ACCT 2810 Exam 4 - Barger
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57 Terms
What is the primary focus of managerial accounting
Recording and reporting information
3 multiple choice options
Which inventory type includes goods that are completed but not yet sold?
Finished Goods
3 multiple choice options
The cost of a manufactured product includes:
Materials & Conversion costs
3 multiple choice options
Direct material costs must:
Be an integral part of the finished product
3 multiple choice options
Which of the following is an example of direct labor
Wages of assembly line workers
3 multiple choice options
Factory overhead costs include:
Indirect materials and indirect labor
3 multiple choice options
Prime costs consist of
Direct materials and direct labor
3 multiple choice options
Conversion costs consist of:
Direct labor and factory overhead
3 multiple choice options
Which of the following is a period cost?
Advertising expense
3 multiple choice options
The predetermined factory overhead rate is calculated by dividing:
Estimated overhead by estimated activity base
3 multiple choice options
If estimated overhead is $50,000 and estimated labor hours are 10,000, the predetermined overhead rate is:
$5 per hour
3 multiple choice options
Underapplied overhead occurs when:
Actual overhead exceeds applied overhead
3 multiple choice options
Which cost allocation method uses multiple overhead
Activity-based costing
3 multiple choice options
Which of the following is NOT a source of factory overhead?
Direct labor
3 multiple choice options
Which of the following is not an inventory type for a manufacturing company?
Factory overhead
3 multiple choice options
Direct labor and direct materials are referred to as:
Prime costs
3 multiple choice options
Which of the following would most accurately describe the effect on accounts when recording direct labor?
Work in process and wages payable would increase.
3 multiple choice options
With just-in-time production, processing functions are combined into work centers known as:
Manufacturing cells.
3 multiple choice options
Which of the following would most accurately describe the effect on accounts when direct materials are requisitioned for a specific job?
Materials would decrease, and work in process would increase.
3 multiple choice options
What is cost behavior?
How costs change as activity changes
3 multiple choice options
Which of the following is a variable cost?
Direct materials
3 multiple choice options
Fixed costs remain constant in:
Total but vary per unit
3 multiple choice options
Mixed costs are also known as:
Semi-variable costs
3 multiple choice options
The high-low method is used to:
Separate mixed costs into fixed and variable components
3 multiple choice options
CVP analysis helps management predict:
Changes in costs and sales on income
3 multiple choice options
Break-even point occurs when:
Sales = Total costs
3 multiple choice options
Contribution margin equals:
Sales - Variable costs
3 multiple choice options
If contribution margin ratio is 40%, an $80,000 increase in sales will increase operating income by:
$32k
3 multiple choice options
To compute units for target profit, add target profit to fixed costs and divide by:
Unit contribution margin
3 multiple choice options
Sales mix refers to:
Relative distribution of sales among products
3 multiple choice options
Operating leverage measures:
Relationship between contribution margin and operating income
3 multiple choice options
If operating leverage is 5 and sales increase by 10%, operating income will increase by:
50%
3 multiple choice options
Margin of safety indicates:
How much sales can drop before a loss occurs
3 multiple choice options
An increase in fixed costs will:
Increase break-even point
3 multiple choice options
An increase in unit selling price will
Decrease break-even point
3 multiple choice options
An increase in unit variable cost will:
Increase break-even point
3 multiple choice options
Which of the following statements is true about variable costs?
Variable cost per unit stays constant as more units are produced.
3 multiple choice options
Which of the following statements is true concerning fixed costs?
Total fixed costs remain constant as the number of units produced increases.
3 multiple choice options
Which of the following increases proportionately as production increases?
Total Variable Cost
3 multiple choice options
Which of the following decreases as production increases?
Fixed cost per unit
3 multiple choice options
Which of the following statements is true regarding a mixed cost?
It is fixed up to a certain level and then increases proportionately as production increases
3 multiple choice options
What is differential revenue?
Increase or decrease in revenue expected from a course of action compared to an alternative
3 multiple choice options
Differential cost refers to:
Increase or decrease in cost expected from a course of action compared to an alternative
3 multiple choice options
Differential income is:
Difference between differential revenue and differential costs
3 multiple choice options
Differential analysis is also known as:
Incremental analysis
3 multiple choice options
Which of the following is NOT a decision where differential analysis is applied?
Setting advertising budget
3 multiple choice options
When discontinuing a product line, which costs are eliminated
All variable costs
3 multiple choice options
Opportunity cost represents:
Benefit lost by choosing one alternative over another
3 multiple choice options
Which concept sets selling price based on covering all costs and profit?
Cost-plus pricing
3 multiple choice options
Under total cost concept, markup is added to:
Total cost per unit
3 multiple choice options
Product cost concept excludes:
Selling and administrative expenses
2 multiple choice options
A production bottleneck occurs when:
Demand exceeds production capacity
3 multiple choice options
Which of the following statements is true when a company is considering discontinuing an unprofitable product?
Fixed costs should not be eliminated.
3 multiple choice options
Which of the following is not a cost-plus method to determine selling price?
Fixed cost concept
3 multiple choice options
For the product cost concept of pricing, the markup would include:
The desired profit plus selling and administrative expenses.
3 multiple choice options
For the variable cost concept of pricing, the markup would include:
The desired profit plus total fixed expenses.
3 multiple choice options
For the total cost concept of pricing, the markup would include:
The desired profit only.
3 multiple choice options