ACC 307: Cost Accounting Fall 2012 Practice Exam II I. TRUE / FALSE 1. A budget generally includes both financial and nonfinancial aspects of the plan. 2. The revenues budget should be based on the production budget. 3. A favorable variance should be ignored by management. 4. The direct manufacturing labor price variance is likely to be unfavorable if lower-skilled workers are put on a job. 5. For fixed overhead costs‚ the flexible-budget amount is always the same as the
Premium Variable cost Cost Manufacturing
and fixtures are the only variable cost with respect to revenue hours. All other costs are fixed with respect to revenue hours. With higher fixed cost‚ Salem Data Services has a higher leverage and is therefore riskier. 2. ($7‚896 + $1‚546) / 329 hours = $28.70 / hour. For every hour spent working‚ the company spends 28.70 dollars. 3. Intracompany Commercial Total Number of Hours (a): 205 138 343 Revenue (a x b): $82‚000 $110‚400 $192‚400 Variable Costs (a x c): ($5‚883.50)
Premium Variable cost Costs Management accounting
achieve a target operating income 3. Understand how income taxes affect CVP analysis 4. Explain how managers use CVP analysis in decision making 5. Explain how sensitivity analysis helps managers cope with uncertainty 6. Use CVP analysis to plan variable and fixed costs 7. Apply CVP analysis to a company producing multiple products All managers want to know how profits will change as the units sold of a product or service change. Home Depot managers‚ for example‚ might wonder how many units of
Premium Contribution margin Management accounting Variable cost
mathematical model shows the relationship between quantifiable and non-quantifiable information. ANSWER: FALSE {moderate‚ THE QUANTITATIVE ANALYSIS APPROACH} 1.8 Decision variables may also be called parameters. ANSWER: FALSE {moderate‚ THE QUANTITATIVE ANALYSIS APPROACH} 1.9 Model variables can be controllable or uncontrollable. ANSWER: TRUE {moderate‚ THE QUANTITATIVE ANALYSIS APPROACH} 1.10 A series of steps or procedures that are repeated is known
Premium Variable cost Fixed cost Costs
MARGINAL COSTING AS A COSTING SYSTEM Marginal Costing is a type of flexible standard costing that separates fixed costs from proportional costs in relation to the output quantity of the objects. In particular‚ Marginal Costing is a comprehensive and sophisticated method of planning and monitoring costs based on resource drivers. Selecting the resource drivers and separating the costs into fixed and proportional components ensures that cost fluctuations caused by changes in operating levels‚ as
Premium Costs Marginal cost Cost
accounts in the subsidiary ledger as variable‚ fixed‚ or mixed using qualitative methods? (TCO 4) In evaluating different alternatives‚ it is useful to concentrate on (TCO 5) The theory of constraints is used for cost analysis when (TCO 5) Schmidt Corporation produces a part that is used in the manufacture of one of its products. The costs associated with the production of 10‚000 units of this part are as follows: Direct materials $45‚000 Direct labor 65‚000 Variable factory overhead 30‚000 Fixed
Premium Variable cost Costs Cost accounting
the company produces. a) Master Budget Number of units 30‚000 Sales prices 36 Sales revenue 1‚080‚000 Variable manufacturing costs Materials 9.00 (270‚000) Labor 4.50 (135‚000) Overhead 6.30 (189‚000) Variable G‚S‚&A 7.20 (216‚000) Contribution margin 270‚000 Fixed costs Manufacturing (135‚000) General‚ selling & adm. (54‚000)
Premium Revenue Income Variable cost
important step in management ’s decision-making process is to determine and evaluate possible courses of action. 2. In making decisions‚ management ordinarily considers both financial and nonfinancial information. 3. In incremental analysis‚ total variable costs will always change under alternative courses of action‚ and total fixed costs will always remain constant. 4. Accountants are mainly involved in developing nonfinancial information for management ’s consideration in choosing among alternatives
Premium Variable cost Costs Management accounting
Gina sells 20 shirts‚ what will her total revenue be? What will her total variable cost be? (F) Fixed Cost= $350.00 (V) Variable Cost= $8.00 (S) Selling Price= $15.00 (X) Number of Units Sold= 20 Revenues = (S)(X) = (15)(20) = $300.00 Total Variable Cost = (V)(X) = (8)(20) = $160.00 If Gina sells 20 shirts her total revenue will be $300.00 and her total variable cost will be $160.00. (b) How many shirts must Gina sell to break even
Premium Variable cost Costs Cost
….‚ xk) Where x1‚ x2‚ x2‚ ….‚ xk Independent variables Y dependent variable Descriptive Predictive Prescriptive Math. Model Estimates of ind. Variables have to be made to predict the dep. variable There is uncertainty in the ind. Variables‚ this model describes the outcome or behavior of a given operations Taking different values of ind. Variables prescribes best possible Value for dependent variable The Problem –solving Process
Premium Decision making Risk Decision theory