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84 Cards in this Set
- Front
- Back
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Exam #1
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Ch. 2-5
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What does knowing specific job costs let managers do?
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What type of costs is setup time?
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Setup time is a batch cost and a production cost but not a value added cost.
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In what situations should ABC be used?
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Multiple product firms with multiple processing steps
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What does the final figure in the Cost of Goods Manufactured schedule represent?
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Total cost of goods completed for the period
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If there is no "a" value in y=a+bx, this is an indications that cost is?
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Variable
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Job Order Costing and Process Costing have which characteristics?
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Job Order: Heterogenous and small quantity
Process: Homogeneous and large quantity |
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In a normal cost system, a debit to WIP would not be made for?
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Actual Overhead
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Lead time - production time = ?
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Non-Value Added Time
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If a firm produces more units than it sells, absorption costing, relative to variable costing, will result in?
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Higher income and assets
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A short-run measure of activity that represents a firm's anticipated activity level for an upcoming period based upon expected demand is referred to as?
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Expected Capacity
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Applied overhead consists of which of the following?
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Actual Activity X Predetermined Overhead Rate
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Exam #2
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Ch. 6-10
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At the break even point, fixed costs are always?
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Equal to contribution margin.
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When will FIFO produce the same Cost of Goods Transferred Out as Weighted Average in process costing?
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When there is no Beginning WIP.
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At the end of a period, a significant material quantity variance should be?
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Allocated among WIP, Finished Goods, and Cost of Goods Sold.
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Which of the following represents a proper sequencing in which the budgets below are prepared?
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Sales, Production, Manufacturing Overhead
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If a company has a policy of keeping an inventory of finished goods at a specified percentage of the next months budgeted sales, budgeted production for January will exceed budgeted sales for January when?
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Budgeted sales for February are greater than budgeted sales for January.
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Exam #3
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Ch. 11-15
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Joint costs are allocated to which, Byproduct or Scrap?
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Joint costs are allocated to neither
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How do you find throughput per hour?
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Good units manufactured
divided by Total hours of manufacturing time |
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When deciding whether to sell at split or process further, management should?
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Ignore joint costs in decision making.
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Holding total production units constant, as the proportion of defective units to total units declines, all of the following measures will be affected except?
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Process Productivity
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The minimum sales price that is acceptable in a special order situation is equal to total?
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Variable costs and avoidable fixed costs.
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A cost is sunk if it?
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Has already been incurred.
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Exam #1
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Exam #1
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Cost of goods sold is an?
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Expired cost
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The cost sheets for incomplete jobs at the end of the period comprise the subsidior ledger for?
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Work In Process Inventory
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An objective of activity based management is to?
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Reduce or eliminate non-value added activity incurred to make a product or provide a service.
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All costs related to the manufacturing function in a company are?
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Product costs
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Another name for variable costing is?
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Direct costing
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A credit to WIP inventory represents?
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The transfer of completed items to finished goods inventory
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Costs that are incurred when customers complain are?
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Failure costs
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Relative to traditional product costing, activity-based costing differs in the way costs are?
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Allocated
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The journal entry to apply overhead to production includes a credit to manufacturing overhead control and a debit to?
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WIP Inventory
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An ending inventory valuation on an absorption costing balance sheet would?
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Always be greater than or equal to the ending inventory valuation under variable costing
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A company uses 2 overhead accounts, the one that would receive the most debits would be?
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Actual overhead
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Traditional overhead allocations result in which of the following situations?
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High-volume products are assigned too much overhead, and low-volume products are assigned too little overhead.
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Costs that are common to many different activities within an organization are known as ____ costs.
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Organizational-level costs
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The sum of the non-value-added time and the value-added time equals?
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Cycle Time
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ABC should be used in which of the following situations?
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multiple-product firms with multiple processing steps
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The term cost driver refers to?
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Any activity that causes costs to be incurred.
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Exam #2
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Exam #2
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Equivalent units of production are equal to the?
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Number of whole units that could have been completed if all work of the period had been used to produce whole units.
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The primary difference between the FIFO and weighted average methods of process costing is?
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In the treatment of beginning Work in Process Inventory.
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A producer of ____ would NOT use a process costing system.
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Stained glass windows
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A standard cost system may be used in?
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Either job order costing or process costing.
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Which of the following statements regarding standard cost systems is true?
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Favorable variances are not necessarily good variances.
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A company using very tight (high) standards in a standard cost system should expect that?
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Most variances will be unfavorable.
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The sum of the material price variance (calculated at point of purchase) and material quantity variance equals?
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No meaningful number
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Which of the following is NOT an "operating" budget?
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capital budget
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Chronologically, in what order are the sales, purchases, and production budgets prepared?
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sales, production, purchases
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The detailed plan for the acquisition and replacement of major portions of property, plant, and equipment is known as the?
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capital budget
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CVP analysis is based on concepts from?
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Variable Costing
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After the level of volume exceeds the break-even point?
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The total contribution margin exceeds the total fixed costs.
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In a multiple-product firm, the product that has the highest contribution margin per unit will?
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Generate the most profit for each unit sold.
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A firm's break-even point in dollars can be found in one calculation using which of the following formulas?
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FC/CM ratio
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A fixed cost is relevant if it is?
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Avoidable
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In a make or buy decision, the reliability of a potential supplier is?
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A qualitative decision factor
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Which of the following costs is irrelevant in making a decision about a special order price if some of the company facilities are currently idle?
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equipment depreciation
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The term incremental cost refers to?
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The additional cost of producing or selling another product or service.
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Which is the best cost accumulation procedure to use for continuous mass production of like units?
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Process
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The method of cost accounting that lends itself to break-even analysis is?
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Variable
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On a break-even chart, the break-even point is located at the point where the total?
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Revenue line crosses the total cost line
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A standard cost system may be used in?
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Either job order costing or process costing
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If actual DLH are less than standard DLH allowed and overhead is applied on a DLH basis, a?
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Favorable variable overhead efficiency variance exists
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Exam #3
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Exam #3
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Which of the following costs would not be accounted for in a company's record keeping system?
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Opportunity cost
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Which is LEAST likely to be a relevant item in deciding whether to replace an old machine?
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The acquisition cost of the old machine
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For purposes of allocating joint costs to joint products using the relative sales value at splitoff, the cost beyond splitoff?
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Does not affect allocation of joint costs
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Salvage value of an old lath is zero, if salvage is 1000, its impact would?
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Increase net present value of the proposal
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In capital budgeting, a firms cost of capital is frequently used as the?
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Discount rate
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The dupont model of ROI as it is affect by?
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Profit Margin
divided by Asset Turnover |
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The method of pricing by-products/scrap where no value is assigned to these items until they are sold is known as the?
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Realized value approach.
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Waste created by a production process is?
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Discarded rather than sold.
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If two or more products share a common process before they are separated, the joint costs should be assigned in a manner that?
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Assigns a proportionate amount of the total cost to each product on a quantitative basis.
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Incremental separate costs are defined as all costs incurred between ____ and the point of sale.
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Split-off point
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Which of the following statements is true regarding by-products or scrap?
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Job order costing systems may have instances where by-products or scrap result from the production process.
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With regard to a capital investment, net cash inflow is equal to the?
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Net increase in cash receipts over cash payments.
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Which of the following capital budgeting techniques may potentially ignore part of a project's relevant cash flows?
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Payback period
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The time value of money is considered in long-range investment decisions by?
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Assigning greater value to more immediate cash flows.
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The net present value method of evaluating proposed investments?
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Discounts cash flows at a minimum desired rate of return.
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The rate of interest that produces a zero net present value when a project's discounted cash operating advantage is netted against its discounted net investment is the?
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Internal rate of return
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All other factors equal, which of the following would affect a project's internal rate of return, net present value, and payback period?
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An increase in the initial cost of the project
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