Accounting Loves You!

25 Questions | Total Attempts: 255

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Accounting Loves You!

Created for Anoush! This quiz has 15 questions. Select an answer, if you don't know it, take a guess! Each question is worth 1. 5 marks.


Questions and Answers
  • 1. 
    A clothing manufacturer incurred the following factory maintenance costs: 2,100 units produced with maintenance cost of $61,500, and 750 units produced with maintenance cost of $41,250. How much of the maintenance cost is made up of fixed cost?
    • A. 

      $11,181

    • B. 

      $20,125

    • C. 

      $30,000

    • D. 

      $50,319

  • 2. 
    Costs that can be significantly influenced by a particular manager are:
    • A. 

      Product costs.

    • B. 

      Period costs.

    • C. 

      Controllable costs.

    • D. 

      Administrative costs.

  • 3. 
    Generally, joint costs are not relevant in decision making after split-off because:
    • A. 

      They do not help increase the sales.

    • B. 

      They increase the sales margin only marginally.

    • C. 

      They do not change regardless of any decision.

    • D. 

      Joint costs reflect opportunity costs.

  • 4. 
    Hamilton, which uses a process-costing system, had a balance in its Work-in-Process account of $68,000 on January 1. The account was charged with direct materials, direct labor, and manufacturing overhead of $450,000 throughout the year. If a review of the accounting records determined that $86,000 of goods were still in production at year-end, Hamilton should make a journal entry on December 31 that includes:
    • A. 

      A debit to Cost of Goods Sold for $432,000.

    • B. 

      A credit to Finished-Goods Inventory for $432,000.

    • C. 

      A credit to Work-in-Process Inventory for $432,000.

    • D. 

      A credit to Work-in-Process Inventory for $86,000.

  • 5. 
    Idle time is:
    • A. 

      Frequently an avoidable cost.

    • B. 

      Classified as overhead.

    • C. 

      Caused by events such as equipment breakdown and new set-ups of production runs.

    • D. 

      All of the given answers

  • 6. 
    If a management accountant is trying to decide whether a cost is relevant to a decision, he or she should consider the cost relevant if:
    • A. 

      It is a historical cost precise in nature.

    • B. 

      It is a historical cost that is the same among all alternatives.

    • C. 

      It is an expected future cost that is the same for each alternative.

    • D. 

      It is an expected future cost that is different for each alternative.

  • 7. 
    In linear programming, a constraint represents:
    • A. 

      the objective function.

    • B. 

      The contribution margin per unit.

    • C. 

      The limitations faced by the firm.

    • D. 

      the break-even level of activity.

  • 8. 
    In linear programming, the objective function is typically based on:
    • A. 

      The selling price of the products.

    • B. 

      the variable cost of the products

    • C. 

      The full cost of the products.

    • D. 

      The contribution margin of the products.

  • 9. 
    Java Joe's operates a chain of coffee shops. The company pays rent of $12,000 per year for each shop. Supplies (napkins, bags and condiments) are purchased as needed. The manager of each shop is paid a salary of $2,000 per month, and all other employees are paid on an hourly basis. Java Joe’s cost is which kind of cost?
    • A. 

      Fixed cost

    • B. 

      Variable cost

    • C. 

      Semi-variable cost

    • D. 

      Step-Fixed cost

  • 10. 
    Linear programming is useful:
    • A. 

      When there is only one product.

    • B. 

      When there are many products.

    • C. 

      Only when an activity-based costing system is in use.

    • D. 

      When there is only one constraint.

  • 11. 
    Manufacturers sometimes sell products at less than full price for a special order. The analysis of such decisions focuses on:
    • A. 

      Relevant benefits.

    • B. 

      both relevant benefits and relevant costs.

    • C. 

      Fixed cost.

    • D. 

      Relevant costs.

  • 12. 
    Media, Inc., an advertising agency, applies overhead to jobs on the basis of direct professional labor hours. Overhead was estimated to be $150,000, direct professional labor hours were estimated to be 15,000, and direct professional labor cost was projected to be $225,000. During the year, Media incurred actual overhead costs of $146,000, actual direct professional labor hours of 14,500, and actual direct labor cost of $222,000. By year-end, the firm's overhead was:
    • A. 

      $1,000 underapplied.

    • B. 

      $1,000 overapplied.

    • C. 

      $4,000 underapplied.

    • D. 

      $5,000 overapplied.

  • 13. 
    Morrison, Inc., which uses a process-cost accounting system, passes completed production from Department A to Department B for further manufacturing. The journal entry to record completed production in Department A requires:
    • A. 

      A debit to Work-in-Process Inventory and a credit to Finished-Goods Inventory.

    • B. 

      A debit to Finished-Goods Inventory and a credit to Work-in-Process Inventory.

    • C. 

      A debit to Finished-Goods Inventory and a credit to Work-in-Process Inventory: Department A.

    • D. 

      D. a debit to Work-in-Process Inventory: Department B and a credit to Work-in-Process Inventory: Department A.

  • 14. 
    Opportunity cost is best defined as:
    • A. 

      The amount of money that is paid for something.

    • B. 

      The amount of money that is paid for something, considering inflation.

    • C. 

      The highest valued benefit given up in making a choice.

    • D. 

      All of the benefits that are given up in making a choice.

  • 15. 
    Oregon Manufacturing incurred $106,000 of direct labor and $11,000 of indirect labor. The proper journal entry to record these events would include a debit to Work in Process for:
    • A. 

      $0 because Work in Process should be credited.

    • B. 

      $0 because Work in Process is not affected

    • C. 

      $117,000.

    • D. 

      $106,000.

  • 16. 
    Technical Engineering presently leases a copying machine on a monthly basis. The lease agreement requires a fixed fee each month in addition to a charge per copy. Technical Engineering made 2 400 copies and paid a total of $162 in rent in September and in October they paid $195 for 3 500 copies. Determine Technical’s monthly fixed fee.
    • A. 

      $138

    • B. 

      $ 90

    • C. 

      $ 66

    • D. 

      $ 55

  • 17. 
    The benefits of management accounting information include:
    • A. 

      Improved decisions.

    • B. 

      More effective planning.

    • C. 

      Greater efficiency of operations.

    • D. 

      All of the given answers

  • 18. 
    The book value of an asset such as equipment is an example of:
    • A. 

      A future cost.

    • B. 

      A differential cost.

    • C. 

      An opportunity cost.

    • D. 

      A sunk cost.

  • 19. 
    Unless overtime and idle time are caused by a particular job, they are treated as:
    • A. 

      A part of direct labour expense.

    • B. 

      A part of manufacturing overhead.

    • C. 

      Associated with a particular product.

    • D. 

      A part of manufacturing overhead AND associated with a particular product.

  • 20. 
    Which of the following is not an advantage of the variable cost pricing formula?
    • A. 

      Variable cost analysis is consistent with cost volume profit analysis.

    • B. 

      Variable cost data does not require the allocation of common fixed costs to individual product lines.

    • C. 

      Variable costs help managers understand the profit implications of changes in price.

    • D. 

      It is cost effective to use because it is required for external reporting.

  • 21. 
     Nellibell's Café bakes croissants that are sold to local restaurants and grocery stores in the Columbia, South Carolina area. When 600 croissants are baked, the average cost is $0.70. When 720 croissants are baked, the average cost is $0.65. What is the total cost when 670 croissants are baked?
    • A. 

      $568.

    • B. 

      $588.

    • C. 

      $448.

    • D. 

      $532.

  • 22. 
     Process costing would be used in all of the following industries except: A. petroleum refining
    • A. 

      Petroleum refining.

    • B. 

      Truck tire manufacturing.

    • C. 

      Wood pulp production.

    • D. 

      Automobile repair.

  • 23. 
     Select the correct statement regarding fixed costs.
    • A. 

      Because they do not change, fixed costs should be ignored in decision making.

    • B. 

      The fixed cost per unit increases when volume increases

    • C. 

      The fixed cost per unit decreases when volume increases.

    • D. 

      The fixed cost per unit does not change when volume decreases.

  • 24. 
    For a firm that currently makes particular component, which of the following are qualitative factors that would be considered following a quantitative analysis in favour of buying?
    • A. 

      Buying increases uncertainty, in particular with respect to timely availability of the component

    • B. 

      Buying surrenders control over the product design and quality

    • C. 

      Employee morale would be affected if a decision to buy means dismissing staff

    • D. 

      All the above

  • 25. 
    What term is used to describe factors in a decision problem that cannot be expressed effectively in numerical terms?
    • A. 

      Qualitative

    • B. 

      Quantitative

    • C. 

      Sensitive

    • D. 

      Uncertain

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