Academic response to Managerial Accounting

We are currently studying for our future managerial accounting exam, I am doing a pre-test and for accuracy I would like to know the answers to the specific problems attached.

1. Stoneberger Corporation produces a single product and has the following cost structure:

The unit product cost under variable costing is:
A. $128
B. $125
C. $202
D. $131

2. Beamish Inc., which produces a single product, has provided the following data for its most recent month of operations:

There were no beginning or ending inventories. The unit product cost under absorption costing was:
A. $93
B. $97
C. $136
D. $194

3. Hopkin Company manufactures a single product. The following data pertain to the company's operations last year:

At the beginning of the year there were no units in inventory. A total of 12,000 units were produced during the year, and 10,000 units were sold.

4. Under variable costing, the unit product cost is:
A. $8.00
B. $10.00
C. $12.00
D. $14.00

5. Under absorption costing, the unit product cost is:
A. $8.00
B. $10.00
C. $12.00
D. $15.00

6. The net operating income under variable costing would be:
A. $64,000
B. $60,000
C. $56,000
D. $52,000

7. The net operating income under absorption costing would be:
A. the same as the income under variable costing.
B. $8,000 greater than the income under variable costing.
C. $12,000 greater than the income under variable costing.
D. $8,000 less than the income under variable costing.

8. When a company shifts from a traditional cost system in which manufacturing overhead is applied based on direct labor-hours to an activity-based costing system in which there are batch-level and product-level costs, the unit product costs of high volume products typically decrease whereas the unit product costs of low volume products typically increase.
True False

9. Leaper Corporation uses an activity-based costing system with the following three activity cost pools:

The activity rate for the Order Processing activity cost pool is closest to:
A. $1,485 per order
B. $1,540 per order
C. $1,465 per order
D. $1,320 per order

10. Bennette Corporation has provided the following data concerning its overhead costs for the coming year:

The activity rate for the Order Processing activity cost pool is closest to:
A. $430 per order
B. $420 per order
C. $360 per order
D. $440 per order

11. Lakatos Corporation uses an activity-based costing system with three activity cost pools. The company has provided the following data concerning its costs:

How much cost, in total, would be allocated in the first-stage allocation to the Fabricating activity cost pool?
A. $88,000
B. $132,000
C. $264,000
D. $120,000

12. Forliche Florist specializes in large floral bouquets for hotels and other commercial spaces. The company has provided the following data concerning its annual overhead costs and its activity based costing system:

13. What would be the total overhead cost per bouquet according to the activity based costing system? In other words, what would be the overall activity rate for the making bouquets activity cost pool? (Round to the nearest whole cent.)
A. $1.65
B. $1.35
C. $1.58
D. $1.80
14. Grefrath Corporation is developing direct labor standards. A particular product requires 0.71 direct labor-hours per unit. The allowance for breaks and personal needs is 0.04 direct labor-hours per unit. The allowance for cleanup, machine downtime, and rejects is 0.12 direct labor-hours per unit. The standard direct labor-hours per unit should be:
A. 0.71
B. 0.87
C. 0.67
D. 0.55

15. Information on Rex Co.'s direct material costs for May follows:

For the month of May, what was Rex's direct materials price variance?
A. $2,800 favorable
B. $2,800 unfavorable
C. $6,000 unfavorable
D. $6,000 favorable
16. Buckler Company manufactures desks with vinyl tops. The standard material cost for the vinyl used per Model S desk is $27.00 based on 12 square feet of vinyl at a cost of $2.25 per square foot. A production run of 1,000 desks in March resulted in usage of 12,600 square feet of vinyl at a cost of $2.00 per square foot, a total cost of $25,200. The materials quantity variance resulting from the above production run was:
A. $1,200 unfavorable
B. $1,350 unfavorable
C. $1,800 favorable
D. $3,150 favorable

17. A key feature of a flexible budget is that actual results can be compared to budgeted costs at the same level of activity.
True False
18. Fixed costs should not be included in a flexible budget because they do not change when the level of activity changes.
True False

19. The manufacturing overhead variance that is a measure of capacity utilization is:
A. the overhead spending variance.
B. the overhead efficiency variance.
C. the overhead budget variance.
D. the overhead volume variance.

20. Ostler Hotel bases its budgets on guest-days. The hotel's static budget for April appears below:

The total overhead cost at an activity level of 9,700 guest-days per month should be:
A. $213,150
B. $237,650
C. $223,950
D. $224,920

21. Riggs Enterprise's flexible budget cost formula for indirect materials, a variable cost, is $0.45 per unit of output. If the company's performance report for last month shows a $90 favorable variance for indirect materials and if 8,700 units of output were produced last month, then the actual costs incurred for indirect materials for the month must have been:
A. $4,005
B. $3,915
C. $3,825
D. $3,735

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Solution Summary

The solution explains some multiple choice questions relating to managerial accounting