Test Content

Question 35

Question 351 Point

Question 35

When interpreting a CVP graph which of the following is NOT correct?(1 mark)

Option A

The anticipated profit or loss at any given level of sales is measured by the vertical distance between the total revenue line and the total expense line.

Option B

The total revenue line starts at the origin.

Option C

The breakeven point is where the total revenue line meets the fixed cost line.

Option D

When sales are below the breakeven intersection the company incurs a loss.

Question 34

Question 344 Points

Question 34

Activities in the Challenger Company's Assembly Department for the month of March follow: (4 marks)

	Percent Completed
	Number of Units	Materials	Conversion
Work in process inventory, March 1	5,000	65%	30%
Started into production during March	65,000
Work in process inventory, March 31	3,000	35%	25%

Using the weighted-average method, what are the equivalent units of production for materials for March?

Option A

67,000 units.

Option B

65,000 units.

Option C

68,050 units.

Option D

70,000 units.

Question 33

Question 333 Points

Question 33

Kanuck Company applies overhead to completed jobs on the basis of $0.70 per machine hour. If Job 501 shows $28,000 of manufacturing overhead applied, how many machine hours were used for the job? (2 marks)

Option A

40,000.

Option B

19,600.

Option C

30,000.

Option D

28,000.

Question 32

Question 323 Points

Question 32

At the beginning of the current year CR Company estimated the following costs: (3 marks)

Direct materials	$4,000
Direct labour	20,000
Rent on factory building	15,000
Sales salaries	25,000
Depreciation on factory equipment	8,000
Indirect labour	10,000
Production supervisor's salary	12,000

CR Company estimated 20,000 labour hours to be worked during the year. Actual labour hours worked were 22,000 hours. If overhead is applied on the basis of direct labour hours, what will be the overhead applied for the year?

Option A

$75,900.

Option B

$55,000.

Option C

$103,400.

Option D

$49,500.

Question 31

Question 313 Points

Question 31

Gargymal Company would like to estimate the variable and fixed components of its electrical costs and has compiled the following data for the last five months of operations: (3 marks)

	Machine Hours	Electrical Cost
August	1,000	$1,620
September	900	1,510
October	1,500	1,870
November	2,000	1,950
December	1,300	1,730

Using the high-low method, the estimated fixed cost per month for electricity is closest to which of the following?

Option A

$870.00.

Option B

$1,306.50.

Option C

$1,150.00.

Option D

$1,290.00.

Question 30

Question 301 Point

Question 30

Which of the following statements is true if a company applies overhead to jobs on the basis of a predetermined overhead rate and reports a credit balance in the Manufacturing Overhead account at the end of any period? (1 mark)

Option A

More overhead cost has been incurred during the period than has been charged to jobs.

Option B

The amount of overhead cost charged to jobs is greater than the estimated cost for the period.

Option C

The amount of overhead cost charged to jobs is less than the estimated overhead cost for the period.

Option D

More overhead cost has been charged to jobs than has been incurred during the period.

Question 29

Question 291 Point

Question 29

Which of the following is true about process costing? (1 mark)

Option A

The department production report is the key document showing the accumulation and disposition of costs by a department.

Option B

Unit costs are computed by job on the job cost sheet

Option C

Costs are accumulated by individual job, regardless of the accounting period during which the work is done.

Option D

All units of product are different.

Question 28

Question 281 Point

Question 28

Which of the following statements referring to a production report is not correct? (1 mark)

Option A

The total "Costs to be accounted for" must equal the total cost of the units completed and transferred out, plus the cost of the ending work-in-process inventory.

Option B

The quantity schedule deals with physical units, not whole units.

Option C

The equivalent units in the ending work-in-process inventory will be different if the weighted-average method is used than it will be if the FIFO method is used.

Option D

The total of the "Units to be accounted for" will equal the total of the "Units accounted for."

Question 27

Question 272 Points

Question 27

Overland, Inc., uses the weighted-average method in its process costing system. The company's work-in-process inventory on April 30 consists of 25,000 units. The units in the ending inventory are 100% complete with respect to materials and 75% complete with respect to conversion costs. If the cost per equivalent unit is $3.00 for materials and $5.50 for conversion costs, what is the total cost in the April 30 work-in-process inventory? (2 marks)

Option A

$159,375.

Option B

$109,375.

Option C

$178,125.

Option D

$212,500

Question 26

Question 262 Points

Question 26

Fletcher Company has three products with the following characteristics: (2 marks)

	Product A	Product B	Product C
Monthly sales in dollars	$60,000	$80,000	$100,000
Contribution margin ratio	20%	40%	16%

Assume sales next year total $240,000; product A $70,000, product B $90,000 and C $80,000. Total Contribution Margin for Fletcher will be closest to:

Option A

$60,000.

Option B

$62,800.

Option C

$32,800.

Option D

$30,000.

Question 25

Question 254 Points

Question 25

Oxyrom Company uses the FIFO method in its process costing system. Operating data for the Brazing Department for the month of November appear below: (4 marks)

	Units	Percentage complete
Beginning work in process inventory	3,800	20%
Transferred in from the prior department during November	46,700
Completed and transferred to the next department during November	43,200
Ending work in process inventory	7,300	80%

What were the equivalent units of production for conversion costs in the Brazing Department for November?

Option A

50,200 units.

Option B

48,280 units.

Option C

43,200 units.

Option D

49,040 units.

Question 24

Question 242 Points

Question 24

Given the cost formula Y = $15,000 + $5X, what is the total cost at an activity level of 8,000 units? (2 marks)

Option A

$55,000.

Option B

$40,000.

Option C

$23,000.

Option D

$15,000.

Question 23

Question 232 Points

Question 23

The beginning balance of the raw materials inventory account for May was $27,500. The ending balance for May was $28,750, and $128,900 of raw materials were used during the month. What was the cost of the materials purchased during the month? (2 marks)

Option A

$131,300.

Option B

$157,650.

Option C

$130,150.

Option D

$127,650.

Question 22

Question 224 Points

Question 22

Information about units processed and processing costs incurred during a recent month in the Refining Department of a manufacturing company follow: (4 marks)

	Number of Units	Conversion costs percentage complete
Beginning work in process inventory	11,000	35%
Units started into production	120,000	-
Units completed and transferred out	114,000	-
Ending work in process inventory	17,000	30%

The beginning work-in-process inventory included $11,000 of conversion cost. During the month, the Refining Department incurred an additional $290,000 in conversion costs.

Assuming that the company uses the FIFO method, what is the cost per equivalent unit for conversion costs for the month in the refining Department, rounded to the nearest cent?

Option A

$2.59.

Option B

$2.44.

Option C

$2.52.

Option D

$2.54.

Question 21

Question 212 Points

Question 21

Fletcher Company has three products with the following characteristics: (2 marks)

	Product A	Product B	Product C
Monthly sales in dollars	$60,000	$80,000	$100,000
Contribution margin ratio	20%	40%	16%

Fixed Costs = $30,000 per month.

What is the overall (Total) contribution margin ratio for the company as a whole, rounded to the nearest tenth of a percent?

Option A

25.3%.

Option B

25.0%.

Option C

28.5%.

Option D

75.0%.

Question 20

Question 201 Point

Question 20

Which of the following best describes the function of managerial accounting within an organization?(1 mark)

Option A

It focuses on the organization as a whole, rather than on the organization's segments.

Option B

It places more emphasis on precision of data than financial accounting does.

Option C

It has its primary emphasis on the future.

Option D

It is required by regulatory bodies such as the Ontario Securities Commission.

Question 19

Question 192 Points

Question 19

During the year, Paul Company used a predetermined overhead rate of $3.50 per direct labour hour, based on an estimate of 22,000 direct labour hours to be worked during the year. Actual overhead cost and activity during the year were: (2 marks)

Actual manufacturing overhead cost incurred	$90,000
Actual direct labour hours worked	25,000

What was the under- or overapplied overhead for the year?

Option A

$10,500 overapplied.

Option B

$13,000 underapplied.

Option C

$2,500 overapplied.

Option D

$2,500 underapplied.

Question 18

Question 184 Points

Question 18

Foss Florist specializes in large floral bouquets for hotels and other commercial spaces. The company has provided the following data concerning its annual overhead costs and its activity-based costing system:

Overhead costs:
Wages and salaries	$70,000
Other expenses	40,000
Total	$110,000

Distribution of Resource Consumption:

	Activity Cost Pools
	Making Bouquets	Delivery	Other	Total
Wages and salaries	55%	35%	10%	100%
Other expenses	45%	25%	30%	100%

The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs. The amount of activity for the year is as follows:

Activity Cost Pool	Activity
Making bouquets	20,000 bouquets
Delivery	7,000 deliveries

What would be the total overhead cost per bouquet according to the activity-based costing system, rounded to the nearest whole cent? In other words, what would be the overall activity rate for the Making Bouquets activity cost pool?

Option A

$2.75.

Option B

$3.03.

Option C

$2.83.

Option D

$2.48.

Question 17

Question 173 Points

Question 17

Madsen Company uses the weighted-average method in its process costing system. During October, the Mixing Department transferred out 40,000 units. The October 31 work-in-process inventory in the Mixing Department consisted of 4,000 equivalent units of material and 5,000 equivalent units of labour and overhead. The cost per equivalent unit was $2.50 for materials and $6.25 for labour and overhead. (2 marks)

What was the total cost of the October 31 work-in-process inventory?

Option A

$41,250.

Option B

$35,000.

Option C

$43,750.

Option D

$78,750.

Question 16

Question 163 Points

Question 16

The following data (in thousands of dollars) have been taken from the accounting records of Karling Corporation for the year just ended. (3 marks)

Sales	$990
Raw materials inventory, beginning	$40
Raw materials inventory, ending	$70
Purchases of raw materials	$120
Direct labour	$200
Manufacturing overhead	$230
Administrative expenses	$150
Selling expenses	$140
Work-in-process inventory, beginning	$70
Work-in-process inventory, ending	$50
Finished goods inventory, beginning	$120
Finished goods inventory, ending	$160

What was the cost of goods manufactured (finished) for the year (in thousands of dollars)?

Option A

$500.

Option B

$540.

Option C

$590.

Option D

$570.

Question 15

Question 153 Points

Question 15

At an activity level of 10,000 units, total variable costs were $35,000 while total fixed costs were $20,800. If 16,000 units are produced, and this activity is within the relevant range, which of the following statements is correct?(2 marks)

Option A

Total costs would equal $89,280.

Option B

Total unit cost would equal $4.80.

Option C

Fixed cost per unit would equal $5.58.

Option D

Total costs would equal $55,800.

Question 14

Question 144 Points

Question 14

Paxton Company uses the weighted-average method in its process costing system. The Moulding Department is the second department in its production process. The data below summarize the department's operations in January:

	Units	Percentage complete
Beginning work in process inventory	2,700	80%
Transferred in from the prior department during January	57,000
Completed and transferred to the next department during January	50,300
Ending work in process inventory	9,400	20%

The accounting records indicate that the conversion cost that had been assigned to beginning work-in-process inventory was $10,973, and a total of $268,107 in conversion costs were incurred in the department during January.

What was the cost per equivalent unit for conversion costs for January in the Moulding Department? (Round off to three decimal places.) (4 marks)

Option A

$4.704.

Option B

$5.080.

Option C

$5.348.

Option D

$4.038.

Question 13

Question 134 Points

Question 13

Dideda Company uses an activity-based costing system with three activity cost pools. The company has provided the following data concerning its costs and its activity-based costing system: (3 marks)

Costs:
Manufacturing overhead	$360,000
	240,000
Total	$600,000

Distribution of Resource Consumption:

	Activity Cost Pools
	Order Size	Customer Support	Other	Total
Manufacturing overhead	25%	65%	10%	100%
Selling and administrative expenses	60%	20%	20%	100%

The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs. You have been asked to complete the first-stage allocation of costs to the activity cost pools.

How much cost, in total, would be allocated in the first-stage allocation to the Order Size activity cost pool?

Option A

$150,000.

Option B

$234,000.

Option C

$255,000.

Option D

$360,000.

Question 12

Question 122 Points

Question 12

Dowan Company uses a predetermined overhead rate based on direct labour hours to apply manufacturing overhead to jobs. During the year, Dowan Company incurred $156,600 in actual manufacturing overhead cost. The Manufacturing Overhead account showed that overhead was underapplied by $12,600 for the year. If the predetermined overhead rate is $6.00 per direct labour-hour, how many hours did the company work during the year?

Option A

28,200 hours.

Option B

24,000 hours.

Option C

26,000 hours.

Option D

25,000 hours.

Question 11

Question 113 Points

Question 11

The following is last month's contribution format income statement:

Sales (15,000 units)	$1,500,000
Less: variable expenses	900,000
Contribution margin	600,000
Less: fixed expenses	500,000
Operating income	$100,000

What is the company's margin of safety in dollars?

Option A

$600,000.

Option B

$100,000.

Option C

$1,500,000.

Option D

$250,000.

Question 10

Question 101 Point

Question 10

Which of the following is an example of a cost that is variable with respect to the number of units produced and sold? (1 mark)

Option A

Insurance on the headquarters building.

Option B

Supervisory salaries.

Option C

Power to run production equipment.

Option D

Amortization of factory facilities.

Question 9

Question 91 Point

Question 9

What are committed fixed costs? (1mark)

Option A

They have a long-term planning horizon, generally encompassing several years.

Option B

They can be reduced in the short run with minimal damage to the long-run organizational objectives

Option C

They vary directly and proportionately with the level of activity.

Option D

They are made up of plant, equipment, and basic organizational costs.

Question 8

Question 83 Points

Question 8

Hurst Co. manufactures and sells a single product. Price and cost data regarding this product are as follows: (3 marks)

Selling price	$40 per unit
Variable manufacturing cost	$20 per unit
Variable selling & administrative expenses	$6 per unit
Fixed manufacturing overhead	$208,000 per year
Fixed selling & administrative expenses	$324,000 per year

What is the break-even point in units per year?

Option A

38,000 units.

Option B

40,000 units.

Option C

26,600 units.

Option D

15,200 units.

Question 7

Question 72 Points

Question 7

Paxton Corp has provided the following data concerning its operations last month: (2 marks)

Sales	$400,000
Variable expenses	$250,000
Fixed expenses	$100,000

Paxton Corp is a retailing organization.

What is the contribution margin ratio? (2 marks)

Option A

37.5%.

Option B

33.0%.

Option C

25.0%.

Option D

12.5%.

Question 6

Question 62 Points

Question 6

Paxton Corp has provided the following data concerning its operations last month: (2 marks)

Sales	$400,000
Variable expenses	$250,000
Fixed expenses	$100,000

Paxton Corp is a retailing organization.

What is the degree of operating leverage?

Option A

3.

Option B

5.

Option C

0.33.

Option D

8.

Question 5

Question 52 Points

Question 5

Bergeron Inc. reported the following data for last year: (2 marks)

Work-in-process inventory, beginning	$100
Work-in-process inventory, ending	$150
Finished goods inventory, beginning	$180
Finished goods inventory, ending	$200
Direct labour cost	$300
Direct materials cost	$500
Manufacturing overhead cost	$400

Which of the following is the prime cost?

Option A

$1,200.

Option B

$900.

Option C

$800.

Option D

$700.

Question 4

Question 42 Points

Question 4

Porter Company has provided the following data for the second quarter of the most recent year: (2 marks)

Sales	$300,000
Fixed Manufacturing Overhead	55,000
Direct Labour	72,500
Fixed Selling Expenses	46,250
Variable Manufacturing Overhead	41,000
Variable Administrative Expenses	48,000
Direct Materials	51,500
Fixed Administrative Expenses	44,500
Variable Selling Expenses	49,750

Assume that direct labour is a variable cost and that there were no beginning or ending inventories.

What was the total contribution margin of Porter Company for the second quarter?

Option A

$37,250.

Option B

$176,000.

Option C

$211,000.

Option D

$87,000.

Question 3

Question 33 Points

Question 3

Lucy Sportswear manufactures a specialty line of T-shirts. The company uses a job-order costing system. During March, the following costs were incurred on Job ICU2: (2 marks)

Direct materials:	$13,700
Direct labour:	$4,800

In addition, selling and shipping costs of $7,000 were incurred on the job. Manufacturing overhead was applied at the rate of $25 per machine hour, and Job ICU2 required 800 machine hours. If Job ICU2 consisted of 7,000 shirts, what was the Cost of Goods Sold per shirt?(3 marks)

Option A

$5.70.

Option B

$6.00.

Option C

$5.50.

Option D

$6.50.

Question 2

Question 22 Points

Question 2

Manufacturing overhead is overapplied for the year by $3,000. The unadjusted cost of goods sold is $360,000. Closing manufacturing overhead into cost of goods sold will result in which of the following? (1 mark)

Option A

Adjusted cost of goods sold of $357,000.

Option B

A credit balance in manufacturing overhead of $6,000.

Option C

Adjusted cost of goods sold of $360,000.

Option D

Adjusted cost of goods sold of $363,000.

Question 1

Question 11 Point

Question 1

Which of the following would be classified as a product-level activity? (1 mark)

Option A

Advertising a product.

Option B

Cafeteria facilities available to and used by all employees.

Option C

Machine setup for a batch of a standard product.

Option D

Human resource management.