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Accounting Exam 4

57 Questions
Accounting Quizzes & Trivia

Accounting

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  • 1. 
    The cost of a manufactured product generally consists of which of the following costs?
    • A. 

      Direct materials cost and factory overhead cost

    • B. 

      Direct labor cost and factory overhead cost

    • C. 

      Direct labor cost, direct materials cost, and factory overhead cost

  • 2. 
    Which of the following costs are referred to as conversion costs?
    • A. 

      Direct labor cost and factory overhead cost

    • B. 

      Direct materials cost and direct labor cost

    • C. 

      Factory overhead cost

  • 3. 
    What term is used to refer to the cost of changing direct materials into a finished manufactured product
    • A. 

      Factory overhead cost

    • B. 

      Period cost

    • C. 

      Conversion cost

  • 4. 
    Which of the following is considered a part of factory overhead cost?
    • A. 

      Sales commissions

    • B. 

      Depreciation of factory buildings

    • C. 

      Deprectation of office equipment

  • 5. 
    Which of the following manufacturing cos is an indirect cost of producing a product?
    • A. 

      Oil lubricants used for factory machinery

    • B. 

      Commissions for sales personnel

    • C. 

      Hourly wages of an assembly worker

  • 6. 
    Which 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 genral accounting systems

  • 7. 
    Which of the following costs are NOT included in finished goods inventory? 
    • A. 

      Direct labor

    • B. 

      Factory overhead

    • C. 

      Company president's salary

  • 8. 
    • A. 

      Transferred to work in progress

    • B. 

      Transferred to cost of goods sold

    • C. 

      Transferred to finished goods

  • 9. 
    Each account in the cost ledger is called a?
    • A. 

      Finished good sheet

    • B. 

      Stock record

    • C. 

      Job cost sheet

  • 10. 
    What was the balance of work i process as of april 30? 
    • A. 

      8,100

    • B. 

      22,900

    • C. 

      29,900

  • 11. 
    If the amount of factory overhead cost incurred exceeds the amount applied, the factory overhead account will have a
    • A. 

      Debit balance and be underapplied

    • B. 

      Debit balance and be oberabsorbed

    • C. 

      Credit balance and be overapplied

  • 12. 
    The recording of the jobs completed would include a credit to
    • A. 

      Factory overhead

    • B. 

      Finished goods

    • C. 

      Work in process

  • 13. 
    The recording of the jobs shipped and customers billed would include a credit to
    • A. 

      Accounts payable

    • B. 

      Cash

    • C. 

      Finished goods

  • 14. 
    The finished goods account is the controlling account for the
    • A. 

      Materials ledger

    • B. 

      Work in process ledger

    • C. 

      Stock ledger

  • 15. 
    In contribution margin analysis, the quantity factor is computed as
    • A. 

      The difference between actual unit price or unit cost and the planned unit price or cost, multiplied by the planned quantity sold

    • B. 

      The difference between actual unit price or unit cost and the planned unit price or cost, multiplied by the actual quantity sold

    • C. 

      The difference between the actual quantity sold and the planned quantity sold, multiplied by the planned unit sales price or unit cost

  • 16. 
    • A. 

      5,000

    • B. 

      9,600

    • C. 

      5,600

  • 17. 
    If variable selling and administrative expenses totaled $120,000 for the year (80,000 units at $1.50 each) and the planned variable selling and administrative expenses totaled $120,900 (78,000 units at $1.55 each), the effect of the unit cost factor on the change in variable selling and administrative expenses is
    • A. 

      900 decrease

    • B. 

      4,000 decrease

    • C. 

      3,100 decrease

  • 18. 
    Under which inventory costing method could increases of decreases in income from operations be misinterpreted to be the result of operating efficiencies or inefficiencies
    • A. 

      Variable costing

    • B. 

      Absorption costing

    • C. 

      Incremental costing

  • 19. 
    The selling price of a product may be just above the variable costs and expenses of making and selling it in
    • A. 

      The long run

    • B. 

      The short run

    • C. 

      Both short run and long run

  • 20. 
    The relative distribution of sales among various products sold is referred to as the
    • A. 

      Joint product mix

    • B. 

      Profit mix

    • C. 

      Sales mix

  • 21. 
    The contribution margin ration is computed as
    • A. 

      Sales divided by contribution margin

    • B. 

      Contribution margin divided by sales

    • C. 

      Contribution margin divided by costs of sales

  • 22. 
    For a supervisor of a manufacturing department, which of the following costs are controllable?
    • A. 

      Direct materials

    • B. 

      Insurance of factory building

    • C. 

      Depreciation of factory building

  • 23. 
    In the variable costing income statement, deduction of variable selling and administrative expenses from manufacturing margin yields
    • A. 

      Differential margin

    • B. 

      Contribution margin

    • C. 

      Gross profit

  • 24. 
    • A. 

      64,000

    • B. 

      56,000

    • C. 

      66,400

  • 25. 
    A business operated at 100% of capacity during its first month and incurred the following costs:if 2,000 units remain unsold at the end of the month and sales total $300,000 for the month, what is the amount of income from operations reported on the variable costing income statement? (50)
    • A. 

      100,000

    • B. 

      114,800

    • C. 

      140,000

  • 26. 
    Which of the following would be included in the cost of a product manufactured according to variable costing?
    • A. 

      Property taxes on factory buildings

    • B. 

      Interest expense

    • C. 

      Direct materials

  • 27. 
    When job 711 was completed, direct materials totaled $4,000; direct labor, $4,600; and factory overhead. $2,400, respectively. Units produced totaled 1,000. Unit costs are:
    • A. 

      $11,000

    • B. 

      $110

    • C. 

      $11

  • 28. 
    Costs that are treated as assets until the product is sold are called:
    • A. 

      Product costs

    • B. 

      Conversion costs

    • C. 

      Selling expenses

  • 29. 
    For the manufacturing business, inventory which is in the process of being manufactured is referred to as:
    • A. 

      Finished goods inventory

    • B. 

      Work in process inventory

    • C. 

      Direct materials inventory

  • 30. 
    Which of the following would probably not be found in the accounting system of a service provider?
    • A. 

      Deferred revenue account

    • B. 

      Job cost sheets

    • C. 

      Finished jobs ledger

  • 31. 
    The direct labor and overhead costs of providing services to clients are accumulated in:
    • A. 

      Work in process

    • B. 

      Overhead

    • C. 

      Finished services expense

  • 32. 
    Which of the following activity bases would be the most appropriate for food costs of a hospital?
    • A. 

      Number of x-rays taken

    • B. 

      Number of patients who stay in the hospital

    • C. 

      Number of scheduled surgeries

  • 33. 
    Which of the following activity bases would be the most appropriate for gasoline costs of a delivery service, such as United Postal Service?
    • A. 

      Number of miles driven

    • B. 

      Number of trucks employed

    • C. 

      Number of packages delivered

  • 34. 
    Which of the following is NOT an example of a cost that varies in total as the number of units produced changes?
    • A. 

      Straight-line depreciation on factory equipment

    • B. 

      Wages of assembly worker

    • C. 

      Direct materials cost

  • 35. 
    Which of the following is NOT an example of a cost that varies in total as the number of units produced changes?
    • A. 

      Wages of assembly worker

    • B. 

      Insurance premiums on factory building

    • C. 

      Direct materials cost

  • 36. 
    A cost that has characteristics of both a variable cost and a fixed cost is called a:
    • A. 

      Sunk cost

    • B. 

      Mixed cost

    • C. 

      Discretionary cost

  • 37. 
    Which of the following costs is a mixed cost?
    • A. 

      Straight-line depreciation on factory equipment

    • B. 

      Electricity costs of $2 per kilowatt-hour

    • C. 

      Rental costs of $5,000 per month plus $.30 per mile per machine hour of use

  • 38. 
    In cost-volume profit analysis, all costs are are classified into the following two categories:
    • A. 

      Variable costs and fixed costs

    • B. 

      Mixed costs and variable costs

    • C. 

      Sunk costs and fixed costs

  • 39. 
    If fixed costs are $250,000, the unit selling price is $20, and the unit variable costs are $16, what is the break-even sales if fixed costs are reduced by $40,000?
    • A. 

      52,500 units

    • B. 

      64,500 units

    • C. 

      60,500 units

  • 40. 
    If fixed costs are $250,000, the unit selling price is $20, and the unit variable costs are $16, what is the break-even sales if fixed costs are increased by $40,000?
    • A. 

      60,500 units

    • B. 

      62,500 units

    • C. 

      72,500 units

  • 41. 
    If fixed costs are $450,000, the unit selling price is $75, and the unit variable costs are $50, what are the old and new break-even sales if the unit selling price increases by $5?
    • A. 

      9,000 units and 6,000 units

    • B. 

      18,000 units and 15,000 units

    • C. 

      9,000 units and 15,000 units

  • 42. 
    Scher Corporation sells product G for $150 per unit, the variable cost per unit is $105, the fixed costs are $720,000, and Scher is in the 25% corporate tax bracket. What are the sales required to earn a net income (after tax) of $40,000?
    • A. 

      $2,577,777

    • B. 

      $2,400,000

    • C. 

      $2,533,350

  • 43. 
    If fixed costs increased and variable costs per unit decreased, the break-even point would:
    • A. 

      Increase

    • B. 

      Decrease

    • C. 

      Increase, decrease, or remain the same, depending upon the amounts of increase in fixed cost and decrease in variable cost.

  • 44. 
    Which of the following conditions would cause the break-even point to decrease?
    • A. 

      Total fixed costs increase

    • B. 

      Unit variable cost decreases

    • C. 

      Unit variable cost increases

  • 45. 
    The point where the sales line and the total costs line intersect on the cost-volume profit chart represents:
    • A. 

      The break-even point

    • B. 

      The maximum possible operating income

    • C. 

      The total fixed costs

  • 46. 
    Assuming that last years fixed costs totaled $910,000, what was Phillips Co's break-even point in units?
    • A. 

      28,000 units

    • B. 

      35,000 units

    • C. 

      40,000 units

  • 47. 
    If a business had a capacity of $10,000,000 of sales, actual sales of $6,000,000, break-even sales of $4,500,000, fixed costs of $1,800,000, and variable costs of 60% of sales, what is the margin of safety expressed as a percentage of sales?
    • A. 

      25%

    • B. 

      15%

    • C. 

      33.3%

  • 48. 
    If a business had a margin of safety ratio of 20%, variable costs of 75% of sales, fixed costs of 240,000, a break-even point of 960,000, and operating income of 60,000 for the current year, what are the current years sales?
    • A. 

      $1,020,000

    • B. 

      $1,200,000

    • C. 

      $1,260,000

  • 49. 
    Cost-volume -profit analysis cannot be used if which of the following occurs?
    • A. 

      The total fixed costs change

    • B. 

      Per unit sales prices change

    • C. 

      Costs cannot be properly classified into fixed and variable costs

  • 50. 
    Under absorption costing, which of the following costs would not be included in finished goods inventory?
    • A. 

      Variable and fixed selling and administrative expenses

    • B. 

      Variable and fixed factory overhead cost

    • C. 

      Direct materials cost

  • 51. 
    Under variable costing, which of the following costs would not be included in finished goods inventory?
    • A. 

      Variable factory overhead cost

    • B. 

      Fixed factory overhead cost

    • C. 

      Direct labor cost

  • 52. 
    Which of the following would be included in the cost of a product manufactured according to absorption costing?
    • A. 

      Sales salaries

    • B. 

      Advertising expense

    • C. 

      Office supplies costs

  • 53. 
    Under variable costing, which of the following would be included in finished goods inventory?
    • A. 

      Straight-line depreciation on factory equipment

    • B. 

      Wages of carpenters in a furniture factory

    • C. 

      Advertising costs

  • 54. 
    Which of the following would be included in the cost of a product manufactured according to variable costing?
    • A. 

      Sales commissions

    • B. 

      Direct materials

    • C. 

      Interest expense

  • 55. 
    In contribution margin analysis, the increase or decrease in unit sales price or unit cost on the number of units sold is referred to as the:
    • A. 

      Cost of goods sold factor

    • B. 

      Unit price or unit cost factor

    • C. 

      Quantity factor

  • 56. 
    The amount of income under absorption costing will be more than the amount of income under variable costing when units manufactured:
    • A. 

      Are less than units sold

    • B. 

      Exceed units sold

    • C. 

      Equal units sold

  • 57. 
    On the variable costing income statement, the figure representing the difference between manufacturing margin and contribution margin is the:
    • A. 

      Fixed manufacturing costs

    • B. 

      Fixed selling and administrative expenses

    • C. 

      Variable selling and administrative expenses