PART A: Multiple Choice Questions [5 x 1mark = 5 marks]

Answer ALL Questions

Q1. Which of the following costs is often important in decision making, but is omitted from
conventional accounting records?
A. Fixed cost
B. Sunk cost
C. Opportunity cost
D. Indirect cost.
Q2. Conversion costs do not include:
A. Depreciation
B. Direct materials
C. Indirect labor
D. Indirect materials.
Q3. Daneman Corporation's fixed monthly expenses are $13,000 and its contribution margin ratio
is 56%. If the fixed monthly expenses do not change, what is the best estimate of the
company's net operating income in a month when sales are $41,000?
A. $22,960
B. $9,960
C. $5,040
D. $28,000.
Q4. Sista Corporation uses a predetermined overhead rate based on direct labor-hours to apply
manufacturing overhead to jobs. The company estimated manufacturing overhead at $510,000
for the year and direct labor-hours at 100,000 hours. Actual manufacturing overhead costs
incurred during the year totaled $540,000. Actual direct labor-hours were 105,000. What was
the overapplied or underapplied manufacturing overhead for the year?
A. $30,000 overapplied
B. $30,000 underapplied
C. $4,500 overapplied
D. $4,500 underapplied.
Q5. Mosby Inc. is working on its cash budget for June. The budgeted beginning cash balance is
$16,000. Budgeted cash receipts total $188,000 and budgeted cash disbursements total
$187,000. The desired ending cash balance is $40,000. The excess (deficiency) of cash
available over disbursements for June will be:
A. $15,000
B. $1,000
C. $17,000
D. $204,000.

End of Quiz