Question 1

List and explain the four alternative measures of capacity.

Accepted Answer

Theoretical capacity--This is the estima

Question 2

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 3

Why should predetermined overhead rates be used?

Accepted Answer

Predetermined overhead rates should be u

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

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

Question 6

Denver Corporation The records of Denver Corporation revealed the following data for the current year.
  Refer to Denver Corporation. Assume, for this question only, actual overhead is $98,700 and applied overhead is $93,250. Manufacturing overhead is:

Accepted Answer

A)  overapplied by $12,900. 
B)  underapplied by $18,350. 
C)  overapplied by $5,450. 
D)  underapplied by $5,450. 
A)  overapplied by $12,900. 
B)  underapplied by $18,350. 
C)  overapplied by $5,450. 
D)  underapplied by $5,450.

Question 7

A mixed cost has which of the following components?

Accepted Answer

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

Question 8

When a relationship between one independent variable and one dependent variable is analyzed, the regression is referred to as ____________________.

Accepted Answer

The answer of When a relationship between one independent variable...

Question 9

Predetermined overhead rates are computed based on

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 10

Wilder Corporation wishes to develop a single predetermined overhead rate. The company's expected annual fixed overhead is $340,000 and its variable overhead cost per machine hour is $2. The company's relevant range is from 200,000 to 600,000 machine hours. Walton expects to operate at 425,000 machine hours for the coming year. The plant's theoretical capacity is 850,000. The predetermined overhead rate per machine hour should be

Accepted Answer

A)  $2.40. 
B)  $2.57. 
C)  $2.80. 
D)  $2.85. 
A)  $2.40. 
B)  $2.57. 
C)  $2.80. 
D)  $2.85.

Question 11

Wyman Company owns two luxury automobiles that are used by employees on company business. Mileage and expenses, excluding depreciation, by quarters for the most recent year are presented below:
   Required: Determine the variable cost per mile (nearest tenth of a cent) and the fixed costs per quarter, using the method of least squares.

Accepted Answer

@#IMG-DLM& _
X = 12,000/4 = 3,000/miles per quarte

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

Actual overhead exceeds applied overhead and the amount is immaterial. Which of the following will be true? Upon closing,

Accepted Answer

A)  underapplied increase 
B)  overapplied decrease 
C)  overapplied increase 
D)  underapplied decrease 
A)  underapplied increase 
B)  overapplied decrease 
C)  overapplied increase 
D)  underapplied decrease

Question 14

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 15

What are the major differences between variable and absorption costing?

Accepted Answer

The major difference between variable co

Question 16

Bush Corporation The following information has been extracted from the financial records of Bush Corporation for its first year of operations:
  Refer to Bush Corporation. Based on absorption costing, what amount of period costs will Bush Corporation deduct?

Accepted Answer

A)  $70,000 
B)  $79,000 
C)  $30,000 
D)  $58,000 
A)  $70,000 
B)  $79,000 
C)  $30,000 
D)  $58,000

Question 17

Anderson Corporation Anderson Corporation has the following standard costs associated with the manufacture and sale of one of its products:
  Refer to Anderson Corporation. Based on variable costing, the income before income taxes for the year was

Accepted Answer

A)  $570,600. 
B)  $560,000. 
C)  $562,600. 
D)  $547,500. 
A)  $570,600. 
B)  $560,000. 
C)  $562,600. 
D)  $547,500.

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

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 20

Consider the following three product costing alternatives: process costing, job order costing, and standard costing. Which of these can be used in conjunction with absorption costing?

Accepted Answer

A)  job order costing 
B)  standard costing 
C)  process costing 
D)  all of the above 
A)  job order costing 
B)  standard costing 
C)  process costing 
D)  all of the above

List and explain the four alternative measures of capacity.

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

Why should predetermined overhead rates be used?

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

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

Denver Corporation The records of Denver Corporation revealed the following data for the current year. Refer to Denver Corporation. Assume, for this question only, actual overhead is $98,700 and applied overhead is $93,250. Manufacturing overhead is:

A mixed cost has which of the following components?

When a relationship between one independent variable and one dependent variable is analyzed, the regression is referred to as ____________________.

Predetermined overhead rates are computed based on

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

Actual overhead exceeds applied overhead and the amount is immaterial. Which of the following will be true? Upon closing,

Overapplied overhead will result if

What are the major differences between variable and absorption costing?

Bush Corporation The following information has been extracted from the financial records of Bush Corporation for its first year of operations: Refer to Bush Corporation. Based on absorption costing, what amount of period costs will Bush Corporation deduct?

Anderson Corporation Anderson Corporation has the following standard costs associated with the manufacture and sale of one of its products: Refer to Anderson Corporation. Based on variable costing, the income before income taxes for the year was

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

Consider the following three product costing alternatives: process costing, job order costing, and standard costing. Which of these can be used in conjunction with absorption costing?

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

List and explain the four alternative measures of capacity.

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

Why should predetermined overhead rates be used?

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

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

Denver Corporation The records of Denver Corporation revealed the following data for the current year. Refer to Denver Corporation. Assume, for this question only, actual overhead is $98,700 and applied overhead is $93,250. Manufacturing overhead is:

A mixed cost has which of the following components?

When a relationship between one independent variable and one dependent variable is analyzed, the regression is referred to as ____________________.

Predetermined overhead rates are computed based on

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

Actual overhead exceeds applied overhead and the amount is immaterial. Which of the following will be true? Upon closing,

Overapplied overhead will result if

What are the major differences between variable and absorption costing?

Bush Corporation The following information has been extracted from the financial records of Bush Corporation for its first year of operations: Refer to Bush Corporation. Based on absorption costing, what amount of period costs will Bush Corporation deduct?

Anderson Corporation Anderson Corporation has the following standard costs associated with the manufacture and sale of one of its products: Refer to Anderson Corporation. Based on variable costing, the income before income taxes for the year was

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

Consider the following three product costing alternatives: process costing, job order costing, and standard costing. Which of these can be used in conjunction with absorption costing?

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