UGRD-MGT6147 Strategic Cost Management

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Started on Friday, 22 April 2022, 8:13 PM

State Finished
Completed on Friday, 22 April 2022, 8:18 PM
Time taken 5 mins 2 secs
Marks 30.00/30.00
Grade 100.00 out of 100.00
Question 1
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A ________ cost increases or decreases in intervals as activity changes

Select one:
a.
Step cost
b.
Fixed cost
c.
Budgeted cost
d.
Historical cost

Question 2
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A difference between standard costs used for cost control and budgeted costs

Select one:
a.
Can exist because budgeted costs are historical costs, whereas standard costs are based
on engineering studies
b.
Can exist because standard costs must be determined after the budget is completed
c.
Can exist because standard costs represent what costs should be, whereas budgeted
costs represent expected actual costs
d.
Cannot exist because they should be the same amounts

Question 3
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A/n ____________ cost increases or decreases in intervals as activity changes

Select one:
a.
Historical cost

b.
Budgeted cost

c.
Fixed cost

d.
Step cost
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Question 4
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ABC Manufacturing Inc. manufactures different products. Unit costs associated with
Product 1 are as follows:

What are the inventoriable costs per unit associated with Product 1?

Select one:
a.
P66
b.
P83
c.
P48
d.
P60

Question 5
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An example of a fixed cost is

Select one:
a.
Total indirect material cost
b.
Cost of electricity
 c.
Straight line depreciation
d.
Total hourly wages

Question 6
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An inaccurate cost function with a constant that is estimated too high may most likely
result in

Select one:
a.
Predicting total costs that are too low

b.
Evaluating a weak manager as providing strong performance

c.
Replicating processes that are truly cost saving

d.
Promoting a product that is actually less profitable than budgeted
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Question 7
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Assume that management expects 500 machine hours in May. Using the high-low
method, calculate May's power cost using machine hours as the basis for prediction.

Select one:
a.
P710
b.
P1,320
c.
P700
d.
P705

Question 8
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Consider the following statements about variance investigation:
I. Variance investigation involves a look at only unfavorable variances.
II. Variance investigation is typically based on a cost-benefit analysis.
III. Variance investigation is often performed by establishing guidelines similar to the
following:
Investigate variances that are greater than in amount or greater than in terms of
percentage of standard cost.
Which of the above statements is (are) true?

Select one:
a.
II only.
b.
II and III.
c.
III only.
d.
I only.

Question 9
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 Question text
Cost allocation is the process of assigning indirect costs to cost object. The indirect costs
are grouped in cost pools and then allocated by a common allocation base to the cost
object.
The base that is employed to allocate a homogeneous cost pool should

Select one:
a.
Assign the costs in the pool uniformly to cost objects even if the cost objects use
resources in a non-uniform way

b.
Have a high correlation with the cost items in the cost pool as the sole criterion for
selection

c.
Have a cause-and-effect relationship with the cost items in the cost pool

d.
Be a nonfinancial measure (e.g. number of setups) because a nonfinancial measure is
more objective
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Question 10
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Direct costs are

Select one:
a.
Associated with a specific activity
b.
Usually discretionary
c.
Usually committed
d.
Always variable
Question 11
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Direct labor is P9.60 per hour and overhead for the month was P9,600. Compute the
total manufacturing costs for June, if there were 1,500 direct labor hours and P21,000 of
raw material was purchased

Select one:
a.
P58,500
b.
P46,500
c.
P43,100
d.
P43,500

Question 12
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Financial accounting is primarily concerned

Select one:
a.
External reporting to investors, creditors, and government authorities

b.
Cost planning and cost controls
 c.
Providing information for strategic and tactical decisions

d.
Profitability analysis
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Question 13
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In a broad sense, cost accounting can best be defined within the accounting system as

Select one:
a.
External reporting to the government, various outside parties, and shareholders.
b.
Internal reporting for use in planning and controlling routine operations.
c.
Internal reporting for use in management planning and control, and external reporting
to the extent of its product costing function that satisfies external reporting
requirements.
d.
Internal and external reporting that may be used in making non-routine decisions and in
developing plans and policies.

Question 14
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Lopelex Mining Corporation uses a process cost system for its ore extraction operations.
The following information pertains to work-in-process inventories and operations for the
month of June:
Under the FIFO method, the equivalent units of conversion cost are

Select one:
a.
184,000 units
b.
196,800 units
c.
171,200 units
d.
177,600 units

Question 15
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Lopelex Mining Corporation uses a process cost system for its ore extraction operations.
The following information pertains to work-in-process inventories and operations for the
month of June:
Using the weighted average method, the equivalent unit cost of materials for June is

Select one:
a.
P2.51
b.
P2.25
c.
P2.06
d.
P2.30

Question 16
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Lopelex Mining Corporation uses a process cost system for its ore extraction operations.
The following information pertains to work-in-process inventories and operations for the
month of June:
Under the FIFO method, the total cost of units in the ending work-in-process inventory
at June 30 is (round-off units costs to nearest peso)

Select one:
a.
P155,424
b.
P153,264
c.
P154,800
d.
P156,960

Question 17
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Product costs are deducted from revenue

Select one:
a.
As expenditures are made
b.
When production is completed
c.
To minimize taxable income
d.
As goods are sold

Question 18
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Regardless of the presence or absence of a profit motive, an organization

Select one:
a.
Must be audited by a certified management accountant
b.
Should use resources efficiently in accomplishing its goals
c.
Should submit its management accounting statements to the Securities and Exchange
Commission
d.
Must pay taxes

Question 19
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The components of manufacturing cost are

Select one:
a.
Purchases, wages and manufacturing overhead

b.
Wages and salaries, maintenance and repairs, utilities and depreciation

c.
Materials, direct labor and overhead

d.
Variable costs, fixed costs and overhead costs
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Question 20
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The direct-material quantity variance is:

Select one:
a.
P6,500U
b.
P750U
c.
P750F
d.
P7,250U

Question 21
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The standard hours allowed for the work performed are:

Select one:
a.
40,100
b.
5.14
c.
39,000
d.
5

Question 22
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The individual generally responsible for the direct-material price variance is the:

Select one:
a.
production supervisor.
b.
purchasing manager.
c.
finance manager.
d.
sales manager.

Question 23
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The source documents for assigning costs to work in process in a job order cost system
are

Select one:
a.
Invoices, time tickets, and the predetermined overhead rate

b.
Material requisition slips, time tickets and the predetermined overhead rate

c.
Material requisition slips, payroll register and the predetermined overhead rate

d.
Material requisition slips, time tickets and the actual overhead cost
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Question 24
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The use of activity based costing normally

Select one:
a.
Equalizing setup costs for all product lines.

b.
Substantially lower unit costs for low volume products than is reported by traditional
product costing.

c.
Substantially higher unit costs for low volume products than is reported by traditional
product costing.

d.
Decrease setup costs being charged to low volume products.
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Question 25
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What is the beginning balance of Finished Goods Inventory if Cost of Goods Sold is
P107,000; the ending balance of Finished Goods Inventory is P20,000; and Cost of Goods
Manufactured is P50,000

Select one:
a.
P77,000
b.
P157,000
c.
P127,000
d.
P70,000

Question 26
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 Question text
Which company is most likely to use job-order costing?

Select one:
a.
A liquor manufacturer

b.
A bridge builder

c.
An automobile manufacturer

d.
A milk manufacturer
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Question 27
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Which of the following choices correctly depicts the proper classification of direct
materials used and management salaries?

Select one:
a.
Choice A
b.
Choice B
c.
Choice D
d.
Choice C
Question 28
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Which of the following is an equation of a variable cost function?

Select one:
a.
y = a+bx

b.
y=a

c.
y = bx

d.
y=b
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Question 29
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Which of the following statements about job order cost sheets is true?

Select one:
a.
Job order cost sheets show costs for direct material and direct labor, but not form
manufacturing overhead since it is an applied amount

b.
If material requisition forms are used, job order cost sheets do not need to be
maintained
 c.
All job order cost sheets serve as the general ledger control account for Work-in Process
Inventory

d.
Job order cost sheets can serve as subsidiary ledger information for both Work-in
Process Inventory and Finished Goods Inventory
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Question 30
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Which one of the following is least likely to be involved in establishing standard costs for
evaluation purposes?

Select one:
a.
Budgetary accountants
b.
Top management
c.
Industrial engineers
d.
Quality control personnel