1. Managerial accounting information:

	Is used mainly by external users.
	Involves gathering information about costs for planning and control decisions.
	Is generally the only accounting information available to managers.
	Can be used for control purposes but not for planning purposes.
	Has little to do with controlling costs

1. The three major cost components of a manufactured product are:

	Marketing, selling, and administrative costs.
	Indirect labor, indirect materials, and miscellaneous factory expenses.
	Direct materials, direct labor, and factory overhead.
	Differential costs, opportunity costs, and sunk costs.
	General, selling, and administrative costs.

1. Juliet Corporation has accumulated the following accounting data for the year:

Finished goods inventory, January 1	$ 5,600
Finished goods inventory, December 31	6,700
Total cost of goods sold	7,200

The cost of goods manufactured for the year is:

	$500
	$1,600
	$8,300
	$11,200
	$13,900

1. Job order costing systems normally use:

	Periodic inventory systems.
	Perpetual inventory systems.
	Real inventory systems.
	General inventory systems.
	All of the above.

1. A job cost sheet includes:

	Direct materials, direct labor, operating costs.
	Direct materials, overhead, administrative costs.
	Direct labor, overhead, selling costs.
	Direct material, direct labor, overhead.
	Direct materials, direct labor, selling costs.

1. Penn Company uses a job order cost accounting system. In the last month, the system accumulated labor time tickets totaling $30,500 for direct labor and $6,100 for indirect labor. These costs were accumulated in Factory Payroll as they were paid. Which entry should Penn make to assign the Factory Payroll?

	General Journal	Debit	Credit
(A)	Payroll Expense	36,600
	Cash		36,600
(B)	Payroll Expense	30,500
	Factory Overhead	6,100
	Factory Payroll		36,600
(C)	Goods in Process Inventory	30,500
	Factory Overhead	6,100
	Factory Payroll		36,600
(D)	Goods in Process Inventory	30,500
	Factory Overhead	6,100
	Accrued Wages Payable		36,600
(E)	Goods in Process Inventory	36,600
	Factory Payroll		36,600

	Option A
	Option B
	Option C
	Option D
	Option E

1. Which of the following characteristics applies to process cost accounting and not to job order cost accounting?

	Use of a predetermined overhead rate.
	Identifiable lots of production.
	Equivalent units of production.
	Labor time ticket for each employee.
	Use of a single Goods in Process account.

1. Which of the following characteristics does not usually apply to process manufacturing systems?

	Each unit of product is separately identifiable.
	Partially completed products are transferred between processes.
	Different managers are responsible for different processes.
	The output of all processes except the final process is an input to the next process.
	In a multistep process, there will be multiple Goods in Process accounts

9. Which of the following journal entries correctly records the current month's activity where $76,000 of direct material and $29,000 of indirect materials were used in the production process?

Goods in process	29,000
Factory overhead	76,000
Cash		105,000

Goods in process	105,000
Raw materials inventory		105,000

Raw materials inventory	105,000
Cash		105,000

Goods in process	76,000
Factory overhead	29,000
Raw materials inventory		105,000

Raw materials inventory	105,000
Goods in process inventory		76,000
Factory overhead		29,000

10. Which of the following statements is true with regard to activity-based costing rates?

	The premise of ABC is that activities are what cause costs to be incurred.
	ABC is another way to refer to a multiple departmental rate situation.
	There one basic stage to ABC.
	ABC is simpler and less expensive to implement than other traditional methods of allocating overhead costs.
	All cost drivers used to determine the rates will be unit-level drivers.

11. What are three advantages of activity-based costing over traditional volume-based allocation methods?

	Ease of use, more accurate product costing, and more effective cost control.
	Fewer allocation bases, ease of use, and a direct correlation to production volume.
	More accurate product costing, more effective cost control, and better focus on the relevant factors for decision making.
	More accurate product costing, fewer cost objects, and a direct correlation to production volume.
	More accurate product costing, ease of use, less costly to implement.

12. A company uses activity-based costing to determine the costs of its three products: A, B and C. The budgeted cost and activity for each of the company's three activity cost pools are shown in the following table:

		Budgeted Activity
Activity Cost Pool	Budgeted Cost	Product A	Product B	Product C
Activity 1	$225,250	10,500	13,500	29,000
Activity 2	$180,000	11,500	24,000	12,500
Activity 3	$142,350	3,400	1,900	2,500

How much overhead will be assigned to Product B using activity-based costing?

	$182,050
	$215,750
	$149,800
	$547,600
	$225,250

13. A cost that changes with volume, but not at a constant rate, is called a:

	Variable cost.
	Curvilinear cost.
	Step-wise variable cost.
	Fixed cost.
	Differential cost.

14. A firm expects to sell 25,000 units of its product at $11 per unit. Pretax income is predicted to be $60,000. If the variable costs per unit are $6, total fixed costs must be:

$65,000

$90,000

$125,000

$215,000

$275,000

15. A company's product sells at $20 per unit and has a $8 per unit variable cost. The company's total fixed costs are $135,000.

The break-even point in units is:

	11,250
	4,219
	6,750
	16,875
	5,625

16. Which of the following statements is true?

	A per unit cost that is constant at all production levels is a variable cost per unit.
	Reported income under variable costing is affected by production level changes.
	A per unit cost that is constant at all production levels is a fixed cost per unit.
	Reported income under absorption costing is not affected by production level changes.
	A cost that is constant over all levels of production is a variable cost.

17. Assume a company sells a given product for $90 per unit. How many units must be sold to break even if variable selling costs are $2 per unit, variable production costs are $31 per unit, and total fixed costs are $1,799,946?

	31,578 units.
	19,995 units.
	20,454 units.
	14,634 units.
	899,973 units.

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18. Under absorption costing, a company had the following unit costs when 14,500 units were produced.

Direct labor	$ 11.75 per unit
Direct material	$ 12.25 per unit
Variable overhead	$ 10.00 per unit
Fixed overhead ($203,000 / 14,500 units)	$ 14.00 per unit
Total production cost	$ 48.00 per unit

Compute the total production cost per unit under variable costing if 67,600 units had been produced.

	$34.00
	$24.00
	$36.00
	$37.00
	$48.00

19. A budget is best described as:

	A formal statement of a company's future plans usually expressed in monetary terms.
	A master control device.
	An informal statement of company future plans usually expressed in monetary terms.
	The most crucial component of a company evaluation process.
	The minimum acceptable performance level.

20. Which of the following is a financial budget?

	Sales budget
	Budgeted balance sheet
	Production budget
	Capital expenditure budget
	Merchandise purchasing budget
21. Bentels Co. desires a December 31 ending inventory of 1,880 units. Budgeted sales for December are 3,400 units. The November 30 inventory was 1,530 units. Budgeted purchases are:

	3,750 units
	350 units
	5,280 units
	3,400 units
	4,930 units

22. The costs that should be incurred under normal conditions to produce a specific product or component or to perform a specific service are:

	Variable costs.
	Fixed costs.
	Standard costs.
	Product costs.
	Period costs.

23. The difference between the actual cost incurred and the standard cost is called the:

	Flexible variance.
	Price variance.
	Cost variance.
	Controllable variance.
	Volume variance.
24. Use the following data to find the direct labor rate variance.

Direct labor standard (4.0 hrs.@ $ 7/hr.)	$28 per finished unit
Actual hours worked per unit	3.5 hours
Actual units produced	4,900 units
Actual rate per hour	7.25 per hour

	$4,288 favorable.
	$4,288 unfavorable.
	$17,150 favorable.
	$19,600 unfavorable.
	$19,600 favorable.

25. Which of the following is most likely to be considered a profit center?

	An individual retail store in a large chain.
	The grocery department of a Walmart Supercenter or Target Superstore.
	The maintenance department of a large retail operation.
	The personnel office of a business.
	A stand-alone eye clinic.

26. The most useful allocation basis for the departmental costs of an advertising campaign for a storewide sale is likely to be:

	Floor space of each department.
	Relative number of items each department had on sale.
	Number of customers to enter each department.
	An equal amount of cost for each department.
	Total sales of each department.
27. General Chemical produced 22,500 gallons of Greon and 45,000 gallons of Baron. Joint costs incurred in producing the two products totaled $15,000. At the split-off point, Greon has a market value of $6 per gallon and Baron $2 per gallon. What portion of the joint costs should be allocated to Greon if the basis is market value at point of separation?

	$6,000
	$3,000
	$9,000
	$10,000
	$5,000

28. Capital budgeting decisions are generally based on:

	Tentative predictions of future outcomes.
	Perfect predictions of future outcomes.
	Results from past outcomes only.
	Results from current outcomes only.
	Speculation of interest rates and economic performance only.

29. The break-even time (BET) method is a variation of the:

	Payback method.
	Internal rate of return method.
	Accounting rate of return method.
	Net present value method.
	Present value method
30. Marsden manufactures a cat food product called Special Export. Marsden currently has 23,000 bags of Special Export on hand. The variable production costs per bag are $1.9 and total fixed costs are $23,000. The cat food can be sold as it is for $9.1 per bag or be processed further into Prime Cat Food and Feline Surprise at an additional $3,900 cost. The additional processing will yield 23,000 bags of Prime Cat Food and 5,850 bags of Feline Surprise, which can be sold for $8.1 and $6.1 per bag, respectively.

The net advantage (incremental income) of processing Special Export further into Prime and Feline Surprise would be:

	$221,985
	$3,900
	$12,685
	$218,085
	$8,785

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