Expert Answer:Cost Accounting Test Questions Help

  

Solved by verified expert:10 questions for the cost accounting test..Budgetary slack is created when:1.When the difference between actual and budgeted amounts are accidental2. When the difference between actual and budgeted amounts are the result of deliberately introduced bias in the budgetary process.3.When the difference between actual and budgeted amounts are based on unforeseen events.4.When the difference between actual and budgeted amounts are the result of management’s inability to be clairvoyant.Direct materials combined with Direct Labor is referred to as1.conversion cost2.variable cost3.prime cost4.fixed costOperating budgets and financial budgets:1.combined form the master budget2.are prepared before the master budget3.are prepared after the master budget4.have nothing to do with the master budgetA cost system determines the cost of a cost object by:1.accumulating and then assigning costs2.accumulating costs3.assigning and then accumulating costs4.assigning costsCrimson Services, Inc., employs 8 individuals. They are all paid $16.50 per hour. How would total costs of personnel be classified?1.variable cost2.mixed cost3.irrelevant cost4.fixed costThe account analysis method estimates cost functions ________.1.by classifying cost accounts as variable, fixed, or mixed based on qualitative analysis2.using time-and-motion studies3.at a high cost, which renders it seldom used4.in a manner that cannot be usefully combined with any other cost estimation methodsThe fundamental cost objects of ABC are ________.1.activities2.cost drivers3.products4.servicesExtreme Manufacturing Company provides the following ABC costing information:Activities Total CostsActivity-cost driversAccount inquiry $390,000 13,000 hoursAccount billing $275,000 5,000,000 linesAccount verification accounts $130,500 60,000 accountsCorrespondence letters $22,000 4,000 lettersTotal costs $817,500The above activities are used by Departments A and B as follows:Department ADepartment BAccount inquiry hours 2,500 hours 4,000 hoursAccount billing lines 800,000 lines 650,000 linesAccount verification accounts 9,000 accounts 7,000 accountsCorrespondence letters 2,000 letters 2,400 lettersHow much of correspondence costs will be assigned to Department A?1.$22,0002.$49,5003.$11,0004.11,242A variance is ________.1.the difference between actual fixed cost per unit and standard variable cost per unit2.the standard units of inputs for one output3.the difference between an actual result and a budgeted performance4.the difference between actual variable cost per unit and standard fixed cost per unitWhich of the following costs is inventoried when using variable costing?1.rent on factory building2.electricity consumed in manufacturing process3.sales commission paid on each sale4.advertising costs incurred for the productBudgeted production equals ________.1.beginning finished goods inventory + budgeted unit sales – targeted ending finished goods inventory2.targeted ending finished goods inventory + beginning finished goods inventory – budgeted unit sales3.budgeted unit sales + targeted ending finished goods inventory – beginning finished goods inventory4.budgeted unit sales + targeted ending finished goods inventory + beginning finished goods inventoryCost structure1.refers to the relative proportion of fixed versus variable costs that a company incurs.2.generally has little impact on profitability.3.cannot be significantly changed by companies.4.refers to the relative proportion of operating versus nonoperating costs that a company incurs.
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.Budgetary slack is created when:
When the difference between actual and budgeted amounts are accidental
1.
When the difference between actual and budgeted amounts are the result of deliberately
introduced bias in the budgetary process.
2.
When the difference between actual and budgeted amounts are based on unforeseen
events.
3.
4.
When the difference between actual and budgeted amounts are the result of management’s
inability to be clairvoyant.
Direct materials combined with Direct Labor is referred to as
1
.
2
.
3
.
4
.
conversion cost
variable cost
prime cost
fixed cost
Operating budgets and financial budgets:
1.
combined form the master
budget
are prepared before the
master budget
2.
are prepared after the
master budget
3.
have nothing to do with the
4.
master budget
A cost system determines the cost of a cost object by:
1
.
accumulating and then
assigning costs
2
accumulating costs
.
3
assigning and then
.
accumulating costs
4
assigning costs
.
Crimson Services, Inc., employs 8 individuals. They are all paid $16.50 per hour. How would
total costs of personnel be classified?
1
.
2
.
3
variable cost
mixed cost
irrelevant cost
.
4
fixed cost
.
The account analysis method estimates cost functions ________.
1. by classifying cost accounts as variable, fixed, or mixed based on qualitative analysis
2.
using time-and-motion studies
at a high cost, which renders it seldom used
3.
in a manner that cannot be usefully combined with any
4.
other cost estimation methods
The fundamental cost objects of ABC are ________.
1
activities
.
2
cost drivers
.
3
products
.
4
.
services
Extreme Manufacturing Company provides the following ABC costing information:
Activities
Total Costs
Account inquiry
$390,000
Account billing
$275,000
Account verification accounts
Correspondence letters
$130,500
$22,000
Activity-cost drivers
13,000 hours
5,000,000 lines
60,000 accounts
4,000 letters
Total costs
$817,500
The above activities are used by Departments A and B as follows:
Department A
Department B
Account inquiry hours
2,500 hours
4,000 hours
Account billing lines
800,000 lines
650,000 lines
9,000 accounts
7,000 accounts
2,000 letters
2,400 letters
Account verification accounts
Correspondence letters
How much of correspondence costs will be assigned to Department A?
$22,00
10
.
$49,50
20
.
$11,00
30
.
4
.
11,242
A variance is ________.
the difference between actual fixed cost per unit and standard variable cost per
1.
unit
the standard units of inputs for one output
2.
the difference between an actual result and a budgeted performance
3.
the difference between actual variable cost per unit and standard fixed cost per
4.
unit
Which of the following costs is inventoried when using variable
costing?
1. rent on factory building
electricity consumed in manufacturing
process
2.
sales commission paid on each sale
3.
4. advertising costs incurred for the product
.
Budgeted production equals ________.
.
beginning finished goods inventory + budgeted unit sales – targeted ending finished goods
1.
inventory
targeted ending finished goods inventory + beginning finished goods inventory – budgeted
2.
unit sales
budgeted unit sales + targeted ending finished goods inventory – beginning finished goods
inventory
3.
budgeted unit sales + targeted ending finished goods inventory + beginning finished goods
4.
inventory
.
.
Cost structure
.
1. refers to the relative proportion of fixed versus variable costs that a company incurs.
2. generally has little impact on profitability.
3. cannot be significantly changed by companies.
4.
.
refers to the relative proportion of operating versus nonoperating costs that a company
incurs.

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