Question 1

The most common treatment of an end- of- year immaterial overhead variance is to:

Accepted Answer

A)  allocate the variance among inventories and cost of goods sold 
B)  ignore it 
C)  close the variance to cost of goods sold in the current period 
D)  capitalize the variance as a cost of finished goods inventory 
A)  allocate the variance among inventories and cost of goods sold 
B)  ignore it 
C)  close the variance to cost of goods sold in the current period 
D)  capitalize the variance as a cost of finished goods inventory

Question 2

A company can increase the accuracy of its product cost information by converting some factory- overhead costs from indirect to direct costs.

Accepted Answer

A) True 
 B)False

Question 3

Cardinals Company reported the following information about the production and sales of its only product during its first month of operations: $\begin{array}{ll}
\text { Sales }(\$ 225 \text { per unit) } & \$ 360,000 \
\text { Direct material s used } & \$ 176,000 \
\text { Direct labor } & \$ 100,000 \
\text { Variable factory overhead } & \$ 44,000 \
\text { Fixed factory overhead } & \$ 80,000 \
\text { Variable selling and admini strative } & \$ 20,000\\text { expenses }\\text { Fixed selling and administrative expenses }&\$10,000\\text { Ending inventories: Direct materials }&-0-\\text { WIP } & -0- \
\text { Finished goods } & 400 \text { units }
\end{array}$ The cost of producing one unit of product using variable costing is:

Accepted Answer

A)  $160 
B)  $225 
C)  $170 
D)  $200 
A)  $160 
B)  $225 
C)  $170 
D)  $200

Question 4

The production- volume variance serves primarily a product costing purpose.

Accepted Answer

A) True 
 B)False

Question 5

Raymond Company had the following data available: (as a percent of direct- labor cost) The ending inventory of work in process is:

Accepted Answer

A)  $130,000 
B)  $146,500 
C)  $422,000 
D)  $438,000 
A)  $130,000 
B)  $146,500 
C)  $422,000 
D)  $438,000

Question 6

Jackson Company reported the following information about the production and sales of its only product during its first month of operations: $$\begin{array} { l l } 
\text { Sales ( } \$ 225 \text { per unit) } & \$ 360,000 \
\text { Direct materials used } & \$ 176,000 \
\text { Direct labor } & \$ 100,000 \
\text { Variable factory overhead } & \$ 44,000 \
\text { Fixed factory overhead } & \$ 80,000 \
\text { Variable selling and administrative } & \$ 20,000 \
\text { expenses } & \
\text { Fixed s elling and administrative expenses } & \$ 10,000 \
\text { Endinginventories: Direct materials } & - 0 - \
\text { WIP } & - 0 -\\text { Finished goods }&400 \text { units }
\end{array}$$ The cost of goods sold under variable costing is:

Accepted Answer

A)  $272,000 
B)  $320,000 
C)  $360,000 
D)  $256,000 
A)  $272,000 
B)  $320,000 
C)  $360,000 
D)  $256,000

Question 7

A company has the following information for the current month of operations: $\begin{array}{ll}
\text { Raw materials used } & \$ 37,500 \
\text { Sales }(\$ 97.50 \text { per unit) } & \$ 117,000 \
\text { Direct labor } & \$ 63,000 \
\text { Variable factory overhead } & \$ 25,500\\text { Fixed factory overhead } & \text { unknown } \
\text { Variable } s \text { elling and administrative } & \$ 4,500 \
\text { Fixed selling and adminis trative } & \$ 7,500 \
\text { Gross profit } & \$ 45,000 \
\text { Contribution margin } & \text { unknown }\
\end{array}$

$\begin{array}{lll}
\text { Inventories: } & \text { Beginning } & \text { Ending } \
\text { Raw materials } & 0 & \$ 10500 \
\text { WIP } & 0 & \text { none } \
\text { Finished goods } & 0 & 1,200 \text { units }
\end{array}$ were sold during the period.

Accepted Answer

A)  2,400 units 
B)  3.600 units 
C)  1,200 units 
D)  0 units 
A)  2,400 units 
B)  3.600 units 
C)  1,200 units 
D)  0 units

Question 8

The denominator in the computation of the fixed overhead rate

Accepted Answer

Expected v

Question 9

Hoover Company reported the following information about the production and sales of its only product during its first month of operations: $$\begin{array} { l r } 
\text { Sales ( } \$ 225 \text { per unit) } & \$ 315,000 \
\text { Direct materials used } & \$ 160,000 \
\text { Direct labor } & \$ 100,000 \
\text { Variable factory overhead } & \$ 60,000 \
\text { Fixed factory overhead } & \$ 80,000 \
\text { Variable selling and administrative expenses } & \$ 20,000 \
\text { Fixed selling and administrative expenses } & \$ 30,000 \
\text { Endinginventories: } & \
\quad \text { Direct materials } & - 0 - \
\text { WIP } & - 0 - \
\text { Finished goods } & 600 \text { units }
\end{array}$$ The cost of producing one unit of product using absorption costing is:

Accepted Answer

A)  $200.00 
B)  $225.00 
C)  $130.00 
D)  $160.00 
A)  $200.00 
B)  $225.00 
C)  $130.00 
D)  $160.00

Question 10

Boyd Company incurred actual overhead costs of $305,000 for the year. A budgeted factory- overhead rate of 150% of direct- labor cost was determined at the beginning of the year. Budgeted factory overhead was $300,000, and budgeted direct- labor cost was $200,000. Actual direct- labor cost was $205,000 for the year. The factory overhead variance for the year was:

Accepted Answer

A)  $2,500 underapplied 
B)  $5,000 underapplied 
C)  $2,500 overapplied 
D)  $5,000 overapplied 
A)  $2,500 underapplied 
B)  $5,000 underapplied 
C)  $2,500 overapplied 
D)  $5,000 overapplied

Question 11

Spock Company has provided the following information for the year ended April 30, 20X5:
 Unitssold $\quad 8,400$ units
Unitsproduced$\quad $ 11,200 units
Directlabor $\quad $$\$ 9 9 , 6 0 0 $
Directmaterialsused $\quad $$\$ \$ 5 5 , 0 0 0$
Fixed manufacturingoverhead$\quad $ $\$ 52,640$
Variablemanufacturingoverhead$\quad $$ \$70,200$
Sellingand administrativeexpenses (allfixed) $\$ 64,800$
Beginninginventories $\quad $$\quad $none  
Contributionmargin $\$ 71,200$
Direct-materialsinventory,April30 $\quad $$\$ 19,920$
WIP, April $30 \quad$$\quad $ none Required:
a. What is the ending finished- goods inventory cost under variable costing?
b. What is the ending finished- goods inventory cost under absorption costing?

Accepted Answer

a. ($155,000 + $99,600 + $70,200) / 11,2

Question 12

A variable- costing income statement separates costs into the major categories of and

Accepted Answer

The answer of A variable- costing income statement separates costs...

Question 13

When actual volume is more than expected volume, fixed overhead is underapplied.

Accepted Answer

A) True 
 B)False

Question 14

It is possible for variable overhead to have a production- volume variance.

Accepted Answer

A) True 
 B)False

Question 15

A normal costing system uses the following:

Accepted Answer

A)  actual direct material, actual direct labor, and applied overhead 
B)  actual direct material, applied direct labor, and actual overhead 
C)  applied direct material, applied direct labor, and actual overhead 
D)  actual direct material, actual direct labor, and actual overhead 
A)  actual direct material, actual direct labor, and applied overhead 
B)  actual direct material, applied direct labor, and actual overhead 
C)  applied direct material, applied direct labor, and actual overhead 
D)  actual direct material, actual direct labor, and actual overhead

Question 16

Absorption costing is more widely used than variable costing.

Accepted Answer

A) True 
 B)False

Question 17

If a department identifies more than one cost driver for overhead costs, the department ideally should:

Accepted Answer

A)  select a single cost driver 
B)  allocate 80% of the costs with 20% of the drivers 
C)  create as many cost pools as there are cost drivers 
D)  put 80% of the cost into one pool and 20% into second pool 
A)  select a single cost driver 
B)  allocate 80% of the costs with 20% of the drivers 
C)  create as many cost pools as there are cost drivers 
D)  put 80% of the cost into one pool and 20% into second pool

Question 18

Clemson Company had the following data available: Direct materials purchased on account $\quad\quad\$ 74,000$
Direct materi als requi sition ed $\quad\quad\$ 41,000$
Payment for direct materi als $\quad\quad\$ 65,000$ Direct materials inventory increased by:

Accepted Answer

A)  $74,000 
B)  $33,000 
C)  $9,000 
D)  $41,000 
A)  $74,000 
B)  $33,000 
C)  $9,000 
D)  $41,000

Question 19

Lincoln Company reported the following information about the production and sales of its only product during its first month of operations: $$\begin{array} { l l } 
\text { Sales ( } \$ 225 \text { per unit) } & \$ 360,000 \
\text { Direct materials used } & \$ 176,000 \
\text { Direct labor } & \$ 100,000 \
\text { Variable factory overhead } & \$ 44,000 \
\text { Fixed factory overhead } & \$ 80,000 \
\text { Variable selling and administrative } & \$ 20,000 \
\text { expenses } & \
\text { Fixed s elling and administrative expenses } & \$ 10,000 \
\text { Endinginventories: Direct materials } & - 0 - \
\text { WIP } & - 0 -\\text { Finished goods }&400 \text { units }
\end{array}$$ The operating income (loss) under variable costing is:

Accepted Answer

A)  41,000 
B)  $(70,000) 
C)  $(6,000) 
D)  $10,000 
A)  41,000 
B)  $(70,000) 
C)  $(6,000) 
D)  $10,000

Question 20

Variable costing is commonly called this

Accepted Answer

Direct cos

The most common treatment of an end- of- year immaterial overhead variance is to:

A company can increase the accuracy of its product cost information by converting some factory- overhead costs from indirect to direct costs.

The production- volume variance serves primarily a product costing purpose.

Raymond Company had the following data available: (as a percent of direct- labor cost) The ending inventory of work in process is:

The denominator in the computation of the fixed overhead rate

A variable- costing income statement separates costs into the major categories of and

When actual volume is more than expected volume, fixed overhead is underapplied.

It is possible for variable overhead to have a production- volume variance.

A normal costing system uses the following:

Absorption costing is more widely used than variable costing.

If a department identifies more than one cost driver for overhead costs, the department ideally should:

Clemson Company had the following data available: Direct materials purchased on account $\quad\quad\$ 74,000$ Direct materi als requi sition ed $\quad\quad\$ 41,000$ Payment for direct materi als $\quad\quad\$ 65,000$ Direct materials inventory increased by:

Variable costing is commonly called this

Managerial Accounting and the Business Organization

Introduction to Cost Behavior and Cost Volume Relationships

Measurement of Cost Behavior

Cost Management Systems and Activity-Based Costing

Relevant Information and Decision-Making: Marketing Decisions

Relevant Information and Decision-Making: Product Decisions

The Master Budget

Flexible Budget and Variance Analysis

Management Control Systems and Responsibility Accounting

Management Control in Decentralized Organizations

Capital Budgeting

Cost Allocation

Process-Costing Systems

Overhead Application: Variable and Absorbtion Costing

Basic Accounting Concepts, Techniques, and Conventions

Understanding Corporate Annual Reports: Basic Financial Statements

Filters

Exam 13: Job-Costing

The most common treatment of an end- of- year immaterial overhead variance is to:

A company can increase the accuracy of its product cost information by converting some factory- overhead costs from indirect to direct costs.

The production- volume variance serves primarily a product costing purpose.

Raymond Company had the following data available: (as a percent of direct- labor cost) The ending inventory of work in process is:

The denominator in the computation of the fixed overhead rate

A variable- costing income statement separates costs into the major categories of and

When actual volume is more than expected volume, fixed overhead is underapplied.

It is possible for variable overhead to have a production- volume variance.

A normal costing system uses the following:

Absorption costing is more widely used than variable costing.

If a department identifies more than one cost driver for overhead costs, the department ideally should:

Clemson Company had the following data available: Direct materials purchased on account $74,000\quad\quad\$ 74,000$74,000 Direct materi als requi sition ed $41,000\quad\quad\$ 41,000$41,000 Payment for direct materi als $65,000\quad\quad\$ 65,000$65,000 Direct materials inventory increased by:

Variable costing is commonly called this

Managerial Accounting and the Business Organization

Introduction to Cost Behavior and Cost Volume Relationships

Measurement of Cost Behavior

Cost Management Systems and Activity-Based Costing

Relevant Information and Decision-Making: Marketing Decisions

Relevant Information and Decision-Making: Product Decisions

The Master Budget

Flexible Budget and Variance Analysis

Management Control Systems and Responsibility Accounting

Management Control in Decentralized Organizations

Capital Budgeting

Cost Allocation

Process-Costing Systems

Overhead Application: Variable and Absorbtion Costing

Basic Accounting Concepts, Techniques, and Conventions

Understanding Corporate Annual Reports: Basic Financial Statements

Filters

Clemson Company had the following data available: Direct materials purchased on account $\quad\quad\$ 74,000$ Direct materi als requi sition ed $\quad\quad\$ 41,000$ Payment for direct materi als $\quad\quad\$ 65,000$ Direct materials inventory increased by: