1. A factor that causes or leads to a change in a cost or activity is a Cost Driver.
2. Accumulating costs means that costs must be measured and tracked.
3. An advantage of the high low method is that it is objective.
4. An advantage of the scattergraph method is that it is descriptive of nonlinear data.
5. An effective managerial accounting system should track information about an organizations activity in which of the following areas? Development, Marketing, Production and Design.
6. An important assumption of cost-volume-profit analysis is that both costs and revenues are linear functions, all cost and revenue relationships are analyzed within the relevant range, there is no change in inventories and the sales mix remains constant.
7. Applied Overhead is an important part of normal costing.
8. Bobby Dee's is an owner operated company that details automobiles. Bobby Dee's is which of the following? Service Firm.
9. Break-even revenue for the multiple-product firm can be calculated by dividing total fixed cost by the overall contribution margin ratio.
10. If a company's total fixed cost decreases by $10,000, which of the following will be true? The variable cost ratio will be unchanged.
11. If the margin of safety is 0, then the company is precisely breaking even.
12. If the variable cost per unit goes down, Contribution Margin does what? Increases. Break-Even Point does what? Decreases.
13. In a normal costing system, the cost of a job includes actual direct materials, actual direct labor, and estimated (applied) overhead.
14. In terms of strategic positioning, which two general strategies may be chosen by a company? Cost leadership and product differentiation.
15. Kellogg's makes a variety of breakfast cereal. Kellogg's is which of the following? Manufacturing.
16. Product (or manufacturing) costs consist of prime costs and manufacturing overhead.
17. Setting objectives and identifying methods to achieve those objectives is called planning.
18. Solemon Company has total fixed cost of $15,000, variable cost per unit is 6%, and a price of $8. If Solemon wants to earn a targeted profit of $3,600, how many units must be sold? 9,300.
19. Stone Inc. is a company that purchases goods from overseas and resells them to gift shops in the United States. Stone Inc. is which of the following? Wholesaler.
20. Target is which of the following? Retailer (only sells, doesn't make anything).
21. The amount of revenue required to earn a targeted profit is equal to total fixed cost plus targeted profit divided by contribution margin ratio.
22. The chief accounting officer for a firm is the Controller.
23. The contribution margin is the difference between sales and the total variable cost.
24. The costs of a job are accounted for on the job-order cost sheet.
25. The ending balance of which of the following accounts is calculated by summing the totals of the open (unfinished) job-order cost sheets? Work In Process.
26. The job-order cost sheet is a subsidiary account to Work In Process.
27. The overhead variance is overapplied if actual overhead is less than applied overhead.
28. The predetermined overhead rate equals estimated overhead divided by estimated activity level for a period.
29. The process of choosing among competitive alternatives is called decision making.
30. The total cost for monthly supervisory cost in a factory is $4,500 regardless of how many hours the supervisor works or the quantity of output achieved. This cost is strictly fixed.
31. The use of fixed costs to extract higher percentage changes in profits as sales activity changes involves operating leverage.
32. What is managerial accounting? The provision of accounting information for a company's internal users.
33. What is not a common form of certification for managerial accountants? certificate in external auditing.
34. What is typically found in a corporation's code of ethics? Compliance with the rule of law, Integrity, Honesty and Competence.
35. When a job is completed, the total cost of the job is added to the finished goods account.
36. When materials are requisitioned for use in production in a job-order costing firm, the cost of materials is added to the work-in-process account.
37. Which of the following is a characteristic of managerial accounting? There is an internal focus, subjective information may be used, there is an emphasis on the future and it is broad based and multidisciplinary.
38. Which of the following is a period expense? CEO Salary.
39. Which of the following is an indirect cost? The cost of restriping a parking lot at a perfume factory.
40. Which of the following is typically a job-order costing firm? Large regional medical center.
41. Which of the following is typically a process-costing firm? Paint Manufacturer.
42. Which of the following would be a fixed cost in an automobile insurance company? The salary of customer service representatives.
43. Which of the following would probably be a variable cost in a soda bottling plant? Bottles.
44. Wilson Company has a predetermined overhead rate of $5 per direct labor hour. The job-order cost sheet for Job 145 shows 500 direct labor hours costing $10,000 and materials requisitions totaling $17,500. Job 145 had 1,000 units completed and transferred to Finished Goods. What is the cost per unit for Job 145? $30.
2. Accumulating costs means that costs must be measured and tracked.
3. An advantage of the high low method is that it is objective.
4. An advantage of the scattergraph method is that it is descriptive of nonlinear data.
5. An effective managerial accounting system should track information about an organizations activity in which of the following areas? Development, Marketing, Production and Design.
6. An important assumption of cost-volume-profit analysis is that both costs and revenues are linear functions, all cost and revenue relationships are analyzed within the relevant range, there is no change in inventories and the sales mix remains constant.
7. Applied Overhead is an important part of normal costing.
8. Bobby Dee's is an owner operated company that details automobiles. Bobby Dee's is which of the following? Service Firm.
9. Break-even revenue for the multiple-product firm can be calculated by dividing total fixed cost by the overall contribution margin ratio.
10. If a company's total fixed cost decreases by $10,000, which of the following will be true? The variable cost ratio will be unchanged.
11. If the margin of safety is 0, then the company is precisely breaking even.
12. If the variable cost per unit goes down, Contribution Margin does what? Increases. Break-Even Point does what? Decreases.
13. In a normal costing system, the cost of a job includes actual direct materials, actual direct labor, and estimated (applied) overhead.
14. In terms of strategic positioning, which two general strategies may be chosen by a company? Cost leadership and product differentiation.
15. Kellogg's makes a variety of breakfast cereal. Kellogg's is which of the following? Manufacturing.
16. Product (or manufacturing) costs consist of prime costs and manufacturing overhead.
17. Setting objectives and identifying methods to achieve those objectives is called planning.
18. Solemon Company has total fixed cost of $15,000, variable cost per unit is 6%, and a price of $8. If Solemon wants to earn a targeted profit of $3,600, how many units must be sold? 9,300.
19. Stone Inc. is a company that purchases goods from overseas and resells them to gift shops in the United States. Stone Inc. is which of the following? Wholesaler.
20. Target is which of the following? Retailer (only sells, doesn't make anything).
21. The amount of revenue required to earn a targeted profit is equal to total fixed cost plus targeted profit divided by contribution margin ratio.
22. The chief accounting officer for a firm is the Controller.
23. The contribution margin is the difference between sales and the total variable cost.
24. The costs of a job are accounted for on the job-order cost sheet.
25. The ending balance of which of the following accounts is calculated by summing the totals of the open (unfinished) job-order cost sheets? Work In Process.
26. The job-order cost sheet is a subsidiary account to Work In Process.
27. The overhead variance is overapplied if actual overhead is less than applied overhead.
28. The predetermined overhead rate equals estimated overhead divided by estimated activity level for a period.
29. The process of choosing among competitive alternatives is called decision making.
30. The total cost for monthly supervisory cost in a factory is $4,500 regardless of how many hours the supervisor works or the quantity of output achieved. This cost is strictly fixed.
31. The use of fixed costs to extract higher percentage changes in profits as sales activity changes involves operating leverage.
32. What is managerial accounting? The provision of accounting information for a company's internal users.
33. What is not a common form of certification for managerial accountants? certificate in external auditing.
34. What is typically found in a corporation's code of ethics? Compliance with the rule of law, Integrity, Honesty and Competence.
35. When a job is completed, the total cost of the job is added to the finished goods account.
36. When materials are requisitioned for use in production in a job-order costing firm, the cost of materials is added to the work-in-process account.
37. Which of the following is a characteristic of managerial accounting? There is an internal focus, subjective information may be used, there is an emphasis on the future and it is broad based and multidisciplinary.
38. Which of the following is a period expense? CEO Salary.
39. Which of the following is an indirect cost? The cost of restriping a parking lot at a perfume factory.
40. Which of the following is typically a job-order costing firm? Large regional medical center.
41. Which of the following is typically a process-costing firm? Paint Manufacturer.
42. Which of the following would be a fixed cost in an automobile insurance company? The salary of customer service representatives.
43. Which of the following would probably be a variable cost in a soda bottling plant? Bottles.
44. Wilson Company has a predetermined overhead rate of $5 per direct labor hour. The job-order cost sheet for Job 145 shows 500 direct labor hours costing $10,000 and materials requisitions totaling $17,500. Job 145 had 1,000 units completed and transferred to Finished Goods. What is the cost per unit for Job 145? $30.
