ACC 241 Exam 1 Practice Questions
Chapters 1,2,3,4,6(100% Accurate)
Planning, directing, and controlling are a manager's three primary responsibilities -
ANSWERSTrue
In a manufacturing firm, manufacturing costs and product costs are the same -
ANSWERSTrue
If the finished goods inventory decreases between the beginning and the end of a
period, then the cost of goods manufactured for the period is larger than the cost of
goods sold - ANSWERSFalse
A plantwide overhead is calculated by dividing the estimated total manufacturing
overhead costs for the year by estimated total amount of the allocation base for the year
- ANSWERSTrue
Claire Corp. allocates (applies) Overhead based on direct labor hours. Here is selected
Data from the Jacob Corp.:
est. manufacturing overhead (MOH) 500,000
actual manufacturing overhead (MOH) 480,000
estimated DLH 50,000
actual DLH 55,000
since actual MOH is 20,000 less than est. MOH, then overhead must have been over-
allocated by 20,000 - ANSWERSFalse
Applied Overhead = $500,000 Est MOH / 50,000 Est DLH = $10/DLH PDOR
$10 PDOR x 55,000 actual DLH = $550,000 Applied
Actual MOH - Applied MOH = $480,000 - $550,000 = $70,000 OVER-applied
Choosing the method of allocating costs to products (ie plantwide vs ABC) can have an
impact on the total manufacturing costs - ANSWERSFalse
Direct Costs don't change, MOH potentially change at individual product level but not
overall
Traditional overhead allocation methods that use unit-based cost drivers are never
accurate - ANSWERSFalse
Cost distortion occurs when some products are overcosted while other products are
undercosted by the cost allocation system - ANSWERSTrue
As output decreases fixed costs per unit will also decrease - ANSWERSFalse
, The relevant range is the range of activity for which the assumed cost relationships are
valid - ANSWERSTrue
Which of the following statements correctly distinguishes between financial and
managerial accounting?
Financial accounting is oriented toward the future
Managerial accounting focuses on the whole organization
Financial accounting is primarily concerned with providing information for internal users
Financial accounting is oriented toward the planning and control aspects of
management
Managerial accounting uses both financial and non-financial measures of performance -
ANSWERSManagerial accounting uses both financial and non-financial measures of
performance
If a frozen pizza plant (factory) is the cost object, classify each of the following costs as
direct or indirect, respectively: property insurance, plant supervisor wages, and janitorial
supplies - ANSWERSAll are direct
Product (inventoriable) costs differ from period expenses because - ANSWERSProduct
costs may appear on the balance sheet as assets
Sunnybrook Orange Groves processes a variety of fresh juices. The company has the
following expenses for July:
Depreciation expense on bottling machines 63,000
Glass juice bottles 54,000
Commissions for salespeople 27,000
Salaries of nutrition researchers 89,000
Costs of maintaining website used for customer orders 4,000
Wages of factory workers 75,000
Freshness seals/caps for juice bottles 3,000
Reconfiguring the factory layout 102,000
Customer help line 2,000
Costs of refrigerated trucks used to deliver juice 17,000
What is the total cost for the production category (manufacturing costs) of the value
chain? - ANSWERS$195,000
$75,000 + $3,000 +$63,000 + $54,000 = $195,000
Chapters 1,2,3,4,6(100% Accurate)
Planning, directing, and controlling are a manager's three primary responsibilities -
ANSWERSTrue
In a manufacturing firm, manufacturing costs and product costs are the same -
ANSWERSTrue
If the finished goods inventory decreases between the beginning and the end of a
period, then the cost of goods manufactured for the period is larger than the cost of
goods sold - ANSWERSFalse
A plantwide overhead is calculated by dividing the estimated total manufacturing
overhead costs for the year by estimated total amount of the allocation base for the year
- ANSWERSTrue
Claire Corp. allocates (applies) Overhead based on direct labor hours. Here is selected
Data from the Jacob Corp.:
est. manufacturing overhead (MOH) 500,000
actual manufacturing overhead (MOH) 480,000
estimated DLH 50,000
actual DLH 55,000
since actual MOH is 20,000 less than est. MOH, then overhead must have been over-
allocated by 20,000 - ANSWERSFalse
Applied Overhead = $500,000 Est MOH / 50,000 Est DLH = $10/DLH PDOR
$10 PDOR x 55,000 actual DLH = $550,000 Applied
Actual MOH - Applied MOH = $480,000 - $550,000 = $70,000 OVER-applied
Choosing the method of allocating costs to products (ie plantwide vs ABC) can have an
impact on the total manufacturing costs - ANSWERSFalse
Direct Costs don't change, MOH potentially change at individual product level but not
overall
Traditional overhead allocation methods that use unit-based cost drivers are never
accurate - ANSWERSFalse
Cost distortion occurs when some products are overcosted while other products are
undercosted by the cost allocation system - ANSWERSTrue
As output decreases fixed costs per unit will also decrease - ANSWERSFalse
, The relevant range is the range of activity for which the assumed cost relationships are
valid - ANSWERSTrue
Which of the following statements correctly distinguishes between financial and
managerial accounting?
Financial accounting is oriented toward the future
Managerial accounting focuses on the whole organization
Financial accounting is primarily concerned with providing information for internal users
Financial accounting is oriented toward the planning and control aspects of
management
Managerial accounting uses both financial and non-financial measures of performance -
ANSWERSManagerial accounting uses both financial and non-financial measures of
performance
If a frozen pizza plant (factory) is the cost object, classify each of the following costs as
direct or indirect, respectively: property insurance, plant supervisor wages, and janitorial
supplies - ANSWERSAll are direct
Product (inventoriable) costs differ from period expenses because - ANSWERSProduct
costs may appear on the balance sheet as assets
Sunnybrook Orange Groves processes a variety of fresh juices. The company has the
following expenses for July:
Depreciation expense on bottling machines 63,000
Glass juice bottles 54,000
Commissions for salespeople 27,000
Salaries of nutrition researchers 89,000
Costs of maintaining website used for customer orders 4,000
Wages of factory workers 75,000
Freshness seals/caps for juice bottles 3,000
Reconfiguring the factory layout 102,000
Customer help line 2,000
Costs of refrigerated trucks used to deliver juice 17,000
What is the total cost for the production category (manufacturing costs) of the value
chain? - ANSWERS$195,000
$75,000 + $3,000 +$63,000 + $54,000 = $195,000
