Exam 1-Ch 1 - 4

A fixed cost: D. Goes down per unit when activity increases. Which of the following types of firms would most likely use process costing? A. A soft drink company Manufacturing overhead was estimated to be $200,000 for the year along with 20,000 direct labor hours. Actual manufacturing overhead was $215,000, actual labor hours were 21,000. The predetermined overhead rate would be: A. $10.00 (200,000/20,000) What determines the difference between a variable and a fixed cost? A. Whether it changes when activity levels change

Exam 1-Ch 1 - 4
Which of the following is not a characteristic of managerial accounting? D. Reports are prepared according to GAAP. A cost is $50,000 when 25,000 units are produced, and $100,000 when 50,000 units are produced. This is an example of a(n) C. variable cost Costs that can be traced to a specific cost object are B. direct costs Which of the following is not a manufacturing cost? B. Marketing cost. A predetermined overhead rate is calculated using which formula? D. Estimated manufacturing overhead cost/estimated units in the allocation base.

Exam 1-Ch 1 - 4
Which of the following represents the cost of materials purchased but not yet issued to production? A. Raw Materials Inventory. What determines the difference between a direct and an indirect cost? C. Whether it can be traced to a specific cost object. To earn summer money, Joe could mow lawns in his neighborhood, or he could work at a local grocery store. Which of the following is an opportunity cost of mowing lawns? C. The wages he could have earned working at the grocery store. When disposed of, overapplied manufacturing overhead will C. Decrease Cost of Goods Sold.

Exam 1-Ch 1 - 4
Manufacturing overhead was estimated to be $400,000 for the year along with 20,000 direct labor hours. Actual manufacturing overhead was $415,000, actual labor hours were 21,000. The predetermined overhead rate would be: C. $420.00 (400,000/20,000) x 21,000 When units are sold, the cos associated with the units is debited to which account? C. Cost of Goods Sold Manufacturing overhead was estimated to be $250,000 for the year along with 20,000 direct labor hours. Actual manufacturing overhead was $225,000, actual labor hours were 19,000. Which of the following would be correct? C. Overhead is overapplied by $12,500. ((250,000/20,000) x 19,000) 225,000

Exam 1-Ch 1 - 4
The one cost that would be classified as part of both prime cost and conversion cost would be: B. Direct labor. Amelia Co used a predetermined overhead rate using estimated overhead of $320,000 and 8,000 estimated direct labor hours. How much overhead was applied during the year? C. $360,000 A volume-based cost system is likely to assign more manufacturing overhead costs to products B. that sell more units than others. To reconcile the number of physical units using the weighted average method of process costing, one must determine whether the units ended up A. completed or still in process at the end of the period.

 Work in process includes: D. All of the above. Suppose Shadow Co has 250 units in beginning inventory, 400 units started in production, and 175 units in ending inventory. How many units did Shadow complete? C. 475 (250 + 400 175) Prevention costs are costs that : A. are incurred to prevent quality problems from occurring in the first place. When target costing is used, the target cost is determined by A. finding the difference between the market price and the amount of profit needed to satisfy stakeholders. Which of the following sets just-in-time systems apart from traditional manufacturing systems? B. Materials are purchased only as they are needed to manufacture goods.

Exam 1-Ch 1 - 4

Exam 1-Ch 1 - 4
Bevine, Inc. produces two different products What is the activity rate for Inspection? B. $500 per batch (30,000/60) How is activity based management related to activity based costing? C. Activity based management bases improvements to operations and reductions in costs on activity based costing data. Which of the following is an example of a period cost? B. Advertising cost for a new product campaign. Which of the following is a requirement under the SOX Act? C. Management must conduct a review of the companys internal control system.

Exam 1-Ch 1 - 4
In a traditional volume-based cost system, total manufacturing costs are calculated by A. Adding manufacturing overhead cost, direct material cost, and direct labor cost. Which of the following best defines a product-level activity? B. An activity that is performed to support a specific product line When units are sold, the cost associated with the units is debited to which account? D. Cost of Goods Sold Martinez Company has the followingWhat are Martinezs prime cost? D. 38,000 (15,000 + 23,000) Martinez Company has the followingWhat are Martinezs total manufacturing overhead?

Exam 1-Ch 1 - 4
Which of the following is true about product and period costs? A. Product costs are usually manufacturing costs, and period costs are usually nonmanufacturing costs. A large company that uses activity based costing would do which of the following? D. Group activities together to simplify the number of activities. Analu, Inc. has formed four activity cost poolsWembleys salary should be D. Allocated among Machining and Production, Machine Setup, and Inspection. Life cycle cost management takes into consideration the fact that costs and revenues B. Are not constant across different stages of the products life cycle.