Cost Accounting: A Managerial Emphasis, 7th Canadian Edition - 3725 Total Questions
Question 1
To execute the company strategy, measures on the balanced scorecard would most likely include the
A) number of process improvements.
B) price premium earned.
C) market share.
D) the amount invested in new product features.
E) employee satisfaction.
Answer: https://biology-forums.com/index.php?topic=803329
Question 2
A department could be considered a cost object.
T/F?
Answer: https://biology-forums.com/index.php?topic=801461
Question 3
Top management faces a persistent challenge to make sure that the performance evaluation model of lower level managers is
A) focused on short-term performance.
B) based solely on quantitative factors.
C) not consistent with the decision model.
D) consistent with the decision model.
E) based only on future costs.
Answer: https://biology-forums.com/index.php?topic=803115
Question 4
What are the physical volume proportions to allocate joint costs for Mr. DirtOut and Mr. SinkClean, respectively?
A) 59.00% and 41.00%
B) 60.82% and 39.18%
C) 39.18% and 60.82%
D) 59.79% and 40.21%
E) 41.00% and 59.00%
Answer: https://biology-forums.com/index.php?topic=803666
Question 5
What is the total manufacturing cost of Job 787 using normal costing?
A) $17,100
B) $14,960
C) $12,800
D) $15,500
E) $14,300
Answer: https://biology-forums.com/index.php?topic=801845
Question 6
Performance measures must be based on financial information to be verifiable.
T/F?
Answer: https://biology-forums.com/index.php?topic=801370
Question 7
The standard error of the estimated coefficient indicates whether a relationship exists between the predictor variable and the outcome variable that
cannot be attributed to chance alone.
T/F?
Answer: https://biology-forums.com/index.php?topic=802909
Question 8
Framingham Ltd. produces three products out of a common process. The company currently uses the physical measures method to allocate joint
costs to the three product lines: Leonid (L), Madagascar, (M) and Napoleon (N). The manager of the Napoleon product line is particularly disgruntled.
He believes that his product line is allocated a disproportionate share of joint costs. In a recent managers' meeting, he argued that the company should
Page 1 of 585
, Cost Accounting: A Managerial Emphasis, 7th Canadian Edition - 3725 Total Questions
consider using sales value as splitoff as the joint cost allocation method. He stated that his product is sold in a highly competitive market and
increasing price is not an option.
The manager of the Leonid product line disagreed strongly. He stated that all products are sold in a competitive market place and that allocating joint
costs on physical measures was simple and easily verifiable. The manager of the Madagascar product line sat quietly through the meeting and she did
not seem to favour one method over the other.
As the assistant controller, you were asked by the controller to look into the concerns of the product line managers. The following additional
information is available:
Product Line Physical Volume Unit Selling Price
Leonid 10,000 units $79.20
Madagascar 12,000 units $36.00
Napoleon 18,000 units $20.00
Joint costs for the company are $950,000.
Required:
As the assistant controller, prepare a report to the controller.
Answer: https://biology-forums.com/index.php?topic=803746
Question 9
In the weighted-average method, costs of units completed and transferred out, and in ending work-in-process, are calculated using average total costs
obtained after merging costs of beginning work-in-process and costs added in the current period.
T/F?
Answer: https://biology-forums.com/index.php?topic=803971
Question 10
Sarasota Bicycles has been manufacturing its own wheels for its bikes. The company is currently operating at 100% capacity, and variable
manufacturing overhead is charged to production at the rate of 30% of direct labour cost. The direct materials and direct labour cost per unit to make
the wheels are $3.00 and $3.60 respectively. Normal production is 200,000 wheels per year.
A supplier offers to make the wheels at a price of $8 each. If the bicycle company accepts this offer, all variable manufacturing costs will be eliminated,
but the $84,000 of fixed manufacturing overhead currently being charged to the wheels will have to be absorbed by other products.
Required:
a. Prepare an incremental analysis for the decision to make or buy the wheels.
b. Should Sarasota Bicycles buy the wheels from the outside supplier? Justify your answer.
Answer: https://biology-forums.com/index.php?topic=803064
Question 11
The sales value at splitoff method can be used to value inventory as well as determining cost of goods sold.
T/F?
Answer: https://biology-forums.com/index.php?topic=803637
Question 12
Measures which monitor critical performance variables that help managers track progress toward achieving a company's strategic goals are
collectively called diagnostic control systems.
T/F?
Answer: https://biology-forums.com/index.php?topic=804911
Question 13
Which of the following statements about a high correlation between two variables s and t is FALSE?
A) s may cause t.
B) t may cause s.
C) They both may be affected by a third variable.
D) The correlation establishes an economically plausible relationship between costs and their cost drivers.
E) The correlation may be due to random chance.
Answer: https://biology-forums.com/index.php?topic=802925
Question 14
Generally, costs which are initially recorded as an asset and subsequently become an expense are called
A) inventoriable costs.
B) non-manufacturing costs.
C) manufacturing costs.
Page 2 of 585
, Cost Accounting: A Managerial Emphasis, 7th Canadian Edition - 3725 Total Questions
D) non-capitalized costs.
E) non-inventoriable costs.
Answer: https://biology-forums.com/index.php?topic=801572
Question 15
What are the variable costs per unit associated with Product ICT101?
A) $18
B) $22
C) $88
D) $92
E) $28
Answer: https://biology-forums.com/index.php?topic=801575
Question 16
Businesses may opt not to claim the full amount of available capital cost allowance.
T/F?
Answer: https://biology-forums.com/index.php?topic=804471
Question 17
The feedback obtained in the decision process cannot affect
A) future predictions.
B) the prediction method.
C) the decision model.
D) implementation.
E) past performance.
Answer: https://biology-forums.com/index.php?topic=802967
Question 18
Throughput costing provides more incentive to produce inventory than does absorption costing.
T/F?
Answer: https://biology-forums.com/index.php?topic=802720
Question 19
Ames Power Point had sales in October of $28,000,000 for its three stores in Toronto. The beginning merchandise inventories for October and
November were $5,000,000 and $4,000,000, respectively. October purchases totalled $19,000,000. All sales are on account (terms 2/15, net 30 days)
and are collected 50 percent in the month of the sale and 50 percent in the following month. One-half of all sales discounts are taken for a total of
$265,000. September sales totalled $25,000,000 while November sales were $30,000,000. Additional information for October is as follows:
Supplies used $1,000,000
Salaries and benefits 1,500,000
Maintenance 45,000
Amortization 9,000
Utilities 35,000
Principal payment on maturing bonds 2,000,000
Required:
Using an appropriately formatted income statement, determine the operating income of the company.
Answer: https://biology-forums.com/index.php?topic=801589
Question 20
Receiving cash from a customer on account would include a:
A) debit to Accounts Receivable and a credit to Cash
B) debit to Cash and a credit to Accounts Payable
C) debit to Accounts Payable and a credit to Cash
D) debit to Cash and a credit to Accounts Receivable
Answer: https://biology-forums.com/index.php?topic=805115
Question 21
Net realizable value generally means expected sales value plus expected separable costs.
Page 3 of 585
, Cost Accounting: A Managerial Emphasis, 7th Canadian Edition - 3725 Total Questions
T/F?
Answer: https://biology-forums.com/index.php?topic=803696
Question 22
Theoretical capacity is rarely used to calculate the budgeted fixed manufacturing cost per case because it departs significantly from the real capacity
available to a company.
T/F?
Answer: https://biology-forums.com/index.php?topic=802595
Question 23
The most important task in variance analysis is to understand why variances occur, and then to use that knowledge to promote learning and continual
improvement.
T/F?
Answer: https://biology-forums.com/index.php?topic=802360
Question 24
Product-cost cross-subsidization means that if a company undercosts one of its products, it will gain market share due to a more competitive price.
T/F?
Answer: https://biology-forums.com/index.php?topic=801927
Question 25
The process in which a company's products or services are measured relative to the best possible levels of performance is known as
A) benchmarking.
B) measuring the performance gap.
C) standard measurement.
D) variance measurement.
E) budgeting.
Answer: https://biology-forums.com/index.php?topic=802392
Question 26
Hitz Video Rental is evaluating rental prices. Historical data show that Friday and Saturday have twice the rentals of other days of the week. The
following information pertains to the store's normal operations per week:
Average rentals per day on Friday and Saturday 1,150
Average rentals per day on Sunday through Thursday 500
Store hours per day 12
Total units available for rent 10,000
Variable operating costs per hour $ 40
Marketing costs per week $1,500
Customer service costs per week $ 250
Required:
What is the unit cost when establishing a long-run price for rentals?
Answer: https://biology-forums.com/index.php?topic=803176
Question 27
Using the incremental method, what amount of revenue will be allocated to Math Fun in the package that contains all three products?
A) $48.25
B) $60.00
C) $45.60
D) $50.67
E) $90.00
Answer: https://biology-forums.com/index.php?topic=803802
Question 28
If the stand-alone method were used, what amount of cost would be allocated to the start-up business?
A) $40,000
B) $50,000
C) $10,000
Page 4 of 585
Question 1
To execute the company strategy, measures on the balanced scorecard would most likely include the
A) number of process improvements.
B) price premium earned.
C) market share.
D) the amount invested in new product features.
E) employee satisfaction.
Answer: https://biology-forums.com/index.php?topic=803329
Question 2
A department could be considered a cost object.
T/F?
Answer: https://biology-forums.com/index.php?topic=801461
Question 3
Top management faces a persistent challenge to make sure that the performance evaluation model of lower level managers is
A) focused on short-term performance.
B) based solely on quantitative factors.
C) not consistent with the decision model.
D) consistent with the decision model.
E) based only on future costs.
Answer: https://biology-forums.com/index.php?topic=803115
Question 4
What are the physical volume proportions to allocate joint costs for Mr. DirtOut and Mr. SinkClean, respectively?
A) 59.00% and 41.00%
B) 60.82% and 39.18%
C) 39.18% and 60.82%
D) 59.79% and 40.21%
E) 41.00% and 59.00%
Answer: https://biology-forums.com/index.php?topic=803666
Question 5
What is the total manufacturing cost of Job 787 using normal costing?
A) $17,100
B) $14,960
C) $12,800
D) $15,500
E) $14,300
Answer: https://biology-forums.com/index.php?topic=801845
Question 6
Performance measures must be based on financial information to be verifiable.
T/F?
Answer: https://biology-forums.com/index.php?topic=801370
Question 7
The standard error of the estimated coefficient indicates whether a relationship exists between the predictor variable and the outcome variable that
cannot be attributed to chance alone.
T/F?
Answer: https://biology-forums.com/index.php?topic=802909
Question 8
Framingham Ltd. produces three products out of a common process. The company currently uses the physical measures method to allocate joint
costs to the three product lines: Leonid (L), Madagascar, (M) and Napoleon (N). The manager of the Napoleon product line is particularly disgruntled.
He believes that his product line is allocated a disproportionate share of joint costs. In a recent managers' meeting, he argued that the company should
Page 1 of 585
, Cost Accounting: A Managerial Emphasis, 7th Canadian Edition - 3725 Total Questions
consider using sales value as splitoff as the joint cost allocation method. He stated that his product is sold in a highly competitive market and
increasing price is not an option.
The manager of the Leonid product line disagreed strongly. He stated that all products are sold in a competitive market place and that allocating joint
costs on physical measures was simple and easily verifiable. The manager of the Madagascar product line sat quietly through the meeting and she did
not seem to favour one method over the other.
As the assistant controller, you were asked by the controller to look into the concerns of the product line managers. The following additional
information is available:
Product Line Physical Volume Unit Selling Price
Leonid 10,000 units $79.20
Madagascar 12,000 units $36.00
Napoleon 18,000 units $20.00
Joint costs for the company are $950,000.
Required:
As the assistant controller, prepare a report to the controller.
Answer: https://biology-forums.com/index.php?topic=803746
Question 9
In the weighted-average method, costs of units completed and transferred out, and in ending work-in-process, are calculated using average total costs
obtained after merging costs of beginning work-in-process and costs added in the current period.
T/F?
Answer: https://biology-forums.com/index.php?topic=803971
Question 10
Sarasota Bicycles has been manufacturing its own wheels for its bikes. The company is currently operating at 100% capacity, and variable
manufacturing overhead is charged to production at the rate of 30% of direct labour cost. The direct materials and direct labour cost per unit to make
the wheels are $3.00 and $3.60 respectively. Normal production is 200,000 wheels per year.
A supplier offers to make the wheels at a price of $8 each. If the bicycle company accepts this offer, all variable manufacturing costs will be eliminated,
but the $84,000 of fixed manufacturing overhead currently being charged to the wheels will have to be absorbed by other products.
Required:
a. Prepare an incremental analysis for the decision to make or buy the wheels.
b. Should Sarasota Bicycles buy the wheels from the outside supplier? Justify your answer.
Answer: https://biology-forums.com/index.php?topic=803064
Question 11
The sales value at splitoff method can be used to value inventory as well as determining cost of goods sold.
T/F?
Answer: https://biology-forums.com/index.php?topic=803637
Question 12
Measures which monitor critical performance variables that help managers track progress toward achieving a company's strategic goals are
collectively called diagnostic control systems.
T/F?
Answer: https://biology-forums.com/index.php?topic=804911
Question 13
Which of the following statements about a high correlation between two variables s and t is FALSE?
A) s may cause t.
B) t may cause s.
C) They both may be affected by a third variable.
D) The correlation establishes an economically plausible relationship between costs and their cost drivers.
E) The correlation may be due to random chance.
Answer: https://biology-forums.com/index.php?topic=802925
Question 14
Generally, costs which are initially recorded as an asset and subsequently become an expense are called
A) inventoriable costs.
B) non-manufacturing costs.
C) manufacturing costs.
Page 2 of 585
, Cost Accounting: A Managerial Emphasis, 7th Canadian Edition - 3725 Total Questions
D) non-capitalized costs.
E) non-inventoriable costs.
Answer: https://biology-forums.com/index.php?topic=801572
Question 15
What are the variable costs per unit associated with Product ICT101?
A) $18
B) $22
C) $88
D) $92
E) $28
Answer: https://biology-forums.com/index.php?topic=801575
Question 16
Businesses may opt not to claim the full amount of available capital cost allowance.
T/F?
Answer: https://biology-forums.com/index.php?topic=804471
Question 17
The feedback obtained in the decision process cannot affect
A) future predictions.
B) the prediction method.
C) the decision model.
D) implementation.
E) past performance.
Answer: https://biology-forums.com/index.php?topic=802967
Question 18
Throughput costing provides more incentive to produce inventory than does absorption costing.
T/F?
Answer: https://biology-forums.com/index.php?topic=802720
Question 19
Ames Power Point had sales in October of $28,000,000 for its three stores in Toronto. The beginning merchandise inventories for October and
November were $5,000,000 and $4,000,000, respectively. October purchases totalled $19,000,000. All sales are on account (terms 2/15, net 30 days)
and are collected 50 percent in the month of the sale and 50 percent in the following month. One-half of all sales discounts are taken for a total of
$265,000. September sales totalled $25,000,000 while November sales were $30,000,000. Additional information for October is as follows:
Supplies used $1,000,000
Salaries and benefits 1,500,000
Maintenance 45,000
Amortization 9,000
Utilities 35,000
Principal payment on maturing bonds 2,000,000
Required:
Using an appropriately formatted income statement, determine the operating income of the company.
Answer: https://biology-forums.com/index.php?topic=801589
Question 20
Receiving cash from a customer on account would include a:
A) debit to Accounts Receivable and a credit to Cash
B) debit to Cash and a credit to Accounts Payable
C) debit to Accounts Payable and a credit to Cash
D) debit to Cash and a credit to Accounts Receivable
Answer: https://biology-forums.com/index.php?topic=805115
Question 21
Net realizable value generally means expected sales value plus expected separable costs.
Page 3 of 585
, Cost Accounting: A Managerial Emphasis, 7th Canadian Edition - 3725 Total Questions
T/F?
Answer: https://biology-forums.com/index.php?topic=803696
Question 22
Theoretical capacity is rarely used to calculate the budgeted fixed manufacturing cost per case because it departs significantly from the real capacity
available to a company.
T/F?
Answer: https://biology-forums.com/index.php?topic=802595
Question 23
The most important task in variance analysis is to understand why variances occur, and then to use that knowledge to promote learning and continual
improvement.
T/F?
Answer: https://biology-forums.com/index.php?topic=802360
Question 24
Product-cost cross-subsidization means that if a company undercosts one of its products, it will gain market share due to a more competitive price.
T/F?
Answer: https://biology-forums.com/index.php?topic=801927
Question 25
The process in which a company's products or services are measured relative to the best possible levels of performance is known as
A) benchmarking.
B) measuring the performance gap.
C) standard measurement.
D) variance measurement.
E) budgeting.
Answer: https://biology-forums.com/index.php?topic=802392
Question 26
Hitz Video Rental is evaluating rental prices. Historical data show that Friday and Saturday have twice the rentals of other days of the week. The
following information pertains to the store's normal operations per week:
Average rentals per day on Friday and Saturday 1,150
Average rentals per day on Sunday through Thursday 500
Store hours per day 12
Total units available for rent 10,000
Variable operating costs per hour $ 40
Marketing costs per week $1,500
Customer service costs per week $ 250
Required:
What is the unit cost when establishing a long-run price for rentals?
Answer: https://biology-forums.com/index.php?topic=803176
Question 27
Using the incremental method, what amount of revenue will be allocated to Math Fun in the package that contains all three products?
A) $48.25
B) $60.00
C) $45.60
D) $50.67
E) $90.00
Answer: https://biology-forums.com/index.php?topic=803802
Question 28
If the stand-alone method were used, what amount of cost would be allocated to the start-up business?
A) $40,000
B) $50,000
C) $10,000
Page 4 of 585
