ACC650 All Weeks Quizzes (October 2019)

<span itemprop="name">ACC650 All Weeks Quizzes (October 2019)</span>

ACC 650 Managerial Accounting

Week 1 Quiz

•A custom-home builder would likely utilize:

•job-order costing.

•process costing.

•mass customization.

•process budgeting.

•joint costing.

Harrison Industries began July with a finished-goods inventory of $48,000. The finished-goods inventory at the end of July was $56,000 and the cost of goods sold during the month was $125,000. The cost of goods manufactured during July was:

•$104,000.

•$125,000.

•$117,000.

•$133,000.

•None of the answers is correct.

•Shu Corporation recently computed total product costs of $567,000 and total period costs of $420,000, excluding $35,000 of sales commissions that were overlooked by the company’s administrative assistant. On the basis of this information, Shu’s income statement should reveal operating expenses of:

•$35,000.

•$420,000.

•$455,000.

•$567,000.

•$602,000.

•Which of the following is not an element of competency?

•To develop appropriate knowledge about a particular subject.

•To perform duties in accordance with relevant laws.

•To perform duties in accordance with relevant technical standards.

•To refrain from engaging in an activity that would discredit the accounting profession.

•To prepare clear reports after an analysis of relevant and reliable information.

•Metalica Company applies overhead based on machine hours. At the beginning of 20×1, the company estimated that manufacturing overhead would be $500,000, and machine hours would total 20,000. By 20×1 year-end, actual overhead totaled $525,000, and actual machine hours were 25,000. On the basis of this information, the 20×1 predetermined overhead rate was:

•$0.04 per machine hour.

•$0.05 per machine hour.

•$20 per machine hour.

•$21 per machine hour.

•$25 per machine hour.

 

ACC 650 Managerial Accounting

Week 2 Quiz

•Equivalent-unit calculations are necessary to allocate manufacturing costs between:

•units completed and ending work in process.

•beginning work in process and units completed.

•units sold and ending work in process.

•cost of goods manufactured and beginning work in process.

•cost of goods manufactured and cost of goods sold.

•Which of the following is true concerning cost drivers for the predetermined overhead rate in a process-costing system?

•Predetermined overhead rates are not used in a process-costing system.

•If direct material cost is the cost driver, direct labor and direct materials may be combined into the single element of prime cost.

•If direct labor hours is the cost driver, direct labor and manufacturing overhead may be combined into the single element of conversion cost.

•If direct labor cost is the cost driver, direct labor and manufacturing overhead may be combined into the single element of conversion cost.

•Cost drivers are irrelevant in process-costing systems.

•Process costing would likely be used in all of the following industries except:

•petroleum refining.

•chemicals.

•truck tire manufacturing.

•wood pulp production.

•automobile repair.

•Corrigan, Inc. overstated the percentage of work completed with respect to conversion cost on the ending work-in-process inventory. What is the effect of this overstatement on conversion-cost equivalent units and physical units manufactured, respectively?

•Overstated, overstated.

•Overstated, understated.

•Overstated, none.

•None, overstated.

•None, none.

•Hornsby has a single production department, and uses a process-costing system. The balance in its Work-in-Process account on January 1 was $68,000. The account was charged with direct materials, direct labor, and manufacturing overhead of $450,000 throughout the year. If a review of the accounting records determined that $86,000 of goods were still in production at year-end, Hornsby should make a journal entry on December 31 that includes:

•a debit to Cost of Goods Sold for $432,000.

•a debit to Finished-Goods Inventory for $432,000.

•a debit to Work-in-Process Inventory for $432,000.

•a debit to Finished-Goods Inventory for $86,000.

•a credit to Work-in-Process Inventory for $86,000.

 

 

ACC 650 Managerial Accounting

Week 3 Quiz

•Which of the following cost drivers would best be associated with the activity of physician time in a medical clinic?

•Number of new patient visits.

•Number of continuing patient visits.

•Physician minutes with a patient.

•Number of line items on the clinic’s bill.

•The number of accreditations held by the clinic.

 

 

 

•             Magnolia Industries combines all manufacturing overhead into a single cost pool and allocates this overhead to products by using machine hours. Activity-based costing would likely show that with Magnolia’s current procedures that:

•all of the company’s products are undercosted.

•the company’s high-volume products are undercosted.

•all of the company’s products are overcosted.

•the company’s high-volume products are overcosted.

•the company’s low-volume products are overcosted.

•When determining customer profitability, activity-based costing can be used to analyze:

•orders processed.

•sales visits.

•special packaging and handling.

•billing and collections.

•All of the answers are correct.

•Baxter customer service department follows up on customer complaints by telephone inquiry. During a recent period, the department initiated 10,000 calls and incurred costs of $312,000. Of these calls, 3,800 were for the company’s wholesale operation; the remainder was for the retail division. Costs allocated to the retail division are:

•$0.

•$31,200.

•$118,560.

•$193,440.

•$203,000.

•Which of the following is not a broad, cost classification category typically used in activity-based costing?

•Unit-level.

•Batch-level.

•Product-sustaining level.

•Facility-level.

•Management-level.

 

 

ACC 650 Managerial Accounting

Week 4 Quiz

•             The difference between budgeted sales revenue and break-even sales revenue is the:

•contribution margin.

•contribution-margin ratio.

•safety margin.

•target net profit.

•operating leverage.

•             Amounts spent for charitable contributions are an example of a (n):

•committed fixed cost.

•committed variable cost.

•discretionary fixed cost.

•discretionary variable cost.

•engineered cost.

•             A cost that has both a fixed and variable component is known as a:

• step-fixed cost.

•step-variable cost.

•semivariable cost.

•curvilinear cost.

•discretionary cost.

•             The break-even point is that level of activity where:

•total revenue equals total cost.

•variable cost equals fixed cost.

•total contribution margin equals the sum of variable cost plus fixed cost.

•sales revenue equals total variable cost.

•profit is greater than zero.

•             Partner Industries sells a single product for $50 that has a variable cost of $30. Fixed costs amount to $5 per unit when anticipated sales targets are met. If the company sells one unit in excess of its break-even volume, profit will be:

•$15.

•$20.

•$50.

•an amount that cannot be derived based on the information presented.

•an amount other than $15, $20, or $50 and one that can be derived based on the information presented.

 

 

ACC 650 Managerial Accounting

Week 5 Quiz

•             Flexible budgets reflect a company’s anticipated costs based on variations in:

•activity levels.

•inflation rates.

•managers.

•anticipated capital acquisitions.

•standards.

•             Auditory Company, which applies overhead to production on the basis of machine hours, reported the following data for the period just ended:

Actual units produced: 13,000

Actual fixed overhead incurred: $742,000

Standard fixed overhead rate: $15 per hour

Budgeted fixed overhead: $720,000

Planned level of machine-hour activity: 48,000

If Auditory estimates four hours to manufacture a completed unit, the company’s fixed-overhead budget variance would be:

•$22,000 favorable.

•$22,000 unfavorable.

•$60,000 favorable.

•$60,000 unfavorable.

•None of the answers is correct

•             Which of the following would have no effect, either direct or indirect, on an organization’s cash budget?

•Sales revenues.

•Outlays for professional labor.

•Advertising expenditures.

•Raw material purchases.

•None of the answers is correct, since all of these items would have some influence.

•             Miracle Enterprises sells electronics in retail outlets and on the Internet. It uses activity-based budgeting in the preparation of its selling, general, and administrative expense budget. Which of the following costs would the company likely classify as a unit-level expense on its budget?

•Media advertising.

•Retail outlet sales commissions.

•Salaries of web-site maintenance personnel.

•Administrative salaries.

•Salary of the sales manager employed at store no. 23.

 

 

ACC 650 Managerial Accounting

Week 6 Quiz

•             Which of the following would have a low likelihood of being organized as a profit center?

• A movie theater of a company that operates a chain of theaters.

•A maintenance department that charges users for its services.

•A maintenance department that charges users for its services.

•The mayor’s office in a large city.

•Both the billing department of an Internet Services Provider (ISP) and the mayor’s office in a large city.

•             Halpern Corporation is in the process of overhauling the performance evaluation system for its San Diego manufacturing division, which produces and sells parts that are popular in the aerospace industry. Which of the following is least likely to be chosen to evaluate the overall operations of the San Diego division?

•Cost center.

•Responsibility center.

•Profit center.

•Investment center.

•The profit center and investment center are equally unlikely to be chosen.

•             Which of the following describes the goal that should be pursued when setting transfer prices?

•Maximize profits of the buying division.

•Maximize profits of the selling division.

•Allow top management to become actively involved when calculating the proper dollar amounts.

•Establish incentives for autonomous division managers to make decisions that are in the overall organization’s best interests (i.e., goal congruence).

•Minimize opportunity costs.

•             Economic value added (EVA) analysis indicates:

•the amount of income generated by each dollar of capital investment.

•the number of sales dollars generated by each dollar of capital investment.

•the percentage of each sales dollar that remains as profit after all expenses are covered.

•the amount of increased capital generated by each dollar of income.

•how much shareholder wealth is being created.

•             Crimson Industries is in the process of evaluating allocation bases so that selected costs can be charged to responsibility centers. Would the number of employees likely be a good base for allocating the costs of Human Resources, Building and Grounds, and Repairs and Maintenance to user centers?

•Human Resources: Yes

Buildings and Grounds: Yes

Repairs and Maintenace: Yes

•Human Resources: Yes

Buildings and Grounds: No

Repairs and Maintenace: Yes

•Human Resources: Yes

Buildings and Grounds: No

Repairs and Maintenace: No

 

 

ACC 650 Managerial Accounting

Week 7 Quiz

•Consider the following comments about absorption- and variable-costing income statements:

I. A variable-costing income statement discloses a firm’s contribution margin.

II. Cost of goods sold on an absorption-costing income statement includes fixed costs.

III. The amount of variable selling and administrative cost is the same on absorption- and variable-costing income statements.

Which of the above statements is (are) true?

•I only.

•II only.

•I and II.

•II and III.

•I, II, and III.

•Vega Enterprises has computed the following unit costs for the year just ended:

Direct material used $12

Direct labor 18

Variable manufacturing overhead 25

Fixed manufacturing overhead 29

Variable selling and administrative cost 10

Fixed selling and administrative cost 17

Under absorption costing, each unit of the company’s inventory would be carried at:

•$55.

•$35.

•$65.

•None of the answers is correct.

•$84.

•All of the following are inventoried under absorption costing except:

•direct labor

•raw materials used in production.

•utilities cost consumed in manufacturing.

•sales commissions.

•machine lubricant used in production.

 

 

ACC 650 Managerial Accounting

Week 8 Quiz

•             San Ruiz Interiors provides design services to residential and commercial clients. The residential services produce a contribution margin of $450,000 and have traceable fixed operating costs of $480,000. Management is studying whether to drop the residential operation. If closed, the fixed operating costs will fall by $370,000 and San Ruiz’ income will:

•decrease by $80,000.

•increase by $80,000.

•increase by $30,000.

•increase by $340,000.

•decrease by $340,000.

•             A company that is using the internal rate of return (IRR) to evaluate projects should accept a project if the IRR:

•is greater than the project’s net present value.

•equates the present value of the project’s cash inflows with the present value of the project’s cash outflows.

•is greater than zero.

•is greater than the hurdle rate.

•is less than the firm’s cost of investment capital.

•             Carmen Company has an asset that cost $5,000 and currently has accumulated depreciation of $2,000. Suppose the firm sold the asset for $2,500 and is subject to a 30% income tax rate.  The loss on disposal would be:

•$350.

•$500.

•$650.

•$2,500.

•None, because the transaction produced a gain.