MBA Semester 1 Exam_Part II_Ver 1

William’s Misguided Methods

WMB Motorcycles had been headquartered and doing business in the United States for three years, building increased demand in the high-end market. The CEO of the company decided to explore the possibility of expanding the business to reach a different market, that of the daily commuter.  With gas prices being what they are, the CEO believed that there may be a need for a new form of inexpensive transportation.  With a few modifications to the product design, WMB Motorcycles may have the answer.

 

The CEO assigned William, the Director of Operations, to be in charge of performing the preliminary work in making the decisions regarding the market(s) in which to expand. William first visited some local firms to gain a feel for their level of interest and the viability of offering a smaller version of their motorcycle for local transportation.  But, after a few visits, William rejected this strategy based on an overall viewpoint of the local business person and their apparent insufficient disposable income in the marketplace.

 

Then William decided to visit with and perform an analysis of 200 corporate locations, gauging the interest level of their employees.  This process was extremely expensive and the time that William put into examining the data was extensive. He had difficulty with the analysis of the information obtained because the questions were limited to the participants’ level of interest in the proposed product.  By the time William finished his analysis, six months had past and he had little to say about the expansion possibilities. The CEO decided to indefinitely delay the project because of the lack of hard evidence to support expansion into a particular direction. The expensive project was an albatross for William and he lost considerable stature in the company for his waste of company funds, time, and resources, with little or no results.

 

Your task is to evaluate William’s work in this process. Describe the major area he neglected, and discuss what this area would have identified. What four (4) external environmental variables should William have used?  William also might have used an issues priority matrix.  Define what this is and using an issues priority matrix, discuss three additional (3) factors that might have influenced William’s lack of serviceable results.

 

 

 

 

 

 

 

Baseball Products, Inc.

 

            You are the new production manager of a small manufacturing company, Baseball Products, Inc., which is located in Littletown, Montana. Your company manufactures two primary products: baseball bats and baseball gloves. You have decided to implement ABC Costing to allocate overhead costs associated with these products.

 

            Your task is to design an ABC report to present to management.  Be sure to show an allocation of the overhead cost to Bats and Gloves and proof that you did the allocation correctly.

 

            You ask the manufacturing supervisor for the necessary data to apply ABC Costing. You are provided with the following information.

 

            The activities involved with manufacturing the bats and gloves in a week include the following.

 

Activity                                   Bats                             Gloves

 

Set-Ups                                       2                                  4

Machining                               150 hours                   350 hours

Receiving                                  30 receipts                   70 receipts

Packing                                   250 deliveries              550 deliveries

Engineering                             400 hours                    600 hours

 

            The overhead costs per activity are as follows in a week.

 

Activity                                   Cost

 

Set Ups                                   $     600

Machining                               $  7,500

Receiving                                $  3,000

Packing                                   $16,000

Engineering                             $22,000

 

Total                                        $49,100

 

      

MBA Semester 1 Exam_Part I_Ver 1

Semester Examination

Instructions

 

1.   When there is little fit between a strategic alternative under study and the corporate culture, which of the following would NOT be one of the considerations taken into account?

A.   Take a chance on bypassing the culture by implementing the strategic alternative

B.   Manage around the culture

C.   Try to change the culture to fit the strategy

D.   Change the strategy to fit the culture

E.   Ignore the corporate culture

Answer: __________

2.   Michael E. Porter advises that a division with strong marketing abilities, product  engineering, creative flair, strong capability in basic research, and a corporate reputation for quality or technological leadership should use a __________ strategy to enhance its prospects for success.

A.   focus

B.   differentiation

C.   overall cost leadership

D.   vertical growth

Answer: __________

3. An organization skilled at creating, acquiring, and transferring knowledge and modifying its behavior to reflect new knowledge and insights is a:

A. learning organization.

B. strategically managed corporation.

C. contingency management entity.

D. logical incrementalism company.

Answer: __________

4. What strategic planning process does research suggest to be the best for multidivisional corporations operating in a relatively stable environment?

A. Top-down strategic planning

B. Bottom-up strategic planning

C. Concurrent strategic planning

D. Functional area strategic planning

Answer: __________

5. A linked set of value-creating activities beginning with basic materials provided by suppliers and ending with distributors getting the final product into the hands of the ultimate consumer is called a:

A. value chain.

B. continuum of sustainability.

C. strategic capability.

D. fully integrated activity set.

E. strategic group.

Answer: __________

6. Price reductions, promotion cutbacks, and competitor dropouts characterize the __________ stage of the business life cycle.

A. introduction

B. growth

C. maturity

D. decline

E. closing

Answer: __________

7. Exxon, BP, and Amoco are popular brands of gasoline.   These large companies produce essentially the same product and sell it at essentially the same price.  As such, these companies are part of the following industry structure type:  __________________.  

A. pure monopoly

B. pure competition

C. pure oligopoly

D. monopolistic competition

E. differentiated oligopoly

Answer: __________

8. When one unit of a company sells a product to another unit, the price charged is the __________ price.

A. delivered

B. transfer

C. uniform

D. transaction

Answer: __________

9. A stock trading company that had its offices in the World Trade Center in 2001 could have used a(n) __________ to make different assumptions about market events, such as future bull markets, bear markets, day trader legislation, dot-com companies driving the market, etc. There is little chance that it would have assumed a deadly terrorist attack. 

A. SWOT analysis

B. societal audit

C. industry forecast

D. scenario analysis

E. competitive analysis

Answer: __________

10. Voice of the customer (VOC) measurements can be collected using:

A. complaint forms.

B. customer shopping habits.

C. value analyses.

D. service vendor analyses.

E. demographic analysis.

Answer: __________

11. The following information pertains to Voyager Company:  total assets $50,000; total current liabilities $10,000; total expenses $60,000; total liabilities $15,000; total revenues $80,000.  If invested capital is defined as total assets, the return on investment is:

A. 160 percent.

B. 25 percent.

C. 57 percent.

D. 40 percent.

Answer: __________

12. Bull Company manufactures a part for its production cycle.  The costs per unit of this part are:  direct material $3; direct labor $5; variable factory overhead $4; and fixed factory overhead $2.  The fixed factory overhead costs are unavoidable.  Assuming no other use of the facilities, the highest price that Bull Company should pay for this part in a make-buy decision is:

A. $12.

B. $14.

C. $8.

D. $11.

Answer: __________

13. The primary difference between variable and absorption costing is the accounting for:

A. beginning inventory costs.

B. fixed manufacturing overhead.

C. selling and administrative costs.

D. variable manufacturing overhead.

Answer: __________

14. Which of the following is NOT a major benefit of budgeting?

A. It compels managers to think ahead.

B. It provides definite expectations that are the best framework for judging subsequent   

            performance.

C. It aids managers in coordinating their efforts, so that the objectives of the organization as 

a whole match the objectives of its parts.

D. It allows managers to operate day-to-day, reacting to current events rather than planning 

for the future.

Answer: __________

15. The most common treatment of end-of-year immaterial factory overhead variances is to:

A. ignore them.

B. allocate the variances among inventories and cost of goods sold.

C. capitalize the variances as a cost of finished goods inventory.

D. close the variances to cost of goods sold in the current period.

Answer: __________

16. Jeffery believes that his actions strongly affect the results achieved in his organization. As the result, Jeffery is described as having a __________, which tends to make Jeffery __________.

A. low internal locus of control; highly self-motivated and active politically

B. high internal locus of control; eager for information and likely to seek leadership 

opportunities

C. strong belief in Theory X; dogmatic

D. strong belief in Theory Y; highly autocratic

E. charismatic leadership style; most comfortable when his work situation is highly 

structured

Answer: __________

17. _______ conversation refers to people talking across boundaries and hierarchical levels about the group o organization's vision, critical strategic themes, and the values that can help achieve desired outcomes. 

A. Purpose-directed

B. Strategic 

C. Empowered

D. Leader 

E. Group

Answer: __________

18. Sam, a chief information officer, spent two years developing a web-based purchasing system that has been operating very successfully for several months. Under his former boss, it was to be the model for a broader web-based system to meet several corporate needs. Tom, the new executive vice president, and Sam’s new boss, doesn’t understand technology, believes that the Internet is a fad, and that Sam shouldn’t waste time expanding web-based systems to other corporate needs. Sam is very frustrated by Tom’s decision. To address this issue, Sam needs to:

A. lead with love.

B. lead with fear.

C. develop his own emotional intelligence.

D. expand his own capacity for leadership.

E. try to shift Tom’s mental model.

Answer: __________

19. Sally is a leader who assesses the situation and adapts her behavior and style to match her followers’ needs, maturity, training, and cohesion. She can best be described as:

A. task oriented.

B. relationship oriented.

C. focused on extroversion.

D. using the contingency approach.

E. using the path-goal theory.

Answer: __________

20. Which of the following theories places emphasis on the characteristics of the follower in determining the leadership style used?

A. Contingency Theory

B. Follower Theory

C. Path-Goal Theory

D. Situational Theory

Answer: __________

C06 Week-5 Threaded Discussion

Discuss two of the main forms of pollution and resource depletion and identify the major problems associated with each form.

(272 words)

EN130 Week-5 Threaded Discussion

Distinguish some things to consider when writing a casual analysis.

(175 words)

EN130 Week 3 Threaded Discussion

Discuss how you can write effective exemplification essays using specific language.

(210 words)

HW-2206 Business Ethics Scenarios

Review the following scenarios.

 

Scenario 1: Medical coding in a physician’s practice

Imagine you work in a high-pressure cardiology physician’s office and you are one of two medical coders. Your supervisor is very focused on the greatest reimbursement to satisfy revenue projections for the practice. As a result, you are asked to “up-code” billing. How can the pressure of acquiring the maximum repayment for services lead to manipulating or falsifying documentation?

 

Scenario #2: Administration of patient medications in the hospital setting

Imagine you are a new graduate nurse working nights on a busy medical unit. You just received a new patient who needs to be admitted to your unit and you just finished medicating a patient with a narcotic injection with a dose greater than ordered. Clearly understanding medication errors may lead to patient injury and even death, explain why a clinician may choose NOT to report the incident.

 

Scenario 3: Not hiring a qualified individual because of discrimination

Imagine you are a new human resources director in a nonprofit organization and have been pressured not to hire Middle Eastern candidates by the organization’s CEO. In the United States, discrimination against people based on their ethnicity, race, or cultural orientation is strictly forbidden under federal and state laws. Ethical discrimination may result in the breeding of ill feelings at work, as well as reduced productivity. To eliminate these ramifications, organizations need to put forth increased effort in curbing ethical discrimination in the employment sector. What are some interventions organizations can put in place to prevent discrimination?

 

Write a 150- to 350-word response for each ethical scenario. 

BU330 Accounting for Managers Set-3

Question-1

In a special sales order decision, incremental fixed costs that will be incurred if the special order is accepted are considered to be:

A. opportunity costs.

B. irrelevant to the decision.

C. relevant to the decision.

D. sunk costs.

 

Question-2

Blue Technologies manufactures and sells DVD players. Great Products Company has offered Blue Technologies $22 per DVD player for 10,000 DVD players. Blue Technologies' normal selling price is $30 per DVD player. The total manufacturing cost per DVD player is $18 and consists of variable costs of $14 per DVD player and fixed overhead costs of $4 per DVD player. (NOTE: Assume excess capacity and no effect on regular sales.)

Question-3

The horizontal line intersecting the vertical y-axis at the level of total cost on a CVP graph represents:

A. total costs.

B. total variable costs.

C. total fixed costs.

D. breakeven point.

 

Question-4

A product is sold at $60.00 per unit, the variable expense per unit is $30, and total fixed expenses are $200,000, what are the breakeven sales in dollars?

A. $3,333

B. $100,000

C. $133,333

D. $400,000

 

Question-5

To find the number of units that need to be sold in order to breakeven or generate a target profit, the formula used is:

A. (fixed expenses + operating income) ÷ contribution margin per unit.

B. (fixed expenses + operating income) ÷ contribution margin ratio.

C. (fixed expenses – operating income) ÷ contribution margin ratio.

D. (fixed expenses – operating income) ÷ contribution margin per unit.

 

Question-6

Sky High Seats manufactures seats for airplanes. The company has the capacity to produce 100,000 seats per year, but is currently producing and selling 75,000 seats per year. The following information relates to current production:

Sale price per unit	$400
Variable costs per unit:	$220
Manufacturing	$50
Marketing and administrative
Total fixed costs:
Manufacturing	$750,000
Marketing and administrative	$200,000

If a special sales order is accepted for 3,000 seats at a price of $300 per unit, and fixed costs increase by $10,000, how would operating income be affected? (NOTE: Assume regular sales are not affected by the special order.)

A. Decrease by $80,000

B. Increase by $230,000

C. Increase by $90,000

D. Increase by $80,000

 

Question-7

Samson Incorporated provided the following information regarding its only product:

Sale price per unit	$50.00
Direct materials used	$160,000
Direct labor incurred	$185,000
Variable manufacturing overhead	$120,000
Variable selling and administrative expenses	$70,000
Fixed manufacturing overhead	$65,000
Fixed selling and administrative expenses	$12,000
Units produced and sold	20,000
Assume no beginning inventory

Assuming there is excess capacity, what would be the effect on operating income of accepting a special order for 1,200 units at a sale price of $47 per product? The 1,200 units would not require any variable selling and administrative expenses. (NOTE: Assume regular sales are not affected by the special order.)

A. Increase by $84,300

B. Decrease by $28,500

C. Increase by $24,300

D. Increase by $28,500

 

Question-8

The area to the right of the breakeven point and between the total revenue line and the total expense line represents:

A. expected profits.

B. expected losses.

C. variable expenses.

D. fixed expenses.

 

Question-9

The Muffin House produces and sells a variety of muffins. The selling price per dozen is $15, variable costs are $9 per dozen, and total fixed costs are $4,200. How many dozen muffins must The Muffin House sell to breakeven?

A. 10,500

B. 700

C. 280

D. 175

 

Question-10

The breakeven point may be defined as the number of units a company must sell to do which of the following?

A. Generate a net loss

B. Generate a zero profit

C. Earn more net income than the previous accounting period

D. Generate a net income

 

Question-11

To find the breakeven point using the shortcut formulas, you use:

A. zero for the contribution margin per unit.

B. zero for the fixed expenses.

C. zero for the contribution margin ratio.

D. zero for the operating income.

 

Question-12

Assume the following amounts:

Total fixed costs	$24,000
Selling price per unit	$20
Variable costs per unit	$15

If sales revenue per unit increases to $22 and 12,000 units are sold, what is the operating income?

A. $264,000

B. $60,000

C. $108,000

D. $84,000

 

Question-13

Pluto Incorporated provided the following information regarding its single product:

Direct materials used	$240,000
Direct labor incurred	$420,000
Variable manufacturing overhead	$160,000
Fixed manufacturing overhead	$100,000
Variable selling and administrative expenses	$60,000
Fixed selling and administrative expenses	$20,000

The regular selling price for the product is $80. The annual quantity of units produced and sold is 40,000 units (the costs above relate to the 40,000 units production level). The company has excess capacity and regular sales will not be affected by this special order. There was no beginning inventory. What would be the effect on operating income of accepting a special order for 3,500 units at a sale price of $55 per product?

A. Increase by $115,500

B. Increase by $269,500

C. Decrease by $115,500

D. Decrease by $269,500

 

Question-14

A manager should always reject a special order if:

A. the special order price is less than the variable costs of the order.

B. there is available excess capacity.

C. the special order price is less than the regular sales price.

D. the special order will require variable nonmanufacturing expenses.

 

Question-15

Which of the following best describes a “sunk cost”?

A. Costs that were incurred in the past and cannot be changed

B. Benefits foregone by choosing a particular alternative course of action

C. A factor that restricts the production or sale of a product

D. Expected future data that differ among alternatives

 

Question-16

Corny and Sweet grows and sells sweet corn at its roadside produce stand. The selling price per dozen is $3.75, variable costs are $1.25 per dozen, and total fixed costs are $750.00. What are breakeven sales in dollars?

A. $563

B. $300

C. $375

D. $1,125

 

Question-17

If total fixed costs are $455,000, the contribution margin per unit is $25.00, and targeted operating income is $25,000, how many units must be sold to breakeven?

A. 11,375,000

B. 19,200

C. 18,200

D. 625,000

 

Question-18

“Contribution margin per unit” is best described by which of the following?

A. Sales price per unit minus fixed cost per unit

B. Sales price per unit minus variable cost unit

C. Sales price per unit minus fixed and variable costs per unit

D. Units sold time contribution margin ratio

 

Question-19

The effect of a plant closing on employee morale is an example of which of the following?

A. A qualitative factor

B. A quantitative factor

C. A sunk cost

D. A variable cost

 

Question-20

The performance evaluation of a profit center is typically based on its:

A. flexible budget variance.

B. static budget variance.

C. return on investment.

D. return on assets.

 

Question-21

Brockman Company is preparing its cash budget for the upcoming month. The budgeted beginning cash balance is expected to be $35,000. Budgeted cash disbursements are $123,000, while budgeted cash receipts are $130,000. Brockman Company wants to have an ending cash balance of $48,000. How much would Brockman Company need to borrow to achieve its desired ending cash balance?

A. $6,000

B. $90,000

C. $42,000

D. $55,000

 

Question-22

Green Company has budgeted sales of 23,000 units for June and 25,000 units for July. Green's policy is to maintain its finished goods inventory at 25% of the following month's sales. Accordingly, at the end of May, Green had 5,750 units on hand. How many units must it produce in June in order to support the sales goal and maintain its policy regarding finished goods inventory?

A. 6,250 units

B. 23,000 units

C. 23,500 units

D. 29,250 units

 

Question-23

The difference between actual and budgeted figures is known as:

A. fluctuations.

B. variances.

C. overages.

D. underages.

 

Question-24

All of the following are responsibility centers EXCEPT:

A. profit centers.

B. investment centers.

C. customer centers.

D. cost centers.

Question-25

The results of a customer survey about customer experiences with the company's services would be an example of measuring which perspective?

A. Financial

B. Customer

C. Internal business

D. Learning and growth

 

Question-26

Which of the following types of cash outlays has its own budget?

A. Capital expenditures

B. Dividends

C. Income taxes

D. All of the above

 

Question-27

The ________ budget is the only budget stated ONLY in units, not dollars.

A. production

B. sales

C. direct materials

D. manufacturing overhead

Question-28

In a(n) ________ center, managers are accountable for both revenues and costs.

A. cost

B. profit

C. equity

D. investment

 

Question-29

For the most recent year, Robin Company reports operating income of $650,000. Robin's sales margin is 10%, and capital turnover is 2.0. What is Robin's return on investment (ROI)?

A. 5%

B. 1%

C. 100%

D. 20%

 

Question-30

If a company must decrease its selling price while all of the company's expenses remain constant, what will happen to return on investment (ROI)?

A. ROI will decrease.

B. ROI will increase.

C. ROI will not be affected.

D. We cannot determine the effect from the information provided.

 

Question-31

Regarding the budgeting process, which of the following statements is true?

A. The budget should always be designed by top corporate management.

B. The budget should be approved by the company's external auditors.

C. The budget should be designed from the bottom up, with input from employees at all levels.

D. All of the listed statements are true regarding the budgeting process.

 

Question-32

Feeney Furniture prepared the following sales budget.

Month	Cash Sales	Credit Sales
March	$20,000	$10,000
April	$36,000	$16,000
May	$42,000	$40,000
June	$54,000	$48,000

Credit collections are 15% two months following the sale, 50% in the month following the sale, and 30% in the month of sale. The remaining 5% is expected to be uncollectible. What are the total cash collections in June?

A. $36,800

B. $90,800

C. $86,000

D. $96,600

 

Question-33

Assume Cucumber Company expects each division to earn an 8% target rate of return. Assume the Company’s Pickle Division had the following results.

Sales $24,500,000
Operating income $1,250,000
Total assets $15,500,000

The Division’s ROI is:

A. 8.1%.

B. 15.8%.

C. 5.1%.

D. 7.0%.

 

Question-34

Budget committees most often would include all of the following people EXCEPT:

A. CEO.

B. research and development manager.

C. shareholder.

D. marketing manager.

 

Question-35

Assume Cucumber Company expects each division to earn an 8% target rate of return. Assume the Company’s Pickle Division had the following results.

Sales $24,500,000
Operating income $1,250,000
Total assets $15,500,000

The Division’s RI is:

A. ($10,000).

B. $10,000.

C. ($710,000).

D. $710,000.

 

Question-36

Kotrick Company has beginning inventory of 15,000 units and expected sales of 23,000 units. If the desired ending inventory is 18,000 units, how many units should be produced?

A. 20,000

B. 56,500

C. 10,000

D. 26,000

 

Question-37

Forty Winks Corporation manufactures nightstands. The production budget shows that Forty Winks Corporation plans to produce 1,200 nightstands in March and 1,050 nightstands in April. Each nightstand requires .50 direct labor hours in its production. Forty Winks Corporation has a direct labor rate of $12 per direct labor hour. What is the total combined direct labor cost that should be budgeted for March and April?

A. 6,300

B. 7,200

C. 27,000

D. 13,500

 

Question-38

Selected financial data for The Portland Porcelain Works Coffee Mug Division is as follows.

Sales	$2,300,000
Operating income	$414,000
Total assets	$718,750
Current liabilities	$180,000
Target rate of return	10%
Weighted average cost of capital	8%

What is The Portland Porcelain Works Coffee Mug Division capital turnover?

A. 5.6

B. 12.8

C. 3.2

D. 1.7

 

Question-39

Beginning inventory is $120,000 and ending inventory is 60% of beginning inventory. Compute cost of goods sold for the period if purchases are $400,000.

A. $72,000

B. $448,000

C. $520,000

D. $592,000

Question-40

How much are the expected increase (decrease) in revenues and expenses from the special sales order?

A. Expected increase in revenues $220,000; expected increase in expenses $140,000

B. Expected increase in revenues $220,000; expected increase in expenses $40,000

C. Expected increase in revenues $300,000; expected increase in expenses $140,000

D. Expected increase in revenues $220,000; expected increase in expenses $120,000

 

 

BU330 Accounting for Managers Set-2

Question-1

The cost of downtime caused by quality problems with the raw materials would be classified as what type of cost?

A. Prevention cost

B. Appraisal cost

C. External failure cost

D. Internal failure cost

 

Question-2

Which of the following is a result of cost distortion?

A. Over costing of all products

B. Under costing of all products

C. Accurate costing of all products

D. Over costing of some products and under costing of other products

 

Question-3

Which term listed below describes a system where companies purchase raw materials when needed in production and complete finished goods when needed by customers?

A. Internal failure costs

B. Backflush costing

C. Just-in-time

D. External failure costs

Question-4

Which of the following is a lean strategy?

A. Group like machines together.

B. Produce in smaller batches than a traditional system.

C. Maintain a higher level of inventory than a traditional system.

D. Lengthen setup times relative to a traditional system.

 

Question-5

The entry to record the purchase of raw materials on account using a job costing system would include a:

A. credit to work-in-process inventory.

B. debit to accounts payable.

C. debit to work-in-process inventory.

D. debit to raw materials inventory.

Question-6

Kramer Company manufactures coffee tables and uses an activity-based costing system to allocate all manufacturing conversion costs. Each coffee table consists of 20 separate parts totaling $240 in direct materials, and each requires 5 hours of machine time to produce. Additional information follows.

Activity	Allocation Base	Cost Allocation Rate
Materials handling	Number of parts	$2.00 per part
Machining	Machine hours	$2.75 per machine hour
Assembling	Number of parts	$1.00 per part
Packaging	Number of finished units	$3.00 per finished unit

What is the cost of machining per coffee table?

A. $15

B. $21

C. $13.75

D. $55

 

Question-7

The predetermined indirect cost allocation rate is computed as:

A. total estimated indirect costs / total estimated amount of the allocation base.

B. total amount of the allocation base / total estimated indirect costs.

C. total estimated indirect costs + total estimated amount of the allocation base.

D. total amount of the allocation base – total estimated indirect costs

 

Question-8

Watson's Computer Company uses ABC to account for its manufacturing process.

Activities	Indirect activity budget	Allocation base (cost driver)
Materials handling	$52,000	Based on number of parts
Machine setup	30,000	Based on number of setups
Assembling	9,750	Based on number of parts
Packaging	15,300	Based on number of finished units

Watson's Computer Company expects to produce 2,250 computers. Watson's Computer Company also expects to use 13,000 parts and have 20 setups. The allocation rate for materials handling will be:

A. $4.

B. $6.80.

C. $23.11.

D. $7.01.

 

Question-9

In job costing, the journal entry to record the use of direct materials on jobs is to debit work-in-process inventory and credit:

A. raw materials inventory.

B. finished goods inventory.

C. manufacturing overhead.

D. wages payable.

 

Question-10

Venus Crates manufactures custom crates for a variety of uses. The following data have been recorded for Job 551, which was recently completed. Direct materials used cost $7,200. There were 82 machine hours used on this job. The predetermined overhead rate is $30 per machine hour used. There were 175 direct labor hours worked on this job at a direct labor wage rate of $24 per hour. What is the total manufacturing cost of Job 551?

A. $13,860

B. $4,200

C. $2,460

D. $7,457

 

Question-11

A system that focuses on activities as the fundamental cost object and uses the costs for these activities to compile indirect costs of goods and services is:

A. appraisal costs.

B. value engineering.

C. activity-based costing.

D. prevention costs.

 

Question-12

If jobs have been under costed due to under allocation of manufacturing overhead, then cost of goods sold (COGS) is too low and which of the following corrections must be made?

A. Decrease COGS for the amount of the under allocation

B. Increase COGS for double the amount of the under allocation

C. Decrease COGS for double the amount of the under allocation

D. Increase COGS for the amount of the under allocation

 

Question-13

The first step in developing an ABC system is:

A. calculate an activity cost allocation rate for each activity.

B. allocate the costs to the cost object using the activity cost allocation rates.

C. select an allocation base for each activity.

D. identify the primary activities and estimate a total cost pool for each.

 

Question-14

Service firms develop a predetermined rate for some costs. This rate is called the:

A. labor rate.

B. direct cost rate.

C. indirect cost allocation rate.

D. hourly cost rate.

 

Question-15

Here are selected data for Sunny Sky Corporation.
 

Beginning raw materials inventory	$37,000	Beginning work-in-process inventory	$62,200
Beginning finished goods inventory	58,300	Cost of materials purchased	151,000
Cost of direct materials requisitioned	91,300	Direct labor incurred	135,000
Actual manufacturing overhead	160,000	Cost of goods manufactured	287,000
Cost of goods sold	265,000	Manufacturing overhead rate (% of direct labor)	125%

 

What is the ending work-in-process inventory balance?

A. $161,500

B. $170,250

C. $211,200

D. $229,950

 

Question-16

Showboat Corporation had actual manufacturing overhead costs for the most recent year of $29,500. Manufacturing overhead is allocated using a predetermined manufacturing overhead rate of $1.50 per direct labor hour. Direct labor cost is $19 per hour. At the end of the year, Cabaret Corporation found it had over allocated manufacturing overhead by $1,250. How much manufacturing overhead was allocated in total during the year?

A. $28,250

B. $29,500

C. $30,750

D. $1,250

 

Question-17

Which term listed below describes costs incurred when the company fails to detect poor quality goods or services before delivery to the customer?

A. Internal failure costs

B. Value-added activity

C. External failure costs

D. Just-in-time production

 

Question-18

Which of these documents informs the storeroom to send specific materials to the factory floor?

A. Receiving report

B. Bill of materials

C. Purchase order

D. Materials requisition

 

Question-19

The benefits of using the ABC costing system are higher if the company:

A. has high indirect costs.

B. produces many different products that use differing amounts of resources.

C. has high indirect costs and produces many different products that use differing amounts of resources.

D. produces only one product.

 

Question-20

A(n) ________ is an estimated manufacturing overhead rate computed before the year begins.

A. cost allocation

B. cost driver

C. predetermined manufacturing overhead rate

D. actual manufacturing overhead rate

 

Question-21

The representation for fixed cost per unit of activity is:

A. vx divided by v.

B. vx divided by y.

C. y divided by x.

D. f divided by x.

Question-22

When units are moved from one processing department to the next, the cost associated with those units must also be moved from one WIP account to the next. What are these costs called?

A. Transported costs

B. Transmitted costs

C. Transferred costs

D. Conveyed costs

 

Question-23

Which of the following is unique to a process costing system?

A. Work is not started on a product until an order is received.

B. Direct materials, direct labor, and manufacturing overhead are assigned to the first department only.

C. Costs for each process stay with that process until the goods are moved to finished goods.

D. Each process has its own WIP account.

 

Question-24

When absorption costing is used and management bonuses are related to operating income, managers are more likely to:

A. decrease inventory levels.

B. increase inventory levels.

C. keep inventory levels consistent.

D. steal from the company.

 

Question-25

The Jones Corporation uses a process system. During the current period, 2,500 units were started and 1,100 units were completed and transferred out. Ending units were 60% complete for materials and 45% complete for conversion costs. Direct materials costs added were $35,405 and conversion costs added were $32,870. There was no beginning WIP inventory and conversion costs are added evenly throughout the process. At the end of the period, what are the total equivalent units for conversion costs?

A. 1,940

B. 1,400

C. 1,100

D. 1,730

 

Question-26

The use of either absorption or variable costing will make little difference in companies:

A. using just-in-time inventory methods.

B. with large inventories.

C. with high fixed costs.

D. with high variable costs.

 

Question-27

Total fixed costs for Purple Figs Company are $52,000. Total costs, both fixed and variable, are $160,000 if 80,000 units are produced. The fixed cost per unit at 80,000 units would be:

A. $1.35/unit.

B. $0.65/unit.

C. $2.00/unit.

D. $2.65/unit.

 

Question-28

The contribution margin is equal to:

A. sales minus cost of goods sold.

B. sales minus operating expenses.

C. sales minus fixed expenses.

D. sales minus variable expenses.

 

Question-29

A company manufactures mirrors. Last month's costs were as follows.

Direct materials	$90,000
Direct labor	144,000
Manufacturing overhead	158,000

What were the conversion costs for the month?

A. $302,000

B. $392,000

C. $234,000

D. $90,000

 

Question-30

Which of the following does NOT appear on an income statement prepared using variable costing?

A. Fixed production costs

B. Contribution margin

C. Gross margin

D. Variable production costs

 

Question-31

In process costing, ________ is/are found by taking the number of partially completed physical units and multiplying it by the percentage of the process completed.

A. cost of goods sold

B. equivalent units

C. fixed manufacturing overhead costs

D. conversion costs

 

Question-32

Sugartown Corporation has total sales revenues of $930,000. If its total fixed costs are $182,000 and its total variable costs are $267,000, then the total contribution margin is:

A. total revenue minus total fixed costs.

B. total revenue minus total variable costs.

C. total variable costs minus total fixed costs.

D. equal to operating income.

 

Question-33

At Hodgson Corporation, direct materials are added at the beginning of the process, and conversion costs are uniformly applied. Other details include the following.

Beginning WIP direct materials	$32,000
Beginning WIP conversion costs	$20,250
Costs of materials added	$384,100
Costs of conversion added	$271,125
WIP beginning (50% for conversion)	19,200 units
Units started	119,500 units
Units completed and transferred out	115,700 units
WIP ending (60% for conversion)	23,000 units

What are the total equivalent units for conversion costs?

A. 127,200

B. 125,300

C. 129,500

D. 138,700

 

Question-34

Fixed costs that are the result of previous management decisions that current managers have no control over in the short run are called ________ fixed costs.

A. discretionary

B. committed

C. standard

D. past

 

Question-35

When predicting costs at other volumes using a cost equation derived from either the high-low method or regression analysis, managers should consider:

A. outliers.

B. general inflation.

C. seasonality.

D. All of the above

 

Question-36

The first step of the 5-step process costing procedure is.

A. compute output in terms of equivalent units.

B. summarize total costs to account for.

C. compute the cost per equivalent unit.

D. summarize the flow of physical units.

 

Question-37

The following information is provided by Adametz Company.

WIP inventory, January 1	0 units
Units started	7,500
Units completed and transferred out	3,300
WIP inventory, December 31	4,200
Direct materials	$15,500
Direct labor	$18,400
Manufacturing overhead	$9,000

The units in ending WIP inventory were 90% complete for materials and 50% complete for conversion costs. At the end of the year, what are the equivalent units for conversion costs?

A. 3,750

B. 3,300

C. 5,400

D. 2,100

Question-38

Fun Stuff Manufacturing produces Frisbees using a three-step process that includes molding, coloring, and finishing. Which of the following accounts is debited for conversion costs?

A. WIP inventory-finishing

B. Finished goods inventory

C. Raw materials inventory

D. Cost of goods sold

 

Question-39

Fun Stuff Manufacturing produces ping pong balls using a three-step sequential process that includes molding, coloring, and finishing. When the balls and associated costs are transferred from the coloring process to the finishing process, which account is credited?

A. WIP inventory-coloring

B. WIP inventory-molding

C. Raw materials inventory

D. WIP inventory-finishing

 

Question-40

On a traditional income statement, sales revenue less cost of goods sold equals:

A. gross profit.

B. contribution margin.

C. operating income.

D. operating expenses

 

BU330 Accounting for Managers Set-1

Question- 1

Lots of Stuff Company reports the following data for its first year of operation.
 

Work in process inventory, beginning	$0
Work in process inventory, ending	140,000
Direct materials used	110,000
Direct Labor	115,000
Manufacturing overhead	185,000
Finished goods inventory, beginning	0
Finished goods inventory, ending	90,000

 

What are the total manufacturing costs?

A. $455,000

B. $410,000

C. $750,000

D. $520,000

Question- 2

Porches, Inc., sells lawn furniture. Selected financial information for the most recent year follows.

Beginning merchandise inventory on January 1 was $33,000.
Ending merchandise inventory on December 31 was $35,000.
Purchases during the year were $92,000.
Selling and administrative expenses were $75,000.
Sales for year were $262,000.

What was the value of goods available for sale?

A. $125,000

B. $127,000

C. $170,000

D. $ 90,000

Question- 3

Which of the following costs could be found in work in process inventory for a candy bar manufacturer?

A. Assembly worker wages

B. Utilities for administrative offices

C. Depreciation on sales office

D. Customer order forms

 

Question- 4

__________ gathers, summarizes, and reports on the financial impact of changes to business operations.

A. Managerial accounting

B. Planning

C. Directing

D. Controlling

 

Question- 5

Evaluating results against the plan is an example of which of the following management functions?

A. Planning

B. Controlling

C. Analyzing

D. Directing

 

Question- 6

Which of the following is NOT an example of an indirect cost incurred in manufacturing automobiles?

A. Plant supervisor salary

B. Machinery depreciation in the factory

C. Plant utilities

D. Cost of the automobile engines

 

Question- 7

Which of the following people is most likely to use only financial accounting information?

A. Vice president of plant operations

B. Product manager

C. Plant manager

D. Bank loan officer

 

Question- 8

Winner's Sporting Equipment manufactures sporting goods. Selected costs from the past year include the following.

Plastics used to make products	$151,000
Heating and lighting costs for factory	65,000
Factory janitor wages	67,000
Costs of shipping to customers	11,000
Lubricants used in factory equipment	2,000
Lighting costs for sales office	20,000
Depreciation on factory equipment	23,000
Office supplies for sales office	6,000
Insurance costs for factory	13,000
Maintenance worker wages	99,000
Freight-in (on plastics)	7,500
Aluminum used to make products	175,000
Assembly-line worker wages	142,000
Salaries of salespeople	74,000

Period costs for Winner's Sporting Equipment totaled:

A. $91,000.

B. $37,000.

C. $188,000.

D. $111,000.

 

Question- 9

The IMA issues which of the following certifications?

A. CMA

B. CIA

C. CFP

D. CPA

 

Question- 10

Indirect materials, indirect labor, and indirect manufacturing costs are what type of manufacturing cost?

A. Direct labor

B. Direct materials

C. Manufacturing overhead

D. Prime costs

 

Question- 11

A wave of accounting scandals around the turn of the 21st century prompted which of the following?

A. XBRL

B. IFRS

C. SOX

D. ISO

 

Question- 12

Internal parties receive information about past performance from:

A. audit reports.

B. budget reports.

C. planning reports.

D. managerial accounting reports.

 

Question- 13

Which of the following types of companies has raw materials, work in process, and finished goods inventory?

A. Retailers

B. Manufacturers

C. Wholesalers

D. Service companies

 

Question- 14

Refusing gifts or favors that could be perceived to influence your actions is an example of which ethical standard?

A. Credibility

B. Integrity

C. Confidentiality

D. Competence

 

Question- 15

The costs associated with reengineering machinery and its location within the factory to increase efficiency would be considered which part of the value chain?

A. Customer service

B. Marketing

C. Research and development

D. Design

 

Question- 16

Costs that remain the same among alternatives are:

A. sunk costs.

B. irrelevant costs.

C. controllable costs.

D. uncontrollable costs.

 

Question- 17

The person who is directly responsible for all financial functions is the:

A. Treasurer.

B. CEO.

C. CFO.

D. COO.

Question- 18

 

________ is the business philosophy and a strategy of manufacturing without waste.

A. ISO 9001

B. Lean thinking

C. TQM

D. Thin manufacturing

 

Question- 19

Communicating information fairly and objectively is an example of which ethical standard?

A. Credibility

B. Integrity

C. Competence

D. Confidentiality

 

Question- 20

Which of the following describes the way in which total fixed costs behave?

A. They will decrease as production increases.

B. They will decrease as production decreases.

C. They will remain the same throughout production levels within the relevant range.

D. They will increase as production decreases.

HCS405 Week-3 Discussions

Question-1

Before granting a loan, bankers closely evaluate an organization’s debt-to-equity ratio. Explain why this ratio is so important to bankers.

Question-2

Read the Preparing Financial Statements section on the U.S. Small Business Administration (SBA) website.

Question-3

How does the balance sheet differ from a:

a. Income statement?

b. Budget?