Question 1

If production exceeds sales,absorption costing net income exceeds variable costing net income.

Accepted Answer

A) True 
 B)False

Question 2

Dollarwise Trainers provides a personalized training program that is popular with many companies.The number of programs offered over the last five months,and the costs of offering these programs are as follows:
                     Programs Offered       Costs Incurred              Jan        55       $15,400               Feb       45       14,050               Mar       60       18,000               April       50       14,700               May       75       19,000      a. Using the hig-low inethod compute the varuable cost per progam. and the total fixed cost per imonth. 
b.Using the least squares regression method compute the variable cost per progran and the total fixed cost per month

Accepted Answer

a.
@#LAT-DLM&

b.
@#LAT-DLM&
 
 a.
@#LAT-DLM& 
Change in costs $19,00

Question 3

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 4

In relationship to changes in activity,fixed overhead changes
in total	      per unit

Accepted Answer

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

Question 5

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

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 6

Variable costing is commonly used for internal reporting.

Accepted Answer

A) True 
 B)False

Question 7

Variable costing considers which of the following to be product costs?
            Fixed Mfg. Costs         Fixed Selling & Adm.         Variable Mfg. Costs         Variable Selling & Adm.

Accepted Answer

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

Question 8

In the formula y = a + bX,a represents

Accepted Answer

A) mixed cost. 
B) variable cost. 
C) total cost. 
D) fixed cost. 
A) mixed cost. 
B) variable cost. 
C) total cost. 
D) fixed cost.

Question 9

Delta,Epilson,and Sigma Companies
Three new companies (Delta,Epilson,and Sigma)began operations on January 1 of the current year.Consider the following operating costs that were incurred by these companies during the complete calendar year:
                   Delta Company       Epsilon Company        Sigma Company               Production in units       10,000       10,000       10,000               Sales price per unit       $10       $10       $10               Fixed production costs       $10,000       $20,000       $30,000               Variable production costs       $30,000       $20,000       $10,000               Variable SG&A       $1/unit       $2/unit       $3/unit               Fixed SG&A       $30,000       $20,000       $10,000      
Refer to Delta,Epilson,and Sigma Companies.Based on sales of 10,000 units,which company will report the greater income before income taxes if variable costing is used?

Accepted Answer

A) Delta Company 
B) Epsilon Company 
C) Sigma Company 
D) All of the companies will report the same income before income taxes. 
A) Delta Company 
B) Epsilon Company 
C) Sigma Company 
D) All of the companies will report the same income before income taxes.

Question 10

Phoenix Corporation
The records of Phoenix Corporation revealed the following data for the current year.
             Work in Process       $ 73,150               Finished Goods       115,000               Cost of Goods Sold       133,650               Direct Labor       111,600               Direct Material       84,200      
Refer to Phoenix Corporation.Assume that Phoenix has underapplied overhead of $37,200 and that this amount is material.What journal entry is needed to close the overhead account? (Round decimals to nearest whole percent. )

Accepted Answer

A) Debit Work in Process $8,456;Finished Goods $13,294;Cost of Goods Sold $15,450 and credit Overhead $37,200 
B) Debit Overhead $37,200 and credit Work in Process $8,456;Finished Goods $13,294;Cost of Goods Sold $15,450 
C) Debit Work in Process $37,200 and credit Overhead $37,200 
D) Debit Cost of Goods Sold $37,200 and credit Overhead $37,200 
A) Debit Work in Process $8,456;Finished Goods $13,294;Cost of Goods Sold $15,450 and credit Overhead $37,200 
B) Debit Overhead $37,200 and credit Work in Process $8,456;Finished Goods $13,294;Cost of Goods Sold $15,450 
C) Debit Work in Process $37,200 and credit Overhead $37,200 
D) Debit Cost of Goods Sold $37,200 and credit Overhead $37,200

Question 11

If underapplied factory overhead is immaterial,the account is closed by a debit to Cost of Goods Sold.

Accepted Answer

A) True 
 B)False

Question 12

In the variable costing income statement,which line separates the variable and fixed costs?

Accepted Answer

A) selling expenses 
B) general and administrative expense 
C) product contribution margin 
D) total contribution margin 
A) selling expenses 
B) general and administrative expense 
C) product contribution margin 
D) total contribution margin

Question 13

An ending inventory valuation on an absorption costing balance sheet would

Accepted Answer

A) sometimes be less than the ending inventory valuation under variable costing. 
B) always be less than the ending inventory valuation under variable costing. 
C) always be the same as the ending inventory valuation under variable costing. 
D) always be greater than or equal to the ending inventory valuation under variable costing. 
A) sometimes be less than the ending inventory valuation under variable costing. 
B) always be less than the ending inventory valuation under variable costing. 
C) always be the same as the ending inventory valuation under variable costing. 
D) always be greater than or equal to the ending inventory valuation under variable costing.

Question 14

What are the major differences between variable and absorption costing?

Accepted Answer

The major difference between variable co

Question 15

Profit under absorption costing may differ from profit determined under variable costing.How is this difference calculated?

Accepted Answer

A) Change in the quantity of all units in inventory times the relevant fixed costs per unit. 
B) Change in the quantity of all units produced times the relevant fixed costs per unit. 
C) Change in the quantity of all units in inventory times the relevant variable cost per unit. 
D) Change in the quantity of all units produced times the relevant variable cost per unit. 
A) Change in the quantity of all units in inventory times the relevant fixed costs per unit. 
B) Change in the quantity of all units produced times the relevant fixed costs per unit. 
C) Change in the quantity of all units in inventory times the relevant variable cost per unit. 
D) Change in the quantity of all units produced times the relevant variable cost per unit.

Question 16

The difference between the reported income under absorption and variable costing is attributable to the difference in the

Accepted Answer

A) income statement formats. 
B) treatment of fixed manufacturing overhead. 
C) treatment of variable manufacturing overhead. 
D) treatment of variable selling,general,and administrative expenses. 
A) income statement formats. 
B) treatment of fixed manufacturing overhead. 
C) treatment of variable manufacturing overhead. 
D) treatment of variable selling,general,and administrative expenses.

Question 17

Direct costing conforms with generally accepted accounting principles.

Accepted Answer

A) True 
 B)False

Question 18

Discuss the application of the high-low method.

Accepted Answer

The high-low method is a technique for a

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

Practical capacity does not adjust for routine downtime in a production process.

Accepted Answer

A) True 
 B)False

If production exceeds sales,absorption costing net income exceeds variable costing net income.

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

In relationship to changes in activity,fixed overhead changes in total per unit

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

Variable costing is commonly used for internal reporting.

Variable costing considers which of the following to be product costs?

Fixed Mfg. Costs Fixed Selling & Adm. Variable Mfg. Costs Variable Selling & Adm.

In the formula y = a + bX,a represents

If underapplied factory overhead is immaterial,the account is closed by a debit to Cost of Goods Sold.

In the variable costing income statement,which line separates the variable and fixed costs?

An ending inventory valuation on an absorption costing balance sheet would

What are the major differences between variable and absorption costing?

Profit under absorption costing may differ from profit determined under variable costing.How is this difference calculated?

The difference between the reported income under absorption and variable costing is attributable to the difference in the

Direct costing conforms with generally accepted accounting principles.

Discuss the application of the high-low method.

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

Practical capacity does not adjust for routine downtime in a production process.

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

	Programs Offered	Costs Incurred
Jan	55	$15,400
Feb	45	14,050
Mar	60	18,000
April	50	14,700
May	75	19,000

	Delta Company	Epsilon Company	Sigma Company
Production in units	10,000	10,000	10,000
Sales price per unit	$10	$10	$10
Fixed production costs	$10,000	$20,000	$30,000
Variable production costs	$30,000	$20,000	$10,000
Variable SG&A	$1/unit	$2/unit	$3/unit
Fixed SG&A	$30,000	$20,000	$10,000

Work in Process	$ 73,150
Finished Goods	115,000
Cost of Goods Sold	133,650
Direct Labor	111,600
Direct Material	84,200

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

If production exceeds sales,absorption costing net income exceeds variable costing net income.

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

In relationship to changes in activity,fixed overhead changes in total per unit

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

Variable costing is commonly used for internal reporting.

Variable costing considers which of the following to be product costs? Fixed Mfg. Costs Fixed Selling & Adm. Variable Mfg. Costs Variable Selling & Adm.

In the formula y = a + bX,a represents

If underapplied factory overhead is immaterial,the account is closed by a debit to Cost of Goods Sold.

In the variable costing income statement,which line separates the variable and fixed costs?

An ending inventory valuation on an absorption costing balance sheet would

What are the major differences between variable and absorption costing?

Profit under absorption costing may differ from profit determined under variable costing.How is this difference calculated?

The difference between the reported income under absorption and variable costing is attributable to the difference in the

Direct costing conforms with generally accepted accounting principles.

Discuss the application of the high-low method.

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

Practical capacity does not adjust for routine downtime in a production process.

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

Variable costing considers which of the following to be product costs?

Fixed Mfg. Costs Fixed Selling & Adm. Variable Mfg. Costs Variable Selling & Adm.