Question 1

The high-low method excludes outliers from the calculation of the slope of a regression line.

Accepted Answer

A) True 
 B)False

Question 2

Kellman Corporation Kellman Corporation produces a single product that sells for $7.00 per unit. Standard capacity is 100,000 units per year; 100,000 units were produced and 80,000 units were sold during the year. Manufacturing costs and selling and administrative expenses are presented below.
There were no variances from the standard variable costs. Any under- or overapplied overhead is written off directly at year-end as an adjustment to cost of goods sold.
  Kellman Corporation had no inventory at the beginning of the year.
Refer to Kellman Corporation. What is the net income under absorption costing?

Accepted Answer

A)  $50,000 
B)  $80,000 
C)  $90,000 
D)  $120,000 
A)  $50,000 
B)  $80,000 
C)  $90,000 
D)  $120,000

Question 3

Alpha, Beta, and Gamma Companies Three new companies (Alpha, Beta, and Gamma) began operations on January 1 of the current year. Consider the following operating costs that were incurred by these companies during the complete calendar year:
  Refer to Alpha, Beta, and Gamma Companies. Based on sales of 7,000 units, which company will report the greater income before income taxes if absorption costing is used?

Accepted Answer

A)  Alpha Company 
B)  Beta Company 
C)  Gamma Company 
D)  All of the companies will report the same income. 
A)  Alpha Company 
B)  Beta Company 
C)  Gamma Company 
D)  All of the companies will report the same income.

Question 4

In relationship to changes in activity, variable overhead changes

Accepted Answer

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

Question 5

Under absorption costing, fixed manufacturing overhead could be found in all of the following except the

Accepted Answer

A)  work-in-process account. 
B)  finished goods inventory account. 
C)  Cost of Goods Sold. 
D)  period costs. 
A)  work-in-process account. 
B)  finished goods inventory account. 
C)  Cost of Goods Sold. 
D)  period costs.

Question 6

In a normal cost system, factory overhead is assigned to an overhead control account and then allocated to products and services.

Accepted Answer

A) True 
 B)False

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

Why is absorption costing not used for CVP analysis?

Accepted Answer

Absorption costing is not used in break-

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

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 11

Anderson Corporation Anderson Corporation has the following standard costs associated with the manufacture and sale of one of its products:
  Refer to Anderson Corporation. Under absorption costing, the standard production cost per unit for the current year was

Accepted Answer

A)  $ 7.30. 
B)  $11.30. 
C)  $11.55. 
D)  $13.05. 
A)  $ 7.30. 
B)  $11.30. 
C)  $11.55. 
D)  $13.05.

Question 12

Variable costing is commonly used for internal reporting.

Accepted Answer

A) True 
 B)False

Question 13

What factor, related to manufacturing costs, causes the difference in net earnings computed using absorption costing and net earnings computed using variable costing?

Accepted Answer

A)  Absorption costing considers all costs in the determination of net earnings, whereas variable costing considers fixed costs to be period costs. 
B)  Absorption costing allocates fixed overhead costs between cost of goods sold and inventories, and variable costing considers all fixed costs to be period costs. 
C)  Absorption costing "inventories" all direct costs, but variable costing considers direct costs to be period costs. 
D)  Absorption costing "inventories" all fixed costs for the period in ending finished goods inventory, but variable costing expenses all fixed costs. 
A)  Absorption costing considers all costs in the determination of net earnings, whereas variable costing considers fixed costs to be period costs. 
B)  Absorption costing allocates fixed overhead costs between cost of goods sold and inventories, and variable costing considers all fixed costs to be period costs. 
C)  Absorption costing "inventories" all direct costs, but variable costing considers direct costs to be period costs. 
D)  Absorption costing "inventories" all fixed costs for the period in ending finished goods inventory, but variable costing expenses all fixed costs.

Question 14

Anderson Corporation Anderson Corporation has the following standard costs associated with the manufacture and sale of one of its products:
  Refer to Anderson Corporation. Under variable costing, the standard production cost per unit for the current year was

Accepted Answer

A)  $11.30. 
B)  $7.30. 
C)  $7.55. 
D)  $11.55. 
A)  $11.30. 
B)  $7.30. 
C)  $7.55. 
D)  $11.55.

Question 15

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 16

The costing technique that treats all manufacturing costs as inventoriable is referred to as _________________ or ___________ costing.
or

Accepted Answer

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

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

Wilson Corporation Wilson Corporation has the following data for use of its machinery
  Refer to Wilson Corporation. Using the high-low method, compute the fixed cost element (to the nearest whole dollar).

Accepted Answer

A)  $225 
B)  $138 
C)  $411 
D)  $364 
A)  $225 
B)  $138 
C)  $411 
D)  $364

Question 19

Which of the following is not a reason to use predetermined overhead rates?

Accepted Answer

A)  to overcome the problems of assigning overhead to diverse types of products 
B)  to compensate for fluctuations in monthly overhead costs 
C)  to provide a means for assigning overhead during the period rather than at the end of the period 
D)  to smooth out the amount of overhead cost assigned to products when monthly production activity differs 
A)  to overcome the problems of assigning overhead to diverse types of products 
B)  to compensate for fluctuations in monthly overhead costs 
C)  to provide a means for assigning overhead during the period rather than at the end of the period 
D)  to smooth out the amount of overhead cost assigned to products when monthly production activity differs

Question 20

The variable costing format is often more useful to managers than the absorption costing format because

Accepted Answer

A)  costs are classified by their behavior. 
B)  costs are always lower. 
C)  it is required for external reporting. 
D)  it justifies higher product prices. 
A)  costs are classified by their behavior. 
B)  costs are always lower. 
C)  it is required for external reporting. 
D)  it justifies higher product prices.

The high-low method excludes outliers from the calculation of the slope of a regression line.

In relationship to changes in activity, variable overhead changes

Under absorption costing, fixed manufacturing overhead could be found in all of the following except the

In a normal cost system, factory overhead is assigned to an overhead control account and then allocated to products and services.

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

Why is absorption costing not used for CVP analysis?

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

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

Anderson Corporation Anderson Corporation has the following standard costs associated with the manufacture and sale of one of its products: Refer to Anderson Corporation. Under absorption costing, the standard production cost per unit for the current year was

Variable costing is commonly used for internal reporting.

What factor, related to manufacturing costs, causes the difference in net earnings computed using absorption costing and net earnings computed using variable costing?

Anderson Corporation Anderson Corporation has the following standard costs associated with the manufacture and sale of one of its products: Refer to Anderson Corporation. Under variable costing, the standard production cost per unit for the current year was

Applied overhead consists of which of the following?

The costing technique that treats all manufacturing costs as inventoriable is referred to as _______ or _ costing. or

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

Wilson Corporation Wilson Corporation has the following data for use of its machinery Refer to Wilson Corporation. Using the high-low method, compute the fixed cost element (to the nearest whole dollar).

Which of the following is not a reason to use predetermined overhead rates?

The variable costing format is often more useful to managers than the absorption costing format because

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

The high-low method excludes outliers from the calculation of the slope of a regression line.

In relationship to changes in activity, variable overhead changes

Under absorption costing, fixed manufacturing overhead could be found in all of the following except the

In a normal cost system, factory overhead is assigned to an overhead control account and then allocated to products and services.

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

Why is absorption costing not used for CVP analysis?

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

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

Anderson Corporation Anderson Corporation has the following standard costs associated with the manufacture and sale of one of its products: Refer to Anderson Corporation. Under absorption costing, the standard production cost per unit for the current year was

Variable costing is commonly used for internal reporting.

What factor, related to manufacturing costs, causes the difference in net earnings computed using absorption costing and net earnings computed using variable costing?

Anderson Corporation Anderson Corporation has the following standard costs associated with the manufacture and sale of one of its products: Refer to Anderson Corporation. Under variable costing, the standard production cost per unit for the current year was

Applied overhead consists of which of the following?

The costing technique that treats all manufacturing costs as inventoriable is referred to as _________________ or ___________ costing. or

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

Wilson Corporation Wilson Corporation has the following data for use of its machinery Refer to Wilson Corporation. Using the high-low method, compute the fixed cost element (to the nearest whole dollar).

Which of the following is not a reason to use predetermined overhead rates?

The variable costing format is often more useful to managers than the absorption costing format because

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 all manufacturing costs as inventoriable is referred to as _______ or _ costing. or