Managerial Accounting

Which of the following is any cost which cannot be capitalized into a prepaid expense, inventory, or fixed asset?

• Period cost

• Product cost

• Paradox cost

• Premium cost

Which of the following is a sunk cost?

• Money spent on materials currently in production

• Manufacturing overhead

• Money spent on an unfinished storage building

• Money spent paying employees

Red Manufacturing produces a product at $25 per unit price, sells 1,000 units and accrues $10,500 in variable cost. Which of the following is the contribution margin per unit?

• $11.50

• $13.50

• $12.50

• $14.50

Which of the following cost accounting systems assigns manufacturing costs to a product or batches of products and is ideal for companies which produce unique products?

• Activity-based costing

• Project costing

• Job-order costing

• Process costing

Jake’s Jump Ropes has a total indirect cost of $500,000 and incurs a direct cost of $100,000. Which of the following is the overhead rate ratio?

• 5:1

• 1:5

• 2:1

• 1:2

Which of the following is the cost of goods sold for Stan’s Floral if they began the month with $500 inventory, purchased $1,000 of inventory during the month, and ended the month with $200 of inventory?

• $1,200

• $1,300

• $1,400

• $1,500

Calculate the purchase price variance for the following scenario. Otto’s Auto Repair purchased a car for $10 a part if they purchased 1,000 parts during the year. Otto’s only purchased 900 parts and they were charged $12 per part.

• $1,200

• $1,400

• $1,600

• $1,800

Which of the following is calculated by subtracting the actual amount from the budgeted amount?

• Linear regression

• Cost-profit value

• Variance analysis

• Cost

Calculate the selling price variance for the following scenario. Karen’s Office Supply sells a calculator for $50. A new business began selling the same calculator which forces Karen’s to sell the calculator for $44 a piece. Karen’s sold 4,000 calculators during the accounting period at this price.

• $20,000

• $16,000

• $12,000

• $8,000

Which of the following is the process of choosing whether to make a product in-house or purchase it from an external source?

• Linear regression

• Variance Analysis

• Cost-profit decision

• Make or buy decision