WorksheetsUnit Test #3 Grade 13F
Total questions: 30
Worksheet time: 30mins
One MAJOR difference between financial accounting and management accounting is that
financial accounting uses only current and future information
financial accounting reports are prepared primarily for internal users
general accepted accounting principles do not apply to management accounting
management accounting is mandatory for companies trading on the stock exchange
Conversion cost consists of:
direct labor
manufacturing overheads
direct labor and direct materials
direct labor and manufacturing overheads
Which of the following is not period cost?
marketing
manufacturing
research and development
general and administrative
A firm has an annual demand of 2 000 units. The cost of placing one order is $800 and there is a holding cost of $8 per unit. What is the firm's annual carrying cost?
$11 000
$10 000
$9 000
$8 000
Wages paid to machine operators on an assembly line are classified as a
period cost
direct materials cost
manufacturing overhead cost
direct manufacturing labor cost
Indirect labor cost is NOT used in the calculation of
prime cost
factory overhead
total manufacturing cost
cost of goods manufactured
Keystone Ltd produces a product under licence from Xango Ltd. At the end of each year, Keystones Ltd has to pay Xango Ltd a licence fee as follow:
For the for first 60 000 litres $30 000 for every litre thereafter $0.30
How is the licence fee classified
step
mixed
fixed
variable
Barry operates a guesthouse. Which of the following cost items would be classified as variables in the costing of the guest rooms?
water
furniture
depreciation on building
wages of housekeeper staff
In July 2016 the beginning balance of the raw materials inventory account for Kayla Inc. was $46 000. The ending inventory balance for July was $47 000. Raw materials used during the month totalled was $127 120.
The cost of raw materials purchased during the month was
$125 320
$126 120
$128 120
$174 120
Gibson Manufacturing uses machine hours to allocate manufacturing overhead to all jobs. For a specific job, the budgeting manufacturing overhead cost is$30 000 and the budgeted labour hours and budgeted machine hours are $60 000 and $100 000 respectively. The predetermined overhead rate per machine hour is
$0.30
$0. 50
$0.60
$3 33
Which of the following costs is not associated with inventory management?
stock out cost
ordering cost
holding cost
economic cost
The economic order quantity is the order size that:
minimizes total inventory cost
minimizes total inventory carrying cost
maximizes the sum ofinventry ordering and carrying costs
minimizes inventory ordering
Another name for inventory holding cost is
ordering cost
carrying cost
economic cost
total inventory cost
Telco Company plans to produce 60 000 fans next year. Each fans requires 2 units of aluminium. It cost $4.50 to place an order for aluminium and $3.00 per year to store a unit of the material.
How much aluminium will Telco need next year?
60 000 units
120 000 units
30 000 units
16 000 units
The optimal order size for aluminum will be:
283 units
424 units
400 units
600 units
How many orders will be placed for aluminum?
200 orders
142 orders
212 orders
300 0rders
The re-order point is the point at which:
an order for raw materials or finished goods should be placed
an order is received
total inventory cost is minimized
total ordering costs equal total carrying costs
Item 18 and 19 refers to:
The information below relates to a product.
Annual demand 65 000 units
Lead time 4 weeks
The number of weeks in the year is 52
What is the re-order point?
1 250 units
2 500 units
5 000 units
313 units
Assuming that a safety stock of 2 000 units is maintained, what is the re-order point?
4 500 units
3 250 units
2 313 units
7 000 units
Which of the following statements are TRUE
I. Overheads are analyzed to determine the portion of overheads to be absorbed into production units.
II. Overheads are analyzed to determine how much overhead is incurred in each cost center
III, Overheads are analyzed to assist in setting selling price for goods and services.
I and III only only
I and II
All of the above
II and III only
What is overhead apportionment?
It is the process of distributing overheads to cost center
It is the process of tracing overheads to cost centers.
It is the process of classifying overhead costs.
It is the process of absorbing overheads into production units.
Overheads which are wholly identifiable with a cost center:
are a direct cost of that cost center
are an indirect cost of that cost center
should be apportioned to the cost center
are variable overheads
Item 3 question 23-25
Question 23
The budgeted overheads for Summands Ltd are:
I. common costs
II. direct costs of the production and maintenance departments.
III. indirect costs of the production and maintenance departments
I and II only
I and III only
I only
All of the above
Which base should be used to apportion depreciation on fixtures and fittings?
Net book value of fixtures and fittings
Machine hours
Cost of fixtures and fittings
floor space occupied
What is the total overhead apportioned to the production department?
$40 375
$61 500
$40 386
$30 750
All of the following may be used to assign overheads to produce EXCEPT:
departmental overhead absorption rates
a plantwide rate
activity cost drivers
utility rates
In an Activity Based Costing system:
Cost are traced to departments and then to the product
Cost are traced to activities and then assigned to products through the use of activity cost drivers,
costs are traced to departments and then assigned to products through the use of activity cost drivers
costs are traced to activities and then assigned to products through the use of departmental ,overhead rates
Relevant costs for decision making are:
future costs that are the same across alternative courses of action
costs already incurred by the organization.
future costs that across alternative courses of action
all costs related to a decision
Which of the following statements is FALSE?
Avoidable costs are relevant costs.
Unavoidable costs are differential costs
Past costs are irrelevant costs
Sunk cost are unavoidable costs
A special order at reduced selling price may be accepted by a company if it:
I. has spare capacity
II. will not interfere with an existing market or existing markets
III. will increase net income
I and II only
II and III only
I and III only
All of the above
