FIN 14 MCQs [Need in 2 hours]

Which cost is a period cost? (Points : 5)  Depreciation of factory equipment
 Transportation-in for raw material
 Patent amortization for the company’s product
 Depreciation of office equipment

Question 2. 2. (TCO 2) Which product would use job-order costing? (Points : 5)

 Ink pens
 Custom boot maker
 Soda pop
 Horse saddles

 

Question 3. 3. (TCO 3) In a process costing system, which would be TRUE? (Points : 5)

 There is no need to use time tickets to assign costs to processes.
 There is no need to track materials to processes.
 A process costing system is more expensive to maintain because it has more work-in-process accounts.
 All of the above

 

Question 4. 4. (TCO 8) A company keeps 60 days of materials inventory on hand to avoid shutdowns due to materials shortages. Carrying costs average $5,000 per day. A competitor keeps 30 days of inventory on hand, and the competitor’s carrying costs average $2,000 per day. The non-value-added costs for the company are (Points : 5)

 $300,000.
 $150,000.
 $60,000.
 $0.

 

Question 5. 5. (TCO 8) Which is an example of a non-value-added manufacturing activity? (Points : 5)

 Assembly
 Scheduling
 Finishing
 All of the above are value-added activities.

 

Question 6. 6. (TCO 1) The break-even point is (Points : 5)

 the volume of activity where all fixed costs are recovered.
 where fixed costs equal total variable costs.
 where total revenues equal total costs.
 where total costs equal total contribution margin.

 

Question 7. 7. (TCO 1) Lewis Production Company had the following projected information for 2010.
Selling price per unit  $150
Variable cost per unit  $90
Total fixed costs  $300,000
 
Which is the break-even point in units? (Points : 5)

 2,000 units
 5,000 units
 3,333 units
 60,000 units

 

Question 8. 8. (TCO 7) Which cost category would most likely use the number of employees or new hires as its activity driver? (Points : 5)

 Maintenance
 Purchasing
 Personnel
 Accounting

 

Question 9. 9. (TCO 7) Yo Department Store incurred $8,000 of indirect advertising costs for its operations. The following data have been collected for 2013 for its three departments.
 

Shoes  Cosmetics  Crafts
Sales $120,000 $100,000 $100,000
Direct advertising costs  $9,000 $7,000  $4,000
Newspaper ad space 60% 20%  20%

How much of the indirect advertising costs will be allocated to the Crafts Department if newspaper ad space is the activity driver? (Points : 5)

 $8,000
 $1,600
 $800
 $6,400

 

Question 10. 10. (TCO 5) When budgets are used for control, (Points : 5)

 budgeted amounts from different years are compared.
 actual amounts from different years are compared.
 budgeted amounts are compared to actual amounts.
 None of the above

 

Question 11. 11. (TCO 5) Canceco Company produces and sells pillows. It expects to sell 10,000 pillows in the year 2014 and had 1,000 pillows in finished goods inventory at the end of 2013. Canceco would like to complete operations in the year 2014 with at least 1,250 completed pillows in inventory. There is no ending work-in-process inventory. The pillows sell for $5 each.
How many pillows would be produced in the year 2014? (Points : 5)

 10,000 pillows
 11,000 pillows
 11,250 pillows
 10,250 pillows

 

Question 12. 12. (TCO 4) Which is the primary difference between variable and absorption costing? (Points : 5)

 Inclusion of fixed selling expenses in product costs
 Inclusion of variable factory overhead in period costs
 Inclusion of fixed selling expenses in period costs
 Inclusion of fixed factory overhead in product costs

 

Question 13. 13. (TCO6) Which factor would cause an UNFAVORABLE material quantity variance? (Points : 5)

 Using poorly maintained machinery
 Using higher quality materials
 Using more highly skilled workers
 Receiving discounts for purchasing larger-than-normal quantities

 

Question 14. 14. (TCO 6) Which equation measures the direct labor rate variance? (Points : 5)

 (SR * AH) – (SR * SH).
 (AR * SH) – (SR * AH).
 (AR * AH) – (SR * AH).
 None of the above

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