Question 1 of 20 5.0 Points When absorption costing is used and management bonuses are related to operating income, managers are more likely to: MACROBUTTON HTMLDirect   A. decrease inventory levels. MACROBUTTON HTMLDirect   B. increase inventory levels. MACROBUTTON HTMLDirect   C. keep inventory levels consistent. MACROBUTTON HTMLDirect   D. steal from the company. Question 2 of 20 5.0 Points Which of the following is unique to a process costing system? MACROBUTTON HTMLDirect   A. Work is not started on a product until an order is received. MACROBUTTON HTMLDirect   B. Direct materials, direct labor, and manufacturing overhead are assigned to the first department only. MACROBUTTON HTMLDirect   C. Costs for each process stay with that process until the goods are moved to finished goods. MACROBUTTON HTMLDirect   D. Each process has its own WIP account. Question 3 of 20 5.0 Points The contribution margin is equal to: MACROBUTTON HTMLDirect   A. sales minus cost of goods sold. MACROBUTTON HTMLDirect   B. sales minus operating expenses. MACROBUTTON HTMLDirect   C. sales minus fixed expenses. MACROBUTTON HTMLDirect   D. sales minus variable expenses. Question 4 of 20 5.0 Points On a traditional income statement, sales revenue less cost of goods sold equals: MACROBUTTON HTMLDirect   A. gross profit. MACROBUTTON HTMLDirect   B. contribution margin. MACROBUTTON HTMLDirect   C. operating income. MACROBUTTON HTMLDirect   D. operating expenses. Question 5 of 20 5.0 Points Fun Stuff Manufacturing produces Frisbees using a three-step process that includes molding, coloring, and finishing. Which of the following accounts is debited for conversion costs? MACROBUTTON HTMLDirect   A. WIP inventory-finishing MACROBUTTON HTMLDirect   B. Finished goods inventory MACROBUTTON HTMLDirect   C. Raw materials inventory MACROBUTTON HTMLDirect   D. Cost of goods sold Question 6 of 20 5.0 Points Total fixed costs for Purple Figs Company are $52,000. Total costs, both fixed and variable, are $160,000 if 80,000 units are produced. The fixed cost per unit at 80,000 units would be: MACROBUTTON HTMLDirect   A. $1.35/unit. MACROBUTTON HTMLDirect   B. $0.65/unit. MACROBUTTON HTMLDirect   C. $2.00/unit. MACROBUTTON HTMLDirect   D. $2.65/unit. Question 7 of 20 5.0 Points The representation for fixed cost per unit of activity is: MACROBUTTON HTMLDirect   A. vx divided by v. MACROBUTTON HTMLDirect   B. vx divided by y. MACROBUTTON HTMLDirect   C. y divided by x. MACROBUTTON HTMLDirect   D. f divided by x. Question 8 of 20 5.0 Points The following information is provided by Adametz Company.  WIP inventory, January 1 0 units Units started 7,500 Units completed and transferred out 3,300 WIP inventory, December 31 4,200 Direct materials $15,500 Direct labor $18,400 Manufacturing overhead $9,000 The units in ending WIP inventory were ...

1. Question 1 of 20
5.0 Points
When absorption costing is used and management bonuses are
related to operating income, managers are more likely to:
MACROBUTTON HTMLDirect
A. decrease inventory levels.
MACROBUTTON HTMLDirect
B. increase inventory levels.
MACROBUTTON HTMLDirect
C. keep inventory levels consistent.
MACROBUTTON HTMLDirect
D. steal from the company.
Question 2 of 20
5.0 Points
Which of the following is unique to a process costing system?
MACROBUTTON HTMLDirect

2. A. Work is not started on a product until an order is received.
MACROBUTTON HTMLDirect
B. Direct materials, direct labor, and manufacturing overhead
are assigned to the first department only.
MACROBUTTON HTMLDirect
C. Costs for each process stay with that process until the goods
are moved to finished goods.
MACROBUTTON HTMLDirect
D. Each process has its own WIP account.
Question 3 of 20
5.0 Points
The contribution margin is equal to:
MACROBUTTON HTMLDirect
A. sales minus cost of goods sold.
MACROBUTTON HTMLDirect
B. sales minus operating expenses.
MACROBUTTON HTMLDirect

3. C. sales minus fixed expenses.
MACROBUTTON HTMLDirect
D. sales minus variable expenses.
Question 4 of 20
5.0 Points
On a traditional income statement, sales revenue less cost of
goods sold equals:
MACROBUTTON HTMLDirect
A. gross profit.
MACROBUTTON HTMLDirect
B. contribution margin.
MACROBUTTON HTMLDirect
C. operating income.
MACROBUTTON HTMLDirect
D. operating expenses.
Question 5 of 20
5.0 Points

4. Fun Stuff Manufacturing produces Frisbees using a three-step
process that includes molding, coloring, and finishing. Which of
the following accounts is debited for conversion costs?
MACROBUTTON HTMLDirect
A. WIP inventory-finishing
MACROBUTTON HTMLDirect
B. Finished goods inventory
MACROBUTTON HTMLDirect
C. Raw materials inventory
MACROBUTTON HTMLDirect
D. Cost of goods sold
Question 6 of 20
5.0 Points
Total fixed costs for Purple Figs Company are $52,000. Total
costs, both fixed and variable, are $160,000 if 80,000 units are
produced. The fixed cost per unit at 80,000 units would be:
MACROBUTTON HTMLDirect
A. $1.35/unit.

5. MACROBUTTON HTMLDirect
B. $0.65/unit.
MACROBUTTON HTMLDirect
C. $2.00/unit.
MACROBUTTON HTMLDirect
D. $2.65/unit.
Question 7 of 20
5.0 Points
The representation for fixed cost per unit of activity is:
MACROBUTTON HTMLDirect
A. vx divided by v.
MACROBUTTON HTMLDirect
B. vx divided by y.
MACROBUTTON HTMLDirect
C. y divided by x.

6. MACROBUTTON HTMLDirect
D. f divided by x.
Question 8 of 20
5.0 Points
The following information is provided by Adametz Company.
WIP inventory, January 1
0 units
Units started
7,500
Units completed and transferred out
3,300
WIP inventory, December 31
4,200
Direct materials
$15,500
Direct labor
$18,400
Manufacturing overhead
$9,000
The units in ending WIP inventory were 90% complete for
materials and 50% complete for conversion costs. At the end of
the year, what are the equivalent units for conversion costs?
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A. 3,750
MACROBUTTON HTMLDirect

7. B. 3,300
MACROBUTTON HTMLDirect
C. 5,400
MACROBUTTON HTMLDirect
D. 2,100
Question 9 of 20
5.0 Points
A company manufactures mirrors. Last month's costs were as
follows.
Direct materials
$90,000
Direct labor
144,000
Manufacturing overhead
158,000
What were the conversion costs for the month?
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A. $302,000
MACROBUTTON HTMLDirect

8. B. $392,000
MACROBUTTON HTMLDirect
C. $234,000
MACROBUTTON HTMLDirect
D. $90,000
Question 10 of 20
5.0 Points
When units are moved from one processing department to the
next, the cost associated with those units must also be moved
from one WIP account to the next. What are these costs called?
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A. Transported costs
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B. Transmitted costs
MACROBUTTON HTMLDirect
C. Transferred costs
MACROBUTTON HTMLDirect

9. D. Conveyed costs
Question 11 of 20
5.0 Points
The Jones Corporation uses a process system. During the
current period, 2,500 units were started and 1,100 units were
completed and transferred out. Ending units were 60% complete
for materials and 45% complete for conversion costs. Direct
materials costs added were $35,405 and conversion costs added
were $32,870. There was no beginning WIP inventory and
conversion costs are added evenly throughout the process. At
the end of the period, what are the total equivalent units for
conversion costs?
MACROBUTTON HTMLDirect
A. 1,940
MACROBUTTON HTMLDirect
B. 1,400
MACROBUTTON HTMLDirect
C. 1,100
MACROBUTTON HTMLDirect
D. 1,730

10. Question 12 of 20
5.0 Points
The first step of the 5-step process costing procedure is.
MACROBUTTON HTMLDirect
A. compute output in terms of equivalent units.
MACROBUTTON HTMLDirect
B. summarize total costs to account for.
MACROBUTTON HTMLDirect
C. compute the cost per equivalent unit.
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D. summarize the flow of physical units.
Question 13 of 20
5.0 Points
Fixed costs that are the result of previous management decisions
that current managers have no control over in the short run are
called ________ fixed costs.
MACROBUTTON HTMLDirect
A. discretionary

11. MACROBUTTON HTMLDirect
B. committed
MACROBUTTON HTMLDirect
C. standard
MACROBUTTON HTMLDirect
D. past
Question 14 of 20
5.0 Points
In process costing, ________ is/are found by taking the number
of partially completed physical units and multiplying it by the
percentage of the process completed.
MACROBUTTON HTMLDirect
A. cost of goods sold
MACROBUTTON HTMLDirect
B. equivalent units
MACROBUTTON HTMLDirect

12. C. fixed manufacturing overhead costs
MACROBUTTON HTMLDirect
D. conversion costs
Question 15 of 20
5.0 Points
Fun Stuff Manufacturing produces ping pong balls using a
three-step sequential process that includes molding, coloring,
and finishing. When the balls and associated costs are
transferred from the coloring process to the finishing process,
which account is credited?
MACROBUTTON HTMLDirect
A. WIP inventory-coloring
MACROBUTTON HTMLDirect
B. WIP inventory-molding
MACROBUTTON HTMLDirect
C. Raw materials inventory
MACROBUTTON HTMLDirect
D. WIP inventory-finishing

13. Question 16 of 20
5.0 Points
Sugartown Corporation has total sales revenues of $930,000. If
its total fixed costs are $182,000 and its total variable costs are
$267,000, then the total contribution margin is:
MACROBUTTON HTMLDirect
A. total revenue minus total fixed costs.
MACROBUTTON HTMLDirect
B. total revenue minus total variable costs.
MACROBUTTON HTMLDirect
C. total variable costs minus total fixed costs.
MACROBUTTON HTMLDirect
D. equal to operating income.
Question 17 of 20
5.0 Points
The use of either absorption or variable costing will make little
difference in companies:
MACROBUTTON HTMLDirect

14. A. using just-in-time inventory methods.
MACROBUTTON HTMLDirect
B. with large inventories.
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C. with high fixed costs.
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D. with high variable costs.
Question 18 of 20
5.0 Points
At Hodgson Corporation, direct materials are added at the
beginning of the process, and conversion costs are uniformly
applied. Other details include the following.
Beginning WIP direct materials
$32,000
Beginning WIP conversion costs
$20,250
Costs of materials added
$384,100
Costs of conversion added
$271,125
WIP beginning (50% for conversion)
19,200 units
Units started
119,500 units
Units completed and transferred out

15. 115,700 units
WIP ending (60% for conversion)
23,000 units
What are the total equivalent units for conversion costs?
MACROBUTTON HTMLDirect
A. 127,200
MACROBUTTON HTMLDirect
B. 125,300
MACROBUTTON HTMLDirect
C. 129,500
MACROBUTTON HTMLDirect
D. 138,700
Question 19 of 20
5.0 Points
When predicting costs at other volumes using a cost equation
derived from either the high-low method or regression analysis,
managers should consider:
MACROBUTTON HTMLDirect

16. A. outliers.
MACROBUTTON HTMLDirect
B. general inflation.
MACROBUTTON HTMLDirect
C. seasonality.
MACROBUTTON HTMLDirect
D. All of the above
Question 20 of 20
5.0 Points
Which of the following does NOT appear on an income
statement prepared using variable costing?
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A. Fixed production costs
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B. Contribution margin
MACROBUTTON HTMLDirect

17. C. Gross margin
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D. Variable production costs