Question 1: Committed resources
a) are supplied as needed.
b) are acquired by a contract for the exact amount of their usage.
c) may exceed the demand for their usage.
d) All of the above are correct.
Question 2: During September, 40,000 units were produced. The standard quantity of material allowed per unit was 5 pounds at a standard cost of $2.50 per pound. If there was a favorable usage variance of $25,000 for September, the actual quantity of materials used must have been
a) 210,000 pounds.
b) 190,000 pounds.
c) 105,000 pounds.
d) 95,000 pounds.
Question 3: Zipp Company manufactures two products (X and Y). The overhead costs ($84,000) have been divided into three cost pools that use the following activity drivers:
Product Number of Setups Machine Hours Packing Orders
X 10 500 75
Y 10 2,000 175
Cost per pool $9,000 $60,000 $15,000
What is the allocation rate per packing order using activity-based costing?
a) $15,000
b) $60
c) $7,500
d) $200
Question 4: If a support department's costs were budgeted to be $150,000 and actual costs incurred by the support department were $200,000, the total amount of the support department's costs that should be allocated to other departments is
a) $350,000.
b) $200,000.
c) $150,000.
d) $50,000.
Question 5: _______________ is (are) a cost accounting system that uses only unit-based activity drivers to assign costs to cost objects.
a) Activity-based management
b) Activity-based costing system
c) Functional-based cost management system
d) Both a and b
Question 6: Spoilage in a process costing process means
a) fewer units leave the process than enter it.
b) fewer units enter a process than leave it.
c) a process is no longer viable.
d) products are receiving too much attention.
Question 7: The predetermined overhead rate is usually calculated
a) at the end of each month.
b) at the beginning of each month.
c) at the beginning of the year.
d) at the end of the year.
Question 8: For a labor-intensive manufacturing operation, which of the following would be the most appropriate activity driver?
a) machine hours
b) direct labor hours
c) number of employees
d) units of output
Question 9: _______________ refers to the assignment of indirect costs to cost objects.
a) Allocation
b) Direct tracing
c) Physical observation
d) Cost management
Question 10: The following information is provided:
Estimated manufacturing overhead $690,000
Estimated machine hours 46,000
Actual machine hours worked 50,000
Actual costs incurred:
Indirect materials $170,00
Indirect labor 230,000
Utilities 120,000
Insurance 100,000
Rent 80,000
The amount of overapplied or underapplied overhead is
a) $65,200 underapplied.
b) $60,000 overapplied.
c) $50,000 overapplied.
d) $10,000 underapplied.