Question 1

If the level of activity increases,

Accepted Answer

A) variable cost per unit and total fixed costs increase. 
B) fixed cost per unit and total variable cost increase. 
C) total cost will increase and fixed cost per unit will decrease. 
D) variable cost per unit and total cost increase. 
A) variable cost per unit and total fixed costs increase. 
B) fixed cost per unit and total variable cost increase. 
C) total cost will increase and fixed cost per unit will decrease. 
D) variable cost per unit and total cost increase.

Question 2

An income statement is prepared as an internal report.Under which of the following methods would the term contribution margin appear?
Absorption costing	      Variable costing

Accepted Answer

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

Question 3

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 4

The estimated maximum potential activity for a specified time is known as theoretical capacity.

Accepted Answer

A) True 
 B)False

Question 5

Why is absorption costing not used for CVP analysis?

Accepted Answer

Absorption costing is not used in break-

Question 6

A firm presently has total sales of $100,000.If its sales rise,its

Accepted Answer

A) net income based on variable costing will go up more than its net income based on absorption costing. 
B) net income based on absorption costing will go up more than its net income based on variable costing. 
C) fixed costs will also rise. 
D) per unit variable costs will rise. 
A) net income based on variable costing will go up more than its net income based on absorption costing. 
B) net income based on absorption costing will go up more than its net income based on variable costing. 
C) fixed costs will also rise. 
D) per unit variable costs will rise.

Question 7

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 8

If underapplied or overapplied factory overhead is immaterial,it is charged to ______________________________.

Accepted Answer

The answer of If underapplied or overapplied factory overhead is...

Question 9

In an actual 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 10

If actual overhead is less than applied overhead,factory overhead is said to be ____________________.

Accepted Answer

The answer of If actual overhead is less than applied...

Question 11

Crafton Corporation applies overhead at the rate of 70 percent of direct labor.Crafton incurred $450,000 of direct labor during the current year.Crafton incurred actual overhead of $367,000.
(a)Compute the amount of under- or overapplied overhead for Crafton Corporation for the current year
(b)Prepare the necessary journal entry to dispose of the under- or overapplied overhead (assuming that the amount is immaterial).

Accepted Answer

Question 12

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

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 13

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

Accepted Answer

A) True 
 B)False

Question 14

In a(n)____________________ cost system,factory overhead is assigned to an overhead control account and then allocated to products and services.

Accepted Answer

The answer of In a(n)____________________ cost system,factory overhead is assigned...

Question 15

Phantom profits result when absorption costing is used and production exceeds sales.

Accepted Answer

A) True 
 B)False

Question 16

Richardson Company
The following information is available for Richardson Company for its first year of operations:
             Sales in units       5,000               Production in units       8,000               Manufacturing costs:                       Direct labor       $3 per unit                Direct material       $5 per unit                Variable overhead       $1 per unit                Fixed overhead       $100,000               Net income (absorption method)       $30,000               Sales price per unit       $40      
Refer to Richardson Company.If Richardson Company had used variable costing,what amount of income before income taxes would it have reported?

Accepted Answer

A) $30,000 
B) ($7,500) 
C) $67,500 
D) cannot be determined from the information given 
A) $30,000 
B) ($7,500) 
C) $67,500 
D) cannot be determined from the information given

Question 17

Absorption costing is commonly used for external reporting.

Accepted Answer

A) True 
 B)False

Question 18

If actual overhead exceeds applied overhead,factory overhead is said to be overapplied.

Accepted Answer

A) True 
 B)False

Question 19

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 20

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...

If the level of activity increases,

An income statement is prepared as an internal report.Under which of the following methods would the term contribution margin appear? Absorption costing Variable costing

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

The estimated maximum potential activity for a specified time is known as theoretical capacity.

Why is absorption costing not used for CVP analysis?

A firm presently has total sales of $100,000.If its sales rise,its

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

If underapplied or overapplied factory overhead is immaterial,it is charged to ______________________________.

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

If actual overhead is less than applied overhead,factory overhead is said to be ____________________.

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

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

In a(n)____________________ cost system,factory overhead is assigned to an overhead control account and then allocated to products and services.

Phantom profits result when absorption costing is used and production exceeds sales.

Absorption costing is commonly used for external reporting.

If actual overhead exceeds applied overhead,factory overhead is said to be overapplied.

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

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

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

Sales in units	5,000
Production in units	8,000
Manufacturing costs:
Direct labor	$3 per unit
Direct material	$5 per unit
Variable overhead	$1 per unit
Fixed overhead	$100,000
Net income (absorption method)	$30,000
Sales price per unit	$40

Exam 3: Predetermined Overhead Rates, Flexible Budgets, and Absorptionvariable Costing

If the level of activity increases,

An income statement is prepared as an internal report.Under which of the following methods would the term contribution margin appear? Absorption costing Variable costing

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

The estimated maximum potential activity for a specified time is known as theoretical capacity.

Why is absorption costing not used for CVP analysis?

A firm presently has total sales of $100,000.If its sales rise,its

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

If underapplied or overapplied factory overhead is immaterial,it is charged to ______________________________.

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

If actual overhead is less than applied overhead,factory overhead is said to be ____________________.

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

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

In a(n)____________________ cost system,factory overhead is assigned to an overhead control account and then allocated to products and services.

Phantom profits result when absorption costing is used and production exceeds sales.

Absorption costing is commonly used for external reporting.

If actual overhead exceeds applied overhead,factory overhead is said to be overapplied.

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

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

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