SCM SPECIAL EXAM II

Cost of benefits foregone as the result of the acceptance of an alternative in accounting. It is measured as the benefits that would result from the next best alternative use of the same resources that were rejected in favor of the one accepted

• Out of pocket cost

• Opportunity cost

• Sunk Cost

• Avoidable Cost

cost that are related to a cost object but cannot practically, economically and effectively be traced to such cost object.

• Fixed Cost

• Variable Cost

• Direct Cost

• Indirect Cost

the band or level of activity where the cost concepts and the relationship of variable and fixed costs are considered valid.

• Margin of Safety

• Break Even Point

• Relevant Range

• Degree of Operating Leverage

Pattison Products, Inc., began operations in October and manufactured 46,000 units during the month with the following unit costs: (see picture). Total fixed factory overhead is $294,400 per month. During October, 46,000 units were produced and 44,600 units were sold at a price of $25.5, and fixed marketing and administrative expenses were $121,900. How much is the difference between the absorption costing income and variable costing income?

• 8,960

• 3,710

• 12,670

• 5,250

If the company wants to earn 1,667 pesos. How many units should be sold?

• 25,000

• 10,000

• 20,000

• 5,000

MORRIS COMPANY uses an activity-based costing system to compute the cost of making floral bouquets and delivering the bouquets to its commercial customers. Company personnel who earn $180,000 typically perform both tasks; other firm-wide overhead is expected to total $70,000. These costs are allocated as follows: (SEE PICTURE). MORRIS COMPANY anticipates making 20,000 bouquets and 4,000 deliveries in the upcoming year. How much is the cost of wages and salaries and other overhead (wages and salaries plus other overhead) that would be charged to each bouquet and each delivery, respectively.

• 8.75 and 20.31

• 12.50 and 26.75

• 7.15 and 19.63

• 13.75 and 40.63

The MARCO Company uses the step method for allocating the costs of its service departments to operating departments. The company has two service departments and two operating departments. The selected information for the four departments is given below: (SEE PICTURE). How much is the total cost allocated to operating department X by Service Department A and B?

• 60,000

• 7,800

• 198,300

• 67,800

What is the material price variance (calculate using the number of units purchased) and material quantity variance (calculate using the number of material used), respectively?

• 2,700 U and 1,890 U

• 2,700 F and 1,890 U

• 2,700 U and 3,105 U

• 2,610 F and 3,105 U

Which of the following is the proper sequence of events in an activity-based costing system?

• Identification of cost drivers, identification of cost pools, calculation of cost application rates, assignment of cost to products.

• Identification of cost pools, identification of cost drivers, calculation of cost application rates, assignment of cost to products.

• Assignment of cost to products, identification of cost pools, identification of cost drivers, calculation of cost application rates.

• Calculation of cost application rates, identification of cost drivers, identification of cost pools, assignment of cost to products.

Standard costs may be used for:

• Product Costing

• Planning

• Controlling

• Planning and Controlling

• Product Costing, Planning and Controlling