Question 1

For financial reporting to the IRS and other external users,manufacturing overhead costs are

Accepted Answer

A) deducted in the period that they are incurred. 
B) inventoried until the related products are sold. 
C) treated like period costs. 
D) inventoried until the related products have been completed. 
A) deducted in the period that they are incurred. 
B) inventoried until the related products are sold. 
C) treated like period costs. 
D) inventoried until the related products have been completed.

Question 2

Under variable costing,which of the following are costs that can be inventoried?

Accepted Answer

A) variable selling and administrative expense 
B) variable manufacturing overhead 
C) fixed manufacturing overhead 
D) fixed selling and administrative expense 
A) variable selling and administrative expense 
B) variable manufacturing overhead 
C) fixed manufacturing overhead 
D) fixed selling and administrative expense

Question 3

If production exceeds sales,absorption costing net income is less than variable costing net income.

Accepted Answer

A) True 
 B)False

Question 4

Why is variable costing not in accordance with generally accepted accounting principles?

Accepted Answer

A) Fixed manufacturing costs are treated as period costs under variable costing. 
B) Variable costing procedures are not well known in industry. 
C) Net earnings are always overstated when using variable costing procedures. 
D) Variable costing ignores the concept of lower of cost or market when valuing inventory. 
A) Fixed manufacturing costs are treated as period costs under variable costing. 
B) Variable costing procedures are not well known in industry. 
C) Net earnings are always overstated when using variable costing procedures. 
D) Variable costing ignores the concept of lower of cost or market when valuing inventory.

Question 5

How will a favorable volume variance affect net income under each of the following methods?

Accepted Answer

A) reduce no effect 
B) reduce increase 
C) increase no effect 
D) increase reduce 
A) reduce no effect 
B) reduce increase 
C) increase no effect 
D) increase reduce

Question 6

A basic concept of variable costing is that period costs should be currently expensed.What is the rationale behind this procedure?

Accepted Answer

A) Period costs are uncontrollable and should not be charged to a specific product. 
B) Period costs are generally immaterial in amount and the cost of assigning the amounts to specific products would outweigh the benefits. 
C) Allocation of period costs is arbitrary at best and could lead to erroneous decision by management. 
D) Because period costs will occur whether production occurs,it is improper to allocate these costs to production and defer a current cost of doing business. 
A) Period costs are uncontrollable and should not be charged to a specific product. 
B) Period costs are generally immaterial in amount and the cost of assigning the amounts to specific products would outweigh the benefits. 
C) Allocation of period costs is arbitrary at best and could lead to erroneous decision by management. 
D) Because period costs will occur whether production occurs,it is improper to allocate these costs to production and defer a current cost of doing business.

Question 7

In the variable costing income statement,which line separates the variable and fixed costs?

Accepted Answer

A) selling expenses 
B) general and administrative expense 
C) product contribution margin 
D) total contribution margin 
A) selling expenses 
B) general and administrative expense 
C) product contribution margin 
D) total contribution margin

Question 8

Unabsorbed fixed overhead costs in an absorption costing system are

Accepted Answer

A) fixed manufacturing costs not allocated to units produced. 
B) variable overhead costs not allocated to units produced. 
C) excess variable overhead costs. 
D) costs that cannot be controlled. 
A) fixed manufacturing costs not allocated to units produced. 
B) variable overhead costs not allocated to units produced. 
C) excess variable overhead costs. 
D) costs that cannot be controlled.

Question 9

When variable costing is used,

Accepted Answer

A) all product costs are treated as variable. 
B) all period costs are treated as variable. 
C) all product costs are treated as fixed. 
D) product costs are treated as both fixed and variable. 
A) all product costs are treated as variable. 
B) all period costs are treated as variable. 
C) all product costs are treated as fixed. 
D) product costs are treated as both fixed and variable.

Question 10

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 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 11

The dollar amount of overhead assigned to work-in-process inventory using a predetermined rate is known as ____________________ overhead.

Accepted Answer

The answer of The dollar amount of overhead assigned to...

Question 12

How can a company produce both variable and absorption costing information from a single accounting system?

Accepted Answer

Firms only have one accounting informati

Question 13

The regression equation y = a+ bX assumes that the function is linear in nature.

Accepted Answer

A) True 
 B)False

Question 14

The costing technique that treats fixed manufacturing overhead as a period cost is referred to as ______________ or ____________ costing.
or

Accepted Answer

The answer of The costing technique that treats fixed manufacturing...

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

In a normal cost system,which of the following is used?

Accepted Answer

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

Question 17

Midwest City Motor Company is exploring different prediction models that can be used to forecast indirect labor costs.One independent variable under consideration is machine hours.Following are matching observations on indirect labor costs and machine hours for the past six months:   In a high-low model,which months' observations would be used to compute the model's parameters?

Accepted Answer

A) 2 and 5 
B) 1 and 6 
C) 2 and 6 
D) 4 and 5 
A) 2 and 5 
B) 1 and 6 
C) 2 and 6 
D) 4 and 5

Question 18

Applied overhead consists of which of the following?

Accepted Answer

A) actual activity times predetermined overhead rate 
B) estimated activity times predetermined overhead rate 
C) actual activity times actual overhead rate 
D) estimated activity times actual overhead rate 
A) actual activity times predetermined overhead rate 
B) estimated activity times predetermined overhead rate 
C) actual activity times actual overhead rate 
D) estimated activity times actual overhead rate

Question 19

Practical capacity does not adjust for routine downtime in a production process.

Accepted Answer

A) True 
 B)False

Question 20

Sheets Corporation The following information was extracted from the first year absorption-based accounting records of Sheets Corporation
  Refer to Sheets Corporation.Based on variable costing,if Sheets 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.

For financial reporting to the IRS and other external users,manufacturing overhead costs are

Under variable costing,which of the following are costs that can be inventoried?

If production exceeds sales,absorption costing net income is less than variable costing net income.

Why is variable costing not in accordance with generally accepted accounting principles?

How will a favorable volume variance affect net income under each of the following methods?

A basic concept of variable costing is that period costs should be currently expensed.What is the rationale behind this procedure?

In the variable costing income statement,which line separates the variable and fixed costs?

Unabsorbed fixed overhead costs in an absorption costing system are

When variable costing is used,

The dollar amount of overhead assigned to work-in-process inventory using a predetermined rate is known as ____________________ overhead.

How can a company produce both variable and absorption costing information from a single accounting system?

The regression equation y = a+ bX assumes that the function is linear in nature.

The costing technique that treats fixed manufacturing overhead as a period cost is referred to as __ or costing. or

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

In a normal cost system,which of the following is used?

Applied overhead consists of which of the following?

Practical capacity does not adjust for routine downtime in a production process.

Sheets Corporation The following information was extracted from the first year absorption-based accounting records of Sheets Corporation Refer to Sheets Corporation.Based on variable costing,if Sheets had sold 12,001 units instead of 12,000,its income before income taxes would have been

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

For financial reporting to the IRS and other external users,manufacturing overhead costs are

Under variable costing,which of the following are costs that can be inventoried?

If production exceeds sales,absorption costing net income is less than variable costing net income.

Why is variable costing not in accordance with generally accepted accounting principles?

How will a favorable volume variance affect net income under each of the following methods?

A basic concept of variable costing is that period costs should be currently expensed.What is the rationale behind this procedure?

In the variable costing income statement,which line separates the variable and fixed costs?

Unabsorbed fixed overhead costs in an absorption costing system are

When variable costing is used,

The dollar amount of overhead assigned to work-in-process inventory using a predetermined rate is known as ____________________ overhead.

How can a company produce both variable and absorption costing information from a single accounting system?

The regression equation y = a+ bX assumes that the function is linear in nature.

The costing technique that treats fixed manufacturing overhead as a period cost is referred to as ______________ or ____________ costing. or

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

In a normal cost system,which of the following is used?

Applied overhead consists of which of the following?

Practical capacity does not adjust for routine downtime in a production process.

Sheets Corporation The following information was extracted from the first year absorption-based accounting records of Sheets Corporation Refer to Sheets Corporation.Based on variable costing,if Sheets had sold 12,001 units instead of 12,000,its income before income taxes would have been

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

The costing technique that treats fixed manufacturing overhead as a period cost is referred to as __ or costing. or