1. Which of the following variances cannot occur together during the same accounting period?

A. Unfavorable labor rate variance and favorable labor efficiency variance.

B. Unfavorable labor efficiency variance and favorable material quantity variance.
C. Favorable labor rate variance and unfavorable total labor variance.
D. Favorable labor efficiency variance and favorable material quantity variance.
E. None of these, because all of these variance combinations are possible

6. Which of the following statements is true in regard to the cause-and-effect relationship

between allocated joint costs and individual products?
A. A high individual product value results in a high level of joint costs.
B. A low individual product value results in a low level of joint costs.
C. A high individual product value results in a low level of joint costs.
D. There is no cause-and-effect relationship.

133,000
9. Which of the following is not a "red flag" indicating problems with an organization's costing
system?
A) Goods and services are complex and require many different processes and inputs.
B) Different departments within the company believe that the costs identified for producing
goods and providing services are not accurate.
C) Standard high-volume goods and services show significant profits.
D) Indirect costs are significant in proportion to direct costs.
Answer: A
When a single manufacturing process yields two products, one of which has a relatively high
sales value compared to the other, the two products are respectively known as
a. joint products and byproducts.
b. joint products and scrap.
c. main products and byproducts.
d. main products and joint products
The Asian Division of a multinational manufacturing organization would likely be classified as a:
A. cost center.
B. revenue center.
C. profit center.
D. investment center.
E. contribution center.

Assume there is a reduction in the selling price and all other CVP parameters remain constant.
This change will reduce operating income

26. Responsibility accounting systems strive to:

A. place blame on guilty individuals.
B. provide information to managers.
C. hold managers accountable for both controllable and noncontrollable costs.
D. identify unfavorable variances.
E. provide information so that managers can make decisions that are in the best interest of
their individual centers rather than in the best interests of the firm as a whole

What are the advantages of decentralization?

1. allows org to respond quicker to events
2. uses specialized knowledge and skills of managers
3. frees top management from day-to-day activities

6) Which of the following is an assumption of CVP analysis? A) Total costs can be divided into a
fixed component and a component that is variable with respect to the level of output

In CVP analysis, focusing on target net income rather than operating income
will not change the breakeven point
18. An unfavorable variable overhead efficiency variance indicates that:
a. variable overhead items were not used efficiently
b. the price of variable overhead items was less than budgeted
*c. the variable overhead cost-allocation base was not used efficiently
d. the denominator level was not accurately determined

Fixed costs depend on the resources acquired, and not whether the resources are used or not.

Brenda Hicks is paid $10 an hour for straight-time and $15 an hour for overtime. One week she
worked 42 hours, which included 2 hours of overtime. Compensation would be reported as
a. $400 of direct labor and $30 of manufacturing overhead.
b. $400 of direct labor and $zero of manufacturing overhead.
c. $420 of direct labor and $10 of manufacturing overhead.
d. $430 of direct labor and $zero of manufacturing overhead.
Answer: c

56. Which of the following entities would not likely be a user of job-costing systems?
A. Custom-furniture manufacturers.
B. Repair shops.
C. Hospitals.
D. Accounting firms.
E. None of the above, as all are likely users

On occasion, the FIFO and the weighted-average methods of process costing will result in the
same dollar amount of costs being transferred to the next department. Which of the following
scenarios would have that result?
A. when the beginning and ending inventories are equal in terms of physical units
B. when the beginning and ending inventories are equal in terms of the percentage of
completion for both direct materials, and conversion costs
C. when there is no ending inventory
D. when there is no beginning inventory
The Swiss Clock Shop manufactures clocks on a highly automated assembly line. Its costing
system utilizes two cost categories, direct materials and conversion costs. Each product must
pass through the Assembly Department and the Testing Department. Direct materials are
added at the beginning of the production process. Conversion costs are allocated evenly
throughout production. Swiss Clock Shop uses weighted-average costing.

Data for the Assembly Department for June 20x3 are:

Work in process, beginning inventory 250 units
Direct materials (100% complete)
Conversion costs (50% complete)

Units started during June 800 units

Work in process, ending inventory: 150 units
Direct materials (100% complete)
Conversion costs (75% complete)

Costs for June 20x3:

Work in process, beginning inventory:
Direct materials $180,000
Conversion costs $270,000
Direct materials costs added during June $1,000,000
Conversion costs added during June $1,000,000

41. What is the conversion cost per equivalent unit in June?

a. $1,254.32
b. $1,579.14
c. $1,730.20
d. $1,890.35

43. What amount of conversion costs are assigned to ending Work-in-Process account for June?
a. $101,956.64
b. $141,111.00
c. $126,450.50
d. $188,148.00
42. What amount of direct materials costs is assigned to the ending Work-in-Process account
for June?
a. $168,571.50
b. $283,552.50
c. $259,530
d. $236,850

40. What is the direct materials cost per equivalent unit during June?
a. $1,123.81
b. $1,730.20
c. $1,579,00
d. $1,890.35

39. What is the total amount debited to the Work-in-Process account during the month of
June?
a. $450,000
b. $2,000,000
c. $2,270,000
d. $2,450,000

38. What are the equivalent units for direct materials and conversion costs, respectively, for
June?
a. 1,200.5 units; 1,160.64 units
b. 1,050 units; 1,012.5 units
c. 1,050 units; 1,050 units
d. 962 units; 990 units