Question 1

Sales minus cost of goods sold is referred to as variable contribution margin.

Accepted Answer

A) True 
 B)False

Question 2

What are the major differences between variable and absorption costing?

Accepted Answer

The major difference between variable co

Question 3

An outlier is

Accepted Answer

A) something that happens outside the organization that does not affect production. 
B) always used in analyzing a mixed cost. 
C) something that happens inside the organization that does not affect production. 
D) typically not used in analyzing a mixed cost. 
A) something that happens outside the organization that does not affect production. 
B) always used in analyzing a mixed cost. 
C) something that happens inside the organization that does not affect production. 
D) typically not used in analyzing a mixed cost.

Question 4

Pratt Tailors has gathered information on utility costs for the past year.The controller has decided that utilities are a function of the hours worked during the month.The following information is available and representative of the company's utility costs:   If 1,425 hours are worked in a month,total utility cost (rounded to the nearest dollar)using the high-low method should be

Accepted Answer

A) $947. 
B) $954. 
C) $959. 
D) $976. 
A) $947. 
B) $954. 
C) $959. 
D) $976.

Question 5

In a(n)____________________ cost system,factory overhead is assigned to an overhead control account and then allocated to products and services.

Accepted Answer

The answer of In a(n)____________________ cost system,factory overhead is assigned...

Question 6

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

Accepted Answer

Overhead must be allocated bec

Question 7

Normal capacity considers present and future production levels and cyclical fluctuations.

Accepted Answer

A) True 
 B)False

Question 8

Allen Corporation uses a predetermined overhead application rate of $.30 per direct labor hour.During the year it incurred $345,000 dollars of actual overhead,but it planned to incur $360,000 of overhead.The company applied $363,000 of overhead during the year.How many direct labor hours did the company plan to incur?

Accepted Answer

A) 1,150,000 
B) 1,190,000 
C) 1,200,000 
D) 1,210,000 
A) 1,150,000 
B) 1,190,000 
C) 1,200,000 
D) 1,210,000

Question 9

McFatter Office Supply Company has the following information available regarding costs and revenues for two recent months.Selling price is $20.
   Required:

Accepted Answer

@#IMG-DLM& @#IMG-DLM& FC = $4,200 - (3.5% ´ 60,000

Question 10

In a normal cost system,factory overhead is assigned directly to products and services.

Accepted Answer

A) True 
 B)False

Question 11

Absorption costing conforms with generally accepted accounting principles.

Accepted Answer

A) True 
 B)False

Question 12

The costing system that classifies costs by functional group only is

Accepted Answer

A) standard costing. 
B) job order costing. 
C) variable costing. 
D) absorption costing. 
A) standard costing. 
B) job order costing. 
C) variable costing. 
D) absorption costing.

Question 13

If actual overhead is less than applied overhead,factory overhead is said to be ____________________.

Accepted Answer

The answer of If actual overhead is less than applied...

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

A short-run measure of activity that represents a firm's anticipated activity level for an upcoming period based upon expected demand is referred to as:

Accepted Answer

A) theoretical capacity 
B) practical capacity 
C) normal capacity 
D) expected capacity 
A) theoretical capacity 
B) practical capacity 
C) normal capacity 
D) expected capacity

Question 16

When using the high-low method,the variable component is computed before the fixed component is.

Accepted Answer

A) True 
 B)False

Question 17

The facility manager of Price Corporation asked the systems analyst for information to help in forecasting handling costs.The following printout was generated using the least squares regression method.

Accepted Answer

The answer of The facility manager of Price Corporation asked...

Question 18

An ending inventory valuation on an absorption costing balance sheet would

Accepted Answer

A) sometimes be less than the ending inventory valuation under variable costing. 
B) always be less than the ending inventory valuation under variable costing. 
C) always be the same as the ending inventory valuation under variable costing. 
D) always be greater than or equal to the ending inventory valuation under variable costing. 
A) sometimes be less than the ending inventory valuation under variable costing. 
B) always be less than the ending inventory valuation under variable costing. 
C) always be the same as the ending inventory valuation under variable costing. 
D) always be greater than or equal to the ending inventory valuation under variable costing.

Question 19

Variable costing has an advantage over absorption costing for which of the following purposes?

Accepted Answer

A) analysis of profitability of products,territories,and other segments of a business 
B) determining the CVP relationship among the major factors of selling price,sales mix,and sales volume 
C) minimizing the effects of inventory changes on net income 
D) all of the above 
A) analysis of profitability of products,territories,and other segments of a business 
B) determining the CVP relationship among the major factors of selling price,sales mix,and sales volume 
C) minimizing the effects of inventory changes on net income 
D) all of the above

Sales minus cost of goods sold is referred to as variable contribution margin.

What are the major differences between variable and absorption costing?

An outlier is

In a(n)____________________ cost system,factory overhead is assigned to an overhead control account and then allocated to products and services.

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

Normal capacity considers present and future production levels and cyclical fluctuations.

McFatter Office Supply Company has the following information available regarding costs and revenues for two recent months.Selling price is $20. Required:

In a normal cost system,factory overhead is assigned directly to products and services.

Absorption costing conforms with generally accepted accounting principles.

The costing system that classifies costs by functional group only is

If actual overhead is less than applied overhead,factory overhead is said to be ____________________.

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

A short-run measure of activity that represents a firm's anticipated activity level for an upcoming period based upon expected demand is referred to as:

When using the high-low method,the variable component is computed before the fixed component is.

The facility manager of Price Corporation asked the systems analyst for information to help in forecasting handling costs.The following printout was generated using the least squares regression method.

An ending inventory valuation on an absorption costing balance sheet would

Variable costing has an advantage over absorption costing for which of the following purposes?

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

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

Sales minus cost of goods sold is referred to as variable contribution margin.

What are the major differences between variable and absorption costing?

An outlier is

In a(n)____________________ cost system,factory overhead is assigned to an overhead control account and then allocated to products and services.

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

Normal capacity considers present and future production levels and cyclical fluctuations.

McFatter Office Supply Company has the following information available regarding costs and revenues for two recent months.Selling price is $20. Required:

In a normal cost system,factory overhead is assigned directly to products and services.

Absorption costing conforms with generally accepted accounting principles.

The costing system that classifies costs by functional group only is

If actual overhead is less than applied overhead,factory overhead is said to be ____________________.

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

A short-run measure of activity that represents a firm's anticipated activity level for an upcoming period based upon expected demand is referred to as:

When using the high-low method,the variable component is computed before the fixed component is.

The facility manager of Price Corporation asked the systems analyst for information to help in forecasting handling costs.The following printout was generated using the least squares regression method.

An ending inventory valuation on an absorption costing balance sheet would

Variable costing has an advantage over absorption costing for which of the following purposes?

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