Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

Absorption costing is commonly used for external reporting.

Accepted Answer

A) True 
 B)False

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

If actual overhead is less than applied overhead, which of the following will be true? Upon closing,

Accepted Answer

A)  underapplied credited 
B)  underapplied debited 
C)  overapplied debited 
D)  overapplied credited 
A)  underapplied credited 
B)  underapplied debited 
C)  overapplied debited 
D)  overapplied credited

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

If there is no "a" value in a linear cost equation, this is an indication that the cost is

Accepted Answer

A)  fixed. 
B)  mixed. 
C)  variable. 
D)  either fixed or mixed. 
A)  fixed. 
B)  mixed. 
C)  variable. 
D)  either fixed or mixed.

Question 7

When a manufacturing company has a highly automated manufacturing plant producing many different products, which of the following is the more appropriate basis of applying manufacturing overhead costs to work in process?

Accepted Answer

A)  direct labor hours 
B)  direct labor dollars 
C)  machine hours 
D)  cost of materials used 
A)  direct labor hours 
B)  direct labor dollars 
C)  machine hours 
D)  cost of materials used

Question 8

Plantwide overhead rates provide a less accurate computation of factory overhead than departmental overhead rates

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is not associated with absorption costing?

Accepted Answer

A)  functional format 
B)  gross margin 
C)  period costs 
D)  contribution margin 
A)  functional format 
B)  gross margin 
C)  period costs 
D)  contribution margin

Question 10

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 11

The Internal Revenue Service allows the use of both variable and absorption costing.

Accepted Answer

A) True 
 B)False

Question 12

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 13

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 14

Dynamic Corporation had the following data regarding monthly power costs:   Assume that management expects 500 machine hours in May. Using the high-low method, calculate May's power cost using machine hours as the basis for prediction.

Accepted Answer

A)  $700 
B)  $705 
C)  $710 
D)  $1,320 
A)  $700 
B)  $705 
C)  $710 
D)  $1,320

Question 15

Sheets Corporation The following information was extracted from the first year absorption-based accounting records of Sheets Corporation
  Refer to Sheets Corporation. If Sheets Corporation had used variable costing in its first year of operations, how much income (loss) before income taxes would it have reported?

Accepted Answer

A)  ($6,000) 
B)  $54,000 
C)  $26,000 
D)  $ 2,000 
A)  ($6,000) 
B)  $54,000 
C)  $26,000 
D)  $ 2,000

Question 16

One reason annual overhead application rates are used is

Accepted Answer

A)  because of seasonal variability of overhead costs. 
B)  to help budget overhead costs. 
C)  to minimize the overhead cost assigned to products. 
D)  to maximize the overhead cost assigned to products. 
A)  because of seasonal variability of overhead costs. 
B)  to help budget overhead costs. 
C)  to minimize the overhead cost assigned to products. 
D)  to maximize the overhead cost assigned to products.

Question 17

Temporary profits that result when absorption costing is used and production exceeds sales are referred to as _________________________.

Accepted Answer

The answer of Temporary profits that result when absorption costing...

Question 18

Discuss underapplied and overapplied overhead and its disposition at the end of the period.

Accepted Answer

During the course of the production cycl

Question 19

Which of the following is an argument against the use of direct (variable) costing?

Accepted Answer

A)  Absorption costing overstates the balance sheet value of inventories. 
B)  Variable factory overhead is a period cost. 
C)  Fixed manufacturing overhead is difficult to allocate properly. 
D)  Fixed manufacturing overhead is necessary for the production of a product. 
A)  Absorption costing overstates the balance sheet value of inventories. 
B)  Variable factory overhead is a period cost. 
C)  Fixed manufacturing overhead is difficult to allocate properly. 
D)  Fixed manufacturing overhead is necessary for the production of a product.

Question 20

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...

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

Absorption costing is commonly used for external reporting.

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

If actual overhead is less than applied overhead, which of the following will be true? Upon closing,

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

If there is no "a" value in a linear cost equation, this is an indication that the cost is

When a manufacturing company has a highly automated manufacturing plant producing many different products, which of the following is the more appropriate basis of applying manufacturing overhead costs to work in process?

Plantwide overhead rates provide a less accurate computation of factory overhead than departmental overhead rates

Which of the following is not associated with absorption costing?

The Internal Revenue Service allows the use of both variable and absorption costing.

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

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

Dynamic Corporation had the following data regarding monthly power costs: Assume that management expects 500 machine hours in May. Using the high-low method, calculate May's power cost using machine hours as the basis for prediction.

One reason annual overhead application rates are used is

Temporary profits that result when absorption costing is used and production exceeds sales are referred to as _________________________.

Discuss underapplied and overapplied overhead and its disposition at the end of the period.

Which of the following is an argument against the use of direct (variable) costing?

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

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

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

Absorption costing is commonly used for external reporting.

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

If actual overhead is less than applied overhead, which of the following will be true? Upon closing,

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

If there is no "a" value in a linear cost equation, this is an indication that the cost is

When a manufacturing company has a highly automated manufacturing plant producing many different products, which of the following is the more appropriate basis of applying manufacturing overhead costs to work in process?

Plantwide overhead rates provide a less accurate computation of factory overhead than departmental overhead rates

Which of the following is not associated with absorption costing?

The Internal Revenue Service allows the use of both variable and absorption costing.

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

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

Dynamic Corporation had the following data regarding monthly power costs: Assume that management expects 500 machine hours in May. Using the high-low method, calculate May's power cost using machine hours as the basis for prediction.

One reason annual overhead application rates are used is

Temporary profits that result when absorption costing is used and production exceeds sales are referred to as _________________________.

Discuss underapplied and overapplied overhead and its disposition at the end of the period.

Which of the following is an argument against the use of direct (variable) costing?

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

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