1. The price of fire insurance for a manufacturing plant is primarily taken into consideration to be a:
a. product cost.
You are watching: The cost of fire insurance for a manufacturing plant is generally considered to be a:
b. duration expense. c. variable cost. d. all of the above.
2. An opportunity expense is:
a. the distinction in full prices which outcomes from selecting one alternative instead of one more. b. the advantage forgone by picking one alternate rather of another. c. a cost which may be saved by not adopting an different. d. a cost which might be shifted to the future via little bit or no effect on existing operations.
3. In a project order cost device, the use of direct products formerly purchased usually is videotaped as a delittle bit to:
a. Work in Process inventory. b. Finiburned Goods inventory. c. Manufacturing Overhead. d. Raw Materials inventory.
4. The balance in White Company’s Work in Process inventory account was $15,000 on August 1 and also $18,000 on August 31. The company incurred $30,000 in direct labor price throughout August and also requisitioned $25,000 in raw products (all straight material). If the amount of the debits to the Manufacturing Overhead account full $28,000 for the month, and if the sum of the credits totaled $30,000, then:
a. Finiburned Goods was debited for $82,000 in the time of the month. b. Finished Goods was credited for $83,000 throughout the month. c. Manufacturing Overhead was underused by $2,000 at the end of the month. d. Finimelted Goods was debited for $85,000 throughout the month.
5. If the estimated production overhead for the year was $24,000, and the applied overhead was $26,500, the actual production overhead price for the year was:
a. $19,500. b. $22,000. c. $28,500. d. $31,000.
6. Departmental overhead prices may not properly asauthorize overhead costs due to:
a. the use of direct labor-hrs in allocating overhead costs to assets fairly than machine time or quantity of materials supplied. b. the high correlation in between straight labor-hrs and the incurrence of overhead costs. c. overreliance on volume as a basis for allocating overhead expenses wright here assets differ regarding the number of devices developed, lot dimension, or intricacy of production. d. difficulties linked through identifying price pools for the initially phase of the alplace procedure.
7. The clerical task linked via processing purchase orders to create an order for a conventional product is an example of a:
a. Unit-level task. b. Batch-level task. c. Product-level task. d. Facility-level activity.
8. Worker recreational infrastructure is an example of a expense that would certainly ordinarily be considered to be:
a. Unit-level. b. Batch-level. c. Product-level. d. Facility-level.
9. David Company uses the weighted-average approach in its process costing mechanism. The first handling department, the Welding Department, began the month with 20,000 devices that were 80% finish through respect to convariation prices. The conversion cost in this beginning work-related in process inventory was $123,200. An added 65,000 systems were started right into manufacturing during the month. Tbelow were 19,000 units in the ending work in procedure inventory of the Welding Department that were 10% complete through respect to conversion costs. A complete of $389,250 in convariation expenses were incurred in the department in the time of the month. What would certainly be the expense per indistinguishable unit for conversion prices for the month? (Round off to three decimal locations.)
a. $7.547 b. $7.700 c. $4.634 d. $5.988
10. Baker Company kind of supplies the weighted-average strategy in its procedure costing mechanism. The Assembly Department started the month through 8,000 systems in its start work in procedure inventory that were 90% complete with respect to conversion prices. An additional 95,000 systems were transferred in from the prior department throughout the month to begin handling in the Assembly Department. There were 11,000 units in the finishing occupational in process inventory of the Assembly Department that were 90% complete via respect to conversion prices. What were the tantamount systems of manufacturing for convariation expenses in the Assembly Department for the month?
a. 94,700 b. 101,900 c. 98,000 d. 92,000
11. Process costing would certainly be proper for each of the following except:
a. custom furniture. b. oil refining. c. grain milling. d. newsprint manufacturing.
12. Expense A is a solved cost; price B is a variable expense. During the current year the activity level has increased, but is still within the relevant range. In terms of cost per unit of activity, we would certainly intend that:
a. expense A has actually stayed unreadjusted. b. cost B has actually reduced. c. price A has decreased. d. expense B has actually raised.
13. An boost in the activity level within the pertinent variety results in:
a. a boost in fixed expense per unit. b. a proportionate boost in total addressed prices. c. an unchanged addressed price per unit. d. a decrease in solved cost per unit.
14. In describing the price formula equation Y = a + bX, which of the complying with statements is correct?
a. “X” is the dependent variable. b. “a” is the fixed component. c. In the high-low strategy, “b” equates to adjust in activity divided by readjust in prices. d. As “X” increases “Y” decreases.
15. Contribution margin is the excess of earnings over:
a. cost of goods offered. b. manufacturing expense. c. all direct costs. d. all variable prices.
16. Given the cost formula Y = $17,500 + $4X, at what level of activity will total price be $42,500?
a. 10,625 systems. b. 4,375 units. c. 6,250 units. d. 5,250 systems.
17. Once the break-even allude is reached:
a. the complete contribution margin changes from negative to positive. b. net income will certainly boost by the unit contribution margin for each extra item marketed. c. variable expenses will remajor consistent in full. d. the contribution margin proportion starts to decrease.
18. Marston Enterprises sells three chemicals: petrol, septine, and tridol. Petrol’s unit contribution margin is greater than septine’s which is higher than tridol’s. Which among the adhering to events is many most likely to increase the company’s all at once break-also point?
a. The installation of brand-new computer-managed equipment and also succeeding lay-off of assembly-line employees. b. A decrease in tridol’s selling price. c. An boost in the in its entirety industry demand for septine. d. A readjust in the family member sector demand for the assets, with the boost favoring petrol family member to septine and also tridol.
19. The break-even suggest in sales for Rice Company is $360,000 and also the company’s contribution margin ratio is 30%. If Rice Company kind of desires an earnings of $84,000, sales would need to total:
a. $280,000. b. $640,000. c. $480,000. d. $560,000.
20. Which of the complying with is not a benefit of budgeting?
a. It uncovers potential bottlenecks before they happen. b. It works with the activities of the entire organization by integrating the plans and also objectives of the various parts. c. It ensures that bookkeeping records comply via mostly welcomed audit values. d. It offers benchmarks for evaluating succeeding performance.
21. The Willsey Merchandise Company type of has budgeted $40,000 in sales for the month of December. The company’s price of items offered is 30% of sales. If the firm has actually budgeted to purchase $18,000 in merchandise in the time of December, then the budgeted change in inventory levels over the month of December is:
a. $6,000 increase. b. $10,000 decrease. c. $22,000 decrease. d. $15,000 increase.
22. The standards that enable for no machine breakdowns or other work-related interruptions and that need height performance at all times are referred to as:
a. normal standards. b. useful requirements. c. best requirements. d. budgeted requirements.
23. Tower Company planned to develop 3,000 units of its single product, Titactium, in the time of November. The standards for one unit of Titactium specify 6 pounds of products at $0.30 per pound. Actual manufacturing in November was 3,100 systems of Titactium. There was a favorable materials price variance of $380 and also a negative products amount variance of $120. Based on these variances, one can conclude that:
a. even more products were purchased than were offered. b. more products were used than were purchased. c. the actual price per pound for products was much less than the typical expense per pound. d. the actual intake of materials was much less than the standard allowed.
24. Which of the following variances would be advantageous in calling attention to feasible difficulties in the control of spfinishing on overhead items? variable solved overhead overhead spending budobtain variance variance
a. No No b. No Yes c. Yes No d. Yes Yes
25. The financial influence of the incapacity to reach a taracquire denominator level of task would certainly best be measured by:
a. the amount of the volume variance. b. the contribution margin shed by failing to accomplish the target denominator level of task. c. the amount of the fixed overhead budobtain variance. d. the amount of the variable overhead efficiency variance.
26. Turnover is computed by separating average operating assets into:
a. invested funding. b. full assets. c. net operating income. d. sales.
27. A company’s rerevolve on investment is the:
a. margin separated by turnover. b. margin multiplied by turnover. c. turnover divided by average operating assets. d. turnover multiplied by average operating assets.
28. Largo Company kind of videotaped for the past year sales of $750,000 and also average operating assets of $375,000. What is the margin that Largo Company type of necessary to earn in order to accomplish an ROI of 15%?
a. 2.00% b. 15.00% c. 9.99% d. 7.50%
29. Consider a decision facing a firm of either accepting or rejecting a distinct sell for among its commodities. A price that is not relevant is:
a. direct materials. b. variable overhead. c. fixed overhead that will certainly be avoided if the distinct offer is embraced. d. common resolved overhead that will proceed if the unique offer is not welcomed.
30. A plant operating at capacity would certainly indicate that:
a. eextremely machine and perkid in the plant is functioning at the maximum feasible price. b. just some certain makers or procedures are operating at the maximum rate feasible. c. fixed costs will certainly must readjust to accommoday raised demand also. d. supervisors must develop those products with the greatest contribution margin in order to resolve the constrained reresource.
31. A study has been conducted to identify if Product A have to be dropped. Sales of the product total $200,000 per year; variable costs complete $140,000 per year. Fixed expenses charged to the product full $90,000 per year. The company approximates that $40,000 of these resolved costs will certainly continue even if the product is dropped. These data show that if Product A is dropped, the company’s as a whole net operating income would:
a. decrease by $20,000 per year. b. increase by $20,000 per year. c. decrease by $10,000 per year. d. increase by $30,000 per year.
32. Suppose an investment has cash inflows of R dollars at the finish of yearly for 2 years. The existing worth of these cash inflows making use of a 12% discount price will certainly be:
a. better than under a 10% discount price. b. much less than under a 10% discount rate. c. equal to that under a 10% discount price. d. occasionally better than under a 10% discount price and sometimes less; it counts on R.
33. Which among the following statements about the payback approach of capital budgeting is correct?
a. The payago strategy does not consider the moment worth of money. b. The payago strategy considers cash flows after the payback has actually been got to. c. The payago strategy uses discounted cash flow techniques. d. The payback approach will certainly cause the same decision as various other methods of funding budgeting.
34. The Jachild Company is considering the purchase of an equipment that will certainly rise revenues by $32,000 each year. Cash outflows for operating this machine will certainly be $6,000 annually. The cost of the machine is $65,000. It is supposed to have a useful life of 5 years via no salvage worth. For this machine, the basic price of rerevolve is:
a. 20%. b. 40%. c. 49.2%. d. 9.2%.
35. Which of the following would be taken into consideration a “use” of cash for purpose of building a statement of cash flows?
a. selling the company’s very own common stock to investors. b. issuing irreversible debt. c. purchasing tools. d. amortizing a patent.
36. An increase in the prepassist expenses account of $1,000 over the course of a year would certainly be displayed on the company’s statement of cash flows ready under the instraight strategy as:
a. an addition to net earnings of $1,000 in order to arrive at net cash gave by operating tasks. b. a deduction from net revenue of $1,000 in order to arrive at net cash provided by operating tasks. c. an addition of $1,000 under financing tasks. d. a deduction of $1,000 under financing tasks.
37. An rise in the bonds payable account of $200,000 over the course of a year would certainly be presented on the company’s statement of cash flows prepared under the indirect strategy as:
a. an enhancement of $200,000 under investing tasks. b. a deduction of $200,000 under investing activities. c. an enhancement of $200,000 under financing tasks. d. a deduction of $200,000 under financing tasks.
38. The gross margin percent is a lot of most likely to be supplied to assess:
a. just how conveniently accounts receivables deserve to be accumulated. b. exactly how conveniently inventories are sold. c. the effectiveness of governmental departments. d. the in its entirety profitcapacity of the company’s commodities.
39. Which of the complying with is true regarding the calculation of rerotate on complete assets?
a. The numerator of the proportion is composed only of net earnings. b. The denominator of the ratio consists of the balance of full assets at the end of the period under consideration. c. The numerator of the proportion consists of net earnings plus interemainder price times the taxes price. d. The numerator of the ratio consists of net income plus interemainder price times one minus the tax rate.
40. Sale of a item of devices at book worth for cash will:
a. boost functioning funding. b. decrease working resources. c. decrease the debt-to-equity ratio. d. boost net revenue.
41. The net accounts receivable for Andante Company kind of were $150,000 at the start of the most recent year and $190,000 at the end of the year. If the accounts receivable turnover for the year was 8.5, and also 15% of complete sales were cash sales, then the full sales for the year were:
a. $1,445,000. b. $1,700,000. c. $1,900,000. d. $1,500,000.
42. In job-order costing, every one of the following statements are correct via respect to labor time and also expense except:
a. time tickets are kept by employees showing the amount of work on particular tasks. b. the task expense sheet for a job will contain all direct labor charges to that particular job. c. labor price that deserve to be traced to a project just with a good deal of effort is treated as component of manufacturing overhead. d. a machine operator perdeveloping regimen annual maintenance work-related on a item of devices would charge the maintenance time to a certain job.
43. For the current year, Paxman Company type of incurred $150,000 in actual manufacturing overhead price. The Manufacturing Overhead account proved that overhead was over used in the amount of $6,000 for the year. If the preestablished overhead rate was $8.00 per direct labor hour, how many hours were worked throughout the year?
a. 19,500 hours b. 18,000 hrs c. 18,750 hrs d. 17,750 hours
44. Each of the complying with would be a period price except:
a. the salary of the firm president’s secretary. b. the expense of a basic bookkeeping office. c. depreciation of a machine supplied in production. d. sales comobjectives.
45. Which of the adhering to have to not be consisted of as part of manufacturing overhead at a company that makes office furniture?
a. sheet steel in a record cabinet made by the firm. b. manufacturing tools depreciation. c. idle time for straight labor. d. taxes on a manufacturing facility building.
46. Which among the following expenses must not be considered a direct expense of serving a details customer that orders a customized personal computer system by phone straight from the manufacturer?
a. the expense of the difficult disk drive installed in the computer system. b. the cost of shipping the computer system to the customer. c. the cost of leasing a machine on a monthly basis that instantly tests hard disk drives prior to they are installed in computers. d. the expense of packaging the computer system for delivery.
47. Testing a protoform of a brand-new product is an instance of a:
a. Unit-level task. b. Batch-level activity. c. Product-level activity. d. Facility-level task.
48. Setting up devices is an example of a:
a. Unit-level task. b. Batch-level task. c. Product-level activity. d. Facility-level activity.
49. Overhead alplace based upon volume alone:
a. is a key facet of the activity-based costing version. b. will certainly systematically overprice high-volume products and underprice low-volume commodities. c. will systematically overcost low-volume assets and undercost high-volume commodities. d. need to be provided for external financial reporting.
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50. Expense A is a addressed cost; cost B is a variable expense. Throughout the present year the task level has enhanced, yet is still within the pertinent range. In terms of expense per unit of activity, we would certainly mean that:
a. cost A has actually continued to be unchanged. b. price B has lessened. c. expense A has actually diminished. d. expense B has boosted.