# Acc310 Cost Accounting: Week 2 Quiz (10 MCQs) – Version 2

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Acc310 Cost Accounting
Week 2 Quiz (10 MCQs) – Version 2

1. Given the following information, compute the total number of units for the period.
Direct labor hours-12,000
Direct labor cost-\$2.70 per hour
Direct materials cost-\$75 per unit
Total manufacturing cost-\$132,600
Variable overhead cost-50% of total labor cost
360
432
640
840

2. The Shapely Company uses the high-low method to determine its cost equation. The following information was gathered for 2008:
Machine Hours Direct Labor Costs
Busiest month (June) 14,000 \$200,000
Slowest month (December) 6,000 \$120,000

If Shapely expects to use 10,000 machine hours next month, what are the estimated direct labor costs?
\$160,000
\$180,000
\$175,000
\$150,000

3. The Blade Division of Axe Company produces hardened steel blades. One-third of Blade's output is sold to the Forestry Products Division of Axe; the remainder is sold to outside customers. Blades' estimated operating profit for the year is:
Forestry Outside
Division Customers
Sales \$15,000 \$40,000
Variable costs (10,000 ) (20,000 )
Fixed costs (3,000 ) (6,000 )
Operating profits. \$2,000 \$ 14,000
Unit sales 10,000 20,000

The Forestry Division has an opportunity to purchase 10,000 blades of the same quality from an outside supplier on a continuing basis. The Blade Division cannot sell any additional products to outside customers. Should the Axe Company allow its Forestry Division to purchase the blades from the outside supplier at \$1.25 per unit?
No; making the blades will save Axe \$1,500.
No; making the blades will save Axe \$2,500.

4. The statistic used to determine if the total cost function is significantly different from the fixed cost function is the
t-value of the b-coefficient.
coefficient of determination.
standard error of the estimate.
coefficient of correlation.
standard error of the a-coefficient.

5. The UVW Manufacturing Company produces a single product in batches throughout the year. Which of the following product costing systems should be used by UVW?
job-order costing
process costing
operation costing
batch costing

6. Which of the following would be the least appropriate allocation base for allocating overhead in a highly automated (i.e., capital-intensive) manufacturing company?
electricity used
machine hours
direct labor hours
material consumed

7. The CJP Company produces 10,000 units of item S10 annually at a total cost of \$190,000.
Direct materials \$ 20,000
Direct labor 55,000
Total \$190,000

The XYZ Company has offered to supply 10,000 units of S10 per year for \$18 per unit. If CJP accepts the offer, \$4 per unit of the fixed overhead would be saved. In addition, some of CJP's facilities could be rented to a third party for \$15,000 per year. What are the relevant costs for the "make" alternative?
\$160,000
\$165,000
\$175,000
\$185,000

8. Regression analysis does not assume a
linear relationship between the dependent and independent variables(s).
normal distribution of the actual values (y) around the predicting equation (y').
constant variance for the independent error terms (e) from the predicting equation.
logical and causal relationship between the dependent and independent variable(s).

9. The theory of constraints focuses on maximizing throughput contribution margin while minimizing all of the following except
production bottlenecks.
investment in buildings.
investment in inventories.

10. Techniques, Inc. uses a predetermined manufacturing overhead rate based on direct labor hours to apply its indirect product costs to jobs. The following information has been collected for the previous year:
Direct materials \$150,000
Direct labor 200,000
Sales commissions 100,000
Indirect labor 50,000
Rent on office equipment 25,000
Depreciation – factory building 75,000
Utilities – factory 125,000

Techniques used 25,000 direct labor hours and 50,000 machine hours during the previous year. What is the predetermined overhead rate per direct labor hour? (Points : 1)
\$24.00
\$15.00
\$14.00
\$10.00