1. (TCO 1) A difference between actual costs and planned costs (Points: 4) should be investigated if the amount is exceptional. indicates that the planned cost was poorly estimated. indicates that the manager is doing a poor job. should be ignored unless it involves the cost of ingredients.
2. (TCO 1) A company has a cost that is $2.00 per unit at a volume of 12,000 units and $2.00 per unit at a volume of 16,000 units. What type of cost is this? (Points: 4) Fixed Variable Sunk Incremental
3. (TCO 2) Ice Box Company manufactures refrigerators. Which of the following items is most likely to be an indirect material cost for Ice Box Company? (Points: 4) Factory supervisor’s salary Lubricant for refrigerator door hinges Glass shelves for the refrigerators Refrigerator motors
4. (TCO 2) A form used to accumulate the cost of producing an item is called a(n) (Points: 4) job-cost sheet material requisition balance sheet invoice
5. (TCO 3) Why is it necessary to compute equivalent units separately for materials and conversion costs? (Points: 4) Mistakes are made in the accounting for these costs Materials and conversion enter the production process at different rates Conversion costs are more difficult to estimate None of the above reasons are true 0
6. (TCO 3) In the assembly department, all the direct materials are added at the beginning of the processing. Beginning Work in Process inventory consists of 2,000 units with a direct materials cost of $31,860. During the period, 15,000 units are started and direct materials costing $250,000 are charged to the department. If there are 1,000 units in ending inventory, what is the cost per equivalent unit? (Points: 4) $15.93 $15.63 $14.83 $16.58
7. (TCO 4) Regression analysis (Points: 4) uses all the available data points to estimate a cost equation can be performed by many spreadsheet programs provides an equation that can be used to estimate total costs at different levels all of the above
8. (TCO 4) Beaudreaux Motors is operating at its break-even point of 16,000 units. Which of the following statements is not true? (Points: 4) The amount of the company’s total costs equals the amount of its revenues. The company’s fixed costs equal its variable costs. The company’s profit equals zero. Assuming no other changes, if the company sold more units, it would earn a profit.
9. (TCO 5) Which of the following is treated as a product cost in full costing? (Points: 4) Sales commissions Administrative salaries Factory supervisor Security at corporate headquarters
10. (TCO 5) When the number of units sold is equal to the number of units produced, net income using full costing will be (Points: 4) greater than net income under variable costing equal to net income using variable costing less than income using variable costing none of the above
1. (TCO 6) A major problem with cost-plus contracts is that they (Points: 4) are not acceptable under GAAP. cause the supplier to take significant financial risks. require the supplier to use variable costing. create an incentive to allocate as much cost as possible to the goods produced under the cost-plus contract.
12. (TCO 6) Which of the following steps is not involved in the ABC approach? (Points: 4) Identify activities which cause costs to be incurred. Allocate costs to products based on activity usage. Group costs of activities into cost pools. Improve processes based on benchmarking
13. (TCO 7) Which of the following is not a term used to describe the additional costs incurred as a result of selecting one decision over another? (Points: 4) Differential costs Sunk costs Relevant costs Incremental costs
1. (TCO 7) Common costs (Points: 4) are fixed costs that are not directly traceable to an individual product line. normally not avoidable. Both A and B are true. Neither A nor B is true.
2. (TCO 8) Activity based pricing seeks to (Points: 4) customers with the costs they are creating. make greater profits by charging all customers more. maintain all customers in the customer base. all of the above.
3. (TCO 8) Which of the following should be true in order for a company to accept a special order? (Points: 4) Variable costs are less than fixed costs Incremental revenues exceed incremental costs Opportunity costs are zero The order is for a current customer
4. (TCO 9) Present value techniques (Points: 4) ignore cash flows that will occur more than ten years in the future. are a way of converting future dollars into equivalent current dollars.
