Question 1

A firm presently has total sales of $100,000.If its sales rise,its

Accepted Answer

A) net income based on variable costing will go up more than its net income based on absorption costing. 
B) net income based on absorption costing will go up more than its net income based on variable costing. 
C) fixed costs will also rise. 
D) per unit variable costs will rise. 
A) net income based on variable costing will go up more than its net income based on absorption costing. 
B) net income based on absorption costing will go up more than its net income based on variable costing. 
C) fixed costs will also rise. 
D) per unit variable costs will rise.

Question 2

Practical capacity is the capacity that can be achieved during normal working hours.

Accepted Answer

A) True 
 B)False

Question 3

The estimated maximum potential activity for a specified time is known as theoretical capacity.

Accepted Answer

A) True 
 B)False

Question 4

An actual cost system differs from a normal cost system in that an actual cost system

Accepted Answer

A) assigns overhead as it occurs during the manufacturing cycle. 
B) assigns overhead at the end of the manufacturing process. 
C) does not assign overhead at all. 
D) does not use an Overhead Control account. 
A) assigns overhead as it occurs during the manufacturing cycle. 
B) assigns overhead at the end of the manufacturing process. 
C) does not assign overhead at all. 
D) does not use an Overhead Control account.

Question 5

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

Accepted Answer

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

Question 6

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 7

An observation that is found outside the relevant range is referred to as a(n)____________________.

Accepted Answer

The answer of An observation that is found outside the...

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

If underapplied factory overhead is immaterial,the account is closed by a credit to Cost of Goods Sold.

Accepted Answer

A) True 
 B)False

Question 10

Phantom profits result when absorption costing is used and production exceeds sales.

Accepted Answer

A) True 
 B)False

Question 11

If a firm uses absorption costing,fixed manufacturing overhead will be included

Accepted Answer

A) only on the balance sheet. 
B) only on the income statement. 
C) on both the balance sheet and income statement. 
D) on neither the balance sheet nor income statement. 
A) only on the balance sheet. 
B) only on the income statement. 
C) on both the balance sheet and income statement. 
D) on neither the balance sheet nor income statement.

Question 12

Sheets Corporation The following information was extracted from the first year absorption-based accounting records of Sheets Corporation
  Refer to Sheets Corporation.What is Cost of Goods Sold for Sheets Corporation's first year?

Accepted Answer

A) $80,000 
B) $90,000 
C) $48,000 
D) can't be determined from the information given 
A) $80,000 
B) $90,000 
C) $48,000 
D) can't be determined from the information given

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

Direct costing conforms with generally accepted accounting principles.

Accepted Answer

A) True 
 B)False

Question 15

The performance measure that considers routine interruptions is known as ____________________ capacity.

Accepted Answer

The answer of The performance measure that considers routine interruptions...

Question 16

A performance measure that is short-run in nature and represents a firm's anticipated activity level for the upcoming period is ____________________ capacity.

Accepted Answer

The answer of A performance measure that is short-run in...

Question 17

Oakwood Corporation Oakwood Corporation produces a single product.The following cost structure applied to its first year of operations:
  Refer to Oakwood Corporation.Assume for this question only that Oakwood Corporation produced 5,000 units and sold 4,500 units in the current year.If Oakwood uses absorption costing,it would deduct period costs of

Accepted Answer

A) $24,000. 
B) $34,000. 
C) $27,000. 
D) $23,000. 
A) $24,000. 
B) $34,000. 
C) $27,000. 
D) $23,000.

Question 18

On December 30,a fire destroyed most of the accounting records of the Alcorn Division,a small one-product manufacturing division that uses standard costs and flexible budgets.All variances are written off as additions to (or deductions from)income; none are pro-rated to inventories.You have the task of reconstructing the records for the year.The general manager informs you that the accountant has been experimenting with both absorption costing and variable costing.
The following information is available for the current year:
   Required:
Compute the following items (ignore income tax effects).

Accepted Answer

The answer of On December 30,a fire destroyed most of...

Question 19

The FASB requires which of the following to be used in preparation of external financial statements?

Accepted Answer

A) variable costing 
B) standard costing 
C) activity-based costing 
D) absorption costing 
A) variable costing 
B) standard costing 
C) activity-based costing 
D) absorption costing

Question 20

If underapplied factory overhead is material,it is prorated among Work in Process Inventory,Finished Goods Inventory,and Cost of Goods Sold.

Accepted Answer

A) True 
 B)False

A firm presently has total sales of $100,000.If its sales rise,its

Practical capacity is the capacity that can be achieved during normal working hours.

The estimated maximum potential activity for a specified time is known as theoretical capacity.

An actual cost system differs from a normal cost system in that an actual cost system

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

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

An observation that is found outside the relevant range is referred to as a(n)____________________.

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

If underapplied factory overhead is immaterial,the account is closed by a credit to Cost of Goods Sold.

Phantom profits result when absorption costing is used and production exceeds sales.

If a firm uses absorption costing,fixed manufacturing overhead will be included

Sheets Corporation The following information was extracted from the first year absorption-based accounting records of Sheets Corporation Refer to Sheets Corporation.What is Cost of Goods Sold for Sheets Corporation's first year?

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

Direct costing conforms with generally accepted accounting principles.

The performance measure that considers routine interruptions is known as ____________________ capacity.

A performance measure that is short-run in nature and represents a firm's anticipated activity level for the upcoming period is ____________________ capacity.

The FASB requires which of the following to be used in preparation of external financial statements?

If underapplied factory overhead is material,it is prorated among Work in Process Inventory,Finished Goods Inventory,and Cost of Goods Sold.

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

A firm presently has total sales of $100,000.If its sales rise,its

Practical capacity is the capacity that can be achieved during normal working hours.

The estimated maximum potential activity for a specified time is known as theoretical capacity.

An actual cost system differs from a normal cost system in that an actual cost system

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

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

An observation that is found outside the relevant range is referred to as a(n)____________________.

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

If underapplied factory overhead is immaterial,the account is closed by a credit to Cost of Goods Sold.

Phantom profits result when absorption costing is used and production exceeds sales.

If a firm uses absorption costing,fixed manufacturing overhead will be included

Sheets Corporation The following information was extracted from the first year absorption-based accounting records of Sheets Corporation Refer to Sheets Corporation.What is Cost of Goods Sold for Sheets Corporation's first year?

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

Direct costing conforms with generally accepted accounting principles.

The performance measure that considers routine interruptions is known as ____________________ capacity.

A performance measure that is short-run in nature and represents a firm's anticipated activity level for the upcoming period is ____________________ capacity.

The FASB requires which of the following to be used in preparation of external financial statements?

If underapplied factory overhead is material,it is prorated among Work in Process Inventory,Finished Goods Inventory,and Cost of Goods Sold.

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