Multiple Choice Questions
1. Which one of the following managerial accounting approaches attempts to allocate manufacturing overhead in a more meaningful fashion?
a. Activity-based costing
b. Total-quality management
c. Balanced scorecard
d. Just-in-time inventory
2. Gammil Company has beginning and ending raw materials inventories of $128,000 and $160,000, respectively. If direct materials used were $520,000, what was the cost of raw materials purchased?
a. $488,000
b. $560,000
c. $552,000
d. $520,000
3. During 2012, Cotte Manufacturing expected Job No. 59 to cost $600,000 of overhead, $1,000,000 of materials, and $400,000 in labor. Cotte applied overhead based on direct labor cost. Actual production required an overhead cost of $560,000, $1,100,000 in materials used, and $440,000 in labor. All of the goods were completed. How much is the amount of over- or underapplied overhead?
a. $100,000 overapplied
b. $40,000 underapplied
c. $40,000 overapplied
d. $100,000 underapplied
4. A company assigned overhead to work in process. At year end, what does the amount of overapplied overhead mean?
a. The overhead assigned to work in process is less than the actual overhead.
b. The overhead assigned to work in process is greater than the overhead incurred.
c. The overhead assigned to work in process is greater than the estimated overhead costs.
d. The overhead assigned to work in process is less than the estimated overhead costs.
5. Physical units are 160,000. Total conversion costs are $276,500. There are 4,000 units in ending inventory which are 50% complete as to conversion costs. How much is the conversion cost per unit?
a. $1.69.
b. $1.75.
c. $1.73.
d. $1.71.
6. Gloria Company had no beginning work in process. During the period, 12,000 units were completed, and there were 1,200 units of ending work in process. How many units were started into production?
a. 12,000.
b. 10,800.
c. 1,200.
d. 13,200.
7. In using the high-low method, the fixed cost
a. Is determined by adding the total variable cost to the total cost at the low activity level.
b. Is determined by subtracting the total cost at the high level of activity from the total cost at the low activity level.
c. Is determined before the total variable cost.
d. May be determined by subtracting the total variable cost from either the total cost at the low or high activity level.
8. If a firm increases its activity level,
a. Some costs will change, others will remain the same.
b. Most costs will rise.
c. No costs will remain the same.
d. Costs should remain the same.
9. Which one of the following is not a benefit of budgeting?
a. It requires all levels of management to plan ahead on a recurring basis.
b. It facilitates the coordination of activities.
c. It provides definite objectives for evaluating performance.
10. The important end-product of the operating budgets is the
a. Budgeted income statement.
c. Cash budget.
d. Production budget.
e. Budgeted balance sheet.
11. A flexible budget can be prepared for which of the following budgets comprising the master budget?
a. Sales
b. Overhead
c. Direct materials
d. All of these.
12. A company's planned activity level for next year is expected to be 200,000 machine hours. At this level of activity, the company budgeted the following manufacturing overhead costs:
:

A flexible budget prepared at the 180,000 machine hours level of activity would show total manufacturing overhead costs of
a. $450,000.
b. $555,000.
c. $405,000.
d. $540,000.

Transcribed Image Text:

Variable Indirect materials S180,000 Depreciation S75,000 Indirect labor Taxes Factory supplies 30,000 Fixed 240,000 15,000 Supervision 60,000