ACC220 | Accounting in Business - Lackawanna university

ACC220 Managerial Accounting Module 1 Quiz Question 1 What is the primary criterion for the preparation of managerial accounting reports? a. relevance of the reports b. manager needs c. timing of the reports d. cost of the reports

Question 2 Which of the following is most associated with financial accounting?

a. can have both objective and subjective information b. can be prepared periodically, or as needed c. prepared in accordance with GAAP d. can be prepared for the entity or segment Question 3 In most business organizations, the chief management accountant is called the a. chief accounting officer b. controller c. chairman of the board d. chief executive officer

Question 4 Which of the following are basic phases of the management process?

a. supervising and directing b. decision making and supervising c. organizing and directing d. planning and controlling Question 5 What term is used to describe the process of monitoring operating results and comparing actual results with the expected results? a. improving b. controlling c. directing d. planning Question 6 Accounting designed to meet the needs of decision makers inside the business is a. general accounting b. financial accounting c. managerial accounting d. external accounting Question 7 What term is used to describe the process of developing the organization’s objectives and translating those into courses of action? a. supervising b. planning c. improving d. decision making Question 8Compute conversion costs given the following data: direct materials, $347,500; direct labor, $196,300; factory overhead, $187,900; and selling expenses, $45,290. a. $543,800 b. $187,900 c. $731,700 d. $384,200 Question 9 Which of the following is an example of direct materials cost for an automobile manufacturer? a. cost of oil lubricants for factory machinery b. cost of wages of assembly worker c. salary of production supervisor d. cost of interior upholstery Question 10 Costs other than direct materials cost and direct labor cost incurred in the manufacturing process are classified as a. factory overhead cost b. miscellaneous expense c. product costs d. period cost ACC220 Managerial Accounting Module 2 Quiz

Question 1. Cost behavior refers to the manner in which

a. a cost changes as the related activity changes b. a cost is allocated to products c. a cost is used in setting selling prices d. a cost is estimated Question 2Costs that remain constant in total dollar amount as the level of activity changes are called a. fixed costs b. mixed costs c. product costs d. variable costs uestion 3. Which of the following costs is an example of a cost that remains the same in total as the number of units produced changes? a. direct labor b. salary of a factory supervisor c. units-of-production depreciation on factory equipment d. direct materials Question 4Which of the following activity bases would be the most appropriate for gasoline costs of a delivery service? a. number of truck drivers b. total of miles driven c. how many trucks are in service d. number of packages picked up Question 5Which of the following describes the behavior of a variable cost per unit? a. varies in increasing proportion with changes in the activity level b. varies in decreasing proportion with changes in the activity level c. remains constant with changes in the activity level d. varies in direct proportion with the activity level

Question 6Which of the following costs is a mixed cost?

a. salary of a factory supervisor b. electricity costs of $3 per kilowatt-hour c. rental costs of $10,000 per month plus $0.30 per machine hour of use d. straight-line depreciation on factory equipment Question 7Strait Co. manufactures office furniture. During the most productive month of the year, 3,000 desks were manufactured at a total cost of $59,000. In the month of lowest production the company made 1,125 desks at a cost of $38,000. Using the high-low method of cost estimation, total fixed costs are a. $21,000 b. $25,400 c. $42,000 d.$13,000 Question 8. Which of the following statements is true regarding fixed and variable costs? a. Both costs are constant when considered on a per-unit basis. b. Both costs are constant when considered on a total basis. c. Fixed costs are constant in total, and variable costs are constant per unit. d. Variable costs are constant in total, and fixed costs vary in total. Question 9The systematic examination of the relationships among selling prices, volume of sales and production, costs, and profits is termed a. contribution margin analysis b. cost-volume-profit analysis c. budgetary analysis d. gross profit analysis Question 10If sales are $820,000, variable costs are 55% of sales, and operating income is $260,000, what is the contribution margin ratio? a. 45% b. 55% c. 62% d. 32% ACC220 Managerial Accounting Module 3 Quiz Question 1Which of the following are the two main types of cost accounting systems for manufacturing operations? a. process cost and general accounting systems b. job order cost and process cost systems c. job order and general accounting systems d. process cost and replacement cost systems Question 2Which of the following would most likely use a job order costing system? a. a paper mill b. a swimming pool installer c. a company that manufactures chlorine for swimming pools d. an oil refinery

Question 3Job order costing and process costing are

a. pricing systems b. cost accounting systems c. cost flow systems d. inventory tracking systems Question 4Which of the following would record the labor costs to an individual job? a. clock cards b. in-and-out cards c. time tickets d. a payroll register Question 5The Thomlin Company forecasts that total overhead for the current year will be $15,500,000 with 250,000 total machine hours. Year to date, the actual overhead is $16,000,000 and the actual machine hours are 330,000 hours. The predetermined overhead rate based on machine hours is a. $48 per machine hour b. $62 per machine hour c. $45 per machine hour d. $50 per machine hour Question 6. At the end of the year, overhead applied was $42,000,000. Actual overhead was $40,300,000. Closing over/underapplied overhead into Cost of Goods Sold would cause net income to a. increase by $1,700,000 b. decrease by $1,700,000 c. increase by $3,400,000 d. decrease by $3,400,000 Question 7The source document for the data for debiting Work in Process for direct materials is a a. purchase order b. purchase requisition c. materials requisition d. receiving report Question 8A summary of the materials requisitions completed during a period serves as the basis for transferring the cost of the materials from the controlling account in the general ledger to the controlling accounts for a. Work in Process and Cost of Goods Sold b. Work in Process and Factory Overhead c. Finished Goods and Cost of Goods Sold d. Work in Process and Finished Goods

Question 9Each document in the cost ledger is called a

a. finished goods sheet b. stock record c. materials requisition d. job cost sheet Question 10The recording of the factory labor incurred for general factory use would include a debit to a. Factory Overhead b. Wages Payable c. Wages Payable d. Cost of Goods Sold ACC220 Managerial Accounting Module 4 Quiz Question 1The cost system best suited to industries that manufacture a large number of identical units of commodities on a continuous basis is a. process b. departmental c. first-in, first-out d. job order Question 2In a process cost system, the amount of work in process inventory is valued by a. finding the sum of all open job costs b. allocating departmental costs between completed and partially completed units c. multiplying units in ending inventory by the direct materials cost per unit d. finding the sum of all completed jobs

Question 3The two categories of cost comprising conversion costs are

a. direct labor and indirect labor b. direct labor and factory overhead c. factory overhead and direct materials d. direct labor and direct materials Question 4The three categories of manufacturing costs comprising the total cost of work in process are direct labor, direct materials, and a. selling expenses b. direct expenses c. accounting salaries expense d. factory overhead

Question 5Which of the following would use a process costing system?

a. custom home builder b. custom helicopter manufacturer c. graduation photographer d. lumber mill Question 6In the manufacture of 10,000 units of a product, direct materials cost incurred was $165,000, direct labor cost incurred was $105,000, and applied factory overhead was $53,000. What is the total conversion cost? a. $218,000 b. $158,000 c. $323,000 d. $53,000 Question 7Department M had 600 units 60% completed in process at the beginning of June, 6,000 units completed during June, and 700 units 30% completed at the end of June. Using the first-in, first-out method of inventory costing, what was the number of equivalent units of production for conversion costs for the period? a. 7,300 units b. 5,640 units c. 6,700 units d. 5,850 units Question 8The debits to Work in Process—Assembly Department for May, together with data concerning production, are as follows:

May 1, work in process:

Materials cost, 3,000 units $ 8,000 Conversion costs, 3,000 units, 66.7% completed 6,000 Materials added during May, 10,000 units 30,000 Conversion costs during May 31,000 Goods finished during May, 11,500 units 0 May 31 work in process, 1,500 units, 50% completed 0 ?All direct materials are placed in process at the beginning of the process and the first-in, first-out method is used to cost inventories. The materials cost per equivalent unit for May is a. $3.00 b. $3.80 c. $2.92 d. $2.31 Question 9Which of the following costs incurred by a tool manufacturer would not be included in conversion costs? a. factory supervisor's salary b. machine operator's wages c. raw steel d. factory maintenance personnel supplies Question 10The four steps necessary to complete a cost of production report in a process cost system are

1.allocate costs to transferred and partially completed units

2.determine the units to be assigned costs

3.determine the cost per equivalent unit

4.calculate equivalent units of production

ACC220 Managerial Accounting Module 5 Quiz Question 1Standards that represent levels of operation that can be attained with reasonable effort are called a. theoretical standards b. ideal standards c. variable standards d. normal standards Question 2The principle of exceptions allows managers to focus on correcting variances between a. standard costs and actual costs b. variable costs and actual costs c. competitor’s costs and actual costs d. competitor’s costs and standard costs

Question 3A favorable cost variance occurs when

a. actual costs are more than standard costs b. standard costs are more than actual costs c. standard costs are less than actual costs d. actual costs are the same as standard costs Question 4Jaxson Corporation has the following data related to direct labor costs for September: actual costs are 10,200 hours at $15.75 per hour and standard costs are 10,800 hours at $15.50 per hour. What is the direct labor time variance? a. ?$9,300 favorable b. ??$9,300 unfavorable c. ?$9,450 favorable d. ??$9,450 unfavorable Question 5 If the actual quantity of direct materials used in producing a commodity differs from the standard quantity, the variance is a a. controllable variance b. price variance c. quantity variance d. rate variance Question 6The budgeting process does not involve which of the following activities? a. Specific goals are established. b. Periodic comparison of actual results to goals. c. Execution of plans to achieve goals. d. Increase in sales by increasing marketing efforts. Question 7A variant of fiscal-year budgeting whereby a twelve-month projection into the future is maintained at all times is termed a. flexible budgeting b. continuous budgeting c. zero-based budgeting d. master budgeting Question 8The primary difference between a static budget and a flexible budget is that a static budget a. is suitable in volatile demand situation while flexible budget is suitable in a stable demand situation b. is concerned only with future acquisitions of fixed assets, whereas a flexible budget is concerned with expenses that vary with sales c. includes only fixed costs, whereas a flexible budget includes only variable costs d. is a plan for a single level of production, whereas a flexible budget can be converted to any level of production Question 9The production budgets are used to prepare which of the following budgets? a. operating expenses b. direct materials purchases, direct labor cost, and factory overhead cost c. sales in dollars d. sales in units Question 10Motorcycle Manufacturers, Inc. projected sales of 78,000 machines for the year. The estimated January 1 inventory is 6,500 units, and the desired December 31 inventory is 6,000 units. What is the budgeted production (in units) for the year? a. 78,500 b. 70,000 c. 77,500 d. 70,500 ACC220 Managerial Accounting Module 6 Quiz

Question 1Which is the best example of a decentralized operation?

a. one owner who prepares plans and makes decisions for the entire company b. each unit is responsible for their own operations and decision making c. in a major company, operating decisions are made by top management d. none of these, all are examples of a centralized operation Question 2Which of the following is not one of the common types of responsibility centers? a. cost center b. profit center c. investment center d. revenue center

Question 3A manager is responsible for costs only in a(n)

a. profit center b. investment center c. volume center d. cost center

Question 4For higher levels of management, responsibility accounting reports

a. are more detailed than for lower levels of management b. are more summarized than for lower levels of management c. contain about the same level of detail as reports for lower levels of management d. are rarely provided or reviewed Question 5Which of the following is a measure of a cost center manager’s performance? a. budget performance report b. rate of return and residual income measures c. divisional income statements d. balance sheet Question 6In a profit center, the manager has responsibility and authority for making decisions that affect a. long-term liabilities b. assets c. investments d. costs Question 7The costs of services charged to a profit center on the basis of its use of those services are a. operating expenses b. noncontrollable charges c. service department charges d. activity charges Question 8To calculate income from operations, total service department charges are a. added to income from operations before service department charges b. subtracted from operating expenses c. subtracted from income from operations before service department charges d. subtracted from gross profit margin Question 9The term used to describe expenses that are incurred by a specific department is a. indirect expenses b. margin expenses c. departmental expenses d. direct expenses Question 10Blaser Corporation had $275,000 in invested assets, sales of $330,000, income from operations amounting to $33,000 and a desired minimum rate of return of 7.5%. The rate of return on investment for Blaser Corporation is a. 8.3% b. 10% c. 12% d. 7.5% ACC220 Managerial Accounting Module 7 Quiz Question 1The amount of increase or decrease in revenue that is expected from a particular course of action as compared with an alternative is a. manufacturing margin b. contribution margin c. differential cost d. differential revenue

Question 2 A cost that will not be affected by later decisions is termed a(n)

sunk cost period cost differential cost replacement cost Question 3The amount of income that would result from an alternative use of cash is called: opportunity cost differential income sunk cost differential revenue Question 4Yasmin Co. can further process Product B to produce Product C. Product B is currently selling for $30 per pound and costs $28 per pound to produce. Product C would sell for $55 per pound and would require an additional cost of $31 per pound to produce. What is the differential cost of producing Product C? $31 per pound $30 per pound $28 per pound $55 per pound Question 5A practical approach that is frequently used by managers when setting normal long-run prices is the cost-plus approach economic theory approach price graph approach price skimming Question 6Decisions to install new equipment, replace old equipment, and purchase or construct a new building are examples of capital investment analysis sales mix analysis variable cost analysis variable cost analysis Question 7Which of the following are two methods of analyzing capital investment proposals that both ignore present value? average rate of return and cash payback method internal rate of return and average rate of return net present value and average rate of return internal rate of return and net present value Question 8The primary advantages of the average rate of return method are its ease of computation and the fact that it is especially useful to managers whose primary concern is liquidity it emphasizes the amount of income earned over the life of the proposal it is especially useful to managers whose primary concern is liquidity there is less possibility of loss from changes in economic conditions and obsolescence when the commitment is short-term rankings of proposals are necessary Question 9The expected average rate of return for a proposed investment of $6,000,000 in a fixed asset, using straight-line depreciation, with a useful life of 20 years, no residual value, and an expected total net income of $12,000,000 over the 20 years is 20% 10% 40% 5% Question 10Which method of evaluating capital investment proposals uses present value concepts to compute the rate of return from the net cash flows? internal rate of return method cash payback method net present value method average rate of return method