Which of the following must be known about the production process to institute a variable costing system?

One of the purposes of standard costs is to:

A. Simplify costing procedures and expedite reports.

The following information pertains to the August manufacturing activities of Griss Co.:

Theoretically, cash discounts permitted on purchased raw materials should be:

C. Deducted from inventory, whether taken or not.

The following information appeared in the accounting records of a retail store for the year ended Dec. 31:
Gross Margin is:

Glen company has the following data pertaining to the year ended Dec. 31:
How much is cost of goods sold?

Jage Co. has two products that use the same manufacturing facilities and cannot be subcontracted. Each product has sufficient orders to utilize the entire manufacturing capacity. For short-run profit maximization, Jago should manufacture the product with the:

D. Greater contribution margin per hour of manufacturing capacity. 

Which of the following is a term more descriptive of the type of cost accounting often called direct costing?

Which of the following must be known about a production process to institute a variable costing system?

A. The variable fixed components of all costs related to production.

What costs are treated as product costs under variable costing?

B. Only variable production costs.

Using the variable costing method, which of the following costs are assigned to inventory?

D. Variable selling and admin costs = No                
Var. o/h costs = yes

Cay Co.'s fixed manufacturing o/h costs for the current year totaled $100,000, and the variable selling costs totaled $80,000. Under variable costing, how should these costs be classified?

Under the variable costing concept unit product cost would most likely be increase by?

A. A decrease in the remaining useful life of factory machinery depreciated on the units of production method

Which costing method is properly classified as to its acceptability for both external and internal reporting:

A. Activity-based Costing.

A basic tenet of variable costing is that period costs should be currently expensed. What is the rationale behind this procedure?

D. Because period costs will occur whether or not production occurs, its improper to allocate these costs to production and defer a current cost of doing business

In an income statement perpared as an internal report using the variable costing method which of the following terms should appear?

D. Gross Profit (No) Operating Income (Yes)

In an income statement prepared as an internal report using the variable costing method variable selling and admin expenses are

D. Used in computation of the contribution margin

When using a variable costing system, the excess contribution margin (CM) discloses the excess of:

C. Revenues over variable costs

In an income statement prepared as an internal report using the variable costing method mixed factory OH would

B. Be used in the computation of operating income but not in the computation of the contribution margin

Dowell manufactures a wooden item. which of the following is included with the inventoriable cost under absorption costing and excluded from the inventoriable cost under variable costing?

B. Straight line depreciation on factory equipment

A non manufacturing org may use

C. Either job order or process costing

In job-order costing, the basic document to accumulate the cost of each order is the:

In a traditional job-order cost system, the issuance of supplies to a production department increases:

C. Factory overhead control.

In a job order costing system the use of direct materials perviously purchased usually is recorded as an increase in

A. Work in process control

In a job order cost system, direct labor costs usually are recorded initially as an increase in:

D. Work-in-process control

In a job-order cost system, the application of factory overhead is usually reflected in the general ledger as an increase in:

A direct labor overtime premium should be charged to a specific job when the overtime is caused by the:

B. Customer's requirements for early completion of the job.

Under a job-order system of cost accounting, the dollar amount of the general ledger entry involved in the transfer of inventory from work-in-process to finished goods is the sum of the costs charged to all jobs:

D. Completed during the period.

In job order costing, payroll taxes paid by the employer for factory are usually accounting for as:

In a job order cost system, factory (manufacturing) overhead is:

Application rates for factory overhead best reflect anticipated fluctuations in sales over a cycle of years when they are computed under the concept of:

Accounting for factory overhead costs involves averaging in:

Cox Company found that the difference in product costs resulting from the application of predetermined overhead rates rather than actual overhead rates:

A. Overhead was composed chiefly of variable costs

A job-order cost system uses a predetermined factory overhead rate based on expected volume and expected fixed cost. At the end of the year, underapplied overhead might be explained by which of the following situations?

C. Less than expected   Greater than expected

A true process costing system could make use of each of the following except:

Which of the following characteristics applies to process costing but not to job-order costing?

B. Equivalent units of production (EUP)

An equivalent unit of the direct materials or conversion cost is equal to:

A. The amount of direct materials or conversion cost necessary to start a unit of production in work-in-process.

An error was made in the computation of the percentage of completion of the current years ending work in process inventory....Consequently the following were misstated....What were the effects of theeror?

A. Understate Overstate Overstate

In the computation of manufacturing costs per equivalent unit, the weighted average method of process costing considers:

B. Current costs plus cost of beginning WIP inventory

In a developing factory overhead application rate for use in a tradition process costing system, which of the following could be used in the numerator and denominator:

D. Estimated factory overhead/ Estimated machine hours

In a process costing system, the application of factory overhead is recorded as an increase in:

B. Work-in-process inventory control.

The completion of goods is recorded as a decrease in work-in-process control when using:

In a production cost report using process costing, transferred-in costs are similar to:

A. Direct Materials added at a point during the process.

What are transferred in costs in a process costing system?

B. Costs of the output of a previous internal process that is subsequently used in a succeeding internal process

In a profess costing system how is the unity cost affected in a production cost report when direct materials are added in a department subsequent to the first department and the added materials result in additional units?

B. The first department's unit cost is decreased which necessitates an adjustment of the transferred in cost

1. Purchased direct materials are added in the second department of a three-department process. This addition increases the number of units produced in the second department and will

a.Always change the direct labor cost percentage in the ending WIP inventory

1. Purchased direct materials are added in the second department of a three-department process. This addition does not increase the number of units produced in the second department and will

d.Increase total unit cost

14.In process 2, material G is added when a batch is 60% complete. Ending WIP units, which are 50% complete, would be included in the computation for equivalent units for

a.Conversion costs = yesmaterial G = no

15.Kew Co. had 3,000 units in work-in-process at April 1 that were 60% complete as to conversion cost. During April, 10,000 units were completed. At April 30, the 4,000 units in work-in-process were 40% complete as to conversion cost. Direct materials are added at the beginning of the process. How many units were started during April?

1.A basic assumption of activity based costing is that

b.products or services require the performance of activities, and activities consume resources

1. Which of the following is true about activity-based costing?

d.It can be used with either process or job costing

3.In an activity-based costing system, what should be used to assign a department's manufacturing overhead costs to products produced in varying lot sizes?

b.Multiple cause-and-effect relationships

Which of the following statements best describes cost allocation?

c.A company's total income will remain unchanged no matter how indirect costs are allocated

2.Parat college allocates support department costs to its individual schools use the step method.... What is amount of May support department costs allocated to the school of education

3.If a company obtains two salable products from the refining of one ore, the refining process should be accounted for as a(n)

4.Which of hte following components of production are allocable as joint costs when a single manufacturing process produces several salable products?

a.Direct materials, direct labor, and overhead

1. One hundred pounds of raw material W is processed into 60 pounds of X and 40 pounds of Y. Joint costs are $135. X is sold for 2.50 per pound, and Y can be sold for 3.00 per pound or processed further into 30 pounds of Z (10 pounds are lost in the second process) at an additional cost of $60. Each pound of Z can then be sold for $6.00. What is the effect on profits of further processing product Y into product Z?

6.Which of the following is(are) often subject to further processing in order to be salable?

d.By-products = yes  scrap = no

7.For purposes of allocating joint costs to joint products, the sales price at point of sale, reduced cost to compete after split-off, is assumed to be equal to the

d.Net sales value at split-off

1. For the purpose of allocating joint costs to joint products. the relative sales-value method could be used in which of the following situations?

9.The method of accounting for joint product costs that will produce the same gross profit rate for all products is the

a.relative sales-value method

10.Actual sales values at the split-off point for joint products Y and Z are not known. For purposes of allocating joint costs to products Y and Z, the relative sales-value method is used. Costs beyond split-off increase for product Z, while those of product Y remain constant. If the selling prices of finished products Y and Z remain constant, the percentage of the total joint costs allocated to product Y and Z will

1. Increase for Y and decrease for Z

1. Lowe Company manufactures A and B from joint process. Sales value at split off was $700,000 for 10,000 units of A AND $300,000 for 15,000 units of B. uSing the sales value at split off approach, joint costs properly allocated to A were 140,000. Total joint costs were

1. THE DIAGRAM BELOW REPRESENTS the product and sales relationships of joint products P and Q.

1.A standard cost system may be used in 

b.either job order costing or process costing

1. When a manager is concerned with monitoring total cost, total revenue, and net profit conditioned ipon the level of productivity, an accountant should normally recommend

1. Which of the following is a purpose of standard costing?

1. Companies in what type of industry may use a standard cost system for cost control?

5.When standard costs are used in a process costing system, how, if at all, are equivalent units of production (EUP) involved or used in the cost report at standard?

c. The actual equivalent units are multiplied by the standard cost per unit

6.Standard costing will produce the same income before extraordinary items as actual costing when standard cost variances are assigned to

c.Cost of goods sold and inventories

7.The budget for a given cost during a given period was $80,000. The actual cost for the period is 72,000. Considering these facts, the plant manager has done a better-than-expected job in controlling the cost if

b.The cost is variable and actual production equaled budgeted production

8.List below are four names for different kinds of standards associated with a standard cost system. Which one describes the labor costs that should be incurred under efficient operating conditions?

9.In a standard cost system, the materials price variance is obtained by multiplying the

b.Actual QUANTIY used by the difference between standard price and actual price

10.The standard direct materials cost to produce a unit of Lem is 4 meters of material at $2.50 per meter. During may, 4,200 meters of materials costing $10,080 were used to produce 1,000 units of Lem. What was the materials price variance for May?

11.If a company follows a practice of isolating variances as soon as possible, the appropriate time to isolate and recognize a direct materials price variance is when

b.materials are purchased

12.If the materials flexible budget variance for a given operation is favorable, why must this variance be further evaluated as to price and usage?

d.Determining price and usage variances allows management to evaluate the efficiency of the purchasing and production functions

13.Which department is customarily held responsible for an unfavorable materials usage variance?

14.At the end of its fiscal year, Graham Co. had several substantial variances from standard variable manufacturing costs. The one that should be allocated between inventories and costs of sales is the one attributable to

d.Increased labor rates won by the union as a result of strike.

15.The standard unit cost is used in the calculation of which of the following variances?

16.A debit balance in the direct labor efficiency variance account indicates that

b.Actual hours exceed standard hours

17.Which of the following unfavorable variances is directly affected by the relative position of a production process on a learning curve?

18.Excess direct labor wages resulting from overtime premium will be disclosed in which type of variance?

19.On the diagram below, the line OW represents the standard labor cost at any output volume expressed in direct labor hours. Point S indicates the actual output at standard cost, and Point A INDICATES the actual hours and actual cost to produce S. Which of the following are favorable or unfavorable?

20.Which of the following is the msot proabable reason a company would experience an unfavorable labor rate variance and a favorable labor efficiency variance?

a.the mix of workers assigned to the particular job was heavily weighted towards the use of higher-paid, experienced workers

21.How is labor rate variance computed?

c. The difference between standard and actual rates times actual hours

22.The difference between the actual labor rate multiplied by the actual hours worked and the standard labor rate multiplied by the standard labor hour is the

23.Yola Co. manufactures one product with a standard direct labor cost of 4 hours at $12 per hour. During June, 1000 units were produced using 4100 hours at $12.20 per hour. The unfavorable DL efficiency variance was

24.Info on hanley's direct labor costs for the month of january is as follows:

25.Tub Co. uses a standard cost system. The following information pertains to direct labor for product B for the month of October

1.  The economic order quantity formula assumes that:

a.Periodic demand for the good is unknown.

2.Bell Co. changed from a traditional manufacturing philosophy to a just-in-time philosophy. What are the expected effects of this change on Bell’s inventory turnover and inventory as a percentage of total asses reported on Bell’s balance sheet?

3.Which changes in costs are most conducive to switching from a traditional inventory ordering system to a just-in-time ordering system?

4.In Belk Co.’s just-in-time production system, costs per setup were reduced from $28 to $2. In the process of reducing inventory levels, Belk found that there were fixed facility and administrative costs that previously had not been included in the carrying cost calculation. The result was an increase from $8 to $32 per unit per year. What were the effects of these changes on Belk’s economic lost size and relevant costs?

5.Key Co. changed from a traditional manufacturing operation with a job-order costing system to a just-in-time operation with a backflush costing system. What is(are) the expected effect(s) of these changes on Key’s inspection costs and recording detail of costs tracked to jobs in process?

Which of the following must be known about a production process to institute a variable costing system?

What costs are treated as product cost under variable costing?

Which of the following statements is correct regarding the difference between the absorption costing and variable costing?

When using variable costing system the contribution margin discloses the excess of?