ACCT 212 connect exam 3 complete solutions correct answers key

Liberty University ACCT 212 connect exam 3 complete solutions correct answers key

Managerial accounting information can be forwarded to the managers of a company quickly since external auditors do not have to review it, and estimates and projections are acceptable.

True

False

A manufacturer's total cost of making and finishing products in the period is called:

Ending finished goods inventory.

Total manufacturing costs.

Ending work in process inventory.

Cost of goods manufactured.

Cost of goods sold.

The file of job cost sheets for completed but undelivered jobs equals the balance in the Work in Process Inventory account.

True

False

If overhead is underapplied, it means that individual jobs have not been charged enough during the year and the cost of goods sold reported is too low.

True

False

A production department's output for the most recent month consisted of 8,000 units completed and transferred to the next stage of production and 5,000 units in ending Work in Process inventory. The units in ending Work in Process inventory were 50% complete with respect to both direct materials and conversion costs. Calculate the equivalent units of production for the month, assuming the company uses the weighted average method.

6,500 units.

9,000 units.

13,000 units.

5,500 units.

10,500 units.

Process costing systems consider overhead costs to include those costs that cannot be traced to a specific process.

True

False

Which of the following statements is true of activity-based costing?

ABC ignores the allocation of marketing costs.

ABC classifies some indirect costs as direct costs.

ABC is more likely to result in big differences from a traditional costing system if the business makes only one product rather than multiple products.

Activities are the cost objects of the second stage of ABC.

The departmental overhead rate method allows each department to have its own overhead rate and its own allocation base.

True

False

There are only two methods to derive an estimated line of cost behavior; the high-low method and the scatter diagram.

True

False

Cost-volume-profit analysis requires management to classify all costs as either fixed or variable with respect to production or sales volume within the relevant range of operations.

True

False

Traditional budgeting is generally better than activity-based budgeting when attempting to reduce costs by eliminating non-value-added activities.

True

False

The process of planning future business actions and expressing them as a formal plan is called:

Budgeting.

Cost accounting.

Managerial accounting.

Variance analysis.

Standard cost analysis.

Which of the following is not a result of following a well-designed budgeting process?

Improved decision-making processes.

Improved performance evaluations.

Improved coordination of business activities.

Assurance of future profits.

Improved communication of management's action plans.

In a company that employs continuous budgeting on a quarterly basis and has an accounting period that ends December 31 of each year, what period would the first revision and update to the January through December 2015 budget cover?

February 2015-January 2016

March 2015-February 2016

December 2015-November 2016

April 2015-March 2016

January 2016-December 2016

The master budget is a small component of the comprehensive budget.

True

False

A plan that states the number of units to be produced in a future period, based on the projected unit sales and inventory considerations, is the:

Sales budget.

Merchandise purchases budget.

Production budget.

Cash budget.

Manufacturing budget.

A capital expenditures budget is prepared before the operating budgets.

True

False

Production budgets always show both budgeted units of product and total costs for the budgeted units.

True

False

The financial statement effects of the budgeting process are summarized on the cash budget and the capital expenditures budget.

True

False

In preparing a budgeted balance sheet, the amount for Accounts Receivable data can be derived from:

The purchases budget and schedule of cash payments.

The sales budget and the schedule of cash receipts.

The capital expenditures budget and purchases budget.

The budgeted income statement and budgeted balance sheet.

The selling expenses budget and the schedule of cash receipts.

Which of the following accounts would appear on a budgeted balance sheet?

Income tax expense.

Accounts receivable.

Sales commissions.

Depreciation expense.

All of the choices are correct.

Sales variance analysis is used by managers for:

Planning purposes only.

Budgeting purposes only.

Control purposes only.

Planning and control purposes.

Planning and budgeting purposes.

The anticipated costs incurred under normal conditions to produce a specific product or to perform a specific service are:

Variable costs.

Fixed costs.

Standard costs.

Product costs.

Period costs.

A cost variance is the difference between actual cost and standard cost.

True

False

A flexible budget performance report compares the differences between:

Actual performance and budgeted performance based on actual sales volume.

Actual performance over several periods.

Budgeted performance over several periods.

Actual performance and budgeted performance based on budgeted sales volume.

Actual performance and standard costs at the budgeted sales volume.

Static budget is another name for:

Standard budget.

Flexible budget.

Variable budget.

Fixed budget.

Master budget.

A company's flexible budget for 12,000 units of production showed per unit contribution margin of $3.00 and fixed costs, $20,000. The operating income expected if the company produces and sells 18,000 units is:

$34,000.

$10,000.

$18,667.

$16,000.

$24,000.

Use the following data to find the direct labor rate variance if the company produced 7,000 units of product during the period.

Standard:

Direct labor (3.2 hrs. per unit @ $7/hr.)

$22.40

per unit

Actual cost incurred:

Direct labor (24,500 hrs. @ $7.50/hr.)

$183,750

$12,250 unfavorable.

$14,700 unfavorable.

$14,700 favorable.

$12,250 favorable.

$26,950 favorable.

Fletcher Company collected the following data regarding production of one of its products. Compute the direct labor efficiency variance.
 

Direct labor standard (2 hrs. @ $12.75/hr.)

$25.50 per finished unit

Actual direct labor hours

81,500 hrs.

Actual finished units produced

40,000 units

Actual cost of direct labor

$1,100,250

$19,125 favorable.

$80,250 favorable.

$61,125 favorable.

$19,125 unfavorable.

$80,250 unfavorable.

The following company information is available for March. The direct materials price variance is:

Direct materials purchased and used

2,500 feet @ $55 per foot

Standard costs for direct materials for March production

2,600 feet @ $53 per foot

$5,000 favorable.

$300 favorable.

$5,200 unfavorable.

$5,000 unfavorable.

$5,200 favorable.

An overhead cost variance is the difference between the total overhead actually incurred for the period and the standard overhead applied to products.

True

False

When evaluating a special order, management should:

Only accept the order if the incremental revenue exceeds all product costs.

Only accept the order if the incremental revenue exceeds fixed product costs.

Only accept the order if the incremental revenue exceeds total variable product costs.

Only accept the order if the incremental revenue exceeds full absorption product costs.

Only accept the order if the incremental revenue exceeds regular sales revenue.

Carter Company reported the following financial numbers for one of its divisions for the year; average total assets of $4,100,000; sales of $4,525,000; cost of goods sold of $2,550,000; and operating expenses of $1,372,000. Assume a target income of 10% of average invested assets. Compute residual income for the division:

$203,000.

$193,000.

$150,500.

$60,300.

$197,500.

If a company reports profit margin of 31.6% and investment turnover of 1.30 for one of its investment centers, the return on investment must be:

24.3%.

41.1%.

32.9%.

30.3%.

4.11%.

Which of the following is not one of the perspectives used to analyze performance using the balanced scorecard?

Customer

Financial/owners

Internal process

Number of employees

Innovation and learning

Which of the following statements is correct concerning the elements of cycle time?

Move time is the time spent moving (1) raw materials from storage to production and (2) goods in process from one factory location to another factory location.

Inspection time is the time spent producing the product.

Process time is considered non-value-added time.

Wait time is considered value-added time.

Cycle efficiency is the ratio of non-value-added time to total cycle time.

The salaries of employees who spend all their time working in one department are:

Variable expenses.

Indirect expenses.

Direct expenses.

Responsibility expenses.

Unavoidable expenses.

Plans that identify costs and expenses under each manager's control prior to the reporting period, typically based on the flexible budget approach, are called:

Cost accounting systems.

Managerial accounting systems.

Responsibility accounting systems.

Responsibility accounting budgets.

Activity-based accounting systems.

Super Grocery store allocates its service department expenses to its various operating (sales) departments. The following data is available for its service departments:

Expense

Basis for allocation

Amount

Administrative

Square feet of floor space

$15,000

Advertising

Amount of dollar sales

$8,000

The following information is available for its three operating (sales) departments:

Department

Square Feet

Dollar Sales

Produce

1,000

  $80,000

Bakery

     800

  $30,000

Meats

   1,200

    $42,000

Totals

   3,000

  $152,000

What is the total administrative expense allocated to the Meats department?

$6,000.

$9,000.

$4,145.

$1,200.

$3,000.

The amount by which a department's sales exceed its direct expenses is:

Net sales.

Gross profit.

Departmental profit.

Contribution margin.

Departmental contribution to overhead.