Managerial Accounting Acct 2210

Question 1

Long term, can be significantly reduced in the short term

Answer 1

Committed

Question 2

May be altered in the short term by current managerial decisions

Answer 2

Discretionary

Question 3

A cost that remains constant regardless of changes in the level of the activity

Answer 3

Fixed Cost

Question 4

A straight line closely approximates a curvilinear variable cost line within the relevant range

Answer 4

Linearity Assumption

Question 5

Range of activity for a fixed cost is the range of activity over which the graph of the cost is flat

Answer 5

Relevant Range

Question 6

Which of the following cost would be variable with respect to the number of cones sold at a Baskin & Robbins Shop?
A. Cost of Lighting
B. Wages of the store manager
C. Cost of ice cream
D. Cost of napkins for customers

Answer 6

C. Cost of ice cream

D. Cost of napkins for customers

Question 7

Contains both variable and fixed elements

Answer 7

Mixed Cost

Question 8

Y=a+bX

Answer 8

Mixed Cost Equation

Question 9

Total mixed cost

Answer 9

Y

Question 10

Total fixed cost

Answer 10

A

Question 11

Variable cost per unit of activity

Answer 11

B

Question 12

Level of activity

Answer 12

X

Question 13

To analyze mixed cost, first identify period with lowest activity and period with the highest activity level.
Change in cost/Change in activity
High-Low

Answer 13

High - Low Method

Question 14

Change in cost/Change in activity

Answer 14

Variable Cost

Question 15

A method used to analyze mixed costs if a scatter graph plot reveals an approximately linear relationship between the X and Y variable.

Answer 15

Least - Squares Regression Method

Question 16

Sales-Cost of Good Sold

Answer 16

Gross Margin

Question 17

Gross Margin-Selling-Administrative Cost

Answer 17

Net Operating Income

Question 18

The potential benefit that is given up when one alternative is selected over another

Answer 18

Opportunity Cost

Question 19

Cost that have already been incurred and cannot be changed now or in the future. These costs should be ignored when making decisions.

Answer 19

Sunk Cost

Question 20

The revenue that can be obtained from selling one more unit of product is called

Answer 20

Marginal Revenue

Question 21

Suppose you are trying to decide whether to drive or take the train to Portland to attend a concert. You have ample cash to do either, but you don’t want to waste money needlessly. Is the cost of the train ticket relevant in this decision? In other words, should the cost of the train ticket affect the decision of whether you drive or take the train to Portland?

Answer 21

A. Yes, the cost of the train ticket is relevant.

Question 22

Suppose you are trying to decide whether to drive or take the train to Portland to attend a concert. You have ample cash to do either, but you don’t want to waste money needlessly. Is the annual cost of licensing your car relevant in this decision?

Answer 22

B. No, the licensing cost is not relevant.

Question 23

Suppose that your car could be sold now for $5,000. Is this a sunk cost?

Answer 23

B. No, it is not a sunk cost.

Question 24

Charge direct material and direct labor costs to each jab as work is performed

Answer 24

Direct Cost

Question 25

Manufacturing Overhead, including indirect materials and indirect labor, are allocated to all jobs rather than directly traced to each job

Answer 25

Indirect Cost

Question 26

What base is used to direct labor hours, direct labor dollars, or machine hours, and is assigned to manufacturing overhead for individual jobs. Cost Driver that causes overhead

Answer 26

Allocation Base

Question 27

``` Estimated total manufacturing overhead cost for the coming period ------------------------------------ Estimated total units in the allocation base for the coming period ```

Answer 27

Predetermined Overhead Rate(POHR)

Question 28

Used to apply overhead to jobs is determined before the period begins

Answer 28

POHR

Question 29

POHR for manufacturing Overhead

Answer 29

Y=a+bX Y = The estimated total manufacturing overhead cost a = The estimated total fixed manufacturing overhead cost b = The estimated variable manufacturing overhead cost per unit of the allocation base X = The estimated total amount of the allocation base.

Question 30

Job WR53 at NW Fab, Inc. required $200 of direct materials and 10 direct labor hours at $15 per hour. Estimated total overhead for the year was $760,000 and estimated direct labor hours were 20,000. What would be recorded as the cost of job WR53?

Answer 30

POHR= $760,000/20,000 hr. $38 Direct Materials $200 Direct Labor $15(10 hrs)= $150 MOHD. $38(10hrs)= $380 Total Cost $730

Question 31

any materials that go into the final product.

Answer 31

Raw Material

Question 32

consists of units of production that are only partially complete and will require further work before they are ready for sale to customers.

Answer 32

Work in Process

Question 33

consist of completed units of product that have not been sold to customers.

Answer 33

Finished Goods

Question 34

include the manufacturing costs associated with the goods that were finished during the period,

Answer 34

Cost of goods manufactured

Question 35

are not assigned to individual jobs, rather they are expensed in the period incurred.

Answer 35

Non manufacturing Cost

Question 36

Beginning work in process was $125,000. Manufacturing costs added to production for the month were $835,000. There were $200,000 of partially finished goods remaining in work in process inventory at the end of the month. What was the cost of goods manufactured during the month?

Answer 36

$760,000

Question 37

Beginning finished goods inventory was $130,000. The cost of goods manufactured for the month was $760,000. And the ending finished goods inventory was $150,000. What was the cost of goods sold for the month?

Answer 37

$740,000

Question 38

exists when the amount of overhead applied to jobs during the period using the predetermined overhead rate is less than the total amount of overhead actually incurred during the period.

Answer 38

Underapplied Overhead

Question 39

exists when the amount of overhead applied to jobs during the period using the predetermined overhead rate is greater than the total amount of overhead actually incurred during the period.

Answer 39

Overapplied Overhead

Question 40

Tiger, Inc. had actual manufacturing overhead costs of $1,210,000 and a predetermined overhead rate of $4.00 per machine hour. Tiger, Inc. worked 290,000 machine hours during the period. Tiger’s manufacturing overhead is:

Answer 40

$50,000 underapplied

Question 41

What effect will the overapplied overhead have on PearCo’s net operating income? a. Net operating income will increase. b. Net operating income will be unaffected. c. Net operating income will decrease.

Answer 41

a. Net operating income will increase.

Question 42

•Costs that can be easily and conveniently traced to a unit of product or other cost object. •Examples: direct material and direct labor

Answer 42

Direct Cost

Question 43

* Costs that cannot be easily and conveniently traced to a unit of product or other cost object. * Example: manufacturing overhead

Answer 43

Indirect Cost

Question 44

Indirect costs incurred to support a number of cost objects. These costs cannot be traced to any individual cost object.

Answer 44

Common Cost

Question 45

Raw materials that become an integral part of the product and that can be conveniently traced directly to it.

Answer 45

Direct Materials

Question 46

Those labor costs that can be easily traced to individual units of product.

Answer 46

Direct Labor

Question 47

Manufacturing costs that cannot be easily traced directly to specific units produced.

Answer 47

Manufacturing Overhead

Question 48

Materials used to support the production process.

Answer 48

Indirect materials

Question 49

Wages paid to employees who are not directly involved in production work.

Answer 49

Indirect Labor

Question 50

Costs necessary to secure the order and deliver the product. Selling costs can be either direct or indirect costs.

Answer 50

Selling Costs

Question 51

All executive, organizational, and clerical costs. Administrative costs can be either direct or indirect costs.

Answer 51

Administrative Costs

Question 52

Selling Costs and Administrative Costs

Answer 52

Non manufacturing Costs

Question 53

include direct materials, direct labor, and manufacturing overhead.

Answer 53

Product Costs

Question 54

include all selling costs and administrative costs.

Answer 54

Period Costs

Question 55

Which of the following costs would be considered a period rather than a product cost in a manufacturing company? A. Manufacturing equipment depreciation. B. Property taxes on corporate headquarters. C. Direct materials costs. D. Electrical costs to light the production facility. E. Sales commissions.

Answer 55

B. Property taxes on corporate headquarters | E. Sales Commissions

Question 56

A cost that varies, in total, in direct proportion to changes in the level of activity.

Answer 56

Variable costs

Question 57

Direct Materials and Direct Labor

Answer 57

Prime Cost

Question 58

Direct Labor and Manufacturing Overhead

Answer 58

Conversion costs

Question 59

Is used when a single product is produced on a continuing basis or for a long period of time. Job-order costing is used when many different jobs having different production requirements are worked on each period. Systems accumulate costs by department. Job-order costing systems accumulated costs by individual jobs.

Answer 59

Process Costing

Question 60

``` Process costing is used for products that are: a. Different and produced continuously. b. Similar and produced continuously. c. Individual units produced to customer specifications. d. Purchased from vendors. ```

Answer 60

b. Similar and produced continuously.