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ACT 321 Cost Accounting

ACT 321 Cost Accounting

The Blue Company is planning to sell product Z for $5 a unit. Variable costs are $3 a unit and fixed costs are $100,000. What must the total sales be to break even? A.   $160,000 B.   $166,667 C.   $250,000 D.   $266,667 E.   None of these.
2________ (Multiple Choice)Which of the following would cause the breakeven point to change? A.   Sales increased. B.   Total production decreased. C.   Total variable costs increased as a function of higher production. D.   Fixed costs increased due to addition to physical plant. E.   None of these.
3________ (Multiple Choice)Ivy Company had sales of $3,000,000, variable costs of $1,800,000, and fixed costs of $1,500,000 for product X.   What would be the amount of sales dollars at the breakeven point? A.   $3,000,000 B.   $3,300,000 C.   $3,600,000 D.   $4,200,000 E.   None of these.
4________ (Multiple Choice)On the schedule of cost of goods manufactured: A.   beginning work-in-process plus direct materials used equals manufacturing costs. B.   cost of goods manufactured is the same thing as total manufacturing costs. C.   work-in-process will necessarily increase if total manufacturing costs increase. D.   factory overhead plus beginning work-in-process equals manufacturing costs. E.   None of these.
5________ (Multiple Choice)Finished goods ending inventory of $10,000 is erroneously determined to be $100,000. The effect of this error will be to: A.   overstate assets by $90,000. B.   overstate income by $90,000. C.   understate income by $90,000. D.   Both A and B. E.   None of these.
6________ (Multiple Choice)A publisher sells a calendar for $6.50.   The variable cost per calendar is $3 at the current annual sales volume of 200,000 calendars; at this volume the publisher is just breaking even. What are the fixed costs?: A.   $600,000 B.   $700,000 C.   $1,200,000 D.   $1,300,000 E.   None of these.
7________ (Multiple Choice)Job costing is: A.   useful in service businesses. B.   only applicable to manufactured products. C.   only applicable to organizations with inventory. D.   provides a substitute for a general ledger system. E.   None of these.
8________ (Multiple Choice)GAAP requires that underapplied overhead relating to idle facilities, wasted material, the allocation of fixed production overhead, and so forth, be charged to: A.   current period income. B.   finished goods inventory. C.   work in process. D.   All of the above. E.   None of these.
9________ (Multiple Choice)Assume that actual overhead consisted of $40,000 for indirect labor, $20,000 for indirect material, and $10,000 for depreciation of factory equipment. Based on the preset rates, $65,000 of overhead was applied to work in process. A.   Overhead is underapplied. B.   This is viewed as an unfavorable situation. C.   There will be a $5,000 debit balance in Factory Overhead. D.   All of the above. E.   None of these.
10________ (Multiple Choice)For job 1838, there were 1,000 direct labor hours, and actual overhead was $500 for depreciation and $1,400 for indirect labor. Overhead is applied at $2 per direct labor hour. Which account should be debited for $1,900? A.   Work in Process. B.   Cost of Goods Sold. C.   Factory Overhead. D.   Cost of Goods Manufactured. E.   None of these.
11.______ (Multiple Choice)Jose Company uses a job order cost system.   At the end of an accounting period, Jose has a debit balance in the Factory Overhead account. This would indicate: A.   a loss for the period. B.   underapplied overhead. C.   overapplied overhead. D.   a malfunction in the job order cost system. E.   None of these.
12______ (Multiple Choice)Which is the best cost accumulation procedure to use when there is a continuous mass production of like units? A.   Process. B.   Standard. C.   Job order. D.   ABC. E.   None of these.
13_______ (Multiple Choice)If beginning work in process was 600 units, 1,400 additional units were put into production, and ending work in process was 500 units, how many units were completed? A.   500 B.   900 C.   1,400 D.   2,000 E.   None of these.
14_______ (Multiple Choice)Under activity based costing, which of the following types of costs would most likely require analysis to determine an activity cost per measure? A.   Direct material B.   Direct labor C.   Unallocated costs D.   Traceable costs E.   None of these.
15_______ (Multiple Choice)A Company uses a job order cost system and applies overhead based on estimated rates. The overhead application rate is based on total estimated overhead costs of $200,000 and direct labor hours of 50,000. For job 836, direct labor hours were 800. A.   Factory Overhead should be debited for $3,200. B.   Factory Overhead should be credited for $3,200. C.   Overhead Expense should be debited for $3,200. D.   Overhead Expense should be credited for $3,200. E.   None of these.
16_______ (Multiple Choice)Operations began May 1. Sales are budgeted to increase as $15,000, $17,000, and $20,000 for the first three months. Ending inventory is 75% of the next month’s projected sales. Ending inventory for June is: A.   $15,000. B.   $11,250. C.   $7,500 if the gross profit rate is 50%. D.   $5,625 if the gross profit rate is 50%. E.   None of these.
17_______ (Multiple Choice)A company began operations on January 1.   Sales are budgeted as $170,000 for February. Receivables at January 31 were $25,000. Collections are expected to be 60% in the month of sale, 30% the next month, and 10% in the next. A.   Budgeted cash collections for February are $25,000. B.   Budgeted cash collections for February are $54,000. C.   Budgeted cash collections for February are $120,750. D.   Budgeted cash collections for February are $127,000. E.   None of these.
18_______ (Multiple Choice)A company began operations on January 1 with cash of $75,000. January sales were $150,000. No collections occurred. Cost of goods sold is $40,000, and there are no ending inventories or payables.   How much cash was on hand at the end of January? A.   $35,000 B.   $110,000. C.   $185,000. D.   $225,000. E.   None of these.
19_______ (Multiple Choice)Assume that $102,000 is budgeted for fixed overhead. $95,000 was actually spent on fixed overhead. Fixed overhead is applied to production at $10 per labor hour, and the achieved output was 5,000 units. The standard labor hours are 2 hours per unit. A.   The fixed overhead spending variance is $7,000 favorable. B.   The total fixed overhead variance is $2,000 favorable. C.   The fixed overhead volume variance is $5,000 unfavorable. D.   All of the above are correct. E.   None of these.
20_______ (Multiple Choice)How is a labor rate variance computed? A.   The difference between standard and actual rate multiplied by actual hours. B.   The difference between standard and actual rate multiplied by standard hours. C.   The difference between standard and actual hours multiplied by actual rate. D.   The difference between standard and actual hours multiplied by standard rate. E.   None of these.
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