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1. Which of the following persons would occupy a line position in a

department store?

I. Sales manager

II. Manager, furniture department

III. Manager, advertising department

IV. Manager, personnel department

A !nly I

" !nly I and II

# !nly I, II, III

$ I, II, III, IV

%. &he 'enefits of a successful (ust)In)&ime system include all of the

following e*cept+

A funds tied up in inventories are released for use elsewhere.

" inventory 'uffers are increased.

# throughput time is reduced.

$ defect rates are decreased.

. A successful (I& system is 'ased upon which of the followingconcepts?

A &he company must rely upon a large num'er of suppliers to ensure

fre-uent deliveries of small lots.

" &he company should always choose those suppliers offering the lowest

prices.

# &he company should avoid long)term contracts with suppliers so as to

e*ert pressure on suppliers to mae prompt and fre-uent deliveries.

$ A small num'er of suppliers mae fre-uent deliveries of specific

-uantities thus avoiding the 'uildup of large inventories of materials on hand.

/. Which of the following statements are true regarding financial and

managerial accounting?

I. "oth are mandatory.

II. "oth rely on the same underlying financial data.

III. "oth emphasi0e the segments of an organi0ation, rather than

ust looing at the

organi0ation as a whole.

IV. "oth are geared to the future, rather than to the past.

A I, II, III, and IV

" !nly II, III and IV

# !nly II and III

$ !nly II

2. &he cost of rent for a manufacturing plant is generally considered

to 'e a+

3rime cost 3roduct cost

A 4o 5es

" 4o 4o

# 5es 4o

$ 5es 5es

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6. &he salary of the president of a manufacturing company would 'e

classified as which of the following?

A 3roduct cost

" 3eriod cost

# Manufacturing overhead

$ $irect la'or

7. Varia'le cost+

A increases on a per unit 'asis as the num'er of units produced

increases.

" remains constant on a per unit 'asis as the num'er of units produced

increases.

# remains the same in total as production increases.

$ decreases on a per unit 'asis as the num'er of units produced

increases.

8. Within the relevant range, the difference 'etween varia'le costs and

fi*ed costs is+

A varia'le costs per unit fluctuate and fi*ed costs per unit remainconstant.

" varia'le costs per unit are constant and fi*ed costs per unit

fluctuate.

# 'oth total varia'le costs and total fi*ed costs are constant.

$ 'oth total varia'le costs and total fi*ed costs fluctuate.

9. If the cost of goods sold is greater than the cost of goods

manufactured, then+

A wor in process inventory has decreased during the period.

" finished goods inventory has increased during the period.

# total manufacturing costs must 'e greater than cost of goods

manufactured.

$ finished goods inventory has decreased during the period.

1:. $elta Merchandising, Inc., has provided the following information

for the year ust ended+

4et sales ;1%8,2::

"eginning inventory %/,:::

3urchases 8:,:::

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" ;1%7,62:.

# ;1:,12:.

$ ;127,62:.

1%. a'or

/72 ;1,::: ; /:: ; %::

/76 ; 9:: ; 6:: ; 8::

/77 ; 8:: ; 9:: ;1,/::

/78 ; 6:: ; 1,1:: ;1,9::

!verhead is charged to production at 7: of the direct materials

cost. (o's /72, /77, and /78 have 'een delivered to the customer.

Samuelsons Wor in 3rocess inventory 'alance on (une : was+A ;6,/2:.

" ;%,86:.

# ;%,::.

$ ;%,7%:.

Bse the following to answer -uestion 16+

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Wayne company uses a o' costing system and applies overhead to o's using a

predetermined overhead rate 'ased on direct la'or)hours. &he company had the

following inventories at the 'eginning and end of March+

March 1 March 1

$irect Materials ;6,::: ;:,:::

Wor in 3rocess 18,::: 1%,:::

Cinished

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%:. #arlo #ompany uses a predetermined overhead rate 'ased on direct

la'or hours to apply manufacturing overhead to o's. &he company estimated

manufacturing overhead at ;%22,::: for the year and direct la'or)hours at

1::,::: hours. Actual manufacturing overhead costs incurred during the year

totaled ;%7:,:::. Actual direct la'or hours were 1:2,:::. What was the

overapplied or underapplied overhead for the year?

A ;%,%2: overapplied.

" ;%,%2: underapplied.

# ;12,::: overapplied.

$ ;12,::: underapplied.

%1. &he Watts #ompany uses predetermined overhead rates to apply

manufacturing overhead to o's. &he predetermined overhead rate is 'ased on

la'or cost in $ept. A and on machine hours in $ept. ". At the 'eginning of the

year, the company made the following estimates+

$ept. A $ept. "

$irect la'or cost ;:,::: ;/:,:::

Manufacturing overhead 6:,::: 2:,:::

$irect la'or hours 6,::: 8,:::Machine hours %,::: 1:,:::

What predetermined overhead rates would 'e used in $ept A and $ept

", respectively?

A 2: and ;8.::

" 2: and ;2.::

# ;12 and 11:

$ %:: and ;2.::

Bse the following to answer -uestions %%)%2+

&he information 'elow has 'een taen from the cost records of &ercel #ompany for

the past year+

=aw materials used in production ;%6,:::

&otal manufacturing costs charged to o's during

the year Dincludes raw materials, direct la'or, and

manufacturing overhead applied at the rate of 6:

percent of direct la'or cost 686,:::

#ost of goods availa'le for sale 8%6,:::

Selling and administrative e*penses %2,:::

Inventories

"eginning Ending

=aw Materials ;72,::: ; 82,:::

Wor in 3rocess 8:,::: :,:::Cinished

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%. $irect la'or costs charged to production during the year amounted

to+

A ;12,:::.

" ;%%2,:::.

# ;6:,:::.

$ ;%16,:::.

%/. &he #ost of

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$ ;186,:::

Bse the following to answer -uestion %8+

&he &se Manufacturing #ompany uses a o')order costing system and applies

overhead to o's using a predetermined overhead rate. &he company closes any

'alance in the Manufacturing !verhead account to #ost of

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$ ;1.68.

%. Bsing the high)low method of analysis, the estimated fi*ed cost per

month for electricity is closest to+

A ;1,:6.2:.

" ; 87:.::.

# ;1,%9:.::.

$ ;1,12:.::.

Bse the following to answer -uestions )/+

Wilson #ompanys activity for the first si* of the current year is as follows+

Machine Electrical

Month @ours #ost

(anuary %,::: ;1,26:

Ce'ruary ,::: ;%,%::

March %,/:: ;1,72:

April 1,9:: ;1,2%:May 1,8:: ;1,/8:

(une %,1:: ;1,6::

. Bsing the high)low method, the varia'le cost per machine hour would

'e+

A ;:.67.

" ;:.6/.

# ;:./:.

$ ;:.6:.

/. Bsing the high)low method, the fi*ed portion of the electrical cost

each month would 'e+

A ;/::.

" ;76:.

# ;%8:.

$ ;19:.

Bse the following to answer -uestions 2)8+

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" ; 2,1::.

# ; %,7::.

$ ;11,%::.

6. &he e*pected contri'ution margin ne*t month is+

A ;17,6::.

" ;11,%::.

# ;1/,/::.

$ ;16,:::.

7. &he e*pected total administrative e*pense ne*t month is+

A ; /,8::.

" ;1,::.

# ; 9,::.

$ ;1/,9::.

8. &he e*pected gross margin ne*t month is+

A ;17,6::." ;11,%::.

# ;1/,/::.

$ ;16,:::.

Bse the following to answer -uestions 9)/:+

&he following data are for 3otras #ompany+

"eginning Ending

Cinished goods inventory ;:,::: ;/:,:::

Wor in process inventory ;%:,::: ;1,:::

=aw materials inventory ;%1,::: ;%6,:::

3urchases of raw materials ;71,:::

Cactory depreciation ; 2,:::

!ther factory costs ;1:,:::

$irect la'or ;%7,:::

Indirect la'or ; 6,:::

Selling e*pense ;1%,:::

!ver) or underapplied overhead ):)

9. &he cost of goods manufactured was+

A ;11/,:::.

" ;1,:::.

# ;1%1,:::.

$ ;18,:::.

/:. &he cost of goods sold was+

A ;11,:::.

" ;91,:::.

# ;81,:::.

$ ;111,:::.

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Answer Fey )) a+GS3:1pE1

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