a favorable materials price variance would most likely occur when
the standard price is more than the actual price
which will decrease the net present value of an investment in a new machine
a decrease in volumes sold
a cost that is relevant to making a short term decision is always
different for one alternative compared to another alternative
indirect labor is included in manufacturing overhead because
it is difficult to determine the indirect labor incurred to make one unit and it is a necessary cost to make the product
the wages for machine operators of the machines that make the product are
a product cost that is variable
which of the following statements is not true for FIFO and weighted average process costing?
equivalent units for ending inventory are never the same
product costs are expensed when
the product is sold to the customer
segment or division profit is computing by including
all segment sales, direct variable expenses, and traceable costs
if all else remains constant, a decrease in average operating assets will
increase the return on investment (ROI)
the formula: high $ - low $ divided by high activity - low activity directly caculates
variable cost per activity
which of the following won't be affected when sales are as expected and production in units is higher for this month than expected
the amount of cash collections in the following month
manufacturing overhead includes the following costs
costs of the facilities and management at the manufacturing plant
managers use which of the following information provided by the managerial accountant for decision making
information relevant to the decision that is being made
the use of indirect labor is initially recorded as an increase in
manufacturing overhead
when manufacturing overhead is applied to products based on machine hours, a favorable efficiency variance will occur when:
less machine hours are used to produce the products manufactured than expected
work in progress inventory is increased (debited) when
direct costs are incurred in production
costs incurred to pack the product to get it ready to ship to the customer are
period costs
to get the actual cost of work in progress that is transferred to finished goods, you would include
actual direct costs + actual manufacturing overhead + beginning WIP - Ending WIP
a company incurred the same sales, fixed costs and cost per unit in the current year as it did in the prior year. Production is lower in the current year and finished goods inventory decreased. When preparing the current year income statement for its shar
income will be lower this year than last year
the purpose of a flexible budget is to determine
the amount of expected profit from various sales volumes
a company operating at less than full capacity should price a special order to cover
all incremental production costs
to determine the quantity of raw materials that must be purchased this period, a company must take
the quantity required for production and the change in finished goods inventory
which of the following is a fixed manufacturing overhead quantity variance?
overhead volume variance
the cost of ending finished goods using the FIFO method of process costing is determined by
taking equivalent units started and competed times the cost of each equivalent unit and then add the total cost of beginning inventory
a company could never incur an operating loss greater than
total costs
when using a flexible budget, if the volume decreases
total costs will decrease
a traditional cost system is different from an activity based costing system because
cost groups are determined for activity based costing
standard quantity allowed means
actual units produced multiplied by the standard required per unit
when calculating break even, which of the following assumptions is not used
fixed costs DO change per unit as volume changes
the only difference in absorption and variable costing income is
manufacturing overhead is a different amount when finished goods inventory changes
operating leverage is used to estimate
how income will change as sales change
the term relevant range means the range that
fixed costs will not change within that range
responsibility accounting defines a profit center as one with a manger who is responsible for
all revenues and all unallocated costs
when a cost changes in total and the cost per unit does not change, the cost is always
a variable cost
a company calculates cost of goods manufactured so that they can
report costs on the income statement and balance sheet
which of the following would be considered part of the cost of inventory
rent all the manufacturing facility
when the discount rate increases
net present value of future cash flows decreases
a company that uses variable costing for management decisions depends on
cost volume relationships
using activity based costing for external financial reporting is a violation of GAAP because
period costs are assigned to products and treated as product costs for analysis
which cost characteristics are most important to making a short term decision
avoidable or unavoidable
when manufacturing overhead is over applied it means that
more activit was used than planned and total budgeted manufacturing overhead expense was more than or equal to actual expense
which of the following is related to a variable costing income statement is true
you can determine fixed productions costs from looking at the statement
which of the following is a major assumption that is used in cost volume profit analysis
total contribution margin will change as volume changes
when the fixed overhead budget variance is 0
actual overhead spent is equal to budgeted overhead dollars
if the sales volume decreases and nothing else changes
margin of safety will decrease in units
a cost that is fixed
will not change proportionately to changes in production volume
a mixed cost
has a flat cost and a cost per usage
contributed margin is defined as
the amount of sales revenue that is available to cover fixed costs
the process of assigning manufacturing overhead costs to a job is called
applying
which of the following decisions is a short term decision
accepting a special order