of product output36. The sum of the material price variance (calculated at point of purchase) and material quantity variance equals ______. the total cost variance the material mix variance the material yield variance no meaningful number37. Which of the following components of production are allocable as joint costs when a single manufacturing process produces several salable products? direct material, direct labor, and overhead direct material and direct labor only direct labor and overhead only overhead and direct material only38. While preparing a salad, you remove the core of a head of lettuce. This core would be classified as ______. defective shrinkage waste scrap39. All costs that are incurred between the split-off point and the point of sale are known as ________. sunk costs incremental separate costs joint cost committed costs40. With respect to fixed costs, CVP analysis assumes total fixed costs _______. per unit remain constant as volume changes remain constant from one period to the next vary directly with volume remain constant across changes in volume41. According to CVP analysis, a company could never incur a loss that exceeded its total ______. variable costs fixed costs costs contribution margin42. If a firm’s net income does not change as its volume changes, the firm(‘s) _______.must be in the service industry must have no fixed costs sales price must equal $0 sales price must equal its variable costs43. To compute the break-even point in units, which of the following formulas is used? FC/CM per unit FC/CM ratio CM/CM ratio (FC+VC)/CM ratio44. A firm’s break-even point in dollars can be found in one calculation using which of the following formulas? FC/CM per unit VC/CM FC/CM ratio VC/CM ratio45. Which of the following is the least likely to be a relevant item in deciding whether to replace an old machine? acquisition cost of the old machine outlay to be made for the new machine annual savings to be enjoyed on the new machine life of the new machine46. The term incremental cost refers to _______. the profit foregone by selecting one choice instead of another the additional cost of producing or selling another product or service a cost that continues to be incurred in the absence of activity a cost common to all choices in question and not clearly or feasibly allocable to any of them47. Key variables that are identified in strategic planning are _______. normally controllable if they are internal seldom if ever controllable normally controllable if they occur in a domestic market normally uncontrollable if they are internal48. The master budget usually includes _______. an operating budget a capital budget pro forma financial statements all of the above49. It is least likely that a production budget revision would cause a revision in the ______. capital budget cash budget purchases budget pro forma balance sheet50. The material purchases budget tells a manager all of the following except the _______. quantity of material to be purchased each period quantity of material to be consumed each period cost of material to be purchased each period cash payment for material each period51. Of the following budgets, which one is least likely to be determined by the dictates of top management? sales material usage revenues general and administrative52. If a company has a policy of maintaining an inventory of finished goods at a specified percentage of the next month’s budgeted sales, budgeted production for January will exceed budgeted sales for January when budgeted _______. February sales exceed budgeted January sales January sales exceed budgeted December sales January sales exceed budgeted February sales December sales exceed budgeted January sales53. Depreciation on the production equipment would appear in which of the following budgets? cash budget production budget selling and administrative expense budget manufacturing overhead budget54. The budgeted amount of selling and administrative expense for a period can be found in the ______. (Points: 4)sales budget cash budget pro forma income statement pro forma balance sheet55. ____ is a “pull” system of production and inventory control. (Points: 4)EDI EOQ JIT ABC56. Reducing inventory to the lowest possible levels is a major focus of ______. (Points: 4)JIT push inventory systems EOQ ABC57. JIT is a philosophy concerned with ______. (Points: 4)when to do something how to do something where to do something how much of something should be done58. Striving for flexibility in the number of products that can be produced in a short period of time is characteristic of _______. (Points: 4)EOQ systems push systems in general JIT pull systems in general59. Just-in-time (JIT) inventory systems _______. (Points: 4)result in a greater number of suppliers for each production process focus on a “push” type of production system can only be used with automated production processes result in inventories being either greatly reduced or eliminated60. With JIT manufacturing, which of the following costs would be considered a direct product cost? (Points: 4)insurance on the plant repair parts for machinery janitors’ salaries salary of the plant supervisor61. The term “cell” is used to describe _______. (Points: 4)a grouping of one or more automated machines within a company a storage bin for “C” type inventory in an ABC inventory system files in a CAD/CAM system a factory’s area of conversion activity62. In a production cell, _______. (Points: 4)an individual worker may be expected to operate several different machines, do setups, and perform preventive maintenance on the equipment each worker becomes an expert in the operation of a single piece of equipment machines are arranged so that similar machines are grouped together clear separation is maintained between those workers who operate the machinery and those workers who set up and maintain the machinery63. The process of ____ occurs when equipment is programmed to stop when a certain situation arises. (Points: 4)throughput automation backflushing information sharing64. Which of the following responsibility centers may be evaluated on the basis of residual income? (Points: 4)investment center revenue center profit center cost center65. The Statement of Cash Flows may be superior to the cash budget as a performance evaluation measure because ______. (Points: 4)cash flows are shown on the accrual basis on the cash budget the cash budget does not include capital investments cash flows are arranged by activity of all the above reasons66. If sales and expenses both rise by $100,000 _______. (Points: 4)residual income will increase return on investment will increase return on investment will be unchanged asset turnover will decrease67. A primary purpose of a balanced scorecard is to give _______. (Points: 4)managers a way to judge past performance stockholders a way to judge current performance managers a way to forecast future performance stockholders a way to tie strategy to profitability68. In a balanced scorecard, measurements should be directly linked to _______. (Points: 4)organizational strategy and values the cost management system current organizational profitability activity-based management concepts69. A balanced scorecard _______. (Points: 4)records the variances between budgeted and actual revenues and expenses can be used at multiple organizational levels by redefining the categories and measurements is most concerned with organizational financial solvency and business processes all of the above70. On a balanced scorecard, which of the following would be most appropriate to measure production process integrity? (Points: 4)Rapid time-to-market of new products Corporate financial profits Low employee turnover Decrease in reworked products
