THEORIES

1
The formula for price/rate variance is (AP - SP) x AQ
(1/1 Point)
True
False
2
The price variance reflects the difference between the quantity of inputs used and
the standard quantity allowed for the output of a period. 
(1/1 Point)
True
False
3
Process cost systems are used to apply costs to a specific job, such as the
manufacturing of a specialized machine.

(1/1 Point)
True
False
4
In a process cost system, materials, labor and overhead are only added in the first
production department.

(1/1 Point)
True
False
5
Variances between actual and budgeted amounts inform management about
performance relative to the budget.

(1/1 Point)
True
False
6
Favorable variances are represented by credit balances in the overhead account.

(1/1 Point)
 True
False
7
7.    Which of the following is not an objective of managerial accounting?

(1/1 Point)
Assisting in directing and controlling operations.
Measuring the performance of managers and subunits
Providing information for decision making and planning.
Maximizing profits and minimizing costs.
8
In an activity-based costing system, direct materials used would typically be
classified as a:
(1/1 Point)
facility-level cost.
batch-level cost.
unit-level cost.
product-sustaining cost
9
If a company obtains two salable products from the refining of one ore, the
refining process should be accounted for as a(n)
(1/1 Point)
mixed cost process
joint process.
extractive process.
reduction process
10
Costs that are expensed when incurred are called:
(1/1 Point)
product costs.
direct costs.
inventoriable costs.
period costs.
11
Ayundai Motors manufactures automobiles. Which of the following would not be
classified as direct materials by the company?
(1/1 Point)
Wheel lubricant
Sheet metal used in the automobile's body.
Tires
Interior leather.
12
Activity-based costing systems:
(1/1 Point)
typically use fewer cost drivers than more traditional costing systems.
assign overhead to products based on the products' relative usage of direct labor.
often reveal products that were under- or over costed by traditional costing systems.
use a single, volume-based cost driver.
13
The process of managing the various activities in the value chain, along with the
associated costs, is commonly known as:
(1/1 Point)
activity-based costing.
strategic cost management.
total quality management.
computer-integrated costing.
14
Of the following organizations, activity-based costing can be used by:
(1/1 Point)
manufacturers.
financial-services firms.
book publishers.
all these organizations can use activity-based costing.
15
Joint costs are most frequently allocated based upon relative
(1/1 Point)
profitability
conversion costs
 prime costs
sales value
16
Which of the following industries are most likely to use a job-order costing
system?
(1/1 Point)
Car repairs
Fast food restaurant
Crude Refinery
Soda Processing
17
Work in Process is a control account supported by detailed cost data contained in
(1/1 Point)
Overhead Account
 Raw Materials Account
Timecard
Job Cost Sheets
18
Indirect materials in a job-order costing system would usually record it debit in
(1/1 Point)
Finished goods
Inventory
Manufacturing Overhead
Equipment
19
After using raw materials purchased, it is recorded usually as debit in
(0/1 Point)
Work in Process
Raw Materials
Inventories
Finished Goods
20
Which of the following best describes a process cost system?
(1/1 Point)
It determines how manufacturing costs incurred during each period will be allocated.
 It determines how much the different processes cost
It is a way to known how much each item costs
None of the above.
PROBLEM SOLVING
21
AM11 Company uses a job order costing system and last period incurred $80,000
of actual overhead and $100,000 of direct labor. AM11 estimates that its
overhead next period will be $75,000. It also expects to incur $100,000 of direct
labor. If AM11 bases applied overhead on direct labor cost, its predetermined
overhead rate for the next period should be:
(2/2 Points)
75%
80%
107%.
125%.
22
(2/2 Points)

$3,200; $ 900.
$2,900; $1,200.
$1,200; $2,900.
$1,700; $1,200.
23
Job XYZ was ordered by a customer on November 25. During the month of
November, Jaybee Inc. requisitioned $2,500 of direct materials and used $4,000
of direct labor. The job was not finished by the end of the month but needed an
additional $3,000 of direct materials and additional direct labor of $6,500 to finish
the job in December. The company applies overhead at the end of each month at
a rate of 200% of the direct labor cost incurred. What is the balance in the Work
in Process account at the end of November relative to Job XYZ?
(0/2 Points)
$5,500
$11,500
$6,500
$14,500
24
Job XYZ was ordered by a customer on November 25. During the month of
November, Jaybee Inc. requisitioned $2,500 of direct materials and used $4,000
of direct labor. The job was not finished by the end of the month but needed an
additional $3,000 of direct materials and additional direct labor of $6,500 to finish
the job in December. The company applies overhead at the end of each month at
a rate of 200% of the direct labor cost incurred. What is the total cost of the job
when it is completed in December?
(2/2 Points)
$22,500
$37,000
$26,500
$32,000
25
Job XYZ was ordered by a customer on November 25. During the month of
November, Jaybee Inc. requisitioned $2,500 of direct materials and used $4,000
of direct labor. The job was not finished by the end of the month but needed an
additional $3,000 of direct materials in December and additional direct labor of
$6,500 to finish the job. The company applies overhead at the end of each month
at a rate of 200% of the direct labor cost. What is the amount of job costs added
to Work in Process Inventory during December?
(0/2 Points)
$16,000
$22,500
$37,000
$32,000
26
(0/2 Points)

12,000, 8,000
10,000, 9,200
12,500, 8,200
8,000, 12,000
27
(0/2 Points)

12,000, 10,400
10,400,12,000
14,000, 10,000
10,300, 8,000
 28
(0/2 Points)

22,000, 20,000
22,400, 22,000
21,000, 18,200
10,300, 8,000
29
(2/2 Points)

16,000, 13,200
21,000, 18,200
22,500, 22,000
23,000, 20,000
 30
(0/2 Points)

24,000, 19,600
22,400, 22,000
21,000, 18,200
16,000, 13,200
31
(0/2 Points)
 69%
52%
50%
45%
32
(0/2 Points)

69%
20%
50%
55%
33
(2/2 Points)
 51,744
52,000
55,500
62,744
34
(0/2 Points)

53,295
55,295
56,294
 66,294
35
Tony Spark sells 800 units resulting in $9,000 of sales revenue, $3,000 of variable
costs, and $1,500 of fixed costs. Contribution margin per unit is_____. (Round the
final answer to the nearest cent.)
(2/2 Points)
$13.75
$11.25
$7.50
$5.00
36
Spongeboblers Inc. sells softwares during the recruiting seasons. During the
current year, 14,000 software packages were sold resulting in $460,000 of sales
revenue, $110,000 of variable costs, and $50,000 of fixed costs. Contribution
margin per software is
(2/2 Points)
$32.86
$25.00
$29.29
$7.86
37
Tony Spark sells 500 units resulting in $10,000 of sales revenue, $4,000 of variable
costs, and $1,500 of fixed costs. Calculate the variable cost per unit. (Round the
final answer to the nearest cent.)
(2/2 Points)
$12.00
$6.00
$2.00
$8.00
38
Spongeboblers Inc. sells software during the recruiting seasons. During the
current year, 10,000 software packages were sold resulting in $470,000 of sales
revenue, $130,000 of variable costs, and $48,000 of fixed costs. If sales increase
by $80,000, operating income will increase by ____. (Round interim calculations to
two decimal places and the final answer to the nearest whole dollar.)
(2/2 Points)
$30,588
$32,000
$48,000
$57,872
39
Patrick Star Inc. sells only one product for $12 per unit, variable production costs
are $3 per unit, and selling and administrative costs are $1.70 per unit. Fixed costs
for 11,000 units are $6,000. When 11,000 units are sold, what is the operating
income?
(2/2 Points)
$8.45 per unit
$6.75 per unit
$7.30 per unit
$4.70 per unit
40
(2/2 Points)

$875 F
 $865 F
$865 U
$875 U
41
(0/2 Points)

$2,040 F
$2,040 U
$2,050 u
$2,050 F
42
(2/2 Points)
 $3,075 U
$3,075 F
$2,938 F
$2,938 U
43
(2/2 Points)
 $2,475 U
$2,250 U
$2,250 F
$225 F
44
(2/2 Points)
 $5,188 F
$2,850 U
$2,850 F
$5,188 U
45
(2/2 Points)
 $155,900
$167,000
$173,400
$171,666
46
(0/2 Points)
 $113,400
$110,000
$115,500
$111,000
47
Raffy Gems Inc. plans to sell 12,000 units during the month of January. If the
company has 2,500 units on hand at the start of the month, and plans to have
2,000 units on hand at the end of the month, how many units must be produced
during the month?
(2/2 Points)
12,000
11,500
12,500
14,000
48
15. Patty Wrap Inc. produces and sells product wrapx. To guard against stockouts,
the company requires that 20% of the next month's sales be on hand at the end
of each month. Budgeted sales of product wrapx over the next four months are:

                                                September  October  November  December

Budgeted sales in units:           30,000       40,000     60,000       50,000

 
Budgeted production for November would be:
(0/2 Points)
50,000 units
70,000 units
62,000 units
58,000 units
49
Question
(2/2 Points)

82,500 units
75,000 units
105,000 units
150,000 units
50
Crystal Products started and finished job no. C19 during June. The job required
$15,000 of direct material and 75 hours of direct labor at $12 per hour. The
predetermined overhead rate is $16 per direct labor hour.

During June, direct materials requisitions for all jobs totaled $149,000; the total
direct labor hours and cost were 6,200 hours at $12 per hour; and the total cost
of jobs completed was $337,500. All of these figures include data that pertain to
job no. C19.

Determine the cost of job no. C19.

(0/3 Points)

Correct answers: 17,100
51
30. Lowman Painting Company has the following production data for March:

 Beginning work in process, 2,000 units

 Units transferred out, 42,000

 Units in ending work in process, 8,000, which are 80% complete for
conversion costs

 
Materials are added only at the beginning of the process.

Compute equivalent units of production for conversion costs.

(0/3 Points)

Correct answers: 48,400
52
Production costs chargeable to the Sanding Department in July for Joyful Art are
$12,500 for materials, $26,000 for labor, and $10,000 for manufacturing overhead.
Equivalent units of production are 25,000 for materials and 20,000 for conversion
costs.
 
Compute the unit costs for materials. (Round answer to 2 decimal places)
(0/3 Points)

Correct answers: 0.50
53
Production costs chargeable to the Sanding Department in July for Joyful Art are
$12,500 for materials, $26,000 for labor, and $10,000 for manufacturing overhead.
Equivalent units of production are 25,000 for materials and 20,000 for conversion
costs.

Compute the unit costs for conversion costs. (Round answer to 2 decimal places)
(0/3 Points)

Correct answers: 1.80
54
Basile Corporation has budgeted sales of 36,000 units, target ending finished
goods inventory of 6,000 units, and beginning finished goods inventory of 1,800
units. How many units should be produced next year?
(0/3 Points)

Correct answers: 40,200
55
(3/3 Points)

56
Question
(0/3 Points)
Correct answers: 146,500
57
(0/3 Points)
Correct answers: 94,000
58
The Mavi Company estimates that the factory overhead for the following year will
be $1,470,000. The company has decided that the basis for applying factory
overhead should be machine hours, which is estimated to be 40,000 hours.
Calculate the predetermined overhead rate to apply factory overhead. (Round
answer to 2 decimal places)
(3/3 Points)

59
The Mavi Company estimates that the factory overhead for the following year will
be $1,250,000. The company has decided that the basis for applying factory
overhead should be machine hours, which is estimated to be 40,000 hours. The
machine hours for the month of April for all of the jobs was 4,780. What is the
amount that will be applied to all of the jobs for the month of April?
(0/3 Points)

Correct answers: 149,375
60
Madrigal Company has the following production data for June: units transferred
out 50,000, and ending work in process 6,000 units that are 100% complete for
materials and 30% complete for conversion costs. Unit materials cost is $5 and
unit conversion cost is $11. Determine the costs to be assigned to the units
transferred out.

(3/3 Points)