1. When the activity level declines within the relevant range, what should happen with respect to the fixed cost per unit and variable cost per unit? A. Neither the fixed nor variable cost per unit change B. The variable cost per unit increases and the fixed cost per unit doesn't change C. The fixed cost per unit increases and the variable cost per unit doesn't change D. Both the fixed and variable cost per unit increase 2. Which of the following is classified as a cost of direct materials cost? A. A period cost B. A product cost C. Neither a product cost nor a period cost D. Both a product cost and a period cost 3. Soledad Corporation had $36,000 of raw materials on hand on December 1. During the month, the Corporation purchased an additional $71,000 of raw materials. The journal entry to record the purchase of raw materials would include a A. credit to Raw Materials of $71,000. B. debit to Raw Materials of $71,000. C. debit to Raw Materials of $107,000. D. credit to Raw Materials of $107,000. 4. Given the cost formula, Y = $7,000 + $1.80X, what would be the total cost for an activity level of 4,000 units? A. $14,200 B. $200 C. $7,000 D. $7,200 5. Dubey Surgical Hospital uses the direct method to allocate service department costs to operating departments. The hospital has two service departments, Telecommunications and Administration, and two operating departments, Surgery and Recovery. Telecommunications Department costs are allocated on the basis of the number of telecommunications ports in departments and Administration Department costs are allocated on the basis of employees. The total Surgery Department cost after service department allocations is closest to which value? A. $473,169 B. $484,059 C. $481,336 D. $478,133 6. Pujol Children's Clinic allocates service department costs to operating departments using the step-down method. The clinic has two service departments, Administration and Information Technology (IT), and two operating departments, Prenatal and Pediatric. Data concerning those departments are presented in the chart below. Administration costs are allocated first on the basis of employees and IT costs are allocated second on the basis of PCs. The total Pediatric Department cost after allocations is closest to which value? A. $328,202 B. $361,823 C. $370,790 D. $370,659 7. Clear Colors Corporation uses a predetermined overhead rate based on direct labor costs to apply manufacturing overhead to jobs. At the beginning of the year the Corporation estimated its total manufacturing overhead cost at $350,000 and its direct labor costs at $200,000. The actual overhead cost incurred during the year was $362,000 and the actual direct labor costs incurred on jobs during the year was $208,000. How much would the manufacturing overhead for the year be? A. $2,000 overapplied B. $2,000 underapplied C. $12,000 underapplied D. $12,000 overapplied 8. Inventoriable costs are also known as A. product costs. B. fixed costs. C. conversion costs. D. variable costs. 9. Gustavson Corporation uses the direct method to allocate service department costs to operating departments. The company has two service departments, Administrative and Facilities, and two operating departments, Assembly and Wholesaling. Administrative costs are allocated on the basis of employee hours and Facilities costs are allocated on the basis of space occupied. The total Wholesaling Department cost after the allocations of service department costs is closest to which value? A. $337,530 B. $340,426 C. $340,240 D. $331,090 10. In February, one of the processing departments at Manger Corporation had beginning work in process inventory of $25,000 and ending work in process inventory of $34,000. During the month, $290,000 of costs was added to production and the cost of units transferred out from the department was $281,000. In the department's cost reconciliation report for February, what would the total cost to be accounted for under the weighted-average method be? A. $315,000 B. $630,000 C. $59,000 D. $605,000 11. The following accounts are from last year's books at Sharp Manufacturing: Sharp uses job-order costing and applies manufacturing overhead to jobs based on direct labor costs. What is the amount of cost of goods manufactured for the year? A. $226,000 B. $255,000 C. $223,000 D. $251,000 12. The following data pertains to activity and utility cost for two recent periods: Utility cost is a mixed cost with both fixed and variable components. Using the high-low method, what would be the cost formula for utility cost? Activity level (units) 8,000 5,000 Utility cost $8,000 $6,500 A. Y = $1,500 + $1.25 X B. Y = $1.25 X C. Y = $1.00 X D. Y = $4,000 + $0.50 X 13. Tarten Corporation uses the FIFO method in its process costing system. Operating data for the Curing Department for the month of March appear below: According to the company's records, the conversion cost in beginning work in process inventory was $7,470 at the beginning of March. The cost per equivalent unit for conversion costs for March was $8.20. How much conversion cost would be assigned to the units completed and transferred out of the department during March? A. $533,090 B. $533,000 C. $525,530 D. $592,040 14. In November, one of the processing departments at Goodsell Corporation had beginning work in process inventory of $36,000 and ending work in process inventory of $35,000. During the month, $427,000 of costs was added to production and the cost of units transferred out from the department was $428,000. The company uses the FIFO method in its process costing system. In the department's cost reconciliation report for November, what would be the total cost to be accounted for? A. $926,000 B. $71,000 C. $463,000 D. $890,000 15. In order to reduce its overall quality costs, on what costs should a company focus most of its efforts? A. External failure costs B. Internal failure costs C. Prevention costs D. Appraisal costs 16. The following table presents information about units processed and processing costs incurred during a recent month in the Refining Department of a manufacturing company. The beginning work in process inventory included $11,000 of conversion cost. During the month, the Department incurred an additional $290,000 in conversion costs. Assuming that the company uses the weighted-average cost method, what is the cost per equivalent unit for conversion costs for the month in the Blending Department? Round to the nearest cent. A. $2.50 B. $2.55 C. $2.53 D. $2.44 17. Steven Corporation uses the FIFO method in its process costing system. Department A's beginning work in process inventory consisted of 15,000 units, 100% complete with respect to materials and 40% complete with respect to conversion costs. The total cost of this inventory was $31,000. A total of 40,000 units were transferred out during the month. The costs per equivalent unit were computed to be $1.30 for materials and $2.20 for conversion costs. What was the cost of the units completed and transferred out? A. $138,300 B. $131,700 C. $118,500 D. $140,000 18. Job 593 was recently completed. The following data have been recorded on its job cost sheet: The Corporation applies manufacturing overhead on the basis of machine-hours. The predetermined overhead rate is $14 per machine-hour. What amount would be the total cost recorded on the job cost sheet for Job 593? A. $4,255 B. $6,705 End of exam C. $5,249 D. $3,219 19. Adams Corporation makes two products: Product A and Product B. Annual production and sales are 500 units of Product A and 900 units of Product B. The company has traditionally used direct labor-hours as the basis for applying all manufacturing overhead to products. Product A requires 0.4 direct labor-hours per unit and Product B requires 0.5 direct labor-hours per unit. The total estimated overhead for next period is $67,522. The company is considering switching to an activity-based costing system for the purpose of computing unit product costs for external reports. The new activity-based costing system would have three overhead activity cost poolsActivity 1, Activity 2, and General Factorywith estimated overhead costs and expected activity as follows: (Note: The General Factory activity cost pool's costs are allocated on the basis of direct labor-hours.) The overhead cost per unit of Product A under the activity-based costing system is closest to which value? A. $48.23 B. $41.55 C. $21.94 D. $67.66 20. Eagle Company's quality cost report is to be based on the following data: What would be the total prevention cost appearing on the quality cost report? A. $86,000 B. $48,000 C. $57,000 D. $77,000