Question 1

A continuous flow process, manufacturing environment takes advantage of the efficiencies of assembly line production while still accommodating product variety.

Accepted Answer

A) True 
 B)False

Question 2

The target cost is the sum of the target price and the desired profit.

Accepted Answer

A) True 
 B)False

Question 3

The Caswell Company produces custom bookcases in a job shop organized into three departments: fabricating; assembly; and finishing. Overhead is applied to jobs using a plant-wide rate based on direct labor costs (dollars). Labor dollars is used as an application base because skill levels and wages of labor differ significantly across the three departments. For the coming year, Caswell's estimates of overhead costs and labor costs for each of the three departments are given in the table below:
 
- Compute the plant-wide overhead rate that Caswell will use to apply overhead to jobs in the coming year.

Accepted Answer

A)  $208.54 
B)  6.50 
C)  $211.00 
D)  8.05 
A)  $208.54 
B)  6.50 
C)  $211.00 
D)  8.05

Question 4

Equivalent unit computations are typically made for both raw material and conversion costs.

Accepted Answer

A) True 
 B)False

Question 5

The Ever Clean Refinery Company uses a weighted average process costing system to account for its refinery operations. Data from the month of October is presented in the table below:
 
- If 50,000 completed units were produced in October, what was the total cost per unit?

Accepted Answer

A)  $22.94 
B)  $23.15 
C)  $21.62 
D)  $7.71 
A)  $22.94 
B)  $23.15 
C)  $21.62 
D)  $7.71

Question 6

During December, Krause Chemical Company had the following selected data concerning the manufacture of Xyzine, an industrial cleaner.
  All material is added at the beginning of processing in this department, and conversion costs are added uniformly during the process. The beginning work-in-process inventory had $120 of raw material and $180 of conversion costs incurred. Material added during December was $540 and conversion costs of $1,484 were incurred. Krause uses the first-in, first-out (FIFO) process-costing method. The equivalent units of production used to calculate conversion costs for December was:

Accepted Answer

A)  110 units. 
B)  104 units. 
C)  100 units. 
D)  92 units. 
A)  110 units. 
B)  104 units. 
C)  100 units. 
D)  92 units.

Question 7

Committed costs are those that are "locked in" or determined by the design of the product and manufacturing process.

Accepted Answer

A) True 
 B)False

Question 8

Westwood Company operates a process/continuous flow manufacturing system and employs weighted average process costing. On September 1, the work-in-process inventory consisted of 2,000 units. During September, another 40,000 units were started in process, and 36,000 completed units were transferred out to finished goods inventory. What number of units remained in work-in-process on September 30?

Accepted Answer

A)  6,000 
B)  4,000 
C)  2,000 
D)  34,000 
A)  6,000 
B)  4,000 
C)  2,000 
D)  34,000

Question 9

Target cost is computed as follows:

Accepted Answer

A)  Desired profit divided by estimated price. 
B)  Cost gap divided by price. 
C)  Estimated full cost less estimated price. 
D)  Estimated price less required profit. 
A)  Desired profit divided by estimated price. 
B)  Cost gap divided by price. 
C)  Estimated full cost less estimated price. 
D)  Estimated price less required profit.

Question 10

Clarke, Inc., operates a process/continuous flow manufacturing system and employs weighted average process costing. During March, 80,000 completed units were transferred out to finished goods inventory. On March 31, another 3,000 units remained unfinished in work-in-process inventory. If 75,000 new units were started during March, how many units were in the beginning work-in-process inventory on March 1?

Accepted Answer

A)  3,000 
B)  77,000 
C)  5,000 
D)  8,000 
A)  3,000 
B)  77,000 
C)  5,000 
D)  8,000

Question 11

The purpose of a process costing system can be best summarized as:

Accepted Answer

A)  Tracing manufacturing costs to a specific batch of units. 
B)  Assigning appropriate portions of total manufacturing costs to completed units of product and units remaining in ending work-in-process. 
C)  Distinguishing between machine center costs and activity costs. 
D)  Assigning overhead to units produced as accurately as possible. 
A)  Tracing manufacturing costs to a specific batch of units. 
B)  Assigning appropriate portions of total manufacturing costs to completed units of product and units remaining in ending work-in-process. 
C)  Distinguishing between machine center costs and activity costs. 
D)  Assigning overhead to units produced as accurately as possible.

Question 12

A job shop manufacturing setting features a continuous flow of homogenous units that are indistinguishable.

Accepted Answer

A) True 
 B)False

Question 13

Under the average method of process costing, costs from previous periods and the current period are combined into a single pool.

Accepted Answer

A) True 
 B)False

Question 14

The profit target set in target costing is intended to provide sufficient funds over the life of the product to allow the firm to recover its development and production costs and provide a reasonable return on its investment in the product.

Accepted Answer

A) True 
 B)False

A continuous flow process, manufacturing environment takes advantage of the efficiencies of assembly line production while still accommodating product variety.

The target cost is the sum of the target price and the desired profit.

Equivalent unit computations are typically made for both raw material and conversion costs.

The Ever Clean Refinery Company uses a weighted average process costing system to account for its refinery operations. Data from the month of October is presented in the table below: - If 50,000 completed units were produced in October, what was the total cost per unit?

Committed costs are those that are "locked in" or determined by the design of the product and manufacturing process.

Target cost is computed as follows:

The purpose of a process costing system can be best summarized as:

A job shop manufacturing setting features a continuous flow of homogenous units that are indistinguishable.

Under the average method of process costing, costs from previous periods and the current period are combined into a single pool.

The profit target set in target costing is intended to provide sufficient funds over the life of the product to allow the firm to recover its development and production costs and provide a reasonable return on its investment in the product.

Business Planning and Analysis: An Integrative Framework for Management Accounting

Measuring and Evaluating Performance

Defining and Using Cost Estimates

Cost Pools, Capacity, and Activity- Based Costing

Understanding the Management Process

Assessing and Improving Product Profitability

Setting Process Expectations

Evaluating and Improving Process Performance

Setting Performance Expectations at the Entity Level

Setting Performance Expectations in Large, Complex Organizations

Evaluating and Improving Entity Performance

Setting and Achieving Targets in the Customer Domain

Strategic Cost Management and the Value Chain Domain

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Exam 6: Planning in the Product Domain

A continuous flow process, manufacturing environment takes advantage of the efficiencies of assembly line production while still accommodating product variety.

The target cost is the sum of the target price and the desired profit.

Equivalent unit computations are typically made for both raw material and conversion costs.

The Ever Clean Refinery Company uses a weighted average process costing system to account for its refinery operations. Data from the month of October is presented in the table below: - If 50,000 completed units were produced in October, what was the total cost per unit?

Committed costs are those that are "locked in" or determined by the design of the product and manufacturing process.

Target cost is computed as follows:

The purpose of a process costing system can be best summarized as:

A job shop manufacturing setting features a continuous flow of homogenous units that are indistinguishable.

Under the average method of process costing, costs from previous periods and the current period are combined into a single pool.

The profit target set in target costing is intended to provide sufficient funds over the life of the product to allow the firm to recover its development and production costs and provide a reasonable return on its investment in the product.

Business Planning and Analysis: An Integrative Framework for Management Accounting

Measuring and Evaluating Performance

Defining and Using Cost Estimates

Cost Pools, Capacity, and Activity- Based Costing

Understanding the Management Process

Assessing and Improving Product Profitability

Setting Process Expectations

Evaluating and Improving Process Performance

Setting Performance Expectations at the Entity Level

Setting Performance Expectations in Large, Complex Organizations

Evaluating and Improving Entity Performance

Setting and Achieving Targets in the Customer Domain

Strategic Cost Management and the Value Chain Domain

Filters