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MNG. ACCT. FINAL
Cumulative Final Exam Review
| Question | Answer |
|---|---|
| Managerial Accounting is applicable to? | manufacturing entities, not-for-profit entities, service entities (ALL OF THESE) |
| The reporting standard for external financial reports is? | GAAP (generally accepted accounting principles) |
| Planning is a function that involves? | setting goals and objectives for an entity |
| A manufacturing process requires small amount of glue. The glue used in the production process is classified as a(n)? | indirect material |
| Because of automation, which component of product cost is declining? | direct labor |
| Which one of the following represents a period cost? | The VP of Sales' salary and benefits. |
| Cost of goods sold? | appears on BOTH manufacturing and merchandising companies' income statements. |
| Cost of goods manufactured is calculates as follows: | Beginning WIP + direct materials used + direct labor + manufacturing overhead - ending WIP |
| During 2011, $400,000 of raw materials were purchased, direct labor costs amounted to $500,000, and manufacturing OH incurred was $480,000. The total raw materials available for use during 2011 is? | $660,000 |
| The equivalent of finished goods inventory for a merchandising firm is referred to as? | merchandise inventory |
| For a manufacturing company, which of the following is an example of a period cost rather than a product cost? | Wages of salespersons |
| The two basic types of cost accounting systems are? | job order and process cost system |
| In a job order cost accounting system, the Raw Materials Inventory account is? | a control account |
| The entry to record the cost of factory labor and the associated payroll tax expense will include a debit to Factory Labor for? | $440,000 |
| The entry to record the acquisition of raw materials on account is? | (D) Raw Materials Inventory & (C) Accounts Payable |
| How much inventory was requisitioned for use on jobs during 2011? | $273,600 |
| How much is the company's predetermined overhead rate to the nearest cent? | $0.90 |
| Redman Company manufactures customized desks...What is the total manufacturing cost for Job No. 978? | $21,450 |
| Manufacturing overhead is applied to each job? | by means of a predetermined overhead rate. |
| The existence of under-or-overapplied overhead at the end of the year: | requires an adjustment to Cost of Goods Sold. |
| Companies assign manufacturing overhead to work in process on an estimated basis through the use of a(n): | predetermined overhead rate |
| Debits to Work in Process Inventory are accompanied by a credit to all but which one of the following accounts? | Cost of Goods Sold |
| A process cost accounting system is most appropriate when: | similar products are mass-produced |
| Which of the following is a true statement about process cost systems? | A process cost system has one work in process account for each process. |
| In process cost accounting, manufacturing costs are summarized on a: | production cost report |
| A product requires processing in two departments, the Banking Department and the Packaging Department, before it is completed. Costs transferred out of the Banking Department will be transferred to: | Work In Process - Packaging Department |
| A primary driver of overhead costs in continuous manufacturing operating is: | machine hours |
| How much is equivalent units of production for the period for conversion costs? | 17,500 equivalent units |
| During the period, 8,000 units were completed, and there were 800 units of ending WIP. How many units were started into production? | 8,800 |
| If there are no units in process at the beginning of the period, then: | the units to be accounted for will equal the units transferred out and the units in process at the end of the period. |
| The total units accounted for equals units in: | ending work in process + units transferred out. |
| If 100,000 units are started into production there was no beginning WIP, and 40,000 units are in process at the end of the period, how many units were completed and transferred out? | 60,000 |
| In the production cost report, the total: | physical units accounted for equals the units to be accounted for. |
| A budget | is an aid to management |
| Budgeting is usually most closely associated with which management function? | planning |
| It is important that budgets be accepted by: | all of these (division managers, department heads, supervisors). |
| Long-range planning: | generally encompasses a longer period of time than an annual budget. |
| A sales forecast: | shows forecasts for the industry and for the firm. |
| The financial budgets include the: | cash budget and the budgeted balance sheet. |
| The single most important output in preparing financial budgets is the | cash budget |
| If the company has a policy of maintaining a minimum end of the month cash balance of $250,000, the amount the company would have to borrow is: | $100,000 |
| What is the minimum cash loan that must be planned to be borrowed from the bank during September? | $260,000 |
| Budgeting in not-for-profit organizations: | usually starts with budgeting expenditures, rather than receipts. |
| A critical factor in budgeting for a service firm is to: | coordinate professional staff needs with anticipated services. |
| The purpose of the sales budget report is to | determine whether sales goals are being met. |
| A static budget is appropriate in evaluating a manager's performance if: | actual activity closely approximates the master budget activity. |
| A flexible budget | projects budget data for various levels of activity. |
| A flexible budget for a level of activity of 60,000 machine hours would show total manufacturing overhead cost of: | $988,000 |
| Which one of the following would be the same total amount on a flexible budget and a static budget if the activity level is different for the two types of budgets? | fixed manufacturing overhead |
| What budgeted amounts appear on the flexible budget? | budgeted amounts for the actual activity level achieved |
| Management by exception | means that material differences will be investigated |
| As one moves up to each higher level of managerial responsibility | a greater number of costs are controllable |
| Top management can control | all costs |
| A cost center | only incurs costs and does not directly generate revenues |
| a profit center is | a responsibility center that incurs costs and generates revenues. |
| a standard cost is | a predetermined cost. |
| The difference between a budget and a standard is that | a budget expresses a TOTAL amount, while a standard expresses a UNIT amount. |
| Ideal standards | reflect optimal performance under perfect operating conditions. |
| Most companies that use standards set them at | the normal level |
| A total materials variance is analyzed in terms of | price and quantity variances |
| The total materials variance is equal to the | sum of the materials price variance and the materials quantity variance |
| Which of the following describes the total overhead variance? | the difference between what was actually incurred and overhead applied. |
| In using variance reports, management looks for: | significant variances |
| The balanced scorecard | incorporates financial and non-financial measures in an integrated system. |
| The investigation of materials price variance usually begins in the | purchasing department |
| Labor efficiency is measured by the | labor quantity variances |
| Which best describes the flow of overhead costs in an activity-based costing system? | Overhead costs -> activity cost pools -> cost drivers -> products |
| Often the most difficult part of computing accurate unit costs is determining the proper amount of ____ to assign to each product, service, or job? | overhead |
| Predetermined overhead rates in traditional costing are often based on | direct labor cost for job order costing and machine hours for process costing. |
| The last step in activity-based costing is to | assign manufacturing overhead costs for each activity cost pool to products. |
| An example of an activity cost pool is | setting up machines |
| Melman produces throw rugs (700 inspections) and area rugs (1,300 inspections). How much of the inspecting cost pool should be assigned to throw rugs? | $35,000 |
| To use activity-based costing, it is necessary to know the: | all of the above |
| Which would be an appropriate cost driver for the ordering and receiving activity cost pool? | purchase orders |
| Which of the following is a value-added activity? | machining |
| Which of the following is a non-value-added activity? | inventory control |
| In service industries | a larger proportion of overhead costs are company-wide costs. |
| A variable cost is a cost that | varies in total in proportion to changes in the level of activity. |
| A fixed cost is a cost which | remains constant in total with changes in the level of activity. |
| Cost behavior analysis applied to | all entities |
| Which of the following is not a fixed cost? | direct materials |
| The relevant range of activity refers to the | levels of activity over which the company expects to operate. |
| Firms operating at 100% capacity | are the exception rather than the rule. |
| If Whisper Wings Airlines cuts its domestic fares by 30% | a profit can be earned either by increasing the number of passengers or by decreasing variable costs. |
| In applying the high-low method, which months are relevant? | February and April. |
| In applying the high-low method, what is the fixed cost? | $26,250 |
| The high-low method is often employed in analyzing | mixed costs |
| In CVP analysis, the term "cost" | includes manufacturing costs plus selling and administrative expenses. |
| Internal reports that review the actual impact of decisions are prepared by: | management accountants |
| Cost that will differ between alternatives and influence the outcome of a decision are | relevant costs |
| Incremental analysis would be appropriate for | all of these |
| If a plant is operating at full-capacity and receives a one-time opportunity to accept an order at a special price below its usual price, then: | the order will likely be rejected |
| A company is within plant capacity. It is contemplating whether a special order should be accepted. The order will not impact regular sales. If the company accepts the special order, what will occur? | net income will increase if the special sales price per unit exceeds the unit variable costs. |
| Which statement is true concerning the decision rule on whether to make or buy? | the company should buy if the cost of buying is less than the cost of producing. |
| Which decision will involve no incremental revenues? | make or buy decisions |
| An outside supplier has offered to produce the corn chips for $25 a batch. How much will Tasty Bites save if it accepts the offer? | $17.00 per batch |
| The decision rule on whether to sell or process further | is process further if incremental revenue from such processing exceeds the incremental processing costs. |
| Costs incurred before the split-off are | sunk costs |
| Book value of old equipment is considered to be a | sunk cost |
Created by:
kserrano005