ACC 561 Final Exams 2 Complete A++ Work - 17213

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26) The _____ method of measuring cost functions is the least reliable.
A. multiple least squares regression
B. visual fit
C. simple least squares regression
D. high low

27) In relation to a cost function, the term reliability means_____.
A. how well the cost function explains past cost behavior
B. whether the cost function conforms to a given mathematical model
C. how well the cost function predicts future costs
D. whether the costs and activities can be easily observed

28) _____ need cost accounting systems.
A. Manufacturing firms, service organizations, and nonprofit organizations
B. Service organizations and nonprofit organizations
C. Manufacturing firms and nonprofit organizations
D. Manufacturing firms and service organizations

29) _____ is an example of the external financial reporting purpose of the cost management systems.
A. Budget reporting
B. The product mix to optimize profitability
C. The amount of inventory that should appear on the balance sheet
D. The cost of a manufacturing process

30) _____ is a name for a system that first accumulates overhead costs for each of the activities of an organization, and then assigns the costs of activities to the products, services, or other cost objects that caused that activity.
A. Transaction costing
B. Cost driver accounting
C. Transaction based accounting
D. Activity based costing

31) _____ budgeting is when budgets are formulated with the active participation of all affected employees
A. Shared
B. Team
C. Participative
D. Financial

32) A _____ gives the expected sales under a given set of conditions.
A. sales forecast
B. sales prediction
C. sales budget
D. budget forecast

33) A sales forecast is _____.
A. all of these answers are correct
B. a prediction of sales under a given set of conditions
C. the result of decisions to create conditions
D. the same as a sales budget that will generate a desired level of sales

34) The master budget includes forecasts for all of the following except _____.
A. cash disbursements
B. sales
C. number of employees
D. balance sheets

35) Unit sales of Product A are currently 10,000, while unit sales of Product B are double those of Product A. The com¬pany's sales forecast will be _____, assuming sales of Product A increase by 10% and those of Product B increase by 4,000 units.
A. none of these answers is correct
B. 10,000 and 20,000 units, respectively
C. 11,000 and 22,000 units, respectively
D. 11,000 and 24,000 units, respectively

36) A sales forecast is _____.
A. all of these answers are correct
B. a prediction of sales under a given set of conditions
C. the result of decisions to create conditions
D. the same as a sales budget that will generate a desired level of sales

37) _____ probably would not be used as a measure of activity in a flexible budget.
A. Number of hours worked by salespeople
B. Sales volume
C. Number of direct labor hours worked
D. Number of machine hours used

38) Which of the following statements is false?
A. Flexible budgets are automatically matched to changes in activity levels
B. Flexible budgets help provide a basis for management by exception.
C. Flexible budgets are not based on the same revenue and cost behavior assumptions as the static budget.
D. Flexible budgets are prepared for a range of activity.

39) _____ are components of a master budget.
A. A cash budget and an activity budget
B. A continuous budget and a static budget
C. A strategic plan and an operating budget
D. An operating budget and a financial budget


40) Costs are allocated for all the following purposes except to _____.
A. compute income and asset valuation
B. determine inventory levels
C. predict the economic effects of planning and control decisions
D. obtain reimbursement

41) _____ is not a type of cost allocation.
A. Reallocation of costs from production departments to service departments
B. Allocation of costs of a particular organizational unit to products or services
C. Allocation of costs to the appropriate organizational unit
D. Reallocation of costs from service departments to production departments

42) The use of budgeted service department cost rates protects using departments from _____.
A. all of these answers are correct
B. service outages
C. service department efficiencies
D. price fluctuations

43) Murphy Company has two service departments, Maintenance and Personnel, as well as two production departments, Mixing and Finishing. Maintenance costs are allocated based on square footage while personnel costs are allocated based on number of employees. The following information has been gathered for the current year:
Maintenance
Personnel
Mixing
Finishing
Direct dept. costs $126,000 $84,000 $105,000 $175,000
Square footage 800 400 1,600 1,200
Number of employees 8 12 24 32
If the step-down method of allocating costs is used and the Personnel Department is allocated first, then the amount of overhead that would be allocated from Personnel to Mixing is _____.
A. $78,000
B. $63,000
C. $31,500
D. $58,500

44) Martinez Company has two service departments, Maintenance and Personnel, as well as two production departments, Mixing and Finishing. Maintenance costs are allocated based on square footage while personnel costs are allocated based on number of employees. The following information has been gathered for the current year:
Maintenance
Personnel
Mixing
Finishing
Direct dept. costs $50,400 $33,600 $42,000 $5,600
Square footage 1,600 800 3,200 2,400
Number of employees 16 24 48 64

If the step down method is used to allocate costs and the Maintenance Department is allocated first, then the amount of overhead that would be allocated from Personnel to Maintenance is _____.
A. $0
B. $3,539
C. $4,998
D. $4,200

45) Gomez Company has two service departments, Maintenance and Personnel, as well as two production departments, Mixing and Finishing. Maintenance costs are allocated based on square footage while personnel costs are allocated based on number of employees. The following information has been gathered for the current year _____.
Maintenance
Personnel
Mixing
Finishing
Direct dept. costs $126,000 $84,000 $105,000 $175,000
Square footage 800 400 1,600 1,200
Number of employees 8 12 24 32
If the step-down method is used to allocate costs and the Maintenance Department is allocated first, the amount of overhead that would be allocated from Maintenance to Mixing is:
A. $36,000
B. $42,750
C. $42,000
D. $63,000

46) _____ is (are) used for external reporting.
A. Absorption costing and variable costing
B. Direct costing
C. Absorption costing
D. Variable costing

47) _____ is another term for variable costing.
A. Absorption costing
B. Direct costing
C. Traditional costing
D. Full costing

48) In absorption costing, costs are separated into the major categories of_____.
A. variable and nonmanufacturing
B. manufacturing and fixed
C. fixed and variable
D. manufacturing and nonmanufacturing


49) _____ is the first step in designing a management control system.
A. Distinguishing between profit centers and cost centers
B. Establishing organizational goals
C. Preparing financial statements
D. Evaluating management's performance

50) Identify which of the following is not a characteristic of a management control system.
A. A management control system coordinates forecasting sales and cost driver activities, budgeting, and measuring and evaluating performance.
B. A management control system encourages short term profitability.
C. A management control system motivates individuals throughout the organization to act in concert.

D. A management control system aids and coordinates the process of making decisions.

51) _____ is the logical integration of management accounting tools to gather and report data and to evaluate performance.
A. A management control system
B. A quality control system

C. A financial reporting system
D. An internal control system

52) Jewel Company’s revenues are $300 and invested capital is $240. Expenses are currently 60% of sales. Jewel Company’s current return on investment is _____.

A. none of these answers are correct
B. 100%

C. 80%
D. 50%

53) The following information is available for the Peter Company:
Sales      $500,000
Invested Capital      312,500
ROI      10%
The return on sales is _____.

A. none of these answers is correct
B. 6.250%
C. 1.000%
D. 10.000%

54) Speedo Company’s revenues are $300 on invested capital of $240. Expenses are currently 70% of sales. If Angelo Company can reduce its invested capital by 20%, return on investment will be _____.
A. 46.88%
B. 93.75%

C. 18.75%
D. 75%

Solution Description

26) The _____ method of measuring cost functions is the least reliable.
A. multiple least squares regression
B. visual fit
C. simple least squares regression
D. high low

27) In relation to a cost function, the term reliability means_____.
A. how well the cost function explains past cost behavior
B. whether the cost function conforms to a given mathematical model
C. how well the cost function predicts future costs
D. whether the costs and activities can be easily observed

28) _____ need cost accounting systems.
A. Manufacturing firms, service organizations, and nonprofit organizations
B. Service organizations and nonprofit organizations
C. Manufacturing firms and nonprofit organizations
D. Manufacturing firms and service organizations

29) _____ is an example of the external financial reporting purpose of the cost management systems.
A. Budget reporting
B. The product mix to optimize profitability
C. The amount of inventory that should appear on the balance sheet
D. The cost of a manufacturing process

30) _____ is a name for a system that first accumulates overhead costs for each of the activities of an organization, and then assigns the costs of activities to the products, services, or other cost objects that caused that activity.
A. Transaction costing
B. Cost driver accounting
C. Transaction based accounting
D. Activity based costing

31) _____ budgeting is when budgets are formulated with the active participation of all affected employees
A. Shared
B. Team
C. Participative
D. Financial

32) A _____ gives the expected sales under a given set of conditions.
A. sales forecast
B. sales prediction
C. sales budget
D. budget forecast

33) A sales forecast is _____.
A. all of these answers are correct