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FIN 073 Strategic Cost Management Second Perlodic Exam 2024., Exams of Finance

FIN 073 Strategic Cost Management Second Perlodic Exam

Typology: Exams

2024/2025

Available from 09/06/2024

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Name:
Date:
Section:
Score:
FIN
073
Strategic
Cost
Management
Second
Perlodic
Exam
Multiple
Choice:
Write
your
final
answer
in
the
box
provided
before
the
number.
Use
CAPITAL
letters
only.
Answers
written
outside
the
box
will
not
be
considered.
Erasures,
changing
of
final
answer,
and
the
like
will
be
considered
wrong.
D‘L
The
professional
certification
developed
by
the
IMA
indicating
professional
competence
in
the
management
accounting
field
is
the:
A.CPA
B.
CAT
C.CMA
D.CIA
D
2.
Which
of
the
following
is/are
true?
1.
Published
financial
statements
show
costs
classified
by
behavior.
I1.
Internal
financial
statements
must
be
prepared
using
generally
accepted
accounting
principles.
a.
lonly
b.
Il
only
c.Bothland
Il
d.
Neither
|
nor
Il
D
3.
Analyzing
cost
overruns
to
determine
their
cause
is
an
example
of
a.
planning
activity.
b.
directing
activity.
c.
controlling
activity.
d.
decision
making
DA.
Currently,
the
activity
found
LEAST
often
within
the
controller’s
department
is
a.
updating
the
general
ledger.
b.
budget
preparation.
c.
maintaining
accounts
receivable
records.
d.
establishing
and
maintaining
a
market
for
the
organization's
debt
and
equity
securities.
DS.
Which
of
the
following
positions
would
most
likely
be
a
line
manager?
a.
personnel
department
manager
c.
treasurer
b.
production
supervisor
d.
purchasing
department
manager
I:‘S.
Primo
Company
has
a
beginning
inventory
of
direct
materials
on
March
1
of
$30,000
and
an
ending
inventory
on
March
31
of
$36,000.
The
following
additional
manufacturing
cost
data
were
available
for
the
month
of
March:
Direct
materials
purchased
$84,000
Direct
labor
60,000
Factory
overhead
80,000
During
March,
prime
cost
added
to
production
was:
A.
$140,000
B.
$138,000
C.
$144,000
D.
$150,000
Dl
Castelo,
Villasin
and
Barrera
is
a
large,
local
accounting
firm
located
in
Cebu.
Belle
Castelo,
one
of
the
Firm's
founders,
appreciates
the
success
her
firm
has
enjoyed
and
wants
to
give
something
back
to
her
community.
She
believes
that
an
inexpensive
accounting
services
clinic
could
provide
basic
accounting
services
for
small
businesses
located
in
the
province.
She
wants
to
price
the
services
at
cost.
Since
the
clinic
is
brand
new,
it
has
no
experience
to
go
on.
Belle
decided
to
operate
the
clinic
for
two
months
before
determining
how
much
to
charge
per
hour
on an
ongoing
basis.
As
a
temporary
measure,
the
clinic
adopted
an
hourly
charge
of
P50,
half
the
amount
charged
by
Castelo,
Villasin
and
Barrera
for
professional
services.
Scanned
with
CamScanner
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Download FIN 073 Strategic Cost Management Second Perlodic Exam 2024. and more Exams Finance in PDF only on Docsity!

Name: Date: Section: Score:

FIN 073 Strategic Cost Management Second Perlodic Exam

Multiple Choice: Write your final answer in the box provided before the number. Use CAPITAL letters only. Answers written outside the box will not be considered. Erasures, changing of final answer, and the like will be considered wrong.

D‘L The professional certification developed by the IMA indicating professional competence in the management accounting field is the:

A.CPA B. CAT C.CMA D.CIA

D 2. Which of the following is/are true?

  1. Published financial statements show costs classified by behavior. I1. Internal financial statements must be prepared using generally accepted accounting principles.

a. lonly b. Il only c.Bothland Il d. Neither | nor Il

D 3. Analyzing cost overruns to determine their cause is an example of a. planning activity. b. directing activity. c. controlling activity. d. decision making

DA. Currently, the activity found LEAST often within the controller’s department is a. updating the general ledger. b. budget preparation. c. maintaining accounts receivable records. d. establishing and maintaining a market for the organization's debt and equity securities.

DS. Which of the following positions would most likely be a line manager? a. personnel department manager c. treasurer b. production supervisor d. purchasing department manager

I:‘S. Primo Company has a beginning inventory of direct materials on March 1 of $30,000 and an ending inventory on March 31 of $36,000. The following additional manufacturing cost data were available for

the month of March:

Direct materials purchased $84, Direct labor 60, Factory overhead 80, During March, prime cost added to production was: A. $140,000 B. $138,000 C. $144,000 D. $150,

Dl Castelo, Villasin and Barrera is a large, local accounting firm located in Cebu. Belle Castelo, one of the Firm's founders, appreciates the success her firm has enjoyed and wants to give something back to her community. She believes that an inexpensive accounting services clinic could provide basic accounting services for small businesses located in the province. She wants to price the services at cost.

Since the clinic is brand new, it has no experience to go on. Belle decided to operate the clinic for two months before determining how much to charge per hour on an ongoing basis. As a temporary measure, the clinic adopted an hourly charge of P50, half the amount charged by Castelo, Villasin and Barrera for professional services.

The accounting services clinic opened on January 1. During January, the clinic had 120 hours of professional service. During February, the activity was 150 hours. Costs for these two levels of activity usage are as follows:

Professional hours 120 hours 150 hours

Salaries:

Senior accountant P2,500 P2,

Office assistant 1,200 1,

Internet and software subscriptions 700 850 Consulting by senior partner 1,200 1, Depreciation (equipment) 2,400 2, Supplies 905 1, Administration 500 500 Rent (offices) 2,000 2, Utilities 332 365

The clinic’s monthly fixed costs amount to:

a. P8,600 b. P9,025 c. P425 d. P12,

Temperance, Inc. is studying marketing cost and sales volume, and has generated the following information by use of a scatter diagram and a least-squares regression analysis:

Scatter Diagram Regression Analysis Variable cost per unit sold $6.50 $6.

Total monthly fixcd cost $45,000 $42,

Temperance is now preparing an estimate for monthly sales of 18,000 units. On the basis of the data presented, compute the most accurate sales forecast possible.

a. $159,500. b. $162,000. c. $164,900. d. $167,400.

As projected net income increases the a. degree of operating leverage declines. c. break-even point goes down. b. margin of safety stays constant. d. contribution margin ratio goes up.

. For its most recent fiscal year, a firm reported that its contribution margin was equal to 40 percent of sales and that its net income amounted to 10 percent of sales. Ifits fixed costs for the year were P60,000, how much was the margin of safety? a. P150,000 b. P200,000 c. P600,000 d. P 50, . Assume that the company's management learned that a new technology that will increase the quality of

its product is available. If implemented, its projections for next year will be changed:

  1. The selling price of the product will increase to P75 per unit.
  2. Fixed manufacturing costs will increase by 20%.
  3. Additional advertising costs will be incurred to promote the higher-quality product. This will increase fixed non-manufacturing cost by 10%.
  4. The improved product will require a new material that will increase direct materials cost by P4.

Ifthe new technology is adapted, how^ much sales should the company make to earn a pre-tax profit of

10% on sales?

a. P366,130 b. P358,875 c. P253,324 d. P353,

Variable: $4 per unit Fixed: $260, Selling and administrative costs: Variable: $1 per unit Fixed: $32,

The gross margin that the company would disclose on^ an absorption-costing income statement is: A. $97,500. B. $147,000. C.$166,500. D. $370,000.

DZO. Norton, which began business atthe startof the current year, had the following data: Planned and actual production: 40,000 units Sales: 37,000 units at$15 per unit Production costs: Variable: $4 per unit Fixed: $260, Selling and administrative costs: Variable: $1 per unit Fixed: $32,

The contribution margin that the company would disclose on a variable-costing income statement is: A. $97,500. B. $147,000. C. $166,500. D. $370,000.

The next two items are based on the following information: Franz began business at the start of this year and had the following costs: variable manufacturing cost per unit, $9; fixed manufacturing costs, $60,000; variable selling^ and^ administrative^ costs^ per^ unit,^ $2;^ and^ fixed^ selling^ and administrative costs, $220,000. The company sells its units for $45 each. Additional data follow.

Planned production in units 10, Actual production in units 10, Number of units sold 8,

th The net income (loss) under absorption costing is: A. $(7,500). B. $9,000. C. $15,000. D. $18,000.

Dzz, The net income (loss) under variable costing is: A. §(7,500). B. $9,000. C. $15,000. D. $18,000.

E‘ZB, If a firm produces more units than it sells, absorption costing, relative to variable costing, will result in a. higher income and assets. c. lower income but higher assets. b. higher income but lower assets. d. lower income and assets.

[:‘2& Garcia's inventory increased during the year. On the basis of this information, income reported under absorption costing: A. will be the same as that reported under variable costing. B. will be higher than that reported under variable costing. C. will be lower than that reported under variable costing. D. will differ from that reported under variable costing, the direction of which cannot be determined from the information given.

The next three items are based on the following information: The following information is available for X Co. for its first year of operations:

Sales in units 5,

Production in units 8, Manufacturing costs: Direct labor P3 per unit Direct material 5 per unit

4

Variable overhead 1 per unit

Fixed overhead P100,

Net income (absorption method) P30, Sales price per unit P

DZS. What would X Co. have reported as its income before income taxes if it had used variable costing? a. (P30,000) b. (P7,500) c. P67,500 d. P90,

[]26. What was the total amount of Selling, General & Administrative expense incurred by X Co.? a. P62,500 b. P30,000 ¢. P25,000 d. P6,

D27. Based on variable costing, what would X Co. show as the value of its ending inventory? a. P120,000 b. P64,500 ¢. P27,000 d. P24,

D 28. Under throughput costing, the cost of a unit typically includes: A. direct labor. B. variable manufacturing overhead. C. the direct costs incurred whenever a unit is manufactured. D. all of the choices.

DZQ. An accounting system that collects^ financial and^ operating data on the basis ofthe underlying nature^ and extent ofthe cost drivers is a.Standard costing. c.Absorption costing. b.Activity-based costing. d.Variable costing.

DSO. Consider the following statements regarding traditional costing systems: 1.Overhead costs are applied to products on the basis ofvolume-related measures. II.All manufacturing costs are easily traceable to the goods produced. ll. Traditional^ costing systems tend to distort unit manufacturing costs when numerous goods are made that have widely varying production requirements.

Which of the above statements is (are) true? A.lonly. B.^ Il^ only.^ C.land^ Ill.^ D.lland^ il

The next fouritems are based on the following^ information: Century, Inc., currently uses traditional costing procedures, applying $400,000 of overhead toproducts X and Y on the basis ofdirect labor hours. The firm isconsidering a shift toactivity-based costing^ and the creation of individual cost pools that will use direct labor hours^ (DLH),^ production^ setups (SU), and number of parts components (PC) as cost drivers. Data on^ the costpools^ and^ respective driver volumes follow.

Pool No. 1 Pool No.^2 Pool No.^3

X^60030 1, Y 1,400^50 1,

Pool Cost $80,000^ $140,000 $180,

D31. The overhead costallocated toproduct X^ by using traditional costing procedures would be: A.$120,000. B. $184,500. C. $215,500. D. $280,000.

Daz. The overhead costallocated toproduct Y^ by using traditional costing procedures would be: A. $120,000. B. $184,500. C. $215,500. D. $280,000.

D.’!S. The overhead costallocated toproduct X^ by using^ activity-based^ costing procedures^ would be: A. $120,000. B. $184,500. C. $215,500. D. $280,000.

[Jae.

[J4o.

[[4e.

Activity 3 P91,200 800 3,000 3,

Using ABC, the cost per unit of coats is approximately: a. P2.40 (^) b. P3.90 (^) c.P6.60 (^) d. P10.

Vanguard combines all manufacturing overhead into a single cost pool and allocates this overhead to products by using machine hours. Activity-based costing would likely show that with Vanguard's current procedures, A. all ofthe company's products are undercosted. B. the company's high-volume products are undercosted. C. all ofthe company's products are overcosted. D. the company's high-volume products are overcosted.

Jackson manufactures products X and Y, applying overhead on the basis of labor hours. X, alow-volume product, requires a variety of complex manufacturing procedures. Y, on the other hand, is both a high- volume product and relatively simplistic in nature. What would an activity-based costing system likely disclose about products Xand Y as aresult ofJackson's current accounting procedures? X ¥ A Undercosted Undercosted B. Undercosted ~ Overcosted C. Overcosted Undercosted D. Overcosted Overcosted

  • If activity-based costing is used, modifications made by engineering to the product design of several products would be classified as a a. unit-level act c. product-level activity. b. batch-level activity. d. facility-level activity. . Maintenance of the production equipment would be classified as a a. unit-level activi c. product-level activity. b. batch-level activity. d. facility-level activity. . Which of the following is true of value-added activities? a. They include activities such as inspection of finished goods. b. They are activities that are necessary to remain in business. c. They are synonymous with the state-detection activities. d. They are the activities that replicate work because it wasn't done correctly the first time . Which of the following is an example of a non-value-added manufacturing activity? a. assembly c. finishing b. scheduling d. All of the choices are value-added activities. . The best characteristics of a standard cost system is A. standard can pinpoint responsibility and help motivation B. all variances from standard should be reviewed C. all significant unfavorable variances should be reviewed D. standard cost involves cost control which is cost reduction

Which of the following is/are true? I. The condition where everything operates perfectly and demands maximum efficiency is called ideal standards. Il. The condition where everything operates perfectly and demands maximum efficiency is called theoretical standards.

a. lonly b. Ilonly c.Bothland Il d.Neither |nor Il

D47. The term "management by exception” isbest defined as: A. choosing exceptional managers. B. controlling actions ofsubordinates through acceptance of management techniques. C. investigating unfavorable variances. D. devoting management time to investigate significant variances.

|:|48. The standard direct materials cost to produce a unitof a product is four meters of materials at P2.50 per meter. During June, 2015, 4,200 meters of materials costing P10,080 were purchased and used to produce 1,000 units ofthe product. What was the materials price variance for June, 2015? a. P480 unfavorable ¢. P400 favorable b. P 80 unfavorable d.P420 favorable

‘:‘49. Samson Company uses a standard costing system inthe production of itsonly product. The 84,000 units Victoria, Inc., recently completed 52,000 units ofa product that was expected toconsume fivepounds of direct material per finished unit. The standard price of the direct material was $9 per pound. Ifthe firm purchased and consumed 268,000 pounds in manufacturing (cost = $2,304,800), the direct-materials quantity variance would be figured as: A. $72,000F. B. $72,000U. C. $107,200F. D. $107,200U.

DSO. Courtney purchased and consumed 50,000 gallons of direct material that was used in the production of 11,000 finished units of product. According to engineering specifications, each finished unit had a manufacturing standard of five gallons. Ifa review of Courtney’s accounting records at the end of the period disclosed a material price variance of $5,000U and a material quantity variance of $3,000F, determine the actual price paid foragallon ofdirect material. A. $0.50. B. $0.60. C. $0.70. D. $0.80.

The next two items are based on the following information: Direct labor standard: 5 hours at $14 per hour Direct labor used in production: 45,000 hours at a cost of $639, Manufacturing activity, product no. 33: 8,900 units completed

[]51. The direct-labor rate variance is: A. $8,900F. B. $8,900U. C. $9,000F. D. $9,000U.

D 52. The direct-labor efficiency variance is: A. $7,000F. B. $7,000U. C. $7,100F. D. $7,100U.

DS& Simms Corporation had a favorable direct-labor efficiency variance of $6,000 for the period just ended. The actual wage rate was (^) $0.50 more than the standard rate of $12.00. If the (^) company's standard hours allowed for actual production totaled 9,500, how many hours did the firm actually work? A.9,000. B. 9,020. C. 9,980, D. 10,000.

The next four items are based on the following information: Cost standards for product no. C77: Direct material 3 pounds at $2.50 per pound $ 7. Direct labor 5 hours at $7.50 per hour 37.

Actual results: Units produced 7,800 units Direct material purchased 26,000 pounds at $2.70 $70, Direct material used 23,100 pounds at $2.70 62, Direct labor 40,100 hours at $7.30 292,

Ds«t. The direct-material quantity variance is: