ACCT 526 FINAL EXAM QUESTIONS WITH CORRECT ANSWERS LATEST UPDATE 2026
a 45% contribution margin ratio means that: - Answers 45% of the companys revenue is available to
cover fixed costs and to contribute towards the operating income
a job order cost system traces direct materials cost to a particular job by means of: - Answers
material requisitions
a production budget includes separate schedules for - Answers materials, labor, and overhead
a well prepared budget can help benefit the company in all of the following ways except for: -
Answers guarantee profit level
an advantage of using regression analysis over the high low and scattergraph methods is that -
Answers regression analysis is a more precide approach than the high-low or scattergraph methods
an example of a discretionary fixed cost is: - Answers management training
at the end of the accounting period, applied overhead was larger than actual overhead by a material
amount. the overapplied overhead should be: - Answers appointed among work in process inventory,
finished goods inventory and cost of goods sold
cash flows are reported on the statement of cash flows in which of the following sequences? -
Answers operating, investing, financing
if a plant is operating at full capacity and receives a one time opportunity to accept an order at a
special price below its usual price then: - Answers the order will likely be rejected
in a decision to retain or replace equipment, the book value of the old equipment is a: - Answers sunk
cost
in a job order cost system, the amount of overhead cost that has been applied to a job that remains
incomplete at the end of a period: - Answers is a part of the ending balance of the work in process
inventory account
in a manufacturing company, the cost of goods is equal to : - Answers the beginning inventory of
work increase of work in progress, plus total manufacturing costs, less the ending inventory of work in
progress
in a revenue center, performance of the center manager is evaluated by - Answers ability to generate
sales revenue
in the year-end financial statements, the manufacturing overhead account should have: - Answers a
zero balance, since all overhead costs incurred during the year should be assigned to the production
of the year
net cash flow from financing activities includes - Answers payment of dividends
Overhead costs are assigned to production using an overhead application rate, whereas no such
application rate is used to assign the costs of direct materials and direct labor to production. the
reason for this difference in procedures is that: - Answers overhead is an indirect cost which cannot
be traced easily and directly to specific units of a product
select the correct statement regarding the accrual basis of accounting - Answers all of the above are
correct!
(A. accrual accounting is the process through which revenues and expenses are recognized before
cash if exchanged.
B. when accrual accounting is applied, revenue and expense items recognized in the current period
may have cash consequences in a later period.
C. revenue and expense items recognized in a past period may result in a cash receipts or payments
that materialize in the current period.)
syndeer corportation, which produces and sells a single product, recently experienced an increase in
fixed cost relating to depreciation on new equipment. if variable cost and sales prices remain
unchanged, what will happen to contribution margin and the break even point? - Answers
contribution margin will be unchanged and the break even point will increase
the advantage of a decentralized management style include all of the following except for - Answers
decision made by manager who is less experienced
the budget for a merchandiser differs from a budget for a manufacturer because: - Answers Both (A)
& (B)
A. A marchandiser purchases budget replaces the production budget
B. the manufacturing budgets are not applicable
the cash budget must be prepared before you can complete the: - Answers budgeted balance sheet
a 45% contribution margin ratio means that: - Answers 45% of the companys revenue is available to
cover fixed costs and to contribute towards the operating income
a job order cost system traces direct materials cost to a particular job by means of: - Answers
material requisitions
a production budget includes separate schedules for - Answers materials, labor, and overhead
a well prepared budget can help benefit the company in all of the following ways except for: -
Answers guarantee profit level
an advantage of using regression analysis over the high low and scattergraph methods is that -
Answers regression analysis is a more precide approach than the high-low or scattergraph methods
an example of a discretionary fixed cost is: - Answers management training
at the end of the accounting period, applied overhead was larger than actual overhead by a material
amount. the overapplied overhead should be: - Answers appointed among work in process inventory,
finished goods inventory and cost of goods sold
cash flows are reported on the statement of cash flows in which of the following sequences? -
Answers operating, investing, financing
if a plant is operating at full capacity and receives a one time opportunity to accept an order at a
special price below its usual price then: - Answers the order will likely be rejected
in a decision to retain or replace equipment, the book value of the old equipment is a: - Answers sunk
cost
in a job order cost system, the amount of overhead cost that has been applied to a job that remains
incomplete at the end of a period: - Answers is a part of the ending balance of the work in process
inventory account
in a manufacturing company, the cost of goods is equal to : - Answers the beginning inventory of
work increase of work in progress, plus total manufacturing costs, less the ending inventory of work in
progress
in a revenue center, performance of the center manager is evaluated by - Answers ability to generate
sales revenue
in the year-end financial statements, the manufacturing overhead account should have: - Answers a
zero balance, since all overhead costs incurred during the year should be assigned to the production
of the year
net cash flow from financing activities includes - Answers payment of dividends
Overhead costs are assigned to production using an overhead application rate, whereas no such
application rate is used to assign the costs of direct materials and direct labor to production. the
reason for this difference in procedures is that: - Answers overhead is an indirect cost which cannot
be traced easily and directly to specific units of a product
select the correct statement regarding the accrual basis of accounting - Answers all of the above are
correct!
(A. accrual accounting is the process through which revenues and expenses are recognized before
cash if exchanged.
B. when accrual accounting is applied, revenue and expense items recognized in the current period
may have cash consequences in a later period.
C. revenue and expense items recognized in a past period may result in a cash receipts or payments
that materialize in the current period.)
syndeer corportation, which produces and sells a single product, recently experienced an increase in
fixed cost relating to depreciation on new equipment. if variable cost and sales prices remain
unchanged, what will happen to contribution margin and the break even point? - Answers
contribution margin will be unchanged and the break even point will increase
the advantage of a decentralized management style include all of the following except for - Answers
decision made by manager who is less experienced
the budget for a merchandiser differs from a budget for a manufacturer because: - Answers Both (A)
& (B)
A. A marchandiser purchases budget replaces the production budget
B. the manufacturing budgets are not applicable
the cash budget must be prepared before you can complete the: - Answers budgeted balance sheet
