LAST MIDTERM 2 EXAM QUESTIONS
25 important questions on LAST MIDTERM 2 EXAM QUESTIONS
Which of the following is not an element of manufacturing overhead?
- Sales manager's salary
- Plant manager's salary
- Factory repairmen's wages
- Product inspector's salary
- None of the other options is correct
What amount is given by the sum of direct materials, direct labour, and manufacturing overhead incurred?
- The total cost of work in process
- Cost of goods available for sale
- Total manufacturing costs
- Cost of goods manufactured
- None of the other options is correct
What activites and responsibilities are not associated with management's functions?
- Planning
- Accountability
- Controlling
- Directing
- None of the other options is correct
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Under absorption costing and variable costing, how are direct labour costs treated?
Absorption Variable
A. Product Cost Product Cost
B. Product Cost Period Cost
C. Period Cost Product Cost
D. Period Cost Period Cost
- A is correct
- B is correct
- C is correct
- D is correct
- None of the other options is correct
The CVP income statement classifies costs
- as a variable or fixed and computes contribution margin
- by function and computes a contribution margin
- as a variable or fixed and computes gross margin
- by function and computes a gross margin
- none of the other options is correct
When production exceeds sales
- Ending inventory under variable costing will exceed ending inventory under absorption costing
- Ending inventory under absorption costing will exceed ending inventory under variable costing
- Ending inventory under absorption costing will be equal to ending inventory under variable costing
- Ending inventory under absorption costing may either exceed, be equal to, or be less than ending inventory under variable costing.
The purpose of the sales budget report is to
- Control selling expenses
- determine whether income objectives are being met
- determine whether sales goals are being met
- control sales commissions
A static budget is appropriate for
- Variable overhead costs
- Direct material costs
- Fixed overhead costs
- Direct labour costs
Which one of the statements below is correct concerning the comparison of differences between actual and planned results?
- The difference must be reported on external financial statements
- The differences always require investigation
- It reflects information from the static budget.
- It enables managers to take corrective action when differences are material
Which of the following is NOT a common form of a responsibility centre?
- Cost centre
- Investment centre
- Division centre
- Profit centre
In companies where there is good reason to change from a traditionally-based costing system to an activity-based costing system, management might expect.
- Products or services with high volumes will have higher overhead costs
- Products or services with high volumes will have lowered overhead costs
- Products or services will low volumes will have lower overhead costs.
- Products or services with high volumes are generally costed accurately
Which best describes the flow of overhead costs in an activity-based costing system?
- Overhead cost - direct labour cost or hours -
- Overhead cost - products
- Overhead costs - activity cost pools - cost drivers - products
- Overhead costs - Machine hours - products
The traditional ccost allocation method uses:
- Activity-based costing for allocating overhead cost
- Multiple (departmental) overhead cost rates for allocating overhead cost
- A single cost-recovery rate for allocating overhead cost
- The random cost drivers for allocating overhead cost
If contribution margin is $140,000, sales is $300,000 and net income is $40,000, then variable and fixed expenses are:
- Variable: $160,000; Fixed: $260,000
- Variable: $160,000; Fixed: $100,000
- Variable: $260,000; Fixed: $100,000
- Variable: $440,000; Fixed: $260,000
Sunlight's CVP income statement included sales of 6,000 units, a selling price of $120, variable expenses of $64 per unit, and fixed expenses of $120,000. Contribution margin ratio is:
- 46.67%
- 27.67%
- 38.33%
- 63.77%
The company produces only one product. Monthly fixed expenses are $20,000, monthly unit sales are 3952, and the unit contribution margin is $7. How much is monthly net profit?
- $7664
- $27664
- $12664
- $17664
Presented below are data related to the shipping costs for the Almond Factory:
Month Distribution of Cost (Y) Number of Statements (X)
Jan $4,918 3500
Feb $4,245 2614
Mar $5,205 3850
Apr $4,532 2999
May $4,544 3002
Jun $5,025 3650
Using the high-low method, calculate the variable shipping cost per shipment per month.
- $0.78
- $1.35
- $1.62
- $0.61
MagTag produces washing machines and dryers. The following per unit information is available for washing machines: direct materials $35, direct labour, $30, variable manufacturing overhead, $18, fixed manufacturing overhead, $103, variable selling and administrative expenses, $17, fixed selling and administrative expenses, $97. MagTag desires an ROI per unit of $106.
Calculate MagTag's markup percentage using a total cost approach.
- 35.33%
- 106.00%
- 53.00%
- 26.50%
For Korb Company, actual sales are $1,289,706 and break-even sales are $881,475.
Calculate the margin of safety ratio.
- 31.65%
- 68.35%
- 168.35%
- 61.23%
Last year, Monica's Manties sold 20,000 mantles at $139 each. This year she expects to increase sales volume by 10%, and to increase the selling price by $5 per mantle. Expected sales revenue for this year is (round your answer to the closet dollar)
Answer:____
Jemima's Outfits has a store in Dixie Outlet Mail. It specializes in high-class fashions and sells complete outfits for a uniform price of $75 each. The sales budget for 2020 was to sell 6,000 outfits. If the actual sales for 2020 are 6,750 units, there would be:
- a favourable sales variance
- an unfavourable sales variance
- a favourable cost variance
- an unfavourable cost variance
Savage Ltd expects variable manufacturing overhead costs to be $20,900 in the first quarter of 2020, with $3,800 increments in each of the remaining three quarters. It estimates fixed overhead costs to be $39084 in each quarter.
Estimate the total manufacturing overhead cost for quarter 3.
Answer________?
DriveSafe Company accumulates the following data concerning a mixed cost, using kilometers as the activity level:
Kilometres Total Cost Driven Kilometres Total Cost Driven
January 8,100 $14,550 March 5451 $11,930
February 7,600 13,600 April 8430 17,104
Required:
Using the high-low method calculates the variable cost per km.
Answer____?
Select Corporation makes a commercial-grade cooking griddle. The following information is available for Select Corporation's expected annual volume of 31,600 units:
Per Unit Total
Direct Materials $18
Direct Labour 8
Variable manufacturing overhead 11
Fixed manufacturing overhead $379,200
Variable selling and admin expense. 3
Fixed selling and admin expense. 126,400
The company uses a 45% markup percentage on total cost
Required:
Calculate the selling price using total cost plus pricing.
- 56.00
- 81.20
- 40.00
- 52.00
Bramble requires sales of $500000 to cover its fixed costs of $111000 and to earn a net income of $75000. What percent are variable costs of sales?
- 37.20%
- 7.20%
- 22.20%
- 62.80%
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