Managerial Accounting :MCQ

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Business / Managerial Accounting - Please select ONLY: a,b,c, or d.
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* Which benefit of performance measurement is realized when managers receive information that enables them to take corrective action?

a. Accountability
b. Information asymmetry
c. Decision guidance
d. Feedback

* Which term refers to the process through which companies delegate authority to independent operating groups in the organization?

a. Decentralization
b. Accountability
c. Information asymmetry
d. Responsibility accounting

* The president of Borden's Pillows, Inc. forecasts the company will incur $1,200,000 of manufacturing overhead in the coming year.

The company also expects the following results for its operations in the coming year:

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Direct labor hours 30,000
Direct labor cost $600,000
Machine hours 40,000

What is the overhead allocation rate based on machine hours?

a. $40 per hour
b. $30 per hour
c. $20 per hour
d. $15 per hour

* Which of the following cost drivers would be the least appropriate overhead allocation base for a highly automated manufacturer of customized electric motors?

a. Direct labor hours
b. Material costs
c. Power consumption
d. Machine hours

* Which of the following is a measure of activity that causes a cost to occur?

a. Activity cost
b. Cost pool
c. Cost driver
d. Overhead allocation

* Cravat's Company uses activity-based costing. The company has two products: Round and Square. The annual production and sales of Round is 8,000 units and of Square is 5,000 units. There are three activity cost pools, with estimated total cost and expected activity as follows:

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Estimated Expected Activity
Activity Cost Pool Cost Round Square Total
Activity 1 20,000 100 400 500
Activity 2 37,000 800 200 1,000
Activity 3 91,200 800 3,000 3,800
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The cost per unit of Round under activity-based costing is closest to:

a. $ 2.40
b. $ 3.90
c. $ 6.60
d. $10.59

* Which of the following is an advantage of the traditional costing system over an activity-based costing system?

a. Better cost control
b. More widely used
c. Greater accuracy
d. Less expensive

* The operation that would be most likely to use a job-order costing system is

a. chemical production
b. sign-making
c. ink pen manufacturing
d. oil refining

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* Josemite Company reports the following cost data:

Administrative cost $26,000
Direct materials cost 21,000
Manufacturing overhead cost 33,000
Direct labor cost 17,000
Selling cost 13,000

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What is the total amount of manufacturing costs?

a. $ 59,000
b. $ 71,000
c. $ 54,000
d. $110,000

* Which of the following costs is an example of a manufacturing overhead cost?

a. Company president's salary
b. Factory maintenance supplies
c. Advertising
d. All of these are manufacturing overhead costs

* Which of the following costs is a manufacturing overhead cost?

a. Security guards at a factory entrance
b. Supplies used in sales activities
c. Wages paid to employees involved in production process
d. Material used in production

Solution Summary

Solution contains calculations of multiple choice questions