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%
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