Final Exam Conceptual Flashcards
(22 cards)
Using the traditional three-part classification of manufacturing costs, prime costs, and conversion costs have the common component of?
A. Variable manufacturing overhead costs
B. Direct Material Costs
C. Direct Labor cots
D. Fixed Manufacturing overhead costs
C. Direct labor costs
In general, costs that can most reliably predicted are: A. Fixed costs per unit B. Variable cost per unit C. Total mixed costs D. Total variable costs
B. Variable cost per unit
The master budget process generally begins with the
A. Production budget
B. Sales budget
C. Operating budget
D. Cash budget
B. Sales Budget
A flexible budget is one that
A. is updated with actual costs as they occur
B. is updated to reflect the actual level of activity during the period
C. is prepared using a computer spreadsheet application
D. contains only variable production costs
D. is updated to reflect actual level of activity during the period.
If the average selling price is great than expected, the revenue variance is: A. labeled as favorable B. labeled as unfavorable C. cannot be labeled D. an activity variance
A. labeled as favorable
A capital budgeting method that takes into consideration the time value of money is the A. annual rate of return method B. return on stock holders equity method C. cash payback technique D. internal rate of return method
A. Annual rate of return method
Equivalent units are calculated by
A. multiplying the percentage of work done by the equivalent units of output.
B. Dividing physical units by the percentage of work done
C. Multiplying the percentage of work done by the physical units.
D. Dividing equivalent units by the percentage of work done.
C. Multiplying the percentage of work done by the physical units
If Manufacturing Overhead has a credit balance at the end of the period, then
A. Overhead has been undersupplied
B. the overhead assigned to work in process inventory is less than the overhead incurred
C. overhead has been over-applied
D. management must take corrective action
C. Overhead has been overapplied
If manufacturing overhead has been over applied during the year, the adjusting entry at the end of the year will show a A. Debit to Manufacturing Overhead B. Credit to Finished Goods Inventory C. Debit to Cost of Goods Sold D. Credit to Work in Process Inventory
A. Debit to Manufacturing Overhead
In a job order cost system, it would be correct in recording the purchase of raw materials to debit
A. Work in Process Inventory
B. Work in Process and Manufacturing Overhead
C. Raw Materials
Inventory
D. Finished Goods Inventory
C. Raw Materials Inventory
It is necessary to calculate equivalent units of production in a department because
A. A physical count of units is impossibles.
B. Some units worked on in the department are not fully complete.
C. The physical units in the department are always 100% complete.
D. At times a department may use a job order cost system and then switch to process cost system
B. Some units worked on in the department are not fully complete.
Manufacturing costs are typically classified as
A. Product costs or period costs.
B. Direct materials or direct labor
C. Direct Materials, Direct Labor, Manufacturing Overhead
D. Direct Materials, Direct Labor, or Selling and Administrative.
C. Direct Materials, Direct Labor, Manufacturing Overhead
Only direct materials, direct labor, and variable manufacturing overhead costs are considered product costs when using
A. Full Costings
B. Absorption Costing
C. Variable Costings
D. Product Costing
C. Variable Costing
The performance of the manager of Ottawa Division is measured by residual income. Which of the following would decrease the manager’s performance measure?
A. Decrease in required rate of return
B. Increase in amount of return on investment desired
C. Increase in sales
D. Increase in contribution margin
B. Increase in amount of return on investment desired
The predetermined overhead rate is based on the relationship between
A. Estimated annual costs and actual activity
B. Estimated Annual costs and expected annual activity.
C. Actual monthly costs and actual annual activity.
D. Estimated monthly costs and actual monthly activity
B. Estimated Annual Costs and Expected Annual Activity
What is the proper preparation sequencing of the following budgets?
- Budgeted Balance Sheet
- Sales Budget
- Selling and Admin Budget
- Budgeted Income Statement
A. 1, 2, 3, 4
B. 2,3,1,4
C. 2,3,4,1
D. 2,4,3,1
C. 2, 3, 4, 1
Which of following ignores the time value of money?
A. Internal Rate of Return
B. Profitability Index
C. Net Present Value
D. Cash payback
D. Cash payback
Which of the following is a disadvantage of the cash payback technique?
A. It is difficult to calculate
B. It relies on the time value of money
C. It can only be calculated when there are annual net cash flows.
D. It ignores the expected profitability of a project
D. It ignores the expected profitability of the project
Which of the following is a unit-level activity?
A. Painting
B. Purchase ordering
C. Inspection
D. Material handling
A. Painting
Which of the following will always be a relevant cost?
A. Sunk cost
B. Fixed cost
C. Variable cost
D. Opportunity cost
D. Opportuntiy
Which of the following will cause an increase in ROI?
A. An increase in variable costs
B. An increase in average operating assets
C. An increase in sales
D. An increase in controllable fixed costs
C. An increase in sales
Which one of the following is an example of a period cost?
A. A change in benefits for the union workers who work in the New York plant of a Fortune 1000 manufacture
B. Workers compensation insurance on factory workers wages allocated to the factory.
C. A box cost associated to computers
D. A managers salary for work that is done in the corporate head office
D. A managers salary for work that is done in the corporate head office.
