In the way to check my understanding I think that I would need help in these question.
1. In general, more observations are required when cost and activity levels are unstable; i.e., the company's operations have changed significantly within the relevant range.
2. One advantage that regression techniques have over other cost estimation methods is it generates information that can be used to determine how well the estimated cost equation will predict future costs.
3. In general, the account analysis method focuses on the underlying relationship between cost and activities from the previous period.
4. The Shapely Company uses the high-low method to determine its cost equation. The following information was gathered for 2008:
If Shapely expects to use 10,000 machine hours next month, what are the estimated direct labor costs?
E. some other answer _______________.
5. The Wiscow Manufacturing Company recorded overhead costs of $14,182 at an activity level of 4,200 machine hours and $8,748 at 2,300 machine hours. The records also indicated that overhead of $9,730 was incurred at 2,600 machine hours. What is the total estimated cost for 2,600 machine hours using the high-low method to estimate the cost equation?
6. Which of the following is the difference between variable costs and fixed costs: (CMA adapted, 6/94)
A. variable costs per unit fluctuate and fixed costs per unit remain constant
B. variable costs per unit are fixed over the relevant range and fixed costs per unit are variable
C. total variable costs are variable over the relevant range and fixed in the long term, while fixed costs never change
D. variable costs per unit change in varying increments, while fixed costs per unit change in equal units
E. total variable costs can be varied by management, while fixed costs are uncontrollable
The Business School at Eastern College is accumulating data as a first step in the preparation of next year's budget development. One cost that is being looked at closely is administrative costs as a function of student credit hours. Data on administrative costs and credit hours for the most recent academic year is shown below:
The controller's office has analyzed the data and has given you the results from the regression analysis:
7. The correlation coefficient for the regression equation for administrative costs is:
E. Some other amount.
8. The following direct labor information pertains to the manufacture of product Glu:
What is the standard direct labor cost per unit of product Glu? (CPA adapted, 5/92)
9. Cost pools are:
A. costs that are accumulated before being allocated to cost objects on some common basis.
B. costs that are relevant to decision-making but irrelevant to financial reporting.
C. product costs that are assigned to cost objects using direct labor or machine hours.
D. accounts in the product life cycle from research and development to customer service.
10. In calculating the break-even point for a multiproduct company, which of the following assumptions is (are) commonly made when variable costing is used? (CPA adapted, 5/92)
I. Sales volume equals production volume.
II. Variable costs are constant per unit.
III. A given sales mix is maintained for all volume changes.
A. I and II
B. I and III
C. II and III
D. I, II, and III
11. The basic cost flow model is:
A. BB + TO = TI + EB
B. BB + TO TI = EB
C. EB = BB + TI TO
D. EB BB = TO TI
E. EB + TI TO = BB
12. The journal entry to record actual manufacturing overhead for indirect material debits Manufacturing Overhead (Control) and credits Accounts Payable.
13. Job shops have three types of inventory accounts: Direct Materials, Work-in-Process, and Merchandise Inventory.
14. Time cards are to direct labor as purchase orders are to direct material.
15. It is unethical to intentionally charge costs to the wrong job.
16. The journal entry to write-off a significant underapplied overhead balance at the end of an accounting period is
17. Complex jobs that take multiple time periods and require the work of many different departments, divisions, or subcontractors are called
18. The journal entry to record the actual manufacturing overhead costs for indirect material is
19. Which of the following companies would most likely use job costing?
A. paper manufacturer
B. paint producer
C. breakfast cereal maker
D. advertising agency
20. Under which of the following conditions will the FIFO method produce the same cost of goods manufactured as the weighted-average method?
A. There is no ending inventory.
B. There is no beginning inventory.
C. The beginning and ending inventories are equal.
D. The beginning and ending inventories are both 50% complete.
21. An equivalent unit of conversion costs is equal to the amount of conversion costs required to
A. start a unit.
B. complete a unit.
C. transfer a unit in.
D. transfer a unit out.
22. The following examples briefly describe the manufacture of two different products. Which costing method (job-order or process) would be the best method to use for each project?
I. Fred Puetz manufactures Fred's Wine Cooler. Fred once made the statement, "People can have any flavor of Fred's Wine Cooler they want as long it's boysenberry."
II. Ahmad Aerondonetics is manufacturing three space shuttles for the country of Kricherra. Each shuttle is slightly different and production will last approximately two years.
23. An operations costing system is
A. identical to a process costing system except that actual cost is used for manufacturing overhead.
B. the same as a process costing system except that materials are allocated on the basis of batches of production.
C. the same as a job order costing system except that materials are accounted for in the same way as they are in a process costing system.
D. the same as a job order costing system except that no overhead allocations are made since actual costs are used throughout.
E. a system in which manufacturing activities are finely divided into individual, discrete steps or operations.
24. Process costing is based on the assumption that all units in a large group have the same unit cost.
25. A company that uses first-in, first-out (FIFO) process costing to assign and control costs, must use FIFO to value its Finished Goods Inventories.
26. The number of units in the beginning Work-in-Process Inventory plus the units transferred out during the period equals the number of units started during the period plus the number of units in the ending Work-in-Process Inventory.
27. Material requisitions required to finish a job that was not complete at the end of the prior period are debited to Work-in-Process inventory account.
28. Service organizations generally use the same job costing procedures as manufacturers.
29. The cost in the ending Finished Goods inventory account consists of the direct materials, direct labor, and manufacturing overhead of all jobs still in process at the end of the period.
30. Manufacturing overhead is only recorded on the job cost sheets when (a) financial statements are prepared or (b) a job is completed.
The solution explains various true/false and multiple choice questions in cost accounting