Acc 329 Exam I Fall 2010

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Multiple Choice

1. The person MOST likely to use management accounting information is a(n):
A. banker evaluating a credit application
B. Shareholder evaluating a stock investment
C. Governmental taxing authority
D. Assembly department supervisor

2. Management accounting
A. focuses on estimating future revenues, costs, and other measures to forecast activities and their results. B. provides information about the company as a whole. C. reports information that has occurred in the past that is verifiable and reliable. D. provides information that is generally available only on a quarterly or annual basis.

3. Within the relevant range, if there is a change in the level of the cost driver then A. fixed and variable costs per unit will change.
B. fixed and variable costs per unit will remain the same. C. fixed costs per unit will remain the same and variable costs per unit will change. D. fixed costs per unit will change and variable costs per unit will remain the same.

4. The strategy MOST likely to reduce the breakeven point would be to A. increase both the fixed costs and the contribution margin. B. decrease both the fixed costs and the contribution margin. C. decrease the fixed costs and increase the contribution margin. D. increase the fixed costs and decrease the contribution margin.

5. Southwestern College is planning to hold a fundraising banquet at one of the local country clubs. It has two options for the banquet:

OPTION 1:Crestview Country Club
a.Fixed rental cost of $1,000.
b.$12 per person for food.

OPTION 2:Tallgrass Country Club
a.Fixed rental cost of $3,000.
b.$8 per person for food.

Southwestern College has budgeted $1,800 for administrative and marketing expenses. It plans to hire a band, which will cost another $800. Tickets are expected to be $30 per person. Local business supporters will donate any other items required for the event.

Which option has the lowest breakeven point?
A. Option one
B. Option two
C. Both options have the same breakeven point.
D. This cannot be determined.

6. What is the appropriate journal entry if direct materials of $50,000 and indirect materials of $3,000 are sent to the manufacturing plant floor?

A. WIPControl50,000
Materials Control50,000

B.WIP Control53,000
Materials Control53,000

C.Manufacturing Overhead Control3,000
Materials Control50,000
WIP Control53,000

D.WIP Control50,000
Manufacturing Overhead Control3,000
Materials Control53,000

E.WIP Control50,000
Manufacturing Overhead Allocated3,000
Materials Control53,000
7. Before any end-of-the year adjustments, why might the manufacturing overhead control account not equal the manufacturing overhead allocated account?
A. Manufacturing overhead was over-allocated
B. Manufacturing overhead was under-allocated
C. The amount of the budgeted cost allocation base was different than the amount of the actual cost allocation base.
D. A and B are correct.
E. A, B, and C are correct.

8. Under variable costing, if a manager’s bonus is tied to operating income, then increasing inventory levels compared to last year would result in A. increasing the manager’s bonus.
B. decreasing the manager’s bonus.
C. not affecting the manager’s bonus.
D. eing unable to determine the manager’s bonus using only the above information.

9. Normal capacity utilization
A. represents real capacity available to the company. B. can result in setting selling prices that are not competitive. C. when used for product costing...
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