Acc240 Cost Accounting: Midterm Exam (35 MCQs)

Acc240 Cost Accounting
Midterm Exam (35 MCQs)

1) Which of the following employees is most likely to only use financial accounting information?
Vice president of plant operations
Product manager
Plant manager
Bank loan officer

2) The primary goal of managerial accounting is to provide information to
internal decision makers.
shareholders.
creditors.
both shareholders and creditors.

3) Which statement is true?
Management uses financial information to analyze costs.
Management uses financial information to plan internal operations.
Management uses reports created for internal parties.
All of the above are true.

4) Which of the following statements is false?
Financial accounting helps investors make decisions.
Financial accounting provides sufficient information for managers to effectively plan and control operations.
Financial accounting reports help creditors make decisions.
Financial accounting provides external reports.

5) Which one of the following reports is most likely to require an audit by an outside entity?
Monthly financial statements
Annual financial budgets
Annual financial statements
All of the above

6) Inventoriable product costs for a manufactured product include
the costs of direct materials, direct labor, and manufacturing overhead.
marketing and research and development costs.
the costs of direct materials and direct labor only.
none of the above.

7) Manufacturing overhead costs for a product include
direct material.
operating expenses.
indirect manufacturing costs.
prime costs.

8) When do inventoriable costs become expenses?
When direct materials are purchased
When the manufacturing process begins
When the manufacturing process is completed
None of the above

9) When manufacturing products, direct labor and direct materials are classified as
period costs and expensed when incurred.
product costs and expensed when the goods are sold.
product costs and expensed when incurred.
period costs and expensed when the goods are sold.

10) Certain materials used in a manufacturing plant cannot be traced to a specific unit. What are these materials called?
General materials
Direct materials
Indirect materials
Finished materials

11) A ________ is used to accumulate the costs of a job.
labor time record
materials inventory requisition form
bill of materials
job cost record

12) Which of these documents informs the storeroom to send specific materials to the factory floor?
Receiving report
Bill of materials
Purchase order
Materials requisition

13) A ________ is a source document for tracking employee hours.
labor time record
process costing
job cost record
job costing

14) Which of the following is a document that accumulates job costs?
Bill of materials
A job cost record
Labor time record
Production schedule

15) In the flow of costs, which of the following comes first?
Cost of goods sold
Finished goods inventory
Work in process inventory
Raw materials inventory

16) Which of the following is the last step of the five-step process costing procedure?
Summarize total costs to account for
Assign total costs to units completed and to units in ending WIP inventory
Compute the cost per equivalent unit
Summarize the flow of physical units

17) Which item would appear last on a production cost report?
Cost of goods finished for the month
Total costs accounted for
Beginning WIP inventory, if any
Ending WIP inventory, if any

18) On a production cost report, which of the following cost(s) appear?
A. Beginning work in process
B. Costs added during the period
C. Total operating costs during the period
D. Both A and B are included on a production cost report.

19) For which of the following do you prepare calculations for equivalent units?
Both direct labor and manufacturing overhead
Both direct materials and conversion costs
Both direct labor and direct materials
Neither direct materials nor conversion costs

20) What are the ending inventory equivalent units for materials if 15,500 units are completed and transferred out and 4,200 remain in ending WIP at 35% complete?
3,955
4,200
1,470
5,425

21) Which of the following is a result of cost distortion?
Overcosting of all products
Undercosting of all products
Accurate costing of all products
Overcosting of some products and undercosting of other products

22) When calculating a departmental overhead rate, what should the numerator be?
Total estimated amount of the departmental allocation base
Total estimated departmental overhead cost pool
Total estimated amount of manufacturing overhead for the factory
Actual quantity of the departmental allocation base used by the job

23) What will the use of departmental overhead rates generally result in?
The use of a separate cost allocation base for each department in the factory
The use of a single cost allocation base
The use of a single overhead cost pool for the factory
The use of separate cost allocation base for each activity in the factory

24) Four basic steps are used in an ABC system. Select the correct order of these steps below:
a. Identify the primary activities and estimate a total cost pool for each.
b. Allocate the costs to the cost object using the activity cost allocation rates.
c. Select an allocation base for each activity.
d. Calculate an activity cost allocation rate for each activity.
c, a, b, d
a, c, d, b
b, a, c, d
a, d, c, b

25) Research and development would most likely be classified as a ________ cost.
unit-level
batch-level
facilitylevel
Product-level

26) With respect to variable costs per unit, which of the following statements is true?
They will decrease as production increases within the relevant range.
They will increase as production decreases within the relevant range.
They will decrease as production decreases within the relevant range.
They will remain the same as production levels change within the relevant range.

27) Total fixed costs for Taylor Incorporated are $240,000. Total costs, including both fixed and variable, are $500,000 if 125,000 units are produced. The variable cost per unit is
$5.92/unit.
$2.08/unit.
$4.00/unit.
$1.92/unit.

28) Total fixed costs for Randolph Manufacturing are $752,450. Total costs, including both fixed and variable, are $1,000,000 if 150,000 units are produced. The fixed cost per unit at 186,250 units would be closest to
$1.31/unit.
$5.31/unit.
$4.00/unit.
$5.03/unit.

29) Total fixed costs for Green Planes Inc. are $120,000. Total costs, including both fixed and variable, are $600,000 if 150,000 units are produced. The total variable costs at a level of 220,000 units would be
$409,091.
$176,000.
$880,000.
$704,000.

30) Total fixed costs for Toys and Trinkets Incorporated are $88,000. Total costs, including both fixed and variable, are $155,000 if 268,000 units are produced. The total variable costs at a level of 275,000 units would be
$68,750.
$159,049.
$90,299.
$151,055.

31) The unit contribution margin is computed by
subtracting the variable cost per unit from the sales price per unit.
dividing the sales revenue by variable cost per unit.
dividing the variable cost per unit by the sales revenue.
subtracting the sales price per unit from the variable cost per unit.

32) By multiplying ________ and then subtracting fixed costs, managers can quickly forecast the operating income.
projected sales units by the contribution margin ratio
projected sales revenue by the contribution margin ratio
projected sales revenue by the unit contribution margin
projected sales units by the variable cost ratio

33) Dairy Days Ice Cream sells ice cream cones for $4 per customer. Variable costs are $3 per cone. Fixed costs are $2,500 per month. What is Dairy Days' contribution margin per ice cream cone?
$1.00
$3.00
$0.25
$4.00

34) Electric Jet Skis operates a jet ski rental business. Assume the jet skis rent for $55 per 6 hours. The variable costs are $33 per six-hour rental, and its fixed costs are $80,000 each month. What is the contribution margin ratio?
40%
60%
250%
22%

35) LaComedia Dinner Theater sells tickets for dinner and a show for $40 each. The cost of providing dinner is $26 per ticket and the fixed cost of operating the theater is $100,000 per month. The company can accommodate 12,000 patrons each month. What is the contribution margin ratio?
65%
35%
14%
286%
Powered by