Final exam

: Week 8 Exam 3 – Exam

 Unfavorable variances are those that contribute to decreases in operating income.

(Points : 2)

      

[removed]

 True

        

[removed] False

   

Standard costs provide a basis for assessing the reasonableness of actual costs incurred for producing a product or service. (Points : 2)

      [removed]

 True         [removed] False   

Service companies do not have work in process and finished goods accounts. (Points : 2)

      [removed] True        [removed] False  

At the end of the period, the balance remaining in Finished Goods is reported on the income statement.  (Points : 2)

      [removed] True         [removed] False  

Cost of goods manufactured must be determined prior to computing cost of goods sold. (Points : 2)

      [removed] True         [removed] False    

If Paterno Company’s turnover(asset utilization) measure is 2.5 and its margin is 7.5%, its ROI is 10%. (Points : 2)

      [removed] True        [removed] False   

Organization charts are drawn in a hierarchical fashion with low level managers shown at the bottom of the chart, middle level managers in the middle of the chart, and senior level managers shown at the top of the chart. (Points : 2)

      [removed] True        [removed] False  

Direct costs must be allocated across departments. (Points : 2)

      [removed] True   

Responsibility performance reports usually compare actual costs to the budgeted costs amounts. (Points : 2)

      [removed] True        [removed] False       [removed] False    

When direct labor is the best cost driver for variable manufacturing overhead, a favorable direct labor efficiency variance would result in: (Points : 2)

      [removed] A favorable variable manufacturing overhead efficiency variance
      [removed] An unfavorable variable manufacturing overhead efficiency variance
      [removed] An unfavorable variable manufacturing overhead efficiency variance and an unfavorable total variable manufacturing overhead variance
      [removed] The answer cannot be determined
  

The July manufacturing overhead budget of Kyoto Corporation, shown below, was constructed assuming an activity level of 48,000 direct labor hours:  

Variable costs:     Indirect labor$48,000    Indirect materials24,000    Factory supplies 19,200$91,200
Fixed costs:     Depreciation$38,400    Supervision69,600    Property taxes 36,000 144,000Total overhead costs $235,200

  If management prepared a flexible budget for July using 40,000 direct labor hours, what amount would this flexible budget show for total variable costs? (Points : 2)

      [removed] $76,000
      [removed] $83,600
      [removed] $87,200
      [removed] $91,200 

Which of the following statements is false? (Points : 2)

      [removed] Under absorption costing some fixed manufacturing costs are deferred in ending inventory if production is greater than sales.
      [removed] When production and sales are equal, net income will be greater under variable costing than it will be under absorption costing.
      [removed] Under absorption costing only the fixed manufacturing cost associated with inventory sold are expensed.
      [removed] Under variable costing fixed manufacturing costs are expensed in the period in which they are incurred regardless of when the inventory is sold.
 

A credit to the Raw Materials account represents (Points : 2)

      [removed] raw materials purchased.
      [removed] raw materials used.
      [removed] raw materials available for use.
      [removed] none of these
 

Select the response that indicates the correct sequence of product cost flows from production to sale. (Points : 2)

      [removed] Raw materials, work in process, finished goods, and cost of goods sold
      [removed] Cost of goods sold, finished goods, work in process, raw materials
      [removed] Work in process, finished goods, cost of goods sold
      [removed] Raw materials, finished goods, cost of goods sold
  

In which of the following is a manager responsible for only costs? (Points : 2)

      [removed] Responsibility center
      [removed] Cost center
      [removed] Profit center
      [removed] Investment center
  

A report that specifies the expected and actual costs under the control of a manager is a: (Points : 2)

      [removed] Managerial cost report.
      [removed] Departmental accounting report.
      [removed] Responsibility accounting report.
      [removed] Controllable expense report.
      [removed] Segmental accounting report.
  

K. Jackson Corporation has the following operating data for 2005:   Net income$ 75,000Revenue500,000Total assets400,000   Given this information, if net income increased to $90,000, the return on investment would be: (Points : 2)

      [removed] 15.0%
      [removed] 18.75%
      [removed] 22.5%
      [removed] 25.0%
 

Which of the following would not improve ROI? (Points : 2)       [removed] Decrease costs       [removed] Decrease assets       [removed] Increase revenue       [removed] Increase inventory

  

Taft Company had no beginning work in process inventory. Its total manufacturing costs for the year were $878,000. If cost of goods manufactured was $676,000 and cost of goods sold was $518,000, the amount of ending work in process inventory would have been what?  (Input only the whole number with no punctuation.)
 (Points : 4)

      [removed]  

Wilson Company applies overhead based on direct labor cost. During 2012, Wilson Company estimated that it would incur $88,000 in manufacturing overhead costs and $59,000 of direct labor costs. In 2012, actual manufacturing overhead cost totaled $73,000 and actual direct labor costs totaled $53,000. If total manufacturing costs were $158,000, what amount of direct materials was used during the period?  (Input only the whole number with no punctuation.)
 (Points : 4)

   

Weymouth Company made a $240,000 investment in new machinery. Assuming the company’s margin is 3%, what income will be earned if the investment generates $510,000 in additional sales?  (Input only the whole number with no punctuation.)
 (Points : 4)

      [removed]  

The following company information is available:   Direct materials used for production  36,000 gallons  Standard quantity for actual units produced  31,800 gallons  Standard cost per gallon of direct material  $6.03  Actual cost per gallon of direct material  $6.53 The direct materials usage variance is what?  (Input only the whole number followed by F or U for favorable or unfavorable.  Example: 100 F) (Points : 4)       [removed]