1) At the end of the year, manufacturing overhead has been overapplied. What occurredto create this situation?2) Luca Company overapplied manufacturing overhead during 2006. Which one of thefollowing is part of the year end entry to dispose of the overapplied amount assumingthe amount is material?3) Why is factory overhead applied to products and jobs by manufacturing companies?4) In a job order cost accounting system, the Work in Process account is5) Which one of the following is an important feature of a job order cost system?6) Which of the following represents the two basic types of cost accounting systems?7) Which of the following represents the correct order in which inventories are reportedon a manufacturer�s balance sheet?8) Which one of the following is indirect labor considered?9) Which of the following is an element of manufacturing overhead?10) Which of the following is NOT typical of traditional costing systems?11) An activity that has a direct cause-effect relationship with the resources consumedis a(n)12) A well-designed activity-based costing system starts with
13) What sometimes makes implementation of activity-based costing difficult in serviceindustries is14) Which of the following is a nonvalue-added activity?15) Each of the following is a limitation of activity-based costing EXCEPT16) Poodle Company manufactures two products, Mini A and Maxi B. Poodlesoverhead costs consist of setting up machines, $800,000; machining, $1,800,000; andinspecting, $600,000. Information on the two products is:Mini A Maxi BDirect labor hours 15,000 25,000Machine setups 600 400Machine hours 24,000 26,000Inspections 800 700Overhead applied to Mini A using activity-based costing is17) Which of the following factors would suggest a switch to activity-based costing?18) Poodle Company manufactures two products, Mini A and Maxi B. Poodlesoverhead costs consist of setting up machines, $800,000; machining, $1,800,000; andinspecting, $600,000. Information on the two products is:Mini A Maxi BDirect labor hours 15,000 25,000Machine setups 600 400Machine hours 24,000 26,000Inspections 800 700Overhead applied to Maxi B using traditional costing using direct labor hours is19) Seran Company has contacted Truckel Inc. with an offer to sell it 5,000 of thewickets for $18 each. If Truckel makes the wickets, variable costs are $11 per unit.Fixed costs are $12 per unit; however, $5 per unit is avoidable. Should Truckel make orbuy the wickets?
20) Max Company uses 10,000 units of Part A in producing its products. A supplieroffers to make Part A for $7. Max Company has relevant costs of $8 a unit tomanufacture Part A. If there is excess capacity, the opportunity cost of buying Part Afrom the supplier is21) Rosen, Inc. has 10,000 obsolete calculators, which are carried in inventory at acost of $20,000. If the calculators are scrapped, they can be sold for $1.10 each (forparts). If they are repackaged, at a cost of $15,000, they could be sold to toy stores for$2.50 per unit. What alternative should be chosen, and why?22) Disneys variable costs are 30% of sales. The company is contemplating anadvertising campaign that will cost $22,000. If sales are expected to increase $40,000,by how much will the companys net income increase?23) H55 Company sells two products, beer and wine. Beer has a 10 percent profitmargin and wine has a 12 percent profit margin. Beer has a 27 percent contributionmargin and wine has a 25 percent contribution margin. If other factors are equal, whichproduct should H55 push to customers?24) Hartley, Inc. has one product with a selling price per unit of $200, the unit variablecost is $75, and the total monthly fixed costs are $300,000. How much is Hartley�scontribution margin ratio?25) Which cost is charged to the product under variable costing?26) Orbach Company sells its product for $40 per unit. During 2005, it produced 60,000units and sold 50,000 units (there was no beginning inventory). Costs per unit are: directmaterials $10, direct labor $6, and variable overhead $2. Fixed costs are: $480,000manufacturing overhead, and $60,000 selling and administrative expenses. The per unitmanufacturing cost under absorption costing is27) Which cost is NOT charged to the product under variable costing?28) If standard costs are incorporated into the accounting system,
29) The difference between a budget and a standard is that30) A standard cost is31) The standard rate of pay is $5 per direct labor hour. If the actual direct labor payrollwas $19,600 for 4,000 direct labor hours worked, the direct labor price (rate) variance is32) A company developed the following per-unit standards for its product: 2 pounds ofdirect materials at $6 per pound. Last month, 2,000 pounds of direct materials werepurchased for $11,400. The direct materials price variance for last month was33) The total variance is $10,000. The total materials variance is $4,000. The total laborvariance is twice the total overhead variance. What is the total overhead variance?34) Which of the following statements is FALSE?35) The overhead volume variance relates only to36) If the standard hours allowed are less than the standard hours at normal capacity,the volume variance37) During December, the capital budget indicates a $280,000 purchase of equipment.The ending November cash balance is budgeted to be $40,000. Cash receipts are$840,000, and cash disbursements are $610,000 during December. The companywants to maintain a minimum cash balance of $20,000. What is the minimum cash loanthat must be planned to be borrowed from the bank during December?38) Wacos Widgets plans to sell 22,000 widgets during May, 19,000 units in June, and20,000 during July. Waco keeps 10% of the next month�s sales as ending inventory.How many units should Waco produce during June?39) At January 1, 2004, Barry, Inc. has beginning inventory of 4,000 widgets. Barryestimates it will sell 35,000 units during the first quarter of 2004 with a 10% increase in
sales each quarter. Barry�s policy is to maintain an ending inventory equal to 25% ofthe next quarter�s sales. Each widget costs $1 and is sold for $1.50. How much isbudgeted sales revenue for the third quarter of 2004?40) Prices are set by the competitive market when41) In cost-plus pricing, the markup percentage is computed by dividing the desiredROI per unit by the42) The cost-plus pricing approachs major advantage is