ACCT505 Managerial Accounting Midterm

Topics: Variable cost, Contribution margin, Costs Pages: 19 (1438 words) Published: September 22, 2013
 1.
Question :
(TCO A)  Wages paid to an assembly line worker in a factory are a

 
Student Answer:

Prime Cost YES.....Conversion Cost NO.
 

Prime Cost YES.....Conversion Cost YES.
 

Prime Cost NO....Conversion Cost NO.
 

Prime Cost NO.....Conversion Cost YES.
 
Instructor Explanation:
Chapter 2

 
Points Received:
6 of 6
 
Comments:

 2.
Question :
(TCO A)  A cost incurred in the past that is not relevant to any current decision is classified as a(n)

 
Student Answer:

period cost.
 

incremental cost.
 

opportunity cost.
 

None of the above
 
Instructor Explanation:
Chapter 2

 
Points Received:
6 of 6
 
Comments:

 3.
Question :
(TCO A)  Property taxes on a company's factory building would be classified as a(n)

 
Student Answer:

sunk cost.
 

opportunity cost.
 

period cost.
 

variable cost.
 

manufacturing cost.
 
Instructor Explanation:
Chapter 2

 
Points Received:
6 of 6
 
Comments:

 4.
Question :
(TCO A) Within the relevant range, variable costs can be expected to

 
Student Answer:

vary in total in direct proportion to changes in the activity level.        

remain constant in total as the activity level changes.
 

increase on a per-unit basis as the activity level increases.  

increase on a per-unit basis as the activity level decreases.  

None of the above
 
Instructor Explanation:
Chapter 5

 
Points Received:
6 of 6
 
Comments:

 5.
Question :
(TCO F)  Which of the following statements is true?
I. Overhead application may be made slowly as a job is worked on. II. Overhead application may be made in a single application at the time of completion of the job. III. Overhead application should be made to any job not completed at year end in order to properly value the work in process inventory.

 
Student Answer:

Only statement I is true.
 

Only statement II is true.
 

Both statements I and II are true.
 

Statements I, II, and III are all true.
 
Instructor Explanation:
Chapter 3

 
Points Received:
6 of 6
 
Comments:

 6.
Question :
(TCO F)  Under a job-order costing system, the product being manufactured

 
Student Answer:

is homogeneous.
 

passes from one manufacturing department to the next before being completed.   

can be custom manufactured.
 

has a unit cost that is easy to calculate by dividing total production costs by the units produced.  
Instructor Explanation:
Chapter 3

 
Points Received:
6 of 6
 
Comments:

 7.
Question :
(TCO F)  The FIFO method only provides a major advantage over the weighted-average method in that

 
Student Answer:

the calculation of equivalent units is less complex under the FIFO method.  

the FIFO method treats units in the beginning inventory as if they were started and completed during the current period.  

the FIFO method provides measurements of work done during the current period.  

the weighted-average method ignores units in the beginning and ending work-in-process inventories.  
Instructor Explanation:
Chapter 4

 
Points Received:
0 of 6
 
Comments:

 8.
Question :
(TCO B)  The contribution margin equals

 
Student Answer:

sales - expenses.
 

sales - cost of goods sold.
 

sales - variable costs.
 

sales - fixed costs.
 
Instructor Explanation:
Chapter 6

 
Points Received:
6 of 6
 
Comments:

 9.
Question :
(TCO B)  To obtain the break-even point in terms of dollar sales, total fixed expenses are divided by which of the following?

 
Student Answer:

Variable expense per unit
 

Variable expense per unit/Selling price per unit
 

Fixed expense per unit
 

(Selling price per unit - Variable expense per unit) /Selling price per unit.  ...
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