Question 1

The variance computed by multiplying the difference between the actual and standard quantity of materials by the standard price paid is the:

Accepted Answer

A)  Materials quantity variance 
B)  Labor rate variance 
C)  Manufacturing overhead spending variance 
D)  Materials price variance 
A)  Materials quantity variance 
B)  Labor rate variance 
C)  Manufacturing overhead spending variance 
D)  Materials price variance

Question 2

The following information relates to Spangle Industries:
  
Based on this information, calculate Spangle Industries sales price variance and sales volume variance.

Accepted Answer

Based on this information, cal

Question 3

Which of the following is NOT a type of responsibility center?

Accepted Answer

A)  Profit center 
B)  Investment center 
C)  Revenue center 
D)  Cost center 
A)  Profit center 
B)  Investment center 
C)  Revenue center 
D)  Cost center

Question 4

Centralization refers to the concept of having decision-making authority in the hands of:

Accepted Answer

A)  Segment managers 
B)  Top management 
C)  Individual employees 
D)  Operational managers 
A)  Segment managers 
B)  Top management 
C)  Individual employees 
D)  Operational managers

Question 5

Exhibit 19-8 The following information is available for Granger Company:
 
- Refer to Exhibit 19-8. Given the information above, the variable manufacturing overhead spending variance is:

Accepted Answer

A)  $7,000 favorable 
B)  $7,000 unfavorable 
C)  $10,000 favorable 
D)  $17,000 unfavorable 
A)  $7,000 favorable 
B)  $7,000 unfavorable 
C)  $10,000 favorable 
D)  $17,000 unfavorable

Question 6

Standard costs are used to control all of the following costs EXCEPT:

Accepted Answer

A)  Relevant costs 
B)  Direct labor costs 
C)  Variable manufacturing overhead costs 
D)  Direct materials costs 
A)  Relevant costs 
B)  Direct labor costs 
C)  Variable manufacturing overhead costs 
D)  Direct materials costs

Question 7

Management by exception uses which of the following?

Accepted Answer

A)  Variances to isolate problem areas 
B)  Responsibility centers to make managers accountable 
C)  Decentralization principles to assign management tasks 
D)  None of these are correct 
A)  Variances to isolate problem areas 
B)  Responsibility centers to make managers accountable 
C)  Decentralization principles to assign management tasks 
D)  None of these are correct

Question 8

Which of the following is a component of the fixed manufacturing overhead budget variance and the volume variance?

Accepted Answer

A)  Actual fixed manufacturing overhead costs 
B)  Fixed manufacturing overhead budget 
C)  Standard fixed manufacturing overhead rate 
D)  All of these are components 
A)  Actual fixed manufacturing overhead costs 
B)  Fixed manufacturing overhead budget 
C)  Standard fixed manufacturing overhead rate 
D)  All of these are components

Question 9

Frank Company, which has total assets of $300,000, has an opportunity to invest $80,000 in a new project that will generate a return of $16,000 per year. Given this information, if Frank Company uses 15% as a minimum rate of return, how much residual income will result from this project?

Accepted Answer

A)  $16,000 per year 
B)  $12,000 per year 
C)  $4,000 per year 
D)  $0 per year 
A)  $16,000 per year 
B)  $12,000 per year 
C)  $4,000 per year 
D)  $0 per year

Question 10

Exhibit 19-7 The following figures represent 100% capacity for Starr Manufacturing:
  Starr Manufacturing normally produces at 100% capacity. During the month of October, the company started and completed 10,000 units of product, using variable manufacturing overhead costs of $20,000. The company used 6,400 direct labor hours in October instead of the 6,000 hours expected for the activity level achieved.
-Refer to Exhibit 19-7. Based on the information above, the variable manufacturing overhead spending variance is:

Accepted Answer

A)  $2,000 favorable 
B)  $2,000 unfavorable 
C)  $800 favorable 
D)  $800 unfavorable 
A)  $2,000 favorable 
B)  $2,000 unfavorable 
C)  $800 favorable 
D)  $800 unfavorable

Question 11

Exhibit 19-5 Ridgeline Corporation has the following operating data for the year:
  
-Refer to Exhibit 19-5. Given the above data for Ridgeline Company, what is the asset turnover assuming the minimum rate of return on assets is 10%?

Accepted Answer

A)  1.0 
B)  1.5 
C)  2.6 
D)  3.2 
A)  1.0 
B)  1.5 
C)  2.6 
D)  3.2

Question 12

Sequim Company is a decentralized company with two segments: Micro and Macro. Additionally, for each segment, Sequim's sales are split between the two states of Oregon and Washington. The following is information applicable to revenue for the year:

Accepted Answer

The answer of Sequim Company is a decentralized company with...

Question 13

Exhibit 19-7 The following figures represent 100% capacity for Starr Manufacturing:
  Starr Manufacturing normally produces at 100% capacity. During the month of October, the company started and completed 10,000 units of product, using variable manufacturing overhead costs of $20,000. The company used 6,400 direct labor hours in October instead of the 6,000 hours expected for the activity level achieved.
-Refer to Exhibit 19-7. Based on the information above, the standard variable manufacturing overhead cost in terms of standard direct labor hours is:

Accepted Answer

A)  $18,000 
B)  $19,200 
C)  $27,000 
D)  $36,000 
A)  $18,000 
B)  $19,200 
C)  $27,000 
D)  $36,000

Question 14

In which of the following is a manager responsible for costs, revenues, and assets?

Accepted Answer

A)  Revenue center 
B)  Cost center 
C)  Profit center 
D)  Investment center 
A)  Revenue center 
B)  Cost center 
C)  Profit center 
D)  Investment center

Question 15

Comparing the standard variable manufacturing overhead costs based on standard hours with the standard variable manufacturing overhead based on actual hours provides:

Accepted Answer

A)  The variable manufacturing overhead efficiency variance 
B)  The variable manufacturing overhead spending variance 
C)  The total variable manufacturing overhead variance 
D)  None of these are correct 
A)  The variable manufacturing overhead efficiency variance 
B)  The variable manufacturing overhead spending variance 
C)  The total variable manufacturing overhead variance 
D)  None of these are correct

Question 16

Which of the following is NOT a disadvantage of standard costing?

Accepted Answer

A)  Standard costing must change as conditions change 
B)  Standard costs are not useful for certain types of businesses 
C)  The setting of standard costs requires an analysis of cost behavior and a determination of the components of manufacturing overhead costs 
D)  It is easy to misinterpret the causes of a variance because so many factors are involved 
A)  Standard costing must change as conditions change 
B)  Standard costs are not useful for certain types of businesses 
C)  The setting of standard costs requires an analysis of cost behavior and a determination of the components of manufacturing overhead costs 
D)  It is easy to misinterpret the causes of a variance because so many factors are involved

Question 17

Frank Company, which has total assets of $300,000, has an opportunity to invest $80,000 in a new project that will generate a return of $16,000 per year. Given this information, if Frank Company's acceptable return on investment is 22%, it will probably:

Accepted Answer

A)  Accept the project, but also look for another project 
B)  Reject the project 
C)  Increase its return on investment by accepting the project 
D)  Not be able to make a decision based on the given information 
A)  Accept the project, but also look for another project 
B)  Reject the project 
C)  Increase its return on investment by accepting the project 
D)  Not be able to make a decision based on the given information

The variance computed by multiplying the difference between the actual and standard quantity of materials by the standard price paid is the:

The following information relates to Spangle Industries: Based on this information, calculate Spangle Industries sales price variance and sales volume variance.

Which of the following is NOT a type of responsibility center?

Centralization refers to the concept of having decision-making authority in the hands of:

Exhibit 19-8 The following information is available for Granger Company: - Refer to Exhibit 19-8. Given the information above, the variable manufacturing overhead spending variance is:

Standard costs are used to control all of the following costs EXCEPT:

Management by exception uses which of the following?

Which of the following is a component of the fixed manufacturing overhead budget variance and the volume variance?

Frank Company, which has total assets of $300,000, has an opportunity to invest $80,000 in a new project that will generate a return of $16,000 per year. Given this information, if Frank Company uses 15% as a minimum rate of return, how much residual income will result from this project?

Exhibit 19-5 Ridgeline Corporation has the following operating data for the year: -Refer to Exhibit 19-5. Given the above data for Ridgeline Company, what is the asset turnover assuming the minimum rate of return on assets is 10%?

Sequim Company is a decentralized company with two segments: Micro and Macro. Additionally, for each segment, Sequim's sales are split between the two states of Oregon and Washington. The following is information applicable to revenue for the year:

In which of the following is a manager responsible for costs, revenues, and assets?

Comparing the standard variable manufacturing overhead costs based on standard hours with the standard variable manufacturing overhead based on actual hours provides:

Which of the following is NOT a disadvantage of standard costing?

Frank Company, which has total assets of $300,000, has an opportunity to invest $80,000 in a new project that will generate a return of $16,000 per year. Given this information, if Frank Company's acceptable return on investment is 22%, it will probably:

Accounting Information: Users and Uses

Financial Statements: An Overview

The Accounting Cycle: The Mechanics of Accounting

Completing the Accounting Cycle

Internal Controls: Ensuring the Integrity of Financial Information

Receivables: Selling a Product or a Service

Inventory and the Cost of Sales

Completing the Operating Cycle

Investments: Property, Plant, and Equipment and Intangible Assets

Financing: Long-Term Liabilities

Financing: Equity

Investments: Debt and Equity Securities

Statement of Cash Flows

Analyzing Financial Statements

Management Accounting and Cost Concepts

Cost Flows and Business Organizations

Activity-Based Costing

Budgeting and Control

Inventory Management and Variable and Absorption Costing

Cost Behavior and Decisions Using C-V-P Analysis

Relevant Information and Decisions

Capital Investment Decisions

New Measures of Performance

Filters

Exam 19: Controlling Cost and Profit

The variance computed by multiplying the difference between the actual and standard quantity of materials by the standard price paid is the:

The following information relates to Spangle Industries: Based on this information, calculate Spangle Industries sales price variance and sales volume variance.

Which of the following is NOT a type of responsibility center?

Centralization refers to the concept of having decision-making authority in the hands of:

Exhibit 19-8 The following information is available for Granger Company: - Refer to Exhibit 19-8. Given the information above, the variable manufacturing overhead spending variance is:

Standard costs are used to control all of the following costs EXCEPT:

Management by exception uses which of the following?

Which of the following is a component of the fixed manufacturing overhead budget variance and the volume variance?

Frank Company, which has total assets of $300,000, has an opportunity to invest $80,000 in a new project that will generate a return of $16,000 per year. Given this information, if Frank Company uses 15% as a minimum rate of return, how much residual income will result from this project?

Exhibit 19-5 Ridgeline Corporation has the following operating data for the year: -Refer to Exhibit 19-5. Given the above data for Ridgeline Company, what is the asset turnover assuming the minimum rate of return on assets is 10%?

Sequim Company is a decentralized company with two segments: Micro and Macro. Additionally, for each segment, Sequim's sales are split between the two states of Oregon and Washington. The following is information applicable to revenue for the year:

In which of the following is a manager responsible for costs, revenues, and assets?

Comparing the standard variable manufacturing overhead costs based on standard hours with the standard variable manufacturing overhead based on actual hours provides:

Which of the following is NOT a disadvantage of standard costing?

Frank Company, which has total assets of $300,000, has an opportunity to invest $80,000 in a new project that will generate a return of $16,000 per year. Given this information, if Frank Company's acceptable return on investment is 22%, it will probably:

Accounting Information: Users and Uses

Financial Statements: An Overview

The Accounting Cycle: The Mechanics of Accounting

Completing the Accounting Cycle

Internal Controls: Ensuring the Integrity of Financial Information

Receivables: Selling a Product or a Service

Inventory and the Cost of Sales

Completing the Operating Cycle

Investments: Property, Plant, and Equipment and Intangible Assets

Financing: Long-Term Liabilities

Financing: Equity

Investments: Debt and Equity Securities

Statement of Cash Flows

Analyzing Financial Statements

Management Accounting and Cost Concepts

Cost Flows and Business Organizations

Activity-Based Costing

Budgeting and Control

Inventory Management and Variable and Absorption Costing

Cost Behavior and Decisions Using C-V-P Analysis

Relevant Information and Decisions

Capital Investment Decisions

New Measures of Performance

Filters