PTS: 1
DIF: Moderate
OBJ: 1-5
PTS: 1
DIF: Moderate
OBJ: 1-5
33. The balanced scorecard perspective that focuses on using a firms intellectual capital to adapt to customer
needs through product or service innovations is the:
a. learning and growth perspective
c. customer value perspective
b. internal business perspective
d. financial perspective
ANS: A
PTS: 1
DIF: Easy
OBJ: 1-7
34. The balanced scorecard perspective that addresses things that an organization needs to do well to meet
customer needs and expectations:
a. learning and growth perspective
c. customer value perspective
b. internal business perspective
d. financial perspective
ANS: B
PTS: 1
DIF: Easy
OBJ: 1-7
35. The balanced scorecard perspective that addresses how well the organization is meeting specific
customer-based criteria is the:
a. learning and growth perspective
c. customer value perspective
b. internal business perspective
d. financial perspective
ANS: C
PTS: 1
DIF: Easy
OBJ: 1-7
Long Enterprises
Inventories:
Raw material
Work in process
Finished goods
Additional information for March:
Raw material purchased
Direct labor payroll
Direct labor rate per hour
Overhead rate per direct labor hour
March 1
$18,000
9,000
27,000
$42,000
30,000
7.50
10.00
50. Refer to Long Enterprises. For March, prime cost incurred was
March 31
$15,000
6,000
36,000
a.
b.
c.
d.
$75,000.
$69,000.
$45,000.
$39,000.
50. ANS:
A
Begin Inv
$18,000
Raw Materials
Purch
$42,000
Rate
$
7.50
Direct Labor
PTS: 1
DIF: Easy
Ending Inv
$(15,000)
Hours
4,000
$45,000
30,000
$75,000
OBJ: 2-5
51. Refer to Long Enterprises. For March, conversion cost incurred was
a. $30,000.
b. $40,000.
c. $70,000.
d. $72,000.
51. ANS:
C
Begin Inv
Direct Labor
Overhead
PTS: 1
Purch
Ending Inv
$
7.50
4,000
Rate
Hours
$ 10.00
4,000
DIF: Easy
30,000
40,000
$70,000
OBJ: 2-5
52. Refer to Long Enterprises. For March, Cost of Goods Manufactured was
a. $118,000.
b. $115,000.
c. $112,000.
d. $109,000.
52. ANS:
PTS: 1
DIF: Easy
$
$
45,000
30,000
40,000
9,000
115,000
(6,000)
$ 118,000
OBJ: 2-6
added.
ANS: A
PTS: 1
DIF: Easy
OBJ: 4-5
65. If activity-based costing is implemented in an organization without any other changes being implemented,
total overhead costs will
a. be reduced because of the elimination of non-value-added activities.
b. be reduced because organizational costs will not be assigned to products or services.
c. be increased because of the need for additional people to gather information on cost
drivers and cost pools.
d. remain constant and simply be spread over products differently.
ANS: D
PTS: 1
DIF: Difficult
OBJ: 4-5
66. A just-in-time manufacturing process should have substantially less of which of the following than a
traditional manufacturing process?
Idle time Transfer time
a.
b.
c.
d.
yes
yes
yes
no
Value-added time
Cycle time
yes
no
no
yes
yes
yes
yes
no
yes
no
yes
yes
ANS: C
PTS: 1
DIF: Difficult
OBJ: 4-6
Trenton Company
Trenton Company has two departments (Processing and Packaging) and uses a job-order costing system.
Baker applies overhead in Processing based on machine hours and on direct labor cost in Packaging. The
following information is available for July:
Machine hours
Direct labor cost
Applied overhead
Processing
Packaging
2,500
$44,500
$55,000
1,000
$23,000
$51,750
77. Refer to Trenton Company. What is the overhead application rate per machine hour for Processing?
a. $ 0.81
b. $ 1.24
c. $17.80
d. $22.00
ANS: D
Total Applied Overhead
$55,000
PTS: 1
DIF: Easy
Machine Hours
2,500
Rate per
Hour
$22.00
OBJ: 5-3
78. Refer to Trenton Co. What is the overhead application rate for Packaging?
a.
b.
c.
d.
$ 0.44
$ 2.25
$23.00
$51.75
ANS: B
Total Applied
Overhead
$51,750
PTS: 1
DIF: Easy
OBJ: 5-4
Mathis Company
The following information is available for Mathis Company for the current year:
Beginning Work in Process
(75% complete)
Started
Ending Work in Process
(60% complete)
Abnormal spoilage
Normal spoilage
(continuous)
Transferred out
5,000 units
66,000 units
PTS: 1
DIF: Easy
Units
% Complete
14,500
100%
51,500
100%
16,000
100%
2,500
100%
Eq. Units
14,500
51,500
16,000
2,500
84,500
OBJ: 6-8
94. Refer to Mathis Company. Using weighted average, what are equivalent units for conversion costs?
a. 80,600
b. 78,100
c. 83,100
d. 75,600
94. ANS:
PTS: 1
Units
% Complete
14,500
100%
51,500
100%
16,000
60%
2,500
100%
DIF: Easy
Eq Units
14,500
51,500
9,600
2,500
78,100
OBJ: 6-8
95. Refer to Mathis Company. What is the cost per equivalent unit for material using weighted average?
a. $1.72
b. $1.62
c. $1.77
d. $2.07
95. ANS:
PTS: 1
Php25,100
120,000
145,100 84,500 =
units
DIF: Moderate
Php1.72
per unit
OBJ: 6-3
96. Refer to Mathis Company. What is the cost per equivalent unit for conversion costs using weighted
average?
a. $4.62
b. $4.21
c. $4.48
d. $4.34
96. ANS:
PTS: 1
Php50,000
300,000
350,000
78,100 =
units
DIF: Moderate
Php4.48
per unit
OBJ: 6-3
97. Refer to Mathis Company. What is the cost assigned to normal spoilage using weighted average?
a. $31,000
b. $15,500
c. $30,850
d. None of the responses are correct
97. ANS:
No costs are assigned to normal, continuous spoilage. Higher costs are assigned to good units
produced.
PTS: 1
DIF: Easy
OBJ: 6-8
98. Refer to Mathis Company. Assume that the cost per EUP for material and conversion are $1.75 and $4.55,
respectively. What is the cost assigned to ending Work in Process?
a. $100,800
b. $87,430
c. $103,180
d. $71,680
98. ANS:
D
Equivalent
Cost per
Units
Equivalent Unit
16,000
$1.75
9,600
$4.55
PTS: 1
DIF: Easy
Total
$28,000
$43,680
$71,680
OBJ: 6-3
99. Refer to Mathis Company. Using FIFO, what are equivalent units for material?
a. 75,000
b. 72,500
c. 84,500
d. 70,000
99. ANS:
Materials: FIFO
Beginning Work in Process
+ Units Started and Completed
+ Ending Work in Process
+ Abnormal Spoilage
Equivalent Units of Production
PTS: 1
DIF: Easy
51,500
16,000
2,500
0%
100%
100%
100%
51,500
16,000
2,500
70,000
OBJ: 6-8
100. Refer to Mathis Company. Using FIFO, what are equivalent units for conversion costs?
a. 72,225
b. 67,225
c. 69,725
d. 78,100
100. ANS:
Conversion: FIFO
Beginning Work in Process
+ Units Started and Completed
+ Ending Work in Process
+ Abnormal Spoilage
Equivalent Units of Production
PTS: 1
DIF: Easy
14,500
51,500
16,000
2,500
OBJ: 6-8
25% 3,625
100%
51,500
60%
9,600
100%
2,500
67,225
101. Refer to Mathis Company. Using FIFO, what is the cost per equivalent unit for material?
a. $1.42
b. $1.66
c. $1.71
d. $1.60
101. ANS:
FIFO: Materials
Current Period
PTS: 1
120,000
120,000
70,000 =
units
DIF: Easy
1.71
per unit
OBJ: 6-4
102. Refer to Mathis Company. Using FIFO, what is the cost per equivalent unit for conversion costs?
a. $4.46
b. $4.15
c. $4.30
d. $3.84
102. ANS:
FIFO: Conversion
Current Period
PTS: 1
DIF: Easy
300,000
300,000 67,225 =
units
4.46
per unit
OBJ: 6-4
103. Refer to Mathis Company. Assume that the FIFO EUP cost for material and conversion are $1.50 and
$4.75, respectively. Using FIFO what is the total cost assigned to the units transferred out?
a. $414,194
b. $339,094
c. $445,444
d. $396,975
103. ANS:
PTS: 1
DIF: Difficult
OBJ: 6-4
4.75
6.25
Total
75,100
17,219
321,875
414,194
PTS: 1
DIF: Easy
OBJ: 7-1
PTS: 1
DIF: Easy
OBJ: 7-2
PTS: 1
DIF: Easy
OBJ: 7-2
PTS: 1
DIF: Easy
OBJ: 7-2
PTS: 1
DIF: Easy
OBJ: 7-1
DIF: Easy
OBJ: 7-1
PTS: 1
ANS: B
PTS: 1
DIF: Easy
OBJ: 7-1
8. Standard costs
a. are estimates of costs attainable only under the most ideal conditions.
b. are difficult to use with a process costing system.
c. can, if properly used, help motivate employees.
d. require that significant unfavorable variances be investigated, but do not require that
significant favorable variances be investigated.
ANS: C
PTS: 1
DIF: Easy
OBJ: 7-1
DIF: Easy
OBJ: 7-2
PTS: 1
PTS: 1
DIF: Moderate
OBJ: 7-2
PTS: 1
DIF: Easy
OBJ: 7-2
16.Fisher Company produces three products from a joint process. The products can be sold at split-off or
processed further. In deciding whether to sell at split-off or process further, management should
a. allocate the joint cost to the products based on relative sales value prior to making the
decision.
b. allocate the joint cost to the products based on a physical quantity measure prior to making
the decision.
c. subtract the joint cost from the total sales value of the products before determining relative
sales value and making the decision.
d. ignore the joint cost in making the decision.
ANS: D
PTS: 1
DIF: Easy
OBJ: 11-3
PTS: 1
DIF: Easy
OBJ: 11-1
PTS: 1
DIF: Moderate
OBJ: 11-4
DIF: Easy
OBJ: 11-4
no
yes
yes
no
ANS: B
Waste
no
no
yes
yes
PTS: 1
20. Under an acceptable method of costing by-products, inventory costs of the by-product are based on the
portion of the joint production cost allocated to the by-product
a. but any subsequent processing cost is debited to the cost of the main product.
b. but any subsequent processing cost is debited to revenue of the main product.
c. plus any subsequent processing cost.
d. minus any subsequent processing cost.
ANS: C
PTS: 1
DIF: Easy
OBJ: 11-4
21. Which of the following is a false statement about scrap and by-products?
a. Both by-products and scrap are salable.
b. A by-product has a higher sales value than does scrap.
c. By-products and scrap are the primary reason that management undertakes the joint
process.
d. Both scrap and by-products are incidental outputs to the joint process.
ANS: C
PTS: 1
DIF: Easy
OBJ: 11-4
PTS: 1
DIF: Easy
OBJ: 11-2
23. A product may be processed beyond the split-off point if management believes that
a. its marketability will be enhanced.
b. the incremental cost of further processing will be less than the incremental revenue of
further processing.
c. the joint cost assigned to it is not already greater than its prospective selling price.
d. both a and b.
ANS: D
PTS: 1
DIF: Easy
OBJ: 11-3
PTS: 1
DIF: Easy
OBJ: 11-2
PTS: 1
DIF: Easy
OBJ: 11-2
26. The net realizable value approach mandates that the NRV of the by-products/scrap be treated as
a. an increase in joint costs.
b. a sunk cost.
c. a reduction of joint costs.
d. a cost that can be ignored totally.
ANS: C
PTS: 1
DIF: Easy
OBJ: 11-4
27. The net realizable value approach is normally used when the NRV is expected to be
insignificant
a.
b.
c.
d.
yes
no
no
yes
ANS: B
significant
yes
yes
no
no
PTS: 1
DIF: Easy
OBJ: 11-3
28. Approximated net realizable value at split-off for joint products is computed as
a. selling price at split-off minus further processing and disposal costs.
b. final selling price minus further processing and disposal costs.
c. selling price at split-off minus allocated joint processing costs.
d. final selling price minus a normal profit margin.
ANS: B
PTS: 1
DIF: Easy
OBJ: 11-3
29. Which of the following is a commonly used joint cost allocation method?
a. high-low method
b. regression analysis
c. approximated sales value at split-off method
PTS: 1
DIF: Easy
OBJ: 11-2
30. Incremental separate costs are defined as all costs incurred between ___________ and the point of sale.
a. inception
b. split-off point
c. transfer to finished goods inventory
d. point of addition of disposal costs
ANS: B
PTS: 1
DIF: Easy
OBJ: 11-2
31. All costs that are incurred between the split-off point and the point of sale are known as
a. sunk costs.
b. incremental separate costs.
c. joint cost.
d. committed costs.
ANS: B
PTS: 1
DIF: Easy
OBJ: 11-2