Accounting 203 - Exam #1 Review (19e)

Instructions
Select the best answer for each question.

This assessment is worth 276 points.

  1. Financial statement analysis:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  2. Evaluation of company performance can include comparison and/or assessment of:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  3. External users of financial information:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  4. Internal users of financial information:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  5. The building blocks of financial statement analysis include:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  6. Financial reporting refers to:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  7. The ability to meet short-term obligations and to efficiently generate revenues is called:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  8. The ability to generate future revenues and meet long-term obligations is referred to as:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  9. The ability to provide financial rewards sufficient to attract and retain financing is called:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  10. The ability to generate positive market expectations is called:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  11. Standards for comparisons in financial statement analysis include:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  12. Intracompany standards for financial statement analysis:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  13. Industry standards for financial statement analysis:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  14. Guidelines (rules-of-thumb) are developed from:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  15. Three of the most common tools of financial analysis are:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  16. The comparison of a company's financial condition and performance across time is known as:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  17. The measurement of key relations among financial statement items is known as:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  18. The comparison of a company's financial condition and performance to a base amount is known as:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  19. A financial statement analysis report usually includes:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  20. The background on a company, its industry, and its economic setting is usually included in which of the following sections of a financial statement analysis report:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  21. A financial statement analysis report:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  22. A complete income statement potentially has the following sections:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  23. Which of the following items is not likely an extraordinary item?   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  24. Financial statements with data for two or more successive accounting periods placed in columns side by side, sometimes with changes shown in dollar amounts and percents, are referred to as:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  25. Horizontal analysis:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  26. Trend analysis is also called:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  27. The dollar change for a financial statement item is calculated by:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  28. A company's sales in 2009 were $250,000 and in 2010 were $287,500. Using 2009 as the base year, the sales trend percent for 2010 is:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  29. Phoenix Company reported sales of $400,000 for 2009, $450,000 for 2010, and $500,000 for 2011. Using 2009 as the base year, what were the percentage increases for 2010 and 2011 compared to the base year?   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  30. In horizontal analysis the percent change is computed by:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  31. To compute trend percents the analyst should:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  32. Comparative financial statements in which each amount is expressed as a percentage of a base amount are called:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  33. Comparative financial statements in which each amount is expressed as a percentage of a base amount, and in which the base amount is expressed as 100%, are called:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  34. Common-size statements:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  35. The common-size percent is computed by:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  36. A corporation reported cash of $14,000 and total assets of $178,300. Its common-size percent for cash equals:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  37. Current assets minus current liabilities is:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  38. Current assets divided by current liabilities is the:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  39. Quick assets divided by current liabilities is the:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  40. Net sales divided by average accounts receivable is the:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  41. Dividing accounts receivable by net sales and multiplying the result by 365 is the:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  42. Dividing ending inventory by cost of goods sold and multiplying the result by 365 is the:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  43. Net sales divided by average total assets is the:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  44. Net income divided by net sales is the:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  45. Net income divided by average total assets is:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  46. Annual cash dividends per share divided by market price per share is the:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  47. The average number of times a company's inventory is sold during an accounting period, calculated by dividing cost of goods sold by the average inventory balance, is the:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  48. A component of operating efficiency and profitability, calculated by expressing net income as a percent of net sales, is the:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  49. One of several ratios that reflects solvency includes the:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  50. A company had a market price of $37.50 per share, earnings per share of $1.25, and dividends per share of $0.40. Its price-earnings ratio equals:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  51. A company reports basic earnings per share of $3.50, cash dividends per share of $0.75, and a market price per share of $64.75. The company's dividend yield equals:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  52. Selected current year company information follows:

     Picture 

    The total asset turnover is:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  53. Selected current year company information follows:

     Picture 

    The return on total assets is:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  54. Managerial accounting information:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  55. Managerial accounting is different from financial accounting in that   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  56. Flexibility of practice when applied to managerial accounting means that   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  57. Which of the following items represents a difference between financial and managerial accounting?   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  58. Which of the following items are management concepts that were created to improve companies' performances?   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  59. The Malcolm Baldridge Award was established by   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  60. Continuous improvement:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  61. An attitude of constantly seeking ways to improve company operations, including customer service, product quality, product features, the production process, and employee interactions, is called:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  62. A management concept that encourages all managers and employees to be in tune with the wants and needs of customers, and which leads to flexible product designs and production processes, is called:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  63. An approach to managing inventories and production operations such that units of materials and products are obtained and provided only as they are needed is called:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  64. A management concept that applies quality improvement to all aspects of business activities is called:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  65. The model whose goal is to eliminate waste while satisfying the customer and providing a positive return to the company is:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  66. Benny, an employee of Parrott Company, used company assets for his own personal gain. This is an example of   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  67. An employee is dissatisfied with the resolution of an ethical conflict at his place of employment. According to the Institute of Management Accountants, the employee's next step should be to   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  68. A direct cost is a cost that is:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  69. An opportunity cost is:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  70. Classifying costs by behavior involves:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  71. Costs classified by controllability are useful for:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  72. A mixed cost:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  73. A fixed cost:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  74. Last year, Smith Company sold 10,000 units of its only product. If sales increase by 15% in the current year, how will unit variable cost and unit fixed cost be affected?

     Picture    (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  75. A primary difference between variable costs and fixed costs is:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  76. Period costs for a manufacturing company would flow directly to:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  77. For product costs associated with a particular product to be expensed on the income statement:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  78. Costs that are first assigned to inventory are called:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  79. Costs that flow directly to the current income statement are called:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  80. Product costs:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  81. Products that have been completed and are ready to be sold by the manufacturer are called:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  82. Goods a company acquires to use in making products are called:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  83. Products that are in the process of being manufactured but are not yet complete are called:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  84. Another title for goods in process inventory is:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  85. Which of the following represents the correct formula for calculating cycle time for a manufacturer?   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  86. Which of the following statements is correct concerning the elements of cycle time?   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  87. The cost of labor that is not clearly associated with specific units or batches of product is called:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  88. Factory overhead costs normally include all of the following except:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  89. Labor costs that are clearly associated with specific units or batches of product because the labor is used to convert raw materials into finished products called are:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  90. Costs that are incurred as part of the manufacturing process but are not clearly associated with specific units of product or batches of production, including all manufacturing costs other than direct material and direct labor costs, are called:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  91. Materials that are used in support of the production process but are not clearly identified with units or batches of product are called:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  92. The salary paid to the supervisor of an assembly line would normally be classified as:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  93. Which of the following items appears only in a manufacturing company's financial statements?   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  94. Which of the following costs is not included in factory overhead?   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  95. Which of the following is never included in direct materials costs?   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  96. Raw materials that physically become part of the product and can be traced to specific units or batches of product are called:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  97. The three major cost components of a manufactured product are:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  98. Which of the following costs would not be classified as factory overhead?   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  99. The total cost of goods completed during the accounting period for a manufacturer is called:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  100. A manufacturing firm's cost of goods manufactured is equivalent to a merchandising firm's:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  101. Which one of the following items is normally not a manufacturing cost?   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  102. A manufacturing company has a beginning finished goods inventory of $14,600, raw material purchases of $18,000, cost of goods manufactured of $32,500, and an ending finished goods inventory of $17,800. The cost of goods sold for this company is:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  103. Juliet Corporation has accumulated the following accounting data for the year:

     Picture 

    The cost of goods manufactured for the year is:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  104. A company's prime costs total $3,000,000 and its conversion costs total $7,000,000. If direct materials are $1,000,000 and factory overhead is $5,000,000, then direct labor is:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  105. A manufacturing statement is also known as a schedule or listing of the:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  106. The following information relates to the manufacturing operations of the IMH Publishing Corporation for the year:

     Picture 

    The raw materials used in manufacturing during the year totaled $118,000. Raw materials purchased during the year amount to:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  107. Ajax Company accumulated the following account information for the year:

     Picture 

    Using the above information, total factory overhead costs would be:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  108. The following information is available for the year ended December 31:

     Picture 

    The amount of raw materials used in production for the year is:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  109. A financial report that summarizes the amounts and types of costs that were incurred in the manufacturing process during the period is a:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  110. If beginning and ending goods in process inventories are $5,000 and $15,000, respectively, and cost of goods manufactured is $170,000, what is the total manufacturing cost for the period?   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  111. The following information is available for Talking Toys, Inc., for the current year:

     Picture 
     
    The total manufacturing costs incurred during the year were:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  112. The following information is available for Talking Toys, Inc., for the current year:

     Picture 
     
    The total cost of goods manufactured for the year was:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  113. The following information is available for Hardy Co. for the current year:

     Picture 
     
    The total of Hardy Co.'s manufacturing costs added during the current year is:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  114. The following information is available for Hardy Co. for the current year:

     Picture 
     
    Hardy Co.'s cost of goods manufactured for the current year is:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  115. Total manufacturing costs incurred during the year do not include:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  116. Which of the following accounts would all appear on a manufacturing statement?   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  117. Which of the following represents the correct formula for calculating cost of goods manufactured?   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  118. Current information for the Austin Company follows:

     Picture 

    All raw materials used were traceable to specific batches of product. Austin Company's cost of goods manufactured for the year is:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  119. Use the following data to determine the cost of goods manufactured.

     Picture    (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  120. Use the following information to compute the cost of goods manufactured:

     Picture    (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  121. The following information pertains to the Hewett Corporation:

     Picture 

    What is the cost of goods sold for the period?   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  122.  Picture 
     
    Refer to the figure above. Calculate the cost of goods manufactured for the period in question.   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  123.  Picture 
     
    Refer to the figure above. Calculate gross profit for the period in question.   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  124. Cost accounting systems used by manufacturing companies are based on the:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  125. A system of accounting for production operations that produces timely information about inventories and production costs per unit of product is a:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  126. Job order costing systems normally use:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  127. In comparison to a general accounting system for a manufacturing company, a cost accounting system places an emphasis on:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  128. A system of accounting for production operations that uses a periodic inventory system is called a:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  129. The two basic types of cost accounting systems are:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  130. The production activities for a customized product represent a(n):   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  131. A job order cost accounting system would best fit the needs of a company that makes:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  132. Job order production is also known as:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  133. Dell Builders manufactures each house to customer specifications. It most likely would use:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  134. A type of production that yields customized products or services for each customer is called:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  135. Target cost is calculated as   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  136. A job order production system would be appropriate for a company that produces which one of the following items?   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  137. Large aircraft producers such as McDonnell Douglas normally use:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  138. A document in a job order cost accounting system that is used to record the costs of producing a job is a(n):   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  139. A job cost sheet shows information about each of the following items except:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  140. The job order cost sheets used by Garza Company revealed the following:

     Picture 

    Job No. 125 was completed during May and Jobs No. 124 and 125 were shipped to customers in May. What were the company's cost of goods sold for May and the goods in process inventory on May 31?   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  141. A job cost sheet includes:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  142. The Goods in Process Inventory account of a manufacturing company that uses an overhead rate based on direct labor cost has a $4,400 debit balance after all posting is completed. The cost sheet of the one job still in process shows direct material cost of $2,000 and direct labor cost of $800. Therefore, the company's overhead application rate is:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  143. A perpetual record of a raw materials item that records data on the quantity and cost of units purchased, units issued for use in production, and units that remain in the raw materials inventory, is called a(n):   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  144. A source document that production managers use to request materials for production and that is used to assign materials costs to specific jobs or to overhead is a:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  145. A company that uses a job order cost accounting system would make the following entry to record the flow of direct materials into production:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  146. The Goods in Process Inventory account for the AB Corp. follows:

     Picture 

    The cost of units transferred to finished goods is:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  147. A company's overhead rate is 60% of direct labor cost. Using the following incomplete accounts, determine the cost of direct materials used.

     Picture    (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  148. A source document that an employee uses to record the number of hours at work and that is used to determine the total labor cost for each pay period is a:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  149. A source document that an employee uses to report how much time was spent working on a job or on overhead activities and that is used to determine the amount of direct labor to charge to the job or to determine the amount of indirect labor to charge to factory overhead is called a:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  150. When factory payroll costs for direct labor are recorded in a job cost accounting system:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  151. Penn Company uses a job order cost accounting system. In the last month, the system accumulated labor time tickets totaling $24,600 for direct labor and $4,300 for indirect labor. These costs were accumulated in Factory Payroll as they were paid. Which entry should Penn make to assign the Factory Payroll?   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  152. Labor costs in production can be:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  153. A company has an overhead application rate of 125% of direct labor costs. How much overhead would be allocated to a job if it required total labor costing $20,000?   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  154. The rate established prior to the beginning of a period that relates estimated overhead to an allocation factor such as estimated direct labor, and that is used to assign overhead cost to jobs, is the:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  155. Canoe Company uses a job order cost accounting system and allocates its overhead on the basis of direct labor costs. Canoe Company's production costs for the year were: direct labor, $30,000; direct materials, $50,000; and factory overhead applied, $6,000. The overhead application rate was:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  156. Alton Company has an overhead application rate of 160% and allocates overhead based on direct materials. During the current period, direct labor is $50,000 and direct materials used are $80,000. Determine the amount of overhead Alton Company should record in the current period.   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  157. The overhead cost applied to a job during a period is recorded with a credit to Factory Overhead and a debit to:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  158. BVD Company uses a job order cost accounting system and last period incurred $80,000 of overhead and $100,000 of direct labor. BVD estimates that its overhead next period will be $75,000. It also expects to incur $100,000 of direct labor. If BVD bases applied overhead on direct labor cost, their overhead application rate for the next period should be:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  159. O.K. Company uses a job order cost accounting system and allocates its overhead on the basis of direct labor costs. O.K. expects to incur $800,000 of overhead during the next period, and expects to use 50,000 labor hours at a cost of $10.00 per hour. What is O.K. Company's overhead application rate?   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  160. The R&R Company's production costs for August are: direct labor, $13,000; indirect labor, $6,500; direct materials, $15,000; property taxes on production equipment, $800; heat, lights and power, $1,000; and insurance on plant and equipment, $200. R&R Company's factory overhead incurred for August is:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  161. Deltan Corp. allocates overhead to production on the basis of direct labor costs. Deltan's total estimated overhead is $450,000 and estimated direct labor is $180,000. Determine the amount of overhead to be allocated to finished goods inventory if there is $20,000 of total direct labor cost in the jobs in the finished goods inventory.   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  162. Austin Company uses a job order cost accounting system. The company's executives estimated that direct labor would be $2,000,000 (200,000 hours at $10/hour) and that factory overhead would be $1,500,000 for the current period. At the end of the period, the records show that there had been 180,000 hours of direct labor and $1,200,000 of actual overhead costs. Using direct labor hours as a base, what was the predetermined overhead allocation rate?   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  163. Using the following accounts and an overhead rate of 90% of direct labor cost, determine the amount of applied overhead.

     Picture    (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  164. If one unit of Product X used $2.50 of direct materials and $3.00 of direct labor, sold for $8.00, and was assigned overhead at the rate of 30% of direct labor costs, how much gross profit was realized from this sale?   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  165. The ending inventory of finished goods has a total cost of $9,000 and consists of 600 units. If the overhead applied to these goods is $3,000, and the overhead rate is 75% of direct labor, how much direct materials cost was incurred in producing these units?   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  166. At the current year-end, Hardly Company found that its overhead was underapplied by $2,500, and this amount was not deemed to be a material amount. Based on this information, Hardly should   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  167. If overhead applied is less than actual overhead, it is:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  168. The amount by which the overhead applied to jobs during a period exceeds the overhead incurred during the period is known as:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  169. The amount by which overhead incurred during a period exceeds the overhead applied to jobs is:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  170. If a company applies overhead to production with a predetermined rate, a credit balance in the Factory Overhead account at the end of the period means that:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  171. M.A.E. charged the following amounts of overhead to jobs during the year: $20,000 to jobs still in process, $60,000 to jobs completed but not sold, and $120,000 to jobs finished and sold. At year-end, M.A.E. Company's Factory Overhead account has a credit balance of $5,000, which is not a material amount. What entry should M.A.E. make at year-end?   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  172. Estimated overhead and direct labor costs for the year were $112,500 and $125,000, respectively. During the year, actual overhead was $107,400 and actual direct labor cost was $120,000. The entry to close the over- or underapplied overhead at year-end, assuming an immaterial amount, would include:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  173. If it is a material amount, overapplied or underapplied overhead should be disposed of by allocating it to:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  174. The Dina Corp. has applied overhead to jobs during the period as follows:

     Picture 

    The application of overhead has resulted in a $5,600 credit balance in the Factory Overhead account, and this amount is not material. The entry to dispose of this remaining factory overhead balance is:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  175. Which of the following five types of products is least likely to be produced in a process manufacturing system?   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  176. Which of the following characteristics does not usually apply to process manufacturing systems?   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  177. Hou Company applies factory overhead to its production departments on the basis of 90% of direct labor costs. In the Assembly Department, Hou had $125,000 of direct labor cost, and in the Finishing Department, Hou had $35,000 of direct labor cost. The entry to apply overhead to these production departments is:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  178. Which of the following characteristics applies to process cost accounting but not to job order cost accounting?   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  179. A measure of the productivity of a process with respect to its use of direct materials, direct labor, or overhead, and an expression of the activity of a process as the number of units that would have been processed during a period if all effort had been applied to units that were started and finished during the period, is called:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  180. Equivalent units of production are equal to:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  181. Which of the following is the best explanation for why it is necessary to calculate equivalent units of production in a process costing environment?   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  182. Which of the following is not one of the four steps in accounting for production activity in a period?   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  183. Which of the following statements is most accurate?   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  184. A production department's output for the most recent month consisted of 10,000 units completed and transferred to the next stage of production and 10,000 units in ending goods in process inventory. The units in ending goods in process inventory were 50% complete with respect to both direct materials and conversion costs. There were 1,000 units in beginning goods in process inventory, and they were 70% complete with respect to both direct materials and conversion costs. Calculate the equivalent units of production for the month, assuming the company uses the weighted average method.   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  185. The Machining Department started the current month with a beginning goods in process inventory of $10,000. During the month, it was assigned the following costs: direct materials, $76,000; direct labor, $24,000; and factory overhead, 50% of direct labor cost. Also, inventory with a cost of $109,000 was transferred out of the department to the next phase in the process. The ending balance of the Goods in Process Inventory account for the Machining Department is:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  186. A company uses a process cost accounting system. Its Assembly Department's beginning inventory consisted of 50,000 units, 3/4 complete with respect to direct labor and overhead. The department started and finished 127,500 units this period. The ending inventory consists of 40,000 units that are 1/4 complete with respect to direct labor and overhead. All direct materials are added at the beginning of the process. The department incurred direct labor costs of $24,000 and overhead costs of $32,000 for the period. Assuming the weighted average method, the direct labor cost per equivalent unit (rounded to the nearest cent) is:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  187. A company's beginning work in process inventory consisted of 20,000 units that were 1/5 complete with respect to direct labor. These beginning units were completed and another 90,000 units were started during the current period. Of those started, 60,000 were finished and the remaining 30,000 were 1/3 complete at the end of the period. Using the weighted-average method, the equivalent units of production with regard to direct labor were:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  188. At the beginning of the recent period, there were 900 units of product in a department, one-third completed. These units were finished and an additional 5,000 units were started and completed during the period. 800 units were still in process at the end of the period, one-fourth completed. Using the weighted average method, the equivalent units produced by the department were:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  189. A company uses the weighted average method for inventory costing. During a period, Department A finished and transferred 50,000 units to Department B. Also, during the period, 10,000 units were started but brought only to a stage of being 3/5 completed. The number of equivalent units produced by Department A during the period was:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  190. Medina Corp. uses the weighted average method for inventory costs and had the following information available for the year:

     Picture 
     
    The number of units transferred to finished goods during the year is:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  191. Medina Corp. uses the weighted average method for inventory costs and had the following information available for the year:

     Picture 
     
    Equivalent units of production for the year are:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  192. A company uses a process cost accounting system. Its Sewing Department completed and transferred out 120,000 units during the current period. The ending inventory in the Sewing Department consists of 40,000 units (20% complete with respect to direct materials and 60% complete with respect to direct labor). Overhead is applied on the basis of direct labor.

    Determine the equivalent units of production for the Sewing Department for direct materials, direct labor and overhead assuming the weighted average method.   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  193. A process cost summary is a managerial accounting report that describes:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  194. Aniston Enterprises manufactures stylish hats for sophisticated women. All materials are introduced at the beginning of the manufacturing process in the Cutting Department. Conversion costs are incurred uniformly throughout the manufacturing process. As the cutting of material is completed, the pieces are immediately transferred to the Sewing Department. Information for the Cutting Department for the month of May 2010 follows:
     Picture 
     
    If Aniston Enterprises uses the FIFO method of process costing, the costs per equivalent unit for May 2010 were:

     Picture    (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  195. Aniston Enterprises manufactures stylish hats for sophisticated women. All materials are introduced at the beginning of the manufacturing process in the Cutting Department. Conversion costs are incurred uniformly throughout the manufacturing process. As the cutting of material is completed, the pieces are immediately transferred to the Sewing Department. Information for the Cutting Department for the month of May 2010 follows:
     Picture 
     
    If Aniston Enterprises uses the FIFO method of process costing, the equivalent units of work completed in May 2010 were:

     Picture    (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  196. The following data are available for a company's manufacturing activities:

     Picture 

    If materials are added when the production process begins and direct labor is applied uniformly throughout the process, what are the equivalent units for direct materials and for direct labor, respectively using the FIFO method of process costing?   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  197. A system of accounting in which the costs of each process are accumulated separately and then assigned to the units of product that passed through the process is a:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  198. A company that applies process costing is most frequently characterized by:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  199. An organizational unit of a factory that has the responsibility for partially manufacturing or producing a product is called a:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  200. A hybrid costing system would be most appropriate when:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  201. Direct material costs are recorded:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  202. The purchase of raw materials on account in a process costing system is recorded with a:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  203. When raw materials are purchased on account for use in a process costing system, the corresponding journal entry that should be recorded will include:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  204. Direct labor and indirect labor are recorded, respectively, to:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  205. In a process operation, the direct labor of a production department includes:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  206. After posting all actual factory overhead and applying factory overhead to production departments in a process costing system,   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  207. In a process costing system, when manufacturing overhead costs are applied to the cost of production, they are debited to:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  208. To compute an equivalent unit of production, one must be able to reasonably estimate:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  209. The following is an account for a production department, showing its costs for one month:

     Picture 

    Assume that materials are added at the beginning of the production process and that direct labor and overhead are applied uniformly. If the units in ending goods in process inventory cost $4,590, and the started and completed units cost $41,850, what was the cost of completing the units in the beginning goods in process inventory?   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  210. Que Corporation uses a process cost accounting system. The company manufactured certain goods at a cost of $800 and sold them on credit to Are Corporation for $1,075. The complete journal entry to be made by Que at the time of this sale is:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  211. A cost center is a unit of a business that incurs costs but does not directly generate revenues. Which of the following would definitely not be considered a cost center?   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  212. A unit of a business that not only incurs costs, but also generates revenues, is called a:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  213. A profit center:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  214. An accounting system that provides information that management can use to evaluate the profitability and/or cost effectiveness of a department's activities is a:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  215. A department that incurs costs without directly generating revenues is a:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  216. The difference between a profit center and an investment center is   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  217. An expense that does not require allocation between departments is a(n):   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  218. Expenses that are easily traced and assigned to a specific department because they are incurred for the sole benefit of that department are called:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  219. Expenses that are not easily associated with a specific department, and which are incurred for the benefit of more than one department, are:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  220. Regardless of the system used in departmental cost analysis:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  221. The salaries of employees who spend all their time working in one department are:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  222. A difficult problem in calculating the total costs and expenses of a department is:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  223. A company has two departments, A and B, that incur delivery expenses. An analysis of the total delivery expense of $9,000 indicates that Dept. A had a direct expense of $1,000 for deliveries. None of the $9,000 is a direct expense to Dept. B. The analysis also indicates that 60% of regular delivery requests originate in Dept. A and 40% in Dept. B.
    The delivery expenses that should be charged to Dept. A and Dept. B, respectively, are:

     Picture    (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  224. The allocation bases for assigning indirect costs include:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  225. The most useful allocation basis for the departmental costs of an advertising campaign for a storewide sale is likely to be:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  226. Costs that the manager has the power to determine or at least strongly influence are called:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  227. A report that specifies the expected and actual costs under the control of a manager is a:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  228. An accounting system that provides information that management can use to evaluate the performance of a department's manager is called a:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  229. Costs that the manager does not have the power to determine or at least strongly influence are:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  230. Which of the following would appear on a responsibility accounting performance report?   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  231. Within an organizational structure, the person most likely to be evaluated in terms of controllable costs would be:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  232. The most useful evaluation of a manager's cost performance is based on:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  233. In a responsibility accounting system:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  234. Responsibility account performance reports:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  235. A responsibility accounting performance report reports:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  236. A responsibility accounting system:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  237. A single cost incurred in producing or purchasing two or more essentially different products is a(n):   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  238. Allocations of joint product costs can be based on the relative market values of the products:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  239. Allocating joint costs to products can be based on their relative:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  240. General Chemical produced 10,000 gallons of Breon and 20,000 gallons of Baron. Joint costs incurred in producing the two products totaled $7,500. At the split-off point, Breon has a market value of $6.00 per gallon and Baron $2.00 per gallon. What portion of the joint costs should be allocated to Breon if the basis is market value at point of separation?   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  241. Data pertaining to a company's joint production for the current period follows:

     Picture 

    What cost amount should be allocated to Product A for this period's $660 of joint costs on the basis of market value at the point of separation?   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  242. A sawmill bought a shipment of logs for $40,000. When cut, the logs produced a million board feet of lumber in the following grades:

    Type 1 - 400,000 bd. ft. priced to sell at $0.12 per bd. ft.
    Type 2 - 400,000 bd. ft. priced to sell at $0.06 per bd. ft.
    Type 3 - 200,000 bd. ft. priced to sell at $0.04 per bd. ft.

    How much cost should be allocated to Type 1 and Type 2, respectively?

     Picture     (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  243. A sawmill paid $70,000 for logs that produced 200,000 board feet of lumber in 3 different grades and amounts as follows:

     Picture 

    How much of the $70,000 joint cost should be allocated to No. 2 Common?   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  244. A dairy allocates the cost of unprocessed milk to the production of milk, cream, butter and cheese. For the current period, unprocessed milk was purchased for $240,000, and the following quantities of product and sales revenues were produced.

     Picture 

    How much of the $240,000 cost should be allocated to milk?   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  245. Breon Beef Company uses the relative market value method of allocating joint costs in its production of beef products. Relevant information for the current period follows:

     Picture 

    The total joint cost for the current period was $43,000. How much of this cost should Breon Beef allocate to sirloin?   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  246. Calculating return on total assets for an investment center is defined by the following formula for an investment center:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  247. Investment center managers are usually evaluated using performance measures   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  248. A retail store has three departments, 1, 2, and 3, and does general advertising that benefits all departments. Advertising expense totaled $50,000 for the year, and departmental sales were as follows:

     Picture 

    How much advertising expense should be allocated to Department 2 if the allocation is based on departmental sales?   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  249. Dresden, Inc., has four departments. Information about these departments follows:

     Picture 

    If maintenance costs are allocated to the other departments based on floor space occupied by each, the amount of maintenance cost allocated to the Cutting Department is:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  250. Baker Corporation has two operating departments, Machining and Assembly, and an office. The three categories of office expenses are allocated to the two departments using different allocation bases. The following information is available for the current period:

     Picture 

    The amount of the total office expenses that should be allocated to Assembly for the current period is:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  251. In a firm that manufactures clothing, the department that is responsible for actually assembling the garments could best be described as a:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  252. A company rents a building with a total of 100,000 square feet, which are evenly divided between two floors. The space on the first floor is considered twice as valuable as that on the second floor. The total monthly rent for the building is $30,000. How much of the monthly rental expense should be allocated to a department that occupies 10,000 square feet on the first floor?   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  253. A company pays $15,000 per period to rent a small building that has 10,000 square feet of space. This cost is allocated to the company's three departments on the basis of the amount and value of the space occupied by each. Department One occupies 2,000 square feet of ground-floor space, Department Two occupies 3,000 square feet of ground-floor space, and Department Three occupies 5,000 square feet of second-floor space. If rents for comparable floor space in the neighborhood average $2.20 per square foot for ground-floor space and $1.10 per square foot for second-floor space and the rent is allocated based on the total value of the space, Department One should be charged rent expense for the period of:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  254. Able Company has two operating (production) departments: Assembly and Fabricating. Assembly has 150 employees and occupies 44,000 square feet; Fabricating has 100 employees and occupies 36,000 square feet. Indirect factory expenses for the current period are as follows:

     Picture 

    Administration is allocated based on workers in each department; maintenance is allocated based on square footage. The total amount of indirect factory expenses that should be allocated to the Assembly Department for the current period is:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  255. Wilson Trade School allocates administrative costs to its respective departments based on the number of students enrolled, while maintenance and utilities are allocated per square feet of the classrooms. Based on the information below, what is the total amount allocated to the Automotive Department (rounded to the nearest dollar) if administrative costs for the school were $50,000, maintenance fees were $12,000, and utilities were $6,000?

     Picture    (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  256. White Company has two service departments and two operating (production) departments. The Payroll Department services all three of the other departments in proportion to the number of employees in each. The Maintenance Department costs are allocated to the two operating departments in proportion to the floor space used by each. Listed below are the operating data for the current period:

     Picture 

    The total cost of operating the Milling Department for the current period is:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  257. Farber, Inc., has four departments. The Administrative Department costs are allocated to the other three departments based on the number of employees in each and the Maintenance Department costs are allocated to the Assembly and Packaging Departments based on their occupied space. Data for these departments follows:

     Picture 

    The total amount of the Administrative Department's cost that would eventually be allocated to the Packaging Department is:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  258. Mace Department store allocates its service department expenses to its various operating (sales) departments. The following data is available:

     Picture 

    The following information is available for its three operating (sales) departments:

     Picture 

    What is the total expense allocated to Department B?   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  259. Activity based costing can be applied to:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  260. A system of assigning costs to departments and products on the basis of a variety of activities instead of only one allocation base is called:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  261. A factor that causes the cost of an activity to go up or down is a(n):   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  262. An activity-based cost allocation system:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  263. A basis for allocating the cost of a resource to an activity cost pool or allocating the cost of an activity cost pool to a cost object is a(n):   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  264. If a firm uses activity-based costing to allocate costs, it must:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  265. A college uses advisors who work with all students in all divisions of the college. The most useful allocation basis for the salaries of these employees would likely be   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  266. A firm produces and sells two products, Mica and Plax. The following information is available relating to setup costs (a part of factory overhead):

     Picture 
     
    With traditional two-stage allocation of overhead costs, using direct labor hours as the allocation base, the setup cost portion of overhead that is allocated to each unit of product is:

     Picture    (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  267. A firm produces and sells two products, Mica and Plax. The following information is available relating to setup costs (a part of factory overhead):

     Picture 
     
    Use of activity-based costing would result in allocating the following amounts of setup cost to each unit:

     Picture    (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  268. A firm produces and sells two products, Mica and Plax. The following information is available relating to setup costs (a part of factory overhead):

     Picture 
     
    Assume the cost per setup remains at $1,080 but that the batch size for Mica is changed from 10 to 25. Separately using activity-based costing and traditional two-stage cost allocation overhead, the amount of setup cost allocated to each unit of Mica would be:

     Picture    (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  269. In the preparation of departmental income statements, the preparer completes the following steps in the following order:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  270. Jamesway Corporation has two separate divisions that operate as profit centers. The following information is available for the most recent year:

     Picture 

    The White Division occupies 20,000 square feet in the plant. The Grey Division occupies 30,000 square feet. Rent is an indirect expense and is allocated based on square footage. Rent expense for the year was $50,000.
     
    Gross profit for the White and Grey Divisions is:

     Picture    (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  271. Jamesway Corporation has two separate divisions that operate as profit centers. The following information is available for the most recent year:

     Picture 

    The White Division occupies 20,000 square feet in the plant. The Grey Division occupies 30,000 square feet. Rent is an indirect expense and is allocated based on square footage. Rent expense for the year was $50,000.
     
    Grey Division's departmental income is:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  272. The amount by which a department's revenues exceed its direct costs and expenses is:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  273. Departmental contribution to overhead is calculated as revenues of the department less:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  274. The Footwear Department of Lee's Department Store had sales of $188,000, cost of goods sold of $132,500, indirect expenses of $13,250, and direct expenses of $27,500 for the current period. The Footwear Department's contribution to overhead as a percent of sales is:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  275. Mach Co. operates three production departments as profit centers. The following information is available for its most recent year:

     Picture 
     
    Department 1's contribution to overhead as a percent of sales is:   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  

  276. Mach Co. operates three production departments as profit centers. The following information is available for its most recent year:

     Picture 
     
    Which department has the greatest departmental contribution to overhead and what is the amount contributed?   (1 point)

    a.  
    b.  
    c.  
    d.  
    e.  



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