ACCOUNTING ACCCOB3 - Final Exam Reference 75 Questions & Answers.

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Please add Multiple Choice - Theory questions on this table.

Please add Multiple Choice - Problem Solving questions in the second table.

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Multiple Choice - Theory and True or False 1

Which of the following could not be used in job order costing?

Group of answer choices

normal costing an average cost per unit for all jobs standards overhead allocation based on the job’s DLH

2

Matthias Corporation has provided data concerning the company’s Manufacturing Overhead account for the month of May. Prior to the closing of the overapplied or underapplied balance to Cost of Goods Sold, the total of the debits to the Manufacturing Overhead account was ₱53,000 and the total credits to the account were ₱69,000.

Which of the following statements is TRUE? Group of answer choices

Actual manufacturing overhead incurred during the month was ₱69,000.

Manufacturing overhead for the month was underapplied by ₱16,000.

Manufacturing overhead transferred from Finished Goods to Cost of Goods Sold during the month was ₱53,000.

Manufacturing overhead applied to the Work-in-Process Inventory for the month was ₱69,000.

3

A decrease in the margin of safety would be caused by a (an) Group of answer choices

decrease in the variable cost per unit. decrease in the break-even point in units. increase in total fixed costs. increase in total revenues or sales.

4

Performance of investment centers can be measured using the following methods except economic value-added. return of investment. residual income. profit variance analysis.

5

Statement I: Management Accounting helps the management of

the firm make data-driven decisions, draw up cohesive plans and continually make progress towards achieving goals by obtaining, evaluating, and responding to feedback. (True) Statement II: Maximizing profit is one of the pillars of management accounting. (False) Group of answer choices

Only Statement I is True Both Statements are False Both Statements are True Only Statement II is True 6

Given the following notations, what is the breakeven point in units?

Group of answer choices

SP / (FC/VC) FC / (SP-VC) VC / (SP-FC) FC / [1-(VC/SP)] 7

A service organization would be most likely to use a predetermined overhead rate based on Group of answer choices

number of complaints.

machine hours. standard material cost. direct labor.

8

A labor efficiency variance indicates that standard rate and standard hours exceed the actual rate and actual hours. actual hours exceed standard hours. standard hours exceed actual hours. actual rate and actual hours exceed standard rate and standard hours.

Did not indicate if the variance is unfavorable or favorable. If you were to guess, choose either actual hours exceed standard hours. standard hours exceed actual hours.

9

Statement I: A variable production cost incurred after split-off is relevant in a decision regarding whether the product should be processed further or not. (True) Statement II: Bottleneck resource is a particular resource or operation where capacity is more than the demand placed upon it.

(False)

Group of answer choices

Only Statement I is True Only Statement II is True Both Statements are True Both Statements are False 10

Which of the following assumptions does not pertain to cost-volume-profit analysis?

Sales mix vary during the related period.

The total revenues function is linear.

All costs are classified as fixed or variable.

The units produced will equal the units sold.

11

Statement I: The theory about CVP analysis states that total variable costs remain the same over a relevant range. (false) Statement II: In a profit-volume graph, the intersection of the profit line with the vertical axis provides a loss equal to the fixed costs. (true) Group of answer choices

Only Statement I is True

Both Statements are True Only Statement II is True Both Statements are False 12

The direct materials required to manufacture each unit of product are listed on a ________.

Group of answer choices

bill of materials. materials requisition form. job order cost sheet. materials ticket.

13

A labor efficiency variance indicates that Group of answer choices

standard rate and standard hours exceed the actual rate and actual hours. actual rate and actual hours exceed standard rate and standard hours. standard hours exceed actual hours. actual hours exceed standard hours.

Did not indicate if the variance is unfavorable or favorable. If you were to guess, choose either

actual hours exceed standard hours. standard hours exceed actual hours.

14

When a greater proportion of costs are fixed costs, then Group of answer choices

when demand is high the breakeven point is increased. a decrease in sales reduces the cost per unit. a small increase in sales results in a small decrease in operating income. when demand is low the risk of loss is high.

15

In a predetermined overhead rate in a job order costing system that is based on machine-hours, which of the following would be used in the numerator and denominator?

Group of answer choices

Numerator: Actual manufacturing overhead Denominator: Actual machine hours Numerator: Estimated manufacturing overhead

Denominator: Estimated machine hours Numerator: Estimated manufacturing overhead Denominator: Actual machine hours Numerator: Actual manufacturing overhead Denominator: Estimated machine hours 16

Statement I: Segmented reporting refers to the preparation of accounting reports by segment and for the organization as a whole. (true) Statement II: A segment can be a unit or department or the whole company. (true) Group of answer choices

Only Statement II is True Both Statements are True Only Statement I is True Both Statements are False 17

A service organization would be most likely to use a predetermined

overhead rate based on Group of answer choices

standard material cost. machine hours. number of complaints. direct labor.

18

Management would generally expect unfavorable variances if standards were based on which of the following capacity measures?

Group of answer choices

Ideal

No

Practical

Yes

Expected Annual

Yes

Ideal

No

Practical

No

Expected Annual

Yes

Ideal

No

Practical

No

Expected Annual

No

Ideal

Yes

Practical

No

Expected Annual

No

19

Performance of investment centers can be measured using the following methods except Group of answer choices

residual income. profit variance analysis. return of investment. economic value-added.

20

Statement I: The total fixed cost fluctuates proportionately to an increase or decrease in the level of activity. (false) Statement II: The unit variable cost varies directly to the increase or decrease in the level of activity. (false) Group of answer choices Only Statement I is True Only Statement II is True

Both Statements are True Both Statements are False

21

What type of direct material variances for price and usage will arise if the actual number of pounds of materials used exceeds standard pounds allowed but the actual cost was less than standard cost?

Group of answer choices

Usage

Favorable

Price

Favorable

Usage

Unfavorable

Price

Unfavorable

Usage

Unfavorable

Price

Favorable

Usage

Favorable

Price

Unfavorable

22

Equal percentage changes in unit selling price and unit variable cost will cause the breakeven pesos Group of answer choices

to increase by the same peso amount. to increase by the same percentage. to remain unchanged. to decrease by the same percentage.

23

The term “standard hours allowed” measures Group of answer choices

budgeted output at actual hours. budgeted output at standard hours. actual output at standard hours. actual output at actual hours 24

In a job-order costing system, the application of manufacturing overhead would be recorded as a debit to: Group of answer choices

Finished Goods Inventory Raw Materials Inventory Cost of Goods Sold Work-in-Process Inventory 25

The direct materials required to manufacture each unit of product are listed on a ________.

Group of answer choices

bill of materials. materials ticket. materials requisition form. job order cost sheet.

26

Identify the graph that is associated with an electricity bill that charges flat fixed rate, plus a variable cost after a certain number of kilowatt-hours are used.

Group of answer choices

Can’t see the image but choose the one that is flat to the left and upward sloping to the right. See number 30.

27

Equal percentage changes in unit selling price and unit variable cost will cause the breakeven pesos

to decrease by the same percentage. to increase by the same percentage. to remain unchanged. to increase by the same peso amount.

28

Which of the following statements is FALSE on Residual Income?

Group of answer choices

It is the difference between operating income and the minimum peso return required on a company’s operating assets.

It is the difference between operating income and a company’s operating assets.

Residual income encourages managers to make profitable investments that would be rejected by managers using ROI. It is a peso measure of performance.

29

Which of the following statements is FALSE on Residual Income?

Residual income encourages managers to make profitable investments that would be rejected by managers using ROI. It is the difference between operating income and the minimum peso return required on a company’s operating assets.

It is a peso measure of performance.

It is the difference between operating income and a company’s operating assets.

30

Identify the graph that is associated with an electricity bill that charges flat fixed rate, plus a variable cost after a certain number of kilowatt-hours are used.

Group of answer choices

1 2 3

4 31

When a greater proportion of costs are fixed costs, then a small increase in sales results in a small decrease in operating income. a decrease in sales reduces the cost per unit. when demand is high the breakeven point is increased. when demand is low the risk of loss is high.

32

Statement I: Segmented reporting refers to the preparation of accounting reports by segment and for the organization as a whole. (true) Statement II: A segment can be a unit or department or the whole company. (true) Only Statement II is True Only Statement I is True Both Statements are True Both Statements are False

33

Which of the following assumptions does not pertain to cost-volume-profit analysis?

Group of answer choices

All costs are classified as fixed or variable.

The units produced will equal the units sold.

The total revenues function is linear.

Sales mix vary during the related period.

34

Interest expense on a firm’s long-term debt can be classified as _____________________.

Group of answer choices

Product cost Fixed cost Joint cost Variable cost 35

A company would most likely have an unfavorable labor rate variance and a favorable labor efficiency variance if Group of answer choices

workers from another part of the plant were used due to an extra heavy production schedule. the mix of workers used in the production process was more experienced than the normal mix. the mix of workers used in the production process was less experienced than the normal mix. the purchasing agent acquired very high-quality material that resulted in less spoilage.

36

A company would most likely have an unfavorable labor rate variance and a favorable labor efficiency variance if workers from another part of the plant were used due to an extra

heavy production schedule. the mix of workers used in the production process was more experienced than the normal mix. the purchasing agent acquired very high-quality material that resulted in less spoilage. the mix of workers used in the production process was less experienced than the normal mix.

37

A service organization would be most likely to use a predetermined overhead rate based on standard material cost. number of complaints. machine hours. direct labor.

38

Statement I: The segment margin is the best measure of performance for a division. (tre) Statement II: The segment margin is the best measure of performance for a division’s manager. (true) Group of answer choices

Only Statement I is True Both Statements are True Only Statement II is True Both Statements are False

39

Companies can improve job cost accuracy by using ________.

Group of answer choices

multiple predetermined overhead rates. direct-labor hours to apply overhead. number of units in the job to apply overhead. a plantwide overhead rate.

40

The direct materials required to manufacture each unit of product are listed on a ________.

Group of answer choices

materials requisition form. materials ticket. bill of materials. job order cost sheet.

41

Which of the following is not an advantage of using the return of investment (ROI) measure?

It discourages excessive investment in operating assets.

It encourages managers to focus on the short-term at the expense of the long-term.

It encourages cost efficiency.

It helps managers focus on the relationship between sales, expenses, and investment.

42

Statement I: Management Accounting helps the management of the firm make data-driven decisions, draw up cohesive plans and continually make progress towards achieving goals by obtaining, evaluating, and responding to feedback. (true) Statement II: Maximizing profit is one of the pillars of management accounting. (fals) Both Statements are True Only Statement II is True Only Statement I is True Both Statements are False 43

For decisions involving limited resources, which of the following are NOT CONSIDERED? Group of answer choices

fixed costs contribution margin per unit of a scarce resource contribution margin variable costs 44

A company that has a profit can increase its return on investment

by Group of answer choices

increasing sales revenue and operating expenses by the same percentage. decreasing average operating assets and sales by the same percentage. increasing sales revenue and operating expenses by the same peso amount. increasing average operating assets and operating expenses by the same peso amount.

45

The direct materials required to manufacture each unit of product are listed on a ________. job order cost sheet. bill of materials. materials ticket. materials requisition form.

46

Which of the following pertains to management accounting?

Group of answer choices

Internal Focus : Yes Historical

: No Highly Aggregated : No Internal Focus No

:

Historical Yes

:

Highly Aggregated : Yes Internal Focus No

:

Historical No

:

Highly Aggregated : Yes Internal Focus No

:

Historical No

:

Highly Aggregated : No 47

Which of the following is not an advantage of using the return of

investment (ROI) measure?

Group of answer choices

It helps managers focus on the relationship between sales, expenses, and investment.

It discourages excessive investment in operating assets.

It encourages cost efficiency.

It encourages managers to focus on the short-term at the expense of the long-term.

48

When a greater proportion of costs are fixed costs, then Group of answer choices

when demand is low the risk of loss is high. when demand is high the breakeven point is increased. a small increase in sales results in a small decrease in operating income. a decrease in sales reduces the cost per unit.

49

Companies can improve job cost accuracy by using ________.

Group of answer choices

direct-labor hours to apply overhead. a plantwide overhead rate. number of units in the job to apply overhead. multiple predetermined overhead rates.

50

Which of the following is TRUE about responsibility centers?

Group of answer choices

An example of an investment center is the paint department in an automobile plant.

The profit center has the highest responsibility.

The cost center has the least responsibility.

The revenue center has control over both costs and revenues.

51

Statement I: Cost accounting is primarily used in financial accounting for pricing products.

Statement II: Decision-making is required in all management functions.

Group of answer choices

Both Statements are False Only Statement I is True Both Statements are True Only Statement II is True

52

Which of the following statement is true when deciding between two alternatives?

Group of answer choices

Sunk costs are always relevant.

Variable costs may not be relevant when the decision alternatives have the same activity levels.

Fixed costs are never relevant.

Variable costs are not relevant when the decision alternatives have different activity levels.

53

Companies can improve job cost accuracy by using ________.

Group of answer choices

a plantwide overhead rate. number of units in the job to apply overhead. direct-labor hours to apply overhead. multiple predetermined overhead rates.

54

Which of the following documents is used to specify the type and quantity of materials drawn from the storeroom, and identifies the job to which the costs of the materials are to be charged?

Group of answer choices

materials ticket. bill of materials. materials requisition form. job order cost sheet.

55

56

In a predetermined overhead rate in a job order costing system that is based on machine-hours, which of the following would be used in the numerator and denominator?

Group of answer choices

Numerator:

Estimated manufacturing overhead

Denominator: Estimated machine hours

Numerator:

Actual manufacturing overhead

Denominator: Actual machine hours

Numerator:

Estimated manufacturing overhead

Denominator: Actual machine hours

Numerator:

Actual manufacturing overhead

Denominator: Estimated machine hours

57

58

Which of the following statements is TRUE?

Group of answer choices

An indirect cost is readily identified with a particular activity or department.

A step-fixed cost has both fixed and variable components.

Variable cost remains constant in total within the relevant range.

Joint costs are applied to situations where multiple outputs are derived from one source.

59

An important qualitative factor to consider regarding special order is Group of answer choices

the effect the sale of a special order will have on the sale of regularly priced units. the avoidable fixed costs associated with the special order. the variable cost associated with the special order. all of the choices stated herein.

60

Which of the following could not be used in job order costing? an average cost per unit for all jobs overhead allocation based on the job’s DLH normal costing standards

61

Which among the following are examples of selling and administrative expenses?

Statement I:

Cost of shipping finished goods to customers

Statement II:

Property taxes on finished goods warehouses

Statement III: Advertising costs Statement IV: Sales manager’s salary Group of answer choices

I, II, and III I and II I, II, III, and IV II, III, and IV

62

63

What type of direct material variances for price and usage will arise if the actual number of pounds of materials used exceeds standard pounds allowed but the actual cost was less than standard cost?

Usage

Favorable

Price

Favorable

Usage

Unfavorable

Price

Unfavorable

Usage

Favorable

Price

Unfavorable

Usage

Unfavorable

Price

Favorable

Statement I: The total fixed cost fluctuates proportionately to an increase or decrease in the level of activity.

Statement II: The unit variable cost varies directly to the increase or decrease in the level of activity.

Both Statements are True

Both Statements are False Only Statement II is True Only Statement I is True 64

The opportunity cost of making a component part in a factory with no excess capacity is the Group of answer choices

variable manufacturing cost of the component. cost of the production given up in order to manufacture the component. fixed manufacturing cost of the component. net benefit foregone from the best alternative use of the capacity required.

65 66

Given the following notations, what is the breakeven point in units?

VC / (SP-FC) SP / (FC/VC) FC / (SP-VC) FC / [1-(VC/SP)]

67

Matthias Corporation has provided data concerning the company’s Manufacturing Overhead account for the month of May. Prior to the closing of the overapplied or underapplied balance to Cost of

Goods Sold, the total of the debits to the Manufacturing Overhead account was ₱53,000 and the total credits to the account were ₱69,000.

Which of the following statements is TRUE? Actual manufacturing overhead incurred during the month was ₱69,000.

Manufacturing overhead for the month was underapplied by ₱16,000.

Manufacturing overhead applied to the Work-in-Process Inventory for the month was ₱69,000.

Manufacturing overhead transferred from Finished Goods to Cost of Goods Sold during the month was ₱53,000.

68

Which of the following statements is FALSE? Group of answer choices

In a sell-as-is or process further decision, sales value at the split-off point is considered a relevant cost.

A special order can be accepted if incremental revenues are greater than incremental costs.

A product line is dropped if its contribution margin is less than direct fixed costs.

In a make or buy decision, earnings from the use of released resources are added to the buy costs.

69

Which of the following statements is FALSE? A product line is dropped if its contribution margin is less than direct fixed costs.

In a make or buy decision, earnings from the use of released resources are added to the buy costs.

A special order can be accepted if incremental revenues are greater than incremental costs.

In a sell-as-is or process further decision, sales value at the split-off point is considered a relevant cost.

70

Which among the following are examples of selling and administrative expenses?

Statement I:

Cost of shipping finished goods to customers

Statement II:

Property taxes on finished goods warehouses

Statement III: Advertising costs Statement IV: Sales manager’s salary I, II, III, and IV II, III, and IV I and II I, II, and III

71

Which of the following statements is FALSE? Group of answer choices

In a make or buy decision, earnings from the use of released resources are added to the buy costs.

In a sell-as-is or process further decision, sales value at the split-off point is considered a relevant cost.

A special order can be accepted if incremental revenues are greater than incremental costs.

A product line is dropped if its contribution margin is less than direct fixed costs.

72

Statement I: The theory about CVP analysis states that total variable costs remain the same over a relevant range.

Statement II: In a profit-volume graph, the intersection of the profit line with the vertical axis provides a loss equal to the fixed costs.

Both Statements are True Only Statement I is True Only Statement II is True Both Statements are False

73 74

Statement I: The segment margin is the best measure of performance for a division.

Statement II: The segment margin is the best measure of

performance for a division’s manager.

Both Statements are False Only Statement I is True Both Statements are True Only Statement II is True

75

In a job-order costing system, the application of manufacturing overhead would be recorded as a debit to: Cost of Goods Sold Work-in-Process Inventory Finished Goods Inventory Raw Materials Inventory 76

Statement I: Segmented reporting refers to the preparation of accounting reports by segment and for the organization as a whole.

Statement II: A segment can be a unit or department or the whole company.

Both Statements are True Only Statement II is True Only Statement I is True Both Statements are False

77 78 79 80 81 82

Multiple Choice - Problem Solving 1 2 3 4 5 6 7 8 9 10 11

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