Question 1

A debit to the Factory Overhead account represents applied overhead costs.

Accepted Answer

A) True 
 B)False

Question 2

Truman Corporation
The following information has been extracted from the financial records of Truman Corporation for its first year of operations:
             Units produced       10,000               Units sold       7,000               Variable costs per unit:                       Direct material       $8                Direct labor       9                Manufacturing overhead       3                SG&A       4               Fixed costs:                       Manufacturing overhead       $70,000                SG&A       30,000      
Refer to Truman Corporation.Based on absorption costing,the Cost of Goods Manufactured for Truman Corporation's first year would be

Accepted Answer

A) $200,000. 
B) $270,000. 
C) $300,000. 
D) $210,000. 
A) $200,000. 
B) $270,000. 
C) $300,000. 
D) $210,000.

Question 3

If sales exceed production,absorption costing net income exceeds variable costing net income.

Accepted Answer

A) True 
 B)False

Question 4

Cooper Industries has the following data for the current year:
             Direct Labor       $220,000               Direct Material       137,800               Actual Overhead       320,000               Applied Overhead       395,000               Raw Material       51,394               Work in Process       101,926               Finished Goods       111,192               Cost of Goods Sold       250,182      
What is the amount of under- or overapplied overhead? Prepare the necessary journal entry to dispose of under- or overapplied overhead.

Accepted Answer

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Question 5

Sales less variable cost of goods sold is referred to as ________________________________________.

Accepted Answer

product co

Question 6

If there is no "a" value in a linear cost equation,this is an indication that the cost is

Accepted Answer

A) fixed. 
B) mixed. 
C) variable. 
D) either fixed or mixeD. 
A) fixed. 
B) mixed. 
C) variable. 
D) either fixed or mixeD.

Question 7

The slope of a regression line is determined by dividing the change in activity level by the change in total cost.

Accepted Answer

A) True 
 B)False

Question 8

Predetermined overhead rates are computed based on
estimated overhead costs        	estimated level of activity

Accepted Answer

A) yes yes 
B) yes no 
C) no yes 
D) no no 
A) yes yes 
B) yes no 
C) no yes 
D) no no

Question 9

What costs are treated as product costs under variable (direct)costing?

Accepted Answer

A) only direct costs 
B) only variable production costs 
C) all variable costs 
D) all variable and fixed manufacturing costs 
A) only direct costs 
B) only variable production costs 
C) all variable costs 
D) all variable and fixed manufacturing costs

Question 10

Overapplied overhead will result if

Accepted Answer

A) the plant is operated at less than expected capacity. 
B) overhead costs incurred were greater than estimated overhead costs. 
C) overhead costs incurred were less than overhead costs charged to production. 
D) overhead costs incurred were greater than overhead charged to production. 
A) the plant is operated at less than expected capacity. 
B) overhead costs incurred were greater than estimated overhead costs. 
C) overhead costs incurred were less than overhead costs charged to production. 
D) overhead costs incurred were greater than overhead charged to production.

Question 11

Rosewood Corporation
Rosewood Corporation produces a single product.The following cost structure applied to its first year of operations:
             Variable costs:                       SG&A       $2 per unit                Production       $4 per unit               Fixed costs (total cost incurred for the year):                       SG&A       $14,000                Production       $20,000      
Refer to Rosewood Corporation.Assume for this question only that Rosewood Corporation manufactured and sold 5,000 units in the current year.At this level of activity it had an income of $30,000 using variable costing.What was the sales price per unit?

Accepted Answer

A) $16.00 
B) $18.80 
C) $12.80 
D) $14.80 
A) $16.00 
B) $18.80 
C) $12.80 
D) $14.80

Question 12

Consider the regression equation y = a + bX.The portion of the equation that represents fixed costs is __________.

Accepted Answer

The answer of Consider the regression equation y = a...

Question 13

Which of the following statements is true for a firm that uses variable costing?

Accepted Answer

A) The cost of a unit of product changes because of changes in the number of units manufactured. 
B) Profits fluctuate with sales. 
C) An idle facility variation is calculated. 
D) None of the above. 
A) The cost of a unit of product changes because of changes in the number of units manufactured. 
B) Profits fluctuate with sales. 
C) An idle facility variation is calculated. 
D) None of the above.

Question 14

What are three reasons that overhead must be allocated to products?

Accepted Answer

Overhead must be allocated bec

Question 15

Truman Corporation
The following information has been extracted from the financial records of Truman Corporation for its first year of operations:
             Units produced       10,000               Units sold       7,000               Variable costs per unit:                       Direct material       $8                Direct labor       9                Manufacturing overhead       3                SG&A       4               Fixed costs:                       Manufacturing overhead       $70,000                SG&A       30,000      
Refer to Truman Corporation.Based on absorption costing,Truman Corporation's income in its first year of operations will be

Accepted Answer

A) $21,000 higher than it would be under variable costing. 
B) $70,000 higher than it would be under variable costing. 
C) $30,000 higher than it would be under variable costing. 
D) higher than it would be under variable costing,but the exact difference cannot be determined from the information given. 
A) $21,000 higher than it would be under variable costing. 
B) $70,000 higher than it would be under variable costing. 
C) $30,000 higher than it would be under variable costing. 
D) higher than it would be under variable costing,but the exact difference cannot be determined from the information given.

Question 16

Weaknesses of the high-low method include all of the following except

Accepted Answer

A) only two observations are used to develop the cost function. 
B) the high and low activity levels may not be representative. 
C) the method does not detect if the cost behavior is nonlinear. 
D) the mathematical calculations are relatively complex. 
A) only two observations are used to develop the cost function. 
B) the high and low activity levels may not be representative. 
C) the method does not detect if the cost behavior is nonlinear. 
D) the mathematical calculations are relatively complex.

Question 17

Ellis Corporation
The following information was extracted from the first year absorption-based accounting records of Ellis Corporation
             Total fixed costs incurred       $100,000               Total variable costs incurred       50,000               Total period costs incurred       70,000               Total variable period costs incurred       30,000               Units produced       20,000               Units sold       12,000               Unit sales price       $12      
Refer to Ellis Corporation.Based on variable costing,if Ellis had sold 12,001 units instead of 12,000,its income before income taxes would have been

Accepted Answer

A) $9.50 higher. 
B) $11.00 higher. 
C) $8.50 higher. 
D) $8.33 higher. 
A) $9.50 higher. 
B) $11.00 higher. 
C) $8.50 higher. 
D) $8.33 higher.

Question 18

Plantwide overhead rates provide a more accurate computation of factory overhead than departmental overhead rates

Accepted Answer

A) True 
 B)False

Question 19

A master budget is a planning document that presents expected variable and fixed overhead costs at different activity levels.

Accepted Answer

A) True 
 B)False

Question 20

Plantwide overhead rates provide a less accurate computation of factory overhead than departmental overhead rates

Accepted Answer

A) True 
 B)False

A debit to the Factory Overhead account represents applied overhead costs.

If sales exceed production,absorption costing net income exceeds variable costing net income.

Sales less variable cost of goods sold is referred to as ________________________________________.

If there is no "a" value in a linear cost equation,this is an indication that the cost is

The slope of a regression line is determined by dividing the change in activity level by the change in total cost.

Predetermined overhead rates are computed based on estimated overhead costs estimated level of activity

What costs are treated as product costs under variable (direct)costing?

Overapplied overhead will result if

Consider the regression equation y = a + bX.The portion of the equation that represents fixed costs is __________.

Which of the following statements is true for a firm that uses variable costing?

What are three reasons that overhead must be allocated to products?

Weaknesses of the high-low method include all of the following except

Plantwide overhead rates provide a more accurate computation of factory overhead than departmental overhead rates

A master budget is a planning document that presents expected variable and fixed overhead costs at different activity levels.

Plantwide overhead rates provide a less accurate computation of factory overhead than departmental overhead rates

Introduction to Cost Accounting

Cost Terminology and Cost Behaviors

Activity-Based Management and Activity-Based Costing

Job Order Costing

Process Costing

Standard Costing and Variance Analysis

The Master Budget

Break-Even Point and Cost-Volume-Profit Analysis

Relevant Information for Decision Making

Allocation of Joint Costs and Accounting for By-Products

Introduction to Cost Management Systems

Responsibility Accounting,support Department Allocations,and Transfer Pricing

Performance Measurement, balanced Scorecards, and Performance Rewards

Capital Budgeting

Managing Costs and Uncertainty

Implementing Quality Concepts

Inventory and Production Management

Emerging Management Practices

Filters

Units produced	10,000
Units sold	7,000
Variable costs per unit:
Direct material	$8
Direct labor	9
Manufacturing overhead	3
SG&A	4
Fixed costs:
Manufacturing overhead	$70,000
SG&A	30,000

Direct Labor	$220,000
Direct Material	137,800
Actual Overhead	320,000
Applied Overhead	395,000
Raw Material	51,394
Work in Process	101,926
Finished Goods	111,192
Cost of Goods Sold	250,182

Variable costs:
SG&A	$2 per unit
Production	$4 per unit
Fixed costs (total cost incurred for the year):
SG&A	$14,000
Production	$20,000

Total fixed costs incurred	$100,000
Total variable costs incurred	50,000
Total period costs incurred	70,000
Total variable period costs incurred	30,000
Units produced	20,000
Units sold	12,000
Unit sales price	$12

Exam 3: Predetermined Overhead Rates, Flexible Budgets, and Absorptionvariable Costing

A debit to the Factory Overhead account represents applied overhead costs.

If sales exceed production,absorption costing net income exceeds variable costing net income.

Sales less variable cost of goods sold is referred to as ________________________________________.

If there is no "a" value in a linear cost equation,this is an indication that the cost is

The slope of a regression line is determined by dividing the change in activity level by the change in total cost.

Predetermined overhead rates are computed based on estimated overhead costs estimated level of activity

What costs are treated as product costs under variable (direct)costing?

Overapplied overhead will result if

Consider the regression equation y = a + bX.The portion of the equation that represents fixed costs is __________.

Which of the following statements is true for a firm that uses variable costing?

What are three reasons that overhead must be allocated to products?

Weaknesses of the high-low method include all of the following except

Plantwide overhead rates provide a more accurate computation of factory overhead than departmental overhead rates

A master budget is a planning document that presents expected variable and fixed overhead costs at different activity levels.

Plantwide overhead rates provide a less accurate computation of factory overhead than departmental overhead rates

Introduction to Cost Accounting

Cost Terminology and Cost Behaviors

Activity-Based Management and Activity-Based Costing

Job Order Costing

Process Costing

Standard Costing and Variance Analysis

The Master Budget

Break-Even Point and Cost-Volume-Profit Analysis

Relevant Information for Decision Making

Allocation of Joint Costs and Accounting for By-Products

Introduction to Cost Management Systems

Responsibility Accounting,support Department Allocations,and Transfer Pricing

Performance Measurement, balanced Scorecards, and Performance Rewards

Capital Budgeting

Managing Costs and Uncertainty

Implementing Quality Concepts

Inventory and Production Management

Emerging Management Practices

Filters