A    60   follows a cycle of planning and control;                                                                                          is clearly explained by the organization chart;                                                                                   consists only of strategic planning;                                                                                              none of these                                                                                                                     The work of management:                                                                                                                                                                                                                                                                                                                                                                                         MANAGERIAL ACCOUNTING                             D         Check-Plan-Do-Act;                                                                                                                Do-Plan-Act-Check;                                                                                                                Act-Check-Do-Plan;                                                                                                                Plan-Do-Check-Act;                                                                                                                Total Quality Management follows a cycle of:                                                                                                                                                                                                                                                                                                                                                                    MANAGERIAL ACCOUNTING                             A         occupies a staff position;                                                                                                        occupies a line position;                                                                                                         has little influence in the decision-making process;                                                                              none of these                                                                                                                     The controller:                                                                                                                                                                                                                                                                                                                                                                                                 MANAGERIAL ACCOUNTING                             C         is governed by generally accepted accounting principles;                                                                          places more emphasis on precision of data than does financial accounting;                                                         draws heavily from other disciplines;                                                                                             is geared primarily to the past rather than to the future.                                                                        Managerial accounting:                                                                                                                                                                                                                                                                                                                                                                                          MANAGERIAL ACCOUNTING                             A         both rely on the same accounting information system;                                                                              both are mandatory;                                                                                                               both focus on providing data for internal uses;                                                                                   none of these.                                                                                                                    Financial and managerial accounting are similar in that:                                                                                                                                                                                                                                                                                                                                                        MANAGERIAL ACCOUNTING                             C         only by top management;                                                                                                           only by managers occupying staff positions;                                                                                       at the lowest managerial level possible in the organization;                                                                      none of these.                                                                                                                    In a decentralized organization decisions are made:                                                                                                                                                                                                                                                                                                                                                             MANAGERIAL ACCOUNTING                             B         decentralization of decision-making authority;                                                                                    obtaining feedback on how well the organization is moving toward its objectives;                                                  preparing an organization chart which shows both line and staff functions;                                                        none of these.                                                                                                                    In large part CONTROL in an organization is achieved through:                                                                                                                                                                                                                                                                                                                                                   MANAGERIAL ACCOUNTING                             D         banker;                                                                                                                           largest shareholder;                                                                                                              bondholders;                                                                                                                      vice president over manufacturing.                                                                                                The managerial accounting reports of a company would be of most interest and benefit to the company's:                                                                                                                                                                                                                                                                                                          MANAGERIAL ACCOUNTING                             D         sunk cost;                                                                                                                        differential cost;                                                                                                                differential cost;                                                                                                                opportunity cost.                                                                                                                 John Johnson decided to leave his former job where he earned $12 per hour to go to a new job where he will earn $13 per hour. In the decision process the former wage of $12 per hour would be classified as a(n):                                                                                                                                                                                              MANAGERIAL ACCOUNTING                             A         product cost;                                                                                                                     opportunity cost;                                                                                                                 period cost;                                                                                                                      prime cost.                                                                                                                       Property taxes on a company's factory building would be classified as a(n):                                                                                                                                                                                                                                                                                                                                     MANAGERIAL ACCOUNTING                             D         Product Cost = No;   Conversion Cost = Yes;                                                                                       Product Cost = Yes;  Conversion Cost = No;                                                                                        Product Cost = No;   Conversion Cost = No;                                                                                        Product Cost = Yes;  Conversion Cost = Yes.                                                                                       The salary paid to the maintenance supervisor in a manufacturing plant is a:                                                                                                                                                                                                                                                                                                                                    MANAGERIAL ACCOUNTING                             B         increase;                                                                                                                         remain unchanged;                                                                                                                 decrease;                                                                                                                         none of these.                                                                                                                    If the activity level increases one would expect the variable costs per unit to:                                                                                                                                                                                                                                                                                                                                MANAGERIAL ACCOUNTING                             A         indirect materials;                                                                                                               advertising;                                                                                                                      administrative salaries;                                                                                                          shipping costs.                                                                                                                   Which of the following costs would not be a period cost?                                                                                                                                                                                                                                                                                                                                                        MANAGERIAL ACCOUNTING                             D         cost of goods sold;                                                                                                               raw materials;                                                                                                                    period cost;                                                                                                                      cost of goods manufactured.                                                                                                       The term used to describe goods moving out of WORK IN PROCESS into FINISHED GOODS is:                                                                                                                                                                                                                                                                                                                           MANAGERIAL ACCOUNTING                             C         product cost;                                                                                                                     inventoriable cost;                                                                                                               period cost;                                                                                                                      cost of goods sold.                                                                                                               MANUFACTURING COST is synonymous with all of the following terms except:                                                                                                                                                                                                                                                                                                                                        MANAGERIAL ACCOUNTING                             B         to increase per unit of product;                                                                                                  to drop in total by 25 percent;                                                                                                   to remain constant in total;                                                                                                      to decrease per unit of product.                                                                                                  If the activity level drops by 25 percent, one would expect the variable costs;                                                                                                                                                                                                                                                                                                                                 MANAGERIAL ACCOUNTING                             A         cost of goods manufactured;                                                                                                       work in process;                                                                                                                  direct materials;                                                                                                                 manufacturing overhead.                                                                                                           Which of the following appears as one element in the computation of COST OF GOODS SOLD in a manufacturing company?                                                                                                                                                                                                                                                                                              MANAGERIAL ACCOUNTING                             D         indirect materials;                                                                                                               idle time;                                                                                                                        rent on factory space;                                                                                                            advertising.                                                                                                                      All of the following would be product costs EXCEPT:                                                                                                                                                                                                                                                                                                                                                             MANAGERIAL ACCOUNTING                             A         the utility expense incurred in the manufacturing process.                                                                        the commissions earned by corporate sales representatives;                                                                        the salary of the factory controller;                                                                                             the cost of temporary secretarial help for the sales manager.                                                                     For the production manager of a company all of the following costs would be considered noncontrollable EXCEPT:                                                                                                                                                                                                                                                                                                  MANAGERIAL ACCOUNTING                             B         direct labor cost;                                                                                                                administrative expense;                                                                                                           manufacturing overhead cost;                                                                                                      selling expense.                                                                                                                  The salary paid to the president of a company would be classified on the income statement as a(n):                                                                                                                                                                                                                                                                                                              MANAGERIAL ACCOUNTING                             B         underapplied by $10K;                                                                                                             overapplied by $ 2K;                                                                                                              underapplied by $ 8K;                                                                                                             overapplied by $10K.                                                                                                              For 2004 a company reported estimated overhead was 100K; actual overhead = $90K; and applied overhead = $92K. The company's overhead cost for the year would be:                                                                                                                                                                                                                                                MANAGERIAL ACCOUNTING                             D         the materials requisition form;                                                                                                   the Work in Process control account;                                                                                              the labor time ticket.                                                                                                            the job cost sheet;                                                                                                               In a job-order cost system, the basic document for accumulating costs by individual job is:                                                                                                                                                                                                                                                                                                                     MANAGERIAL ACCOUNTING                             C         Work in Process;                                                                                                                  Retained Earnings;                                                                                                                Cost of Goods Sold;                                                                                                               Finished Goods.                                                                                                                   The most common treatment of under- or over- applied overhead is to close it out to:                                                                                                                                                                                                                                                                                                                            MANAGERIAL ACCOUNTING                             B         overapplied = $3K;                                                                                                                underapplied = $2.1K;                                                                                                             underapplied = $3K;                                                                                                               overapplied = $5.1K.                                                                                                              Buggaboo Company bases its predetermined overhead rates on machine hours. Its estimates for 2004 were: overhead = $60K and machine hours = 40K. Actual operating data for 2004 were: overhead of $65.1K; and machine hours of 42K. Under- or overapplied overhead for the year would be:                                                                                                                        MANAGERIAL ACCOUNTING                             C         the Finished Goods inventory account;                                                                                             the Cost of Goods Sold account;                                                                                                   the job cost sheets of uncompleted jobs;                                                                                          the Manufacturing Overhead account.                                                                                               The Work in Process account is a control account supported by detailed cost information contained in:                                                                                                                                                                                                                                                                                                           MANAGERIAL ACCOUNTING                             C         $15K;                                                                                                                             $18K;                                                                                                                             $13K;                                                                                                                             $10K.                                                                                                                             On 1/1/04 a company's WORK IN PROCESS account had a balance of $18. During the year raw materials costing $40K were purchased, and raw materials costing $35K were placed into productions. Factory labor cost for the year totaled $70K; of which $60K was direct labor. The predetermined overhead rate for the year was set at 150% of direct labor cost. Actual overhead costs for the year totaled $92K. JoMANAGERIAL ACCOUNTING                             A         $ 2.0K;                                                                                                                           $ 4.0K;                                                                                                                           $ 1.6K;                                                                                                                           $ 2.2K.                                                                                                                           Marvel Company's Manufacturing Overhead account showed a $10K underapplied overhead balance on December 31. Other accounts showed the following on that date: Raw Materials = $ 50K; Work in Process = $ 40K; Finished Goods = $ 60K; Cost of Goods Sold = $100K. If the company allocates the underapplied overhead, the amount allocated to Work in Process would be:                                         MANAGERIAL ACCOUNTING                             D         Raw and In-Process Inventory;                                                                                                     Direct Labor Expense;                                                                                                             Finished Goods Inventory;                                                                                                         Manufacturing Overhead.                                                                                                           When first incurred; direct labor cost in a JIT system is generally debited to:                                                                                                                                                                                                                                                                                                                                 MANAGERIAL ACCOUNTING                             B         toy manufacturing;                                                                                                                shipbuilding;                                                                                                                     crude oil refining;                                                                                                               candy manufacturing.                                                                                                              The manufacturing operation that would be most likely to use a job-order costing system is:                                                                                                                                                                                                                                                                                                                     MANAGERIAL ACCOUNTING                             A         both job-order and process;                                                                                                       process but not job-order;                                                                                                        job-order but not process;                                                                                                        neither job-order or process.                                                                                                     In computing unit costs for products, an averaging process is used under which of the following costing method(s):                                                                                                                                                                                                                                                                                              MANAGERIAL ACCOUNTING                             A         a cell;                                                                                                                           an activity center;                                                                                                               a functional layout;                                                                                                              a flow line.                                                                                                                      A cluster of two or more machines at a single workstation is referred to as:                                                                                                                                                                                                                                                                                                                                    MANAGERIAL ACCOUNTING                             C         Queue time;                                                                                                                       Move time;                                                                                                                        Process time;                                                                                                                     Inspection time.                                                                                                                  Which of the following adds value to a product or service?                                                                                                                                                                                                                                                                                                                                                      MANAGERIAL ACCOUNTING                             D         unit-level activities;                                                                                                            batch-level activities;                                                                                                           product-level activities;                                                                                                         facility-level activities.                                                                                                        Which of the following levels of costs theoretically should NOT be added to products since doing so involves the use of volume-based measures?                                                                                                                                                                                                                                                                  MANAGERIAL ACCOUNTING                             C         product-level activities;                                                                                                         unit-level activities;                                                                                                            batch-level activities;                                                                                                           facility-level activities.                                                                                                        Product inspection is an example of an activity center at which of the following levels of activity in an entity?                                                                                                                                                                                                                                                                                               MANAGERIAL ACCOUNTING                             C         unit-level activities;                                                                                                            batch-level activities;                                                                                                           product-level activities;                                                                                                         facility-level activities.                                                                                                        Purchase order processing is an example of an activity center at which of the following levels of activity in an entity?                                                                                                                                                                                                                                                                                        MANAGERIAL ACCOUNTING                             A         unit-level activities;                                                                                                            batch-level activities;                                                                                                           product-level activities;                                                                                                         facility-level activities.                                                                                                        The machine-related activity of cutting is an example of an activity center at which of the following levels of activity in an entity?                                                                                                                                                                                                                                                                          MANAGERIAL ACCOUNTING                             D         unit-level activities;                                                                                                            batch-level activities;                                                                                                           product-level activities;                                                                                                         facility-level activities.                                                                                                        Personnel administration is an example of an activity center at which of the following levels of activity in an entity?                                                                                                                                                                                                                                                                                         MANAGERIAL ACCOUNTING                             C         a single company-wide pool;                                                                                                       department pools;                                                                                                                 pools created according to the number of cost drivers that can be identified;                                                     batches and allocated to products based on labor or materials costs.                                                              Under activity-based costing overhead costs are accumulated in:                                                                                                                                                                                                                                                                                                                                                 MANAGERIAL ACCOUNTING                             D         Machine setups for various products;                                                                                              Cafeteria facilities available to and used by all employees;                                                                      Personnel administration;                                                                                                         Products are tested in a testing center.                                                                                          Which of the following would be classified as a product-level activity?                                                                                                                                                                                                                                                                                                                                         MANAGERIAL ACCOUNTING                             B         Subassemblies are checked for defects;                                                                                            Materials are cut to proper size;                                                                                                 Completed units are tested to ensure that each functions properly;                                                                Subassemblies are transferred to the assembly department.                                                                         Which of the following would be classified as process time in a Process Value Analysis (PVA)?                                                                                                                                                                                                                                                                                                                   MANAGERIAL ACCOUNTING                             C         $12K;                                                                                                                             $ 6K;                                                                                                                             $10K;                                                                                                                             $ 4K.                                                                                                                             A Company's cost formula for maintenance is: Y = $4K + $3X (based on machine hours). During a period; 2K machine hours were worked. The expected cost for maintenance would be:                                                                                                                                                                                                                                 MANAGERIAL ACCOUNTING                             D         discretionary costs;                                                                                                              linear costs;                                                                                                                     variable costs;                                                                                                                   committed costs.                                                                                                                  The costs associated with a company's basic plant; equipment, and organization are known as:                                                                                                                                                                                                                                                                                                                    MANAGERIAL ACCOUNTING                             A         $ 80K;                                                                                                                            $ 30K;                                                                                                                            $240K;                                                                                                                            $200K.                                                                                                                            For 2004 a company's sales were $240K, its fixed costs were $50K; and its variable costs were $2 per unit. During the year 80K units were sold. The contribution margin for the year was:                                                                                                                                                                                                                       MANAGERIAL ACCOUNTING                             B         is curvilinear;                                                                                                                   is the best possible fit of a regression line to the data;                                                                        generally has a downward slope;                                                                                                   can be represented by the equation Y = ab + X                                                                                     The regression line derived by the least squares equation:                                                                                                                                                                                                                                                                                                                                                      MANAGERIAL ACCOUNTING                             C         depreciation on equipment;                                                                                                        rent on a factory building;                                                                                                       salaries of top management;                                                                                                       none of these.                                                                                                                    An example of a discretionary fixed cost would be:                                                                                                                                                                                                                                                                                                                                                              MANAGERIAL ACCOUNTING                             B         on a per unit basis;                                                                                                              on a total basis;                                                                                                                 on a contribution margin basis;                                                                                                   none of these.                                                                                                                    Fixed costs are most easily (and most safely) dealt with:                                                                                                                                                                                                                                                                                                                                                       MANAGERIAL ACCOUNTING                             D         14K units;                                                                                                                        22K units;                                                                                                                        8K units;                                                                                                                         10K units.                                                                                                                        Given the cost formula: Y = $70K + $4X, at what activity level will total cost equal $110K:                                                                                                                                                                                                                                                                                                                     MANAGERIAL ACCOUNTING                             A         $ 4.00K;                                                                                                                          $ 3.25K;                                                                                                                          $ 6.00K;                                                                                                                          $ 5.20K.                                                                                                                          An analysis of utility costs for a company shows that utility costs will be $0.40 per hour at an activity level of 9K machine hours and $0.25 per hour at an activity level of 18K machine hours. What will be the total utility costs at 13K machine hours?                                                                                                                                                    MANAGERIAL ACCOUNTING                             A         $ 7.5K plus $1.25 per machine hour;                                                                                               $ 7.5K plus $0.80 per machine hour;                                                                                               $11.0K plus $1.00 per machine hour;                                                                                               $25.0K plus $1.25 per machine hour.                                                                                               A company had the following data for last year and this year respectively: Machine hours incurred 14K and 18K; Maintenance cost incurred $25K and $30K. The cost formula for maintenance within the relevant range shown above would be:                                                                                                                                                                        MANAGERIAL ACCOUNTING                             C         Direct labor;                                                                                                                     Variable manufacturing overhead;                                                                                                  Fixed manufacturing overhead;                                                                                                     Direct materials.                                                                                                                 Which of the following production costs, if expressed on a per unit basis, would be expected to vary inversely with the production level?                                                                                                                                                                                                                                                                       MANAGERIAL ACCOUNTING                             D         $6.24K;                                                                                                                           $6.20K;                                                                                                                           $9.75K;                                                                                                                           $6.44K.                                                                                                                           A company shipped 6K tons of halibut for $5K in March and 9K tons for $7.4K in April. Shipping cost expected in May for shipping 7.8K tons would be:                                                                                                                                                                                                                                                            MANAGERIAL ACCOUNTING                             A         $ 80K;                                                                                                                            $120K;                                                                                                                            $ 40K;                                                                                                                            $ 60K.                                                                                                                            Product A has a selling price of $50 per unit and variable expenses of $30 per unit. If the company is past its break-even point and sales increase by $200K; one would expect net income to increase by:                                                                                                                                                                                                       MANAGERIAL ACCOUNTING                             B         the ratio of variable costs to sales;                                                                                             the CM ratio;                                                                                                                     total fixed costs;                                                                                                                the mix of less profitable products sold.                                                                                         The break-even point in a given situation would be decreased by an increase in:                                                                                                                                                                                                                                                                                                                                 MANAGERIAL ACCOUNTING                             A         to increase by an equal amount;                                                                                                   to decrease by an equal amount;                                                                                                   to increase by an amount equal to the differential fixed cost;                                                                    none of these.                                                                                                                    If the total contribution margin increases and fixed costs do not change, then net income can be expected:                                                                                                                                                                                                                                                                                                      MANAGERIAL ACCOUNTING                             B         increase;                                                                                                                         decrease;                                                                                                                         there will be no change in the break-even point;                                                                                  none of these.                                                                                                                    In multiple product firms, a shift in the sales mix from less profitable products to more profitable products will cause the company's break-even point to:                                                                                                                                                                                                                                                     MANAGERIAL ACCOUNTING                             C         the break-even point;                                                                                                             the CM ratio at various levels of sales activity;                                                                                 the relationship of volume, costs, and revenues over a range of activity;                                                         none of these.                                                                                                                    The most important use of the cost-volume-profit graph is to show:                                                                                                                                                                                                                                                                                                                                              MANAGERIAL ACCOUNTING                             A         $ 60K.                                                                                                                            $ 50K;                                                                                                                            $ 30K;                                                                                                                            $150K;                                                                                                                            The following figures are taken from a company's income statement:  Net Operating Income = $30K; Fixed costs = $70K; Sales = $200K; and CM ratio = 50 percent. The company's margin of safety in dollars is:                                                                                                                                                                                                    MANAGERIAL ACCOUNTING                             C         60%;                                                                                                                              75%;                                                                                                                              30%;                                                                                                                              25%.                                                                                                                              The following figures are taken from a company's income statement:  Net Operating income = $30K; Fixed costs = $70K; Sales = $200K; and CM ratio = 50 percent. The margin of safety in percentage form is:                                                                                                                                                                                                      MANAGERIAL ACCOUNTING                             D         $350K;                                                                                                                            $150K;                                                                                                                            $500K;                                                                                                                            $250K.                                                                                                                            Given the following data: selling price = $60, CM ratio = 50%, and fixed costs = $250K, the total variable expenses at the break-even point would be:                                                                                                                                                                                                                                                           MANAGERIAL ACCOUNTING                             C         manufacturing cost;                                                                                                               product cost;                                                                                                                     administrative cost;                                                                                                              selling expense.                                                                                                                  The corporate controller's salary would be considered a(n):                                                                                                                                                                                                                                                                                                                                                     MANAGERIAL ACCOUNTING                             D         Depreciation on a factory building;                                                                                               Salaries of factory workers;                                                                                                      Indirect labor in the factory;                                                                                                    Advertising expenses;                                                                                                             Which of the following would NOT be treated as a product cost for external financial reporting purposes?                                                                                                                                                                                                                                                                                                        MANAGERIAL ACCOUNTING                             B         costs may fluctuate;                                                                                                              a particular cost formula is valid;                                                                                               production may vary;                                                                                                              relevant costs are incurred.                                                                                                      The term 'relevant range' means the range over which:                                                                                                                                                                                                                                                                                                                                                           MANAGERIAL ACCOUNTING                             C         the accounting department;                                                                                                        top management;                                                                                                                   lower levels of management;                                                                                                       the budget committee.                                                                                                             Detailed budget data are generally prepared by:                                                                                                                                                                                                                                                                                                                                                                 MANAGERIAL ACCOUNTING                             B         direct materials budget;                                                                                                          sales budget;                                                                                                                     income statement;                                                                                                                 cash budget.                                                                                                                      Most other budgets are dependent in some way on the:                                                                                                                                                                                                                                                                                                                                                            MANAGERIAL ACCOUNTING                             A         borrow $32K;                                                                                                                      borrow $20K;                                                                                                                      borrow $ 8K;                                                                                                                      borrow $38K.                                                                                                                      If the beginning cash balance is $15K, the required ending cash balance is $12K, cash disbursements are $125K, and cash collections from customers are $90K, the company must:                                                                                                                                                                                                                                  MANAGERIAL ACCOUNTING                             B         32K units;                                                                                                                        44K units;                                                                                                                        36K units;                                                                                                                        40K units.                                                                                                                        A company has budgeted sales of 30K units in April, 40K units in May, and 60K units in June. The company has 6K units on hand on April 1. If the company requires an ending inventory equal to 20 percent of the following month's sales; production during May should equal:                                                                                                                                   MANAGERIAL ACCOUNTING                             A         105K pounds;                                                                                                                      19K pounds;                                                                                                                       87K pounds;                                                                                                                       97K pounds.                                                                                                                       A company has budgeted sales of 30K units in April, 40K units in May, and 60K units in June. The company has 6K units on hand on April 1. If the company requires an ending inventory equal to 20 percent of the following month's sales; each unit requires 3 lbs. of material X. Some 24K pounds of material X were on hand April 1st, and the company requires materials on hand at the end of each month equMANAGERIAL ACCOUNTING                             A         $60.5K;                                                                                                                           $62.0K;                                                                                                                           $57.0K;                                                                                                                           $61.5K.                                                                                                                           Actual sales for a company were: June = $30K, July = $50K, and August = $70K. Sales in September are expected to be $60K. If 30% of a month's sales are collected in the month of sale, 50% in the first month after sale, and 15% in the second month after sale then cash receipts for September are budgeted to be:                                                                                          MANAGERIAL ACCOUNTING                             D         cash budget;                                                                                                                      operating budget;                                                                                                                 zero-based budget;                                                                                                                capital budget.                                                                                                                   A planning horizon of 30 years or more is generally used in preparing a(n):                                                                                                                                                                                                                                                                                                                                     MANAGERIAL ACCOUNTING                             B         production budget;                                                                                                                budgeted balance sheet;                                                                                                           raw materials purchases budget;                                                                                                   schedule of cash disbursements.                                                                                                   The cash budget must be prepared before you can complete the:                                                                                                                                                                                                                                                                                                                                                   MANAGERIAL ACCOUNTING                             B         is the beginning point in the budget process;                                                                                     must provide for desired ending inventory as well as for production;                                                              is accompanied by a schedule of cash collections;                                                                                 is completed after the cash budget.                                                                                               The material purchase budget:                                                                                                                                                                                                                                                                                                                                                                                   MANAGERIAL ACCOUNTING                             C         production budget;                                                                                                                operating budget;                                                                                                                 sales budget;                                                                                                                     cash budget.                                                                                                                      The master budget process usually begins with the:                                                                                                                                                                                                                                                                                                                                                              MANAGERIAL ACCOUNTING                             C         It details the required direct labor hours;                                                                                       It details the required raw materials purchases;                                                                                  It is calculated based on the sales budget and the desired ending inventory;                                                      It summarizes the costs of producing units for the budget period.                                                                 There are various budgets within the master budget. One of these budgets is the production budget. Which of the following BEST describes the production budget?                                                                                                                                                                                                                                                 MANAGERIAL ACCOUNTING                             A         11,500;                                                                                                                           12,500;                                                                                                                           12,000;                                                                                                                           14,000;                                                                                                                           A Company plans to sell 12,000 units during the month of August. If the company has 2,500 units on hand at the start of the month, and plans to have 2,000 units on hand at the end of the month, how many units must be produced during the month?                                                                                                                                                             MANAGERIAL ACCOUNTING                             A         price variance;                                                                                                                   quantity variance;                                                                                                                efficiency variance;                                                                                                              none of the above.                                                                                                                The mutual price-quantity variance is usually recognized as part of the:                                                                                                                                                                                                                                                                                                                                        MANAGERIAL ACCOUNTING                             C         the materials are placed into production;                                                                                         goods are completed and transferred to finished goods;                                                                            the materials are purchased;                                                                                                      none of these.                                                                                                                    It is best to recognize the price variance for raw materials when:                                                                                                                                                                                                                                                                                                                                              MANAGERIAL ACCOUNTING                             B         the standard hours allowed;                                                                                                       the actual hours worked;                                                                                                          the budgeted hours allowed;                                                                                                       the volume adjusted hours.                                                                                                        The labor rate variance is determined by multiplying the difference between the actual labor rate and the standard labor rate by:                                                                                                                                                                                                                                                                               MANAGERIAL ACCOUNTING                             B         an unfavorable materials price variance;                                                                                          a favorable materials price variance;                                                                                             a favorable labor efficiency variance;                                                                                            none of these.                                                                                                                    If inferior-grade materials are purchased the result may be:                                                                                                                                                                                                                                                                                                                                                    MANAGERIAL ACCOUNTING                             A         14K hours;                                                                                                                        15K hours;                                                                                                                        24K hours;                                                                                                                        18K hours.                                                                                                                        During June a company produced 4K units of product.  The standard cost card indicates the following for labor costs (per unit): 3.5 hours @ $6 = 21.  During the month the company worked 15K hours. The standard hours allowed for the month were:                                                                                                                                                             MANAGERIAL ACCOUNTING                             B         rate variance;                                                                                                                    spending variance;                                                                                                                budget variance;                                                                                                                  none of these.                                                                                                                    The PRICE variance for variable overhead is called a:                                                                                                                                                                                                                                                                                                                                                           MANAGERIAL ACCOUNTING                             A         the actual is higher than the budget;                                                                                             the budget is higher than the actual;                                                                                             when the number on the left is higher than the number on the right;                                                               none of these;                                                                                                                    For an expense item an UNFAVORABLE variance occurs when:                                                                                                                                                                                                                                                                                                                                                        MANAGERIAL ACCOUNTING                             C         the actual is higher than the budget;                                                                                             the budget is higher than the actual;                                                                                             when the number on the right is higher than the number on the left;                                                               none of these;                                                                                                                    For an revenue item an UNFAVORABLE variance occurs when:                                                                                                                                                                                                                                                                                                                                                        MANAGERIAL ACCOUNTING                             D         more per hour, for labor, than it budgeted;                                                                                       none of these;                                                                                                                    more per hour, for labor, than standard allows;                                                                                   less per hour, for labor, than standard allows;                                                                                   When analyzing Direct Labor, if there is an favorable rate variance is means the company is paying:                                                                                                                                                                                                                                                                                                             MANAGERIAL ACCOUNTING                             A         $7.60;                                                                                                                            $8.40;                                                                                                                            $8.00;                                                                                                                            $2.50.                                                                                                                            A company employs a standard costing system. The following data are available for February:   I. Actual direct labor hours worked = 6.5K.   II. Standard direct labor rate = $8 per hour.   III. Labor rate variance = $2.6K favorable. The actual direct labor rate for February is:                                                                                                                           MANAGERIAL ACCOUNTING                             A         Only I is true.                                                                                                                   Only II is true.                                                                                                                  Both I and II are true.                                                                                                           Neither I nor II is true.                                                                                                         Which of the following is(are) true?      I.  Practical standards are generally viewed as having better motivational characteristics than ideal standards.     II. Ideal standards allow for machine breakdown time and other normal inefficiencies.                                                                                                                                                            MANAGERIAL ACCOUNTING                             B         the actual hours required to complete the output of the period;                                                                   the standard hours allowed to complete the output of the period;                                                                  the denominator hours chosen for the period;                                                                                      none of these.                                                                                                                    In a standard-cost system; overhead is applied to production on a basis of:                                                                                                                                                                                                                                                                                                                                     MANAGERIAL ACCOUNTING                             A         is geared to a range of activity;                                                                                                 excludes fixed costs;                                                                                                             is conceptually inferior to a static budget;                                                                                      none of these.                                                                                                                    A flexible budget:                                                                                                                                                                                                                                                                                                                                                                                              MANAGERIAL ACCOUNTING                             C         a favorable budget variance;                                                                                                      an unfavorable budget variance;                                                                                                   a favorable volume variance;                                                                                                      an unfavorable volume variance.                                                                                                   If the standard hours allowed for the output of a period exceed the denominator hours used in setting overhead rates; there will be:                                                                                                                                                                                                                                                                            MANAGERIAL ACCOUNTING                             A         underapplied overhead;                                                                                                            overapplied overhead;                                                                                                             the volume variance would have no effect on the manufacturing overhead account;                                                   none of these.                                                                                                                    If a company has a large unfavorable volume variance, one would expect the Manufacturing Overhead account to show:                                                                                                                                                                                                                                                                                              MANAGERIAL ACCOUNTING                             C         over- or underspending;                                                                                                           the difference between actual and budgeted fixed overhead costs.                                                                  plant utilization;                                                                                                                none of these.                                                                                                                    The volume variance is a measure of:                                                                                                                                                                                                                                                                                                                                                                            MANAGERIAL ACCOUNTING                             B         $12K U;                                                                                                                           $48K U;                                                                                                                           $72K F;                                                                                                                           $60K U.                                                                                                                           A company reported the following data for the year: actual hours = 40K; denominator hours = 50K; standard hours allowed for output = 42K. The predetermined overhead rate was $9 per hour of which $3 was variable and $6 was fixed. Given these data the company's volume variance for the year was:                                                                                                           MANAGERIAL ACCOUNTING                             B         $ 6K;                                                                                                                             $ 9K;                                                                                                                             $26K;                                                                                                                             $ 7K.                                                                                                                             The following data is available for June: Sales price = $80 per unit, Variable Production costs = $50 per unit, Fixed production costs = $10K, Variable selling expenses = $10 per unit, Fixed selling expenses = $5K, Units produced and sold = 1000 units, Relevant range of production = 700-1400 units. If 1200 units are to be produced and sold in August; the expected net income will be:               MANAGERIAL ACCOUNTING                             B         $45K;                                                                                                                             $55K;                                                                                                                             $63K;                                                                                                                             $65K.                                                                                                                             The following data is available for June: Sales price = $80 per unit, Variable Production costs = $50 per unit, Fixed production costs = $10K, Variable selling expenses = $10 per unit, Fixed selling expenses = $5K, Units produced and sold = 1000 units, Relevant range of production = 700-1400 units. If 900 units are to be produced and sold in August, the expected cost of goods sold will be:        MANAGERIAL ACCOUNTING                             D         $150K;                                                                                                                            $260K;                                                                                                                            $160K;                                                                                                                            $180K.                                                                                                                            For a single product the following is recorded: Relevant range = 16K-20K units, March budgeted data = 18K units, Direct materials = $24 per unit, Direct labor = $13 per unit, Manufacturing overhead = $ 4 per unit + $150 per mo., Selling and Admin. expense = $ 1 per unit + $ 30 per mo., Sales price = $80 per unit. At 16K units, total budgeted fixed expense is:                                       MANAGERIAL ACCOUNTING                             A         only production control;                                                                                                          only cost control;                                                                                                                both production control and cost control;                                                                                         neither production control nor cost control.                                                                                      A production manager has two prime responsibilities---production control and cost control. The static budget does a good job of measuring:                                                                                                                                                                                                                                                                      MANAGERIAL ACCOUNTING                             D         sales;                                                                                                                            turnover;                                                                                                                         margin;                                                                                                                           net operating assets.                                                                                                             A company that is seeking to increase ROI should attempt to decrease:                                                                                                                                                                                                                                                                                                                                           MANAGERIAL ACCOUNTING                             B         evaluated as a profit center;                                                                                                     evaluated as a cost center;                                                                                                       evaluated as an investment center;                                                                                                not be evaluated as a responsibility center.                                                                                      A company has a cafeteria which services only company employees.  The cafeteria function would most likely be:                                                                                                                                                                                                                                                                                                  MANAGERIAL ACCOUNTING                             B         18%;                                                                                                                              40%;                                                                                                                              36%;                                                                                                                              80%.                                                                                                                              A company reported the following data last year: Sales = $900K, Operating expenses = $700K, Interest expense = $ 50K, Taxes expense = $ 60K, Stockholder's equity = $250K, Average operating assets = $500K, Minimum required rate of return = 14%. The return on investment last year was:                                                                                                                     MANAGERIAL ACCOUNTING                             C         $126K;                                                                                                                            $ 90K;                                                                                                                            $130K;                                                                                                                            $ 70K.                                                                                                                            A company reported the following data last year: Sales = $900K, Operating expenses = $700K, Interest expense = $ 50K, Taxes expense = $ 60K, Stockholder's equity = $250K, Average operating assets = $500K, Minimum required rate of return = 14%.  The residual income for last year was:                                                                                                                     MANAGERIAL ACCOUNTING                             D         $300.0K                                                                                                                           $ 60.0K;                                                                                                                          $ 10.8K;                                                                                                                          $ 12.0K.                                                                                                                          A company had the following results during the year: net operating income = $2160, turnover = 5, and ROI = 18%. The company's average operating assets for the year were:                                                                                                                                                                                                                                       MANAGERIAL ACCOUNTING                             A         $600K;                                                                                                                            $400K;                                                                                                                            $500K;                                                                                                                            $400K;                                                                                                                            Operating data for a company for a year follows:  Sales = $900K, Stockholders' equity = $500K, Return on investment = 12%, Average operating assets =  ? , Turnover = 1.5, Residual income =  ? ,  Minimum required rate of return = 10%, and Total assets = $800K. The average operating assets for the year were:                                                                                             MANAGERIAL ACCOUNTING                             A         $ 12K;                                                                                                                            $ 18K;                                                                                                                            $ 10K;                                                                                                                            $ 16K.                                                                                                                            Operating data for a company for a year follows:  Sales = $900K, Stockholders' equity = $500K, Return on investment = 12%, Average operating assets =  ? , Turnover = 1.5, Residual income = ? , Minimum required rate of return = 10%, Total assets = $800K.  The residual income for the year was:                                                                                                            MANAGERIAL ACCOUNTING                             B         18.00%;                                                                                                                           8.00%;                                                                                                                            6.67%;                                                                                                                            15.00%.                                                                                                                           Operating data for a company for a year follows:  Sales = $900K, Stockholders' equity = $500K, Return on investment = 12%, Average operating assets =  ? , Turnover = 1.5, Residual income = ? , Minimum required rate of return = 10%, Total assets = $800K.  The profit margin for the year was:                                                                                                              MANAGERIAL ACCOUNTING                             C         $108.0K;                                                                                                                          $129.6K;                                                                                                                          $ 86.4K;                                                                                                                          $115.2K.                                                                                                                          Operating data for a company for a year follows:  Sales = $900K, Stockholders' equity = $500K, Return on investment = 12%, Average operating assets =  ? , Turnover = 1.5, Residual income = ? , Minimum required rate of return = 10%, Total assets = $800K.  If the next years sales increase 20% but margin and turnover remain unchanged, the NOI would be:                                                 MANAGERIAL ACCOUNTING                             C         maximize a segment's overall rate of return;                                                                                      maximize the ROI a segment is able to get on its operating assets;                                                                maximize the total amount of the residual income;                                                                                 maximize the contribution margin.                                                                                                 The purpose of the residual income approach is to:                                                                                                                                                                                                                                                                                                                                                              MANAGERIAL ACCOUNTING                             B         Only I is true.                                                                                                                   Only II is true.                                                                                                                  Both I and II are true.                                                                                                           Neither I nor II is true.                                                                                                         Which of the following is(are) true?     I.  The objective of a cost center is to minimize costs--not simply to control costs.    II. All profit centers are responsibility centers--but not all responsibility centers are profit centers.                                                                                                                                                                     MANAGERIAL ACCOUNTING                             B         Only I is true.                                                                                                                   Only II is true.                                                                                                                  Both I and II are true.                                                                                                           Neither I nor II is true.                                                                                                         Which of the following is(are) true?     I.  The residual income approach is superior to ROI as a method of measuring performance in divisions that differ substantially in size.     II. In decentralized organizations decision making takes place at many levels of management.                                                                                                                              MANAGERIAL ACCOUNTING                             A         break-even point in unit sales;                                                                                                   profit margin;                                                                                                                    contribution margin ratio;                                                                                                        margin of safety.                                                                                                                 The ratio of fixed expenses to the unit contribution margin is the:                                                                                                                                                                                                                                                                                                                                             MANAGERIAL ACCOUNTING                             D         earnings value analysis;                                                                                                          economic value analysis;                                                                                                          earnings value added;                                                                                                             economic value added;                                                                                                             EVA is short for:                                                                                                                                                                                                                                                                                                                                                                                               MANAGERIAL ACCOUNTING                             D         weighted average capital charge;                                                                                                  weighted annual cost of capital;                                                                                                  weighted annual capital charge;                                                                                                   weighted average cost of capital;                                                                                                 WACC is short for:                                                                                                                                                                                                                                                                                                                                                                                              MANAGERIAL ACCOUNTING                             A         Earnings Before Interest and Taxes;                                                                                               Earnings Before Taxes;                                                                                                            Earnings After Taxes;                                                                                                             Earnings From Operations.                                                                                                         Net Operating Income is equal to:                                                                                                                                                                                                                                                                                                                                                                               MANAGERIAL ACCOUNTING                             D         $30,000;                                                                                                                          $100,000;                                                                                                                         $50,000;                                                                                                                          $10,000;                                                                                                                          The Axle Division of a company makes and sells a product for $50 per unit, with variable cost of $30 per unit. The company total fixed costs are $200,000, Average operating assets are $750,000, and the minimum required rate of return is 12%. If the company sells 15,000 units per year, the residual income should be:                                                                                    MANAGERIAL ACCOUNTING                             C         12%;                                                                                                                              15%;                                                                                                                              16%;                                                                                                                              18%.                                                                                                                              The Axle Division of a company makes and sells a product for $50 per unit, with variable cost of $30 per unit. The company total fixed costs are $200,000, Average operating assets are $750,000, and the minimum required rate of return is 12%. If the company sells 16,000 units per year, the return on investment should be:                                                                               MANAGERIAL ACCOUNTING                             C         14,500;                                                                                                                           16,750;                                                                                                                           18,250;                                                                                                                           19,500;                                                                                                                           The Axle Division of a company makes and sells a product for $50 per unit, with variable cost of $30 per unit. The company total fixed costs are $200,000, Average operating assets are $750,000, and the minimum required rate of return is 12%. If the company wants a 22% return, how many units must be sold?                                                                                               MANAGERIAL ACCOUNTING                             B         14,500;                                                                                                                           16,750;                                                                                                                           18,250;                                                                                                                           19,500;                                                                                                                           The Axle Division of a company makes and sells a product for $50 per unit, with variable cost of $30 per unit. The company total fixed costs are $200,000, Average operating assets are $750,000, and the minimum required rate of return is 12%. If the company wants a residual income of $45,000, how many units must be sold?                                                                               MANAGERIAL ACCOUNTING                             A         17,500;                                                                                                                           16,750;                                                                                                                           18,250;                                                                                                                           14,500;                                                                                                                           The Axle Division of a company makes and sells a product for $50 per unit, with variable cost of $30 per unit. The company total fixed costs are $200,000, Average operating assets are $750,000, and the minimum required rate of return is 12%. If the company has a 40% tax rate and wants a zero EVA, how many units must be sold?                                                                          MANAGERIAL ACCOUNTING                             C         shift downward and have a steeper slope;                                                                                          shift downward and have a flatter slope;                                                                                          shift upward and have a flatter slope;                                                                                            shift downward and have a flatter slope;                                                                                          If a company decreases the variable cost per unit while increasing the total fixed costs, the total cost line relative to its previous position on a cost-volume-profit graph will:                                                                                                                                                                                                                             MANAGERIAL ACCOUNTING                             D         sales volume variance;                                                                                                            marginal income rate;                                                                                                             variable sales ratio;                                                                                                             margin of safety.                                                                                                                 For a profitable company, the amount by which sales can decline before losses occur is known as the:                                                                                                                                                                                                                                                                                                            MANAGERIAL ACCOUNTING                             B         1.486K units;                                                                                                                     2.600K units;                                                                                                                     3.467K units;                                                                                                                     1.040K units.                                                                                                                     A company sells a single product: Product K. Product K sells for $90 per unit and has a contribution margin ratio of 35%. The company's fixed expenses are $46.8K. If the company desires a monthly target net income equal to 15% of sales; sales will have to be (rounded):                                                                                                                                   MANAGERIAL ACCOUNTING                             B         $260K;                                                                                                                            $280K;                                                                                                                            $440K;                                                                                                                            $240K.                                                                                                                            The contribution margin ratio is 25% for Grain Company and the break-even point in sales is $200K. If Grain Company desires a target net income of $20K; sales would have to be:                                                                                                                                                                                                                                MANAGERIAL ACCOUNTING