1. Davis Company manufacturers desks. The beginning balance of Raw Material Inventory was $4,500; raw material purchases of $29,600 were made during the month. At month end, $7,700 of raw material was on hand. Raw material used during the month was ______. $26,400
2. Urban Company manufacturers tables. If raw material used was $80,000 and Raw Material Inventory at the beginning and end of the period, respectively, was $17,000 and $21,000, what was amount of raw material was purchased? $76,000
3. Reno Corporation uses a predetermined overhead application rate of $.30 per direct labor hour. During the year it incurred $345,000 dollars of actual overhead, but it planned to incur $360,000 of overhead. The company applied $363,000 of overhead during the year. How many direct labor hours did the company plan to incur? 1,200,000
4. Aztec Company is relocating its facilities. The company estimates that it will take three trucks to move office contents. If the per truck rental charge is $1,000 plus 25 cents per mile, what is the expected cost to move 800 miles? $3,600
5. Dixie Company uses a weighted average process costing system. Material is added at the start of production. Dixie Company started 13,000 units into production and had 4,500 units in process at the start of the period that were 60 percent complete as to conversion costs. If Dixie transferred out 11,750 units, how many units were in ending Work in Process Inventory? 5,750
6. One unit requires 2 direct labor hours to produce. Standard variable overhead per unit is $1.25 and standard fixed overhead per unit is $1.75. If 330 units were produced this month, what total amount of overhead is applied to the units produced? $990
7. Alpha, Beta, and Epsilon Companies Below are income statements that apply to three companies: Alpha, Beta, and Epsilon: Alpha Co. Beta Co. Epsilon Co. Sales $100 $100 $100 Variable costs (10) (20) (30) Contribution margin $ 90 $ 80 $ 70 Fixed costs (30) (20) (10) Profit before taxes $ 60 $ 60 $ 60 Refer to Alpha, Beta, and Epsilon Companies. At sales of $100, which firm has the highest margin of safety? Epsilon Company
8. Courtney Company manufactures products A and B from a joint process. Sales value at split-off was $700,000 for 10,000 units of A, and $300,000 for 15,000 units of B. Using the sales value at split-off approach, joint costs properly allocated to A were $140,000. Total joint costs were ______. $200,000
9. Precious Jewels Corporation produces quality jewelry items for various retailers. For the coming year, it has estimated it will consume 500 ounces of gold. Its carrying costs for a year are $2 per ounce. No safety stock is maintained. If the EOQ is 100 ounces, what is the cost per order? $20
10. A company annually consumes 10,000 units of Part C. The carrying cost of this part is $2 per year and the ordering costs are $100. The company uses an order quantity of 500 units. By how much could the company reduce its total costs if it purchased the economic order quantity instead of 500 units? $500
11. The process of ____ causes the need for cost accounting. conversion
12. The Institute of Management Accountants issues ______. Cost Accounting Standards
13. Weaknesses of the high-low method include all of the following except ______. the mathematical calculations are relatively complex
14. An outlier is ______. never used in analyzing a mixed cost
15. Applied overhead consists of which of the following? estimated activity times predetermined overhead rate
16. If a company used two overhead accounts (actual overhead and applied overhead), the one that would receive the most debits would be ______. actual overhead
17. All other things being equal, if actual cost per unit is greater than budgeted cost per unit, variable overhead will be ______. underapplied
18. The measure of activity that allows for routine variations in manufacturing activity is ______. practical capacity
19. 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 expected capacity
20. An item or event that has a cause-effect relationship with the incurrence of a variable cost is called a ______. cost driver
21. Total manufacturing costs for the year plus beginning Work in Process Inventory cost equals ______. total manufacturing costs to account for
22. Which of the following would be least likely to be supported by subsidiary accounts or ledgers in a company that employs a job order costing system? Accounts Payable
23. A material requisition form should show all of the following information except ______. purchase order number
24. The cost sheets for incomplete jobs at the end of the period comprise the subsidiary ledger for ______. Work in Process Inventory
25. The ____ provides management with a historical summation of total costs for a given product. job order cost sheet
26. Which of the following journal entries records the accrual of the cost of indirect labor used in production? debit Manufacturing Overhead, credit Wages Payable
27. The first step in determining the cost per EUP per cost component under the weighted average method is to ______. add the beginning Work in Process Inventory cost to the current period's production cost
28. In a process costing system, the journal entry to record the transfer of goods from Department #2 to Finished Goods Inventory is a ______. debit Finished Goods Inventory, credit Work in Process Inventory #2
29. Process costing techniques should be used in assigning costs to products ______. if a product is composed of mass-produced homogeneous units
30. A process costing system ______. assigns direct labor and manufacturing overhead costs separately to units of production
31. When standard costs are used in process costing, ______. variances can be measured during the production period
32. Which of the following statements regarding standard cost systems is true? Favorable variances are not necessarily good variances.
33. A standard cost system may be used in ______. either job order costing or process costing
34. Standard costs may be used for ______. product costing
35. A purpose of standard costing is to ______. eliminate the need for actual costing for external reporting purposes
36. If actual direct labor hours (DLHs) are less than standard direct labor hours allowed and overhead is applied on a DLH basis, a(n) ______. favorable volume variance exists
37. Which of the following is a false statement about scrap and by-products? By-products and scrap are the primary reason that management undertakes the joint process
38. All costs that are incurred between the split-off point and the point of sale are known as ______. incremental separate costs
39. At the break-even point, fixed costs are always ______. equal to the contribution margin
40. To compute the break-even point in units, which of the following formulas is used? FC/CM per unit
41. The contribution margin ratio always increases when the ______. variable costs as a percentage of net sales decrease
42. A fixed cost is relevant if it is ______.A future cost
43. Which of the following is the least likely to be a relevant item in deciding whether to replace an old machine? acquisition cost of the old machine
44. Which of the following costs would be relevant in short-term decision making? incremental fixed costs
45. Most ____ are relevant to decisions to acquire capacity, but not to short-run decisions involving the use of that capacity. fixed costs
46. 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? equipment depreciation
47. Which of the following is a basic element of effective budgetary control? cost behavior patterns
48. External factors that cause the achievement of company goals are the ______. industry price and cost structure
49. Ineffective budgets and/or control systems are characterized by the use of ______. budgets as a planning tool only and disregarding them for control purposes
50. An example of a recurring short-term plan is ______. a unit sales forecast
51. If the chief accountant of a firm has to prepare an operating budget for the coming year, the first budget to be prepared is the ______. sales budget
52. Budgeted production for a period is equal to ______. the ending inventory + sales - the beginning inventory
53. Both the budgeted quantity of material to be purchased and the budgeted quantity of material to be consumed can be found in the ______. production budget
54. Depreciation on the production equipment would appear in which of the following budgets? manufacturing overhead budget
55. The budgeted amount of selling and administrative expense for a period can be found in the ______. cash budget
56. A ____ system of production control is paced by product demand. ABC
57. Reducing inventory to the lowest possible levels is a major focus of ______. JIT
58. JIT is a philosophy concerned with ______. how much of something should be done
59. Striving for flexibility in the number of products that can be produced in a short period of time is characteristic of ______. JIT
60. In a JIT manufacturing environment, product costing information is least important for use in ______. work in process inventory valuation
61. With JIT manufacturing, which of the following costs would be considered a direct product cost? repair parts for machinery
62. Which of the following statements is not true? JIT manufacturing utilizes long lead time and few deliveries.
63. The JIT environment has caused a reassessment of product costing techniques. Which of the following statements is true with respect to this reassessment? Traditional cost allocations based on direct labor are being questioned and criticized.
64. The term "cell" is used to describe ______. a grouping of one or more automated machines within a company
65. In a production cell, ______. machines are arranged so that similar machines are grouped together
66. Using a single performance evaluation criterion for an investment center ______. can result in manipulation of the performance measure
67. In evaluating the performance of a profit center manager, the manager ______. should be evaluated on all costs and revenues that can be directly traced to the sub-unit
68. A primary purpose of a balanced scorecard is to give ______. managers a way to forecast future performance
69. On a balanced scorecard, which of the following would be most appropriate to measure innovation? Rapid time-to-market of new products
70. A pay plan that does not encourage the overall company good is ______. contingent pay