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ACCT 520 Exam Latest 2025 Test Review
Questions And Verified Answers Top Score
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Cost and managerial accounting systems are goods in the economic sense, and as such, their benefits must exceed their costs. When managerial accounting systems change, the cost that is frequently ignored is the cost of Educating users. An accounting system that collects financial and operating data on the basis of the underlying nature and extent of the cost drivers is Activity-based costing. The primary reason for adopting total quality management is to achieve Greater customer satisfaction. Companies characterized by the production of basically homogeneous products will most likely use which of the following methods for the purpose of averaging costs and providing management with unit-cost data? Process costing
Just-in-time manufacturing practices are based in part on the belief that Goods should be "pulled" through the production process, not "pushed". The perpetual inventory method Maintains a continuous record of transactions affecting the inventory balances. Controllers ordinarily are not responsible for Investor relations. The treasury function usually is not responsible for Financial reporting. Which professional organization represents management accountants in the United States? The Institute of Management Accountants (IMA). The professional certification program most suited for one interested in a career in management accounting leads to which of the following designations?
Life-cycle costing Is sometimes used as a basis for cost planning and product pricing. One of the purposes of standard costs is to Simplify costing procedures and expedite cost reports. The relevance of a particular cost to a decision is determined by Potential effect on the decision. Incremental cost is The difference in total costs that results from selecting one choice instead of another. A company will produce 20,000 units of product A at a unit variable cost of $7 and a unit selling price of $13. Fixed costs are $40,000. However, the company will still have 40% idle capacity. The company can use this idle capacity to produce 6,000 units of a different product B, which it can sell for $7 per unit. The incremental variable cost of producing a unit B is $6. Present fixed costs that will be allocated to B amount to $10,000. To decide whether to produce B, the company should use Differential cost analysis.
Conversion costs do not include Direct materials. Joint costs are costs of Two of more products produced from a common process. Controllable costs Are primarily subject to the influence of a given manager of a given responsibility center for a given time span. When a decision is made in an organization, it is selected from a group of alternative courses of action. The loss associated with choosing the alternative that does not maximize the benefit is the Opportunity cost. Which one of the following costs should be relevant in short-term decision making? Incremental fixed costs. Conversion cost pricing
The costs included in Huron's fixed overhead are Committed costs. Glen company has the following data pertaining to the year ended December 31: Purchases $450, Beginning inventory $170, Ending inventory $210, Freight-in $50, Freight-out $75, How much is the cost of goods sold for the year? $460,000. The following information appeared in the accounting records of a retail sore for the previous year: Sales $300, Purchases $140, Inventories-
January 1 $70, December 31 $100, Sales commissions $10, The gross margin was $190,000. Madtack Company's prime cost for November is $370,000. Madtack Company's total manufacturing cost for November is $510,000. Madtack Company's cost of goods transferred to finished goods inventory for November is $484,000. Madtack Company's net charge to overhead control for the month of November is $8,000 credit, overapplied.
COGM $97,
Direct materials issued to production $20, Factory overhead is assigned at 150% of direct labor cost. What was the direct labor cost incurred? $30,000. What is the nature of work-in-process? Inventory. Theoretically, cash discounts permitted on purchased raw materials should be Deducted from inventory, whether taken or not. For a retailer, the income statement includes cost of goods sold. Cost of goods sold is, in effect, purchases adjusted for changes in inventory. For a manufacturer, purchases is replaced by Cost of goods manufactured. The difference between variable costs and fixed costs is
Variable costs per unit are fixed over the relevant range and fixed costs per unit are variable. The difference between the sales price and total variable costs is The contribution margin. A company has always used the full cost of its product as the starting point in the pricing of that product. The price set by competitors and the demand for the company's only product, the Widget, have never been predictable. Lately, the company's market share has been increasing as it continues to lower its price, but total revenues have not changed significantly relative to the gain in sales volume. The likely reason for the stability of total revenues is the Fixed cost component of the full cost. Unit fixed costs Are determined by dividing total fixed costs by a denominator such as production or sales volume. Jago Co. has two products that use the same manufacturing facilities and cannot be subcontracted. Each product has sufficient orders to utilize the entire manufacturing capacity. For short-run profit maximization, Jago should manufacture the product with the Greater contribution margin per hour of manufacturing capacity.
A decrease in the nonvariable element. Quo Co. rented a building to Hava Fast Food. Each month Quo receives a fixed rental amount plus a variable rent amount based on Hava's sales for that month. As sales increase, so does the variable rental amount but at a reduced rate. Which of the following curves reflects the monthly rentals under the agreement? I. The following data were collected from the records of the shipping department of a company: Month - Units Shipped - Cost of Shipping Supplies The cost of shipping supplies is most likely to be a Variable cost. Assuming all manufacturing costs for finished goods are known, which of the following statements explains why the accountant's unit cost used in inventory valuation for the annual financial statements would differ from the economist's marginal unit cost? The manufacturing cost per unit reflected in financial statements includes fixed costs.
A manufacturing firm planned to manufacture and sell 100,000 units of product during the year at a variable cost per unit of $4.00 and a fixed cost per unit of $2.00. The firm fell short of its goal and only manufactured 80,000 units at a total incurred cost of $515,000. The firm's manufacturing cost variance was $5,000 favorable. Inventoriable costs Are regarded as assets before the products are sold. Internal auditors must often distinguish between product costs and period costs. Product costs are properly assigned to inventory when incurred. Period costs are always expensed in the same period in which they are incurred. Which of the following items is a product cost for a manufacturing company? Property taxes on a factory. West Co.'s manufacturing costs for the month just ended were as follows: Direct materials and direct labor $700, Other variable manufacturing costs $100, Depreciation of factory building and manufacturing equipment $80, Other fixed manufacturing overhead $18, What amount should be considered product cost for external reporting purposes?
Are always expensed in the same period in which they are incurred. Which of the following are usually considered period costs? A (Sales materials, advertising costs, sales commissions, administrative supplies expense, administrative labor, depreciation on administration building, and cost of research on customer demographics). In a traditional manufacturing operation, direct costs would normally include Wood in a furniture factory. A fixed cost that would be considered a direct cost is A production supervisor's salary when the cost object is the Production Department. Which one of the following costs is classified as a period cost? The wages of the workers on the shipping docks who load completed products onto outgoing trucks. For product costing purposes, the cost of production overtime caused by equipment failure that represents idle time plus the overtime premium should be classified as a(n) Indirect cost.
The salary of the line supervisor in the assembly division of an automobile company should be included in Conversion costs. Indirect materials are a Conversion cost - Yes Manufacturing cost - Yes Prime cost - No The fixed portion of the semivariable cost of electricity for a manufacturing plant is a Conversion cost - Yes Product cost - Yes The wages of the factory janitorial staff should be classified as Manufacturing overhead cost. The IMA Statement of Ethical Professional Practice includes an integrity standard. It requires an IMA member to
Competence. Integrity is an ethical requirement for all IMA members. One aspect of integrity requires Avoidance of apparent conflicts of interest. Which ethical standard is most clearly violated if an IMA member knows of information that could mislead users but does not report the deficiency? Credibility. The IMA Statement of Ethical Professional Practice includes a competence standard. It requires an IMA member to Enhance his or her skills. In accordance with the IMA Statement of Ethical Professional Practice, a member who fails to perform professional duties in accordance with relevant standards is acting contrary to which one of the following standards? Competence. Which of the following statements best describes cost allocation?
A company's total income will remain unchanged no matter how indirect costs are allocated. Allocation of support department costs to the production departments is necessary to Determine overhead rates. A computer company charges indirect manufacturing costs to a project at a fixed percentage of a cost pool. The project is covered by a cost-plus government contract. Which of the following is an appropriate guideline for determining how costs are assigned to the pool? Establish separate pools for variable and fixed costs. The allocation of costs to particular cost objects allows a firm to analyze all of the following except Why the sales of a particular product have increased. Costs are allocated to cost objects in many ways and for many reasons. Which one of the following is a purpose of cost allocation? Measuring income and assets for external reporting. The allocation of general overhead costs to operating departments can be least justified in determining
