Question 1

The profit contribution each segment makes toward covering a company's common fixed costs is called ______________.

Accepted Answer

The answer of The profit contribution each segment makes toward...

Question 2

Figure 8-1.
Last year, Fabre Company produced 20,000 units and sold 18,000 units at a price of $12. Costs for last year were as follows:
   Fixed factory overhead is applied based on expected production. Last year, Fabre expected to produce 20,000 units.
-Refer to Figure 8-1. Assuming that beginning inventory was zero, what is the value of ending inventory under variable costing?

Accepted Answer

A)  $3,300 
B)  $2,500 
C)  $5,000 
D)  $3,720 
E)  $7,200 
A)  $3,300 
B)  $2,500 
C)  $5,000 
D)  $3,720 
E)  $7,200

Question 3

Grass Valley Mining mines three products. Gold ore sells for $1,000 per ton, variable costs are $400 per ton, and fixed mining costs are $250,000. Last year the segment margin was $(100,000). How many tons of gold ore did Grass Valley Mining sell last year?

Accepted Answer

A)  375 tons 
B)  1,000 tons 
C)  250 tons 
D)  200 tons 
A)  375 tons 
B)  1,000 tons 
C)  250 tons 
D)  200 tons

Question 4

Generally Accepted Accounting Principles (GAAP) require the use of which accounting method for external reporting?

Accepted Answer

A)  absorption costing. 
B)  variable costing. 
C)  transfer price costing. 
D)  responsibility costing. 
E)  all of these are acceptable for GAAP. 
A)  absorption costing. 
B)  variable costing. 
C)  transfer price costing. 
D)  responsibility costing. 
E)  all of these are acceptable for GAAP.

Question 5

Figure 8-8.
Steele Corporation has the following information for January, February, and March:
   Production costs per unit (based on 10,000 units) are as follows:
   There were no beginning inventories for January, and all units were sold for $50. Costs are stable over the three months.
-Refer to Figure 8-8. What is the January ending inventory for Steele Corporation using the variable costing method?

Accepted Answer

A)  $260,000 
B)  $78,000 
C)  $108,000 
D)  $90,000 
A)  $260,000 
B)  $78,000 
C)  $108,000 
D)  $90,000

Question 6

Figure 8-6.
Bailey Company incurred the following costs in manufacturing desk calculators:
   During the period, the company produced and sold 2,000 units.
-Refer to Figure 8-6. What is the inventory cost per unit using absorption costing?

Accepted Answer

A)  $104 
B)  $77 
C)  $84 
D)  $32 
A)  $104 
B)  $77 
C)  $84 
D)  $32

Question 7

Match each statement with the correct item below.
a.
the costs of not having a product available when demanded by a customer
b.
the costs of carrying inventory
c.
approach that maintains goods should be pulled through the system by present demand
d.
the number of units in the order quantity that minimizes the total cost
e.
the costs of placing and receiving an order
-Just-in-time

Accepted Answer

The answer of Match each statement with the correct item...

Question 8

A disadvantage of absorption costing is

Accepted Answer

A)  that it is not a useful format for decision making. 
B)  that it assigns only manufacturing costs to the product. 
C)  All of these. 
D)  None of these. 
A)  that it is not a useful format for decision making. 
B)  that it assigns only manufacturing costs to the product. 
C)  All of these. 
D)  None of these.

Question 9

Absorption costing treats fixed factory overhead as a ____________.

Accepted Answer

The answer of Absorption costing treats fixed factory overhead as...

Question 10

Consider the following portion of a segmented income statement for the year just ended. Assume fixed expenses of Division X include $30,000 of direct expenses and that the discontinuance of the department will not affect the sales of the other departments nor reduce the common expenses.   What is X's divisional segment margin?

Accepted Answer

A)  ($10,000) 
B)  $40,000 
C)  $10,000 
D)  $100,000 
A)  ($10,000) 
B)  $40,000 
C)  $10,000 
D)  $100,000

Question 11

JIT responds to the problems traditionally solved by carrying inventories by

Accepted Answer

A)  ensuring that sufficient inventory is on hand to prevent stockouts. 
B)  purchasing extra materials when price discounts are offered. 
C)  negotiating long-term contracts with supplier to lock in low prices. 
D)  selecting an inventory level that minimizes the total of ordering and carrying costs. 
E)  choosing a wide number of suppliers to increase the chance of receiving quantity discounts. 
A)  ensuring that sufficient inventory is on hand to prevent stockouts. 
B)  purchasing extra materials when price discounts are offered. 
C)  negotiating long-term contracts with supplier to lock in low prices. 
D)  selecting an inventory level that minimizes the total of ordering and carrying costs. 
E)  choosing a wide number of suppliers to increase the chance of receiving quantity discounts.

Question 12

Variable costing treats fixed factory overhead as a ______________.

Accepted Answer

The answer of Variable costing treats fixed factory overhead as...

Question 13

The ___________________ income statement groups expenses according to function.

Accepted Answer

The answer of The ___________________ income statement groups expenses according...

Question 14

When the economic order quantity (EOQ) model is applied to units produced within the company, ordering costs become

Accepted Answer

A)  setup costs. 
B)  stockout costs. 
C)  carrying costs. 
D)  safety-stock costs. 
E)  production costs. 
A)  setup costs. 
B)  stockout costs. 
C)  carrying costs. 
D)  safety-stock costs. 
E)  production costs.

Question 15

All ______________ expenses will vanish if a particular segment is eliminated.

Accepted Answer

The answer of All ______________ expenses will vanish if a...

Question 16

Prepare a segmented income statement for Mario Co. for the coming year, using variable costing.
   A sales commission of 2% of sales is paid for each of the two product lines. Direct fixed selling and administrative expense was estimated to be $32,000 for the leather jackets and $66,000 for the suede jackets. Common fixed overhead for the factory was estimated to be $83,000 and common selling and administrative expense was estimated to be $14,000.
Required: Prepare a segmented income statement for Mario Co. for the coming year, using variable costing.

Accepted Answer

The answer of Prepare a segmented income statement for Mario...

Question 17

Last year, Baker Company produced 30,000 units and sold 28,000 units. Beginning inventory was zero. During the period, the following costs were incurred:
   Required: Compute the dollar amount of ending inventory using:

Accepted Answer

The answer of Last year, Baker Company produced 30,000 units...

Question 18

Figure 8-2.
Loring Company had the following data for the month:
   Fixed overhead is $4,000 per month; it is applied to production based on normal activity of 2,000 units. During the month, 2,000 units were produced. Loring started the month with 300 units in beginning inventory, with unit product cost equal to this month's unit product cost. A total of 2,100 units were sold during the month at price of $14. Selling and administrative expense for the month, all fixed, totaled $3,600.
-Refer to Figure 8-2. What is the unit product cost under variable costing?

Accepted Answer

A)  $8.60 
B)  $10.60 
C)  $8.20 
D)  $10.20 
E)  $7.20 
A)  $8.60 
B)  $10.60 
C)  $8.20 
D)  $10.20 
E)  $7.20

Question 19

A ____________ is a subunit of a company of sufficient importance to warrant the production of performance reports.

Accepted Answer

The answer of A ____________ is a subunit of a...

Question 20

Which of the following is never included in product cost?

Accepted Answer

A)  overhead 
B)  direct materials 
C)  variable selling expense 
D)  fixed factory overhead 
E)  direct labor 
A)  overhead 
B)  direct materials 
C)  variable selling expense 
D)  fixed factory overhead 
E)  direct labor

The profit contribution each segment makes toward covering a company's common fixed costs is called ______________.

Grass Valley Mining mines three products. Gold ore sells for $1,000 per ton, variable costs are $400 per ton, and fixed mining costs are $250,000. Last year the segment margin was $(100,000). How many tons of gold ore did Grass Valley Mining sell last year?

Generally Accepted Accounting Principles (GAAP) require the use of which accounting method for external reporting?

Figure 8-6. Bailey Company incurred the following costs in manufacturing desk calculators: During the period, the company produced and sold 2,000 units. -Refer to Figure 8-6. What is the inventory cost per unit using absorption costing?

A disadvantage of absorption costing is

Absorption costing treats fixed factory overhead as a ____________.

JIT responds to the problems traditionally solved by carrying inventories by

Variable costing treats fixed factory overhead as a ______________.

The ___________________ income statement groups expenses according to function.

When the economic order quantity (EOQ) model is applied to units produced within the company, ordering costs become

All ______________ expenses will vanish if a particular segment is eliminated.

Last year, Baker Company produced 30,000 units and sold 28,000 units. Beginning inventory was zero. During the period, the following costs were incurred: Required: Compute the dollar amount of ending inventory using:

A ____________ is a subunit of a company of sufficient importance to warrant the production of performance reports.

Which of the following is never included in product cost?

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost Behavior

Cost-Volume-Profit Analysis: a Managerial Planning Tool

Job-Order Costing

Process Costing

Activity-Based Costing and Management

Profit Planning

Standard Costing: a Managerial Control Tool

Flexible Budgets and Overhead Analysis

Performance Evaluation and Decentralization

Short-Run Decision Making: Relevant Costing

Capital Investment Decisions

Statement of Cash Flows

Financial Statement Analysis

Filters

Exam 8: Absorption and Variable Costing, and Inventory Management

The profit contribution each segment makes toward covering a company's common fixed costs is called ______________.

Grass Valley Mining mines three products. Gold ore sells for $1,000 per ton, variable costs are $400 per ton, and fixed mining costs are $250,000. Last year the segment margin was $(100,000). How many tons of gold ore did Grass Valley Mining sell last year?

Generally Accepted Accounting Principles (GAAP) require the use of which accounting method for external reporting?

Figure 8-6. Bailey Company incurred the following costs in manufacturing desk calculators: During the period, the company produced and sold 2,000 units. -Refer to Figure 8-6. What is the inventory cost per unit using absorption costing?

A disadvantage of absorption costing is

Absorption costing treats fixed factory overhead as a ____________.

JIT responds to the problems traditionally solved by carrying inventories by

Variable costing treats fixed factory overhead as a ______________.

The ___________________ income statement groups expenses according to function.

When the economic order quantity (EOQ) model is applied to units produced within the company, ordering costs become

All ______________ expenses will vanish if a particular segment is eliminated.

Last year, Baker Company produced 30,000 units and sold 28,000 units. Beginning inventory was zero. During the period, the following costs were incurred: Required: Compute the dollar amount of ending inventory using:

A ____________ is a subunit of a company of sufficient importance to warrant the production of performance reports.

Which of the following is never included in product cost?

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost Behavior

Cost-Volume-Profit Analysis: a Managerial Planning Tool

Job-Order Costing

Process Costing

Activity-Based Costing and Management

Profit Planning

Standard Costing: a Managerial Control Tool

Flexible Budgets and Overhead Analysis

Performance Evaluation and Decentralization

Short-Run Decision Making: Relevant Costing

Capital Investment Decisions

Statement of Cash Flows

Financial Statement Analysis

Filters