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ACC 561 Final Exams

18  questions (36- 54) and ANSWERS  

 

36) A _____ gives the expected sales under a given set of conditions. A. sales prediction B. sales budget C. budget forecast D. sales forecast

37) Differences between the static budget and the flexible budget are due to _____. A. problems of cost control B. poor usage of material and labor C. a combination of price and material variances D. actual activity differing from expected activity levels

38) _____ are components of a master budget. A. A strategic plan and an operating budget B. An operating budget and a financial budget C. A continuous budget and a static budget D. A cash budget and an activity budget

39) The master budget quantifies targets for all of the following except _____. A. sales B. production C. markets D. cost driver activity

 40) The use of budgeted service department cost rates protects using departments from _____. A. service department efficiencies B. price fluctuations C. service outages D. all of these answers are correct

41) _____ is not a type of cost allocation. A. Allocation of costs to the appropriate organizational unit B. Reallocation of costs from service departments to production departments C. Allocation of costs of a particular organizational unit to products or services D. Reallocation of costs from production departments to service departments

42) The preferred guidelines for allocating service department costs include _____. A. identifying the direct and indirect costs B. evaluating performance using allocated costs for each service department C. establishing part or all of the details regarding cost allocation in advance of rendering the service D. allocating variable- and fixed-cost pools simultaneously

43) Kevin Company has two service departments, Maintenance and Personnel, as well as two production departments, Mixing and Finishing. Maintenance costs are allocated based on square footage while personnel costs are allocated based on number of employees. The following information has been gathered for the current year: Maintenance Personnel Mixing Finishing Direct dept. costs $126,000 $84,000 $105,000 $175,000 Square footage 800 400 1,600 1,200 Number of employees 8 12 24 32 If the step-down method of allocating costs is used and the Personnel Department is allocated first, then the amount of overhead that would be allocated from Personnel to Finishing is _____. A. $42,000 B. $72,000 C. $31,500 D. $105,000

44) Serena Company has two service departments, Maintenance and Personnel, as well as two production departments, Mixing and Finishing. Maintenance costs are allocated based on square footage while personnel costs are allocated based on number of employees. The following information has been gathered for the current year: Maintenance Personnel Mixing Finishing Direct dept. costs $126,000 $84,000 $105,000 $175,000 Square footage 800 400 1,600 1,200 Number of employees 8 12 24 32 If the step-down method is used to allocate costs and the Maintenance Department is allocated first, then the amount of overhead that would be allocated from Maintenance to Finishing is _____. A. $42,750 B. $31,500 C. $57,000 D. $47,250

45) Murphy Company has two service departments, Maintenance and Personnel, as well as two production departments, Mixing and Finishing. Maintenance costs are allocated based on square footage while personnel costs are allocated based on number of employees. The following information has been gathered for the current year: Maintenance Personnel Mixing Finishing Direct dept. costs $126,000 $84,000 $105,000 $175,000 Square footage 800 400 1,600 1,200 Number of employees 8 12 24 32 If the step-down method of allocating costs is used and the Personnel Department is allocated first, then the amount of overhead that would be allocated from Personnel to Mixing is _____. A. $31,500 B. $58,500 C. $63,000 D. $78,000

 46) _____ is another term for variable costing. A. Full costing B. Direct costing C. Traditional costing D. Absorption costing

47) _____ is (are) used for external reporting. A. Absorption costing B. Variable costing C. Direct costing D. Absorption costing and variable costing

48) factory overhead appears on the absorption-costing income statement as_____. A. a fixed expense B. part of cost of goods sold C. a production volume variance D. part of cost of goods sold and as a production volume variance

 30) The change from traditional costing to activity-based costing may reveal that _____. A. high volume products are overcosted B. both high and low volume products are undercosted C. both high and low volume products are overcosted D. low volume products are overcosted

49) Identify which of the following is not a characteristic of a management control system. A. A management control system aids and coordinates the process of making decisions. B. A management control system encourages short term profitability. C. A management control system motivates individuals throughout the organization to act in concert. D. A management control system coordinates forecasting sales and cost driver activities, budgeting, and measuring and evaluating performance.

50) _____ is the first step in designing a management control system. A. Evaluating management's performance B. Establishing organizational goals C. Preparing financial statements D. Distinguishing between profit centers and cost centers

51) _____ is the logical integration of management accounting tools to gather and report data and to evaluate performance. A. An internal control system B. A quality control system C. A financial reporting system D. A management control system

 52) The following information is available for the Peter Company: Sales $150,000 Invested Capital 156,250 ROI 10% The return on sales is _____. A. 10.00% B. 62.50% C. none of these answers is correct D. 10.42%

53) _____ is a measure of income or profit divided by the investment required to obtain that income or profit. A. Return on sales B. Return on investment C. Residual income D. Capital turnover

54) Jewel Company’s revenues are $300 and invested capital is $240. Expenses are currently 60% of sales. Jewel Company’s current return on investment is _____. A. 50% B. 80% C. none of these answers are correct D. 100%

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