BU330 Accounting For Managers Set-2

Question-1

The cost of downtime caused by quality problems with the raw materials would be classified as what type of cost?

    

A. Prevention cost 

B. Appraisal cost 

C. External failure cost 

D. Internal failure cost

Question-2

Which of the following is a result of cost distortion?

    

A. Over costing of all products 

B. Under costing of all products 

C. Accurate costing of all products 

D. Over costing of some products and under costing of other products

Question-3

Which term listed below describes a system where companies purchase raw materials when needed in production and complete finished goods when needed by customers?

    

A. Internal failure costs 

B. Backflush costing 

C. Just-in-time 

D. External failure costs

Question-4

Which of the following is a lean strategy?

    

A. Group like machines together. 

B. Produce in smaller batches than a traditional system. 

C. Maintain a higher level of inventory than a traditional system. 

D. Lengthen setup times relative to a traditional system.

Question-5

The entry to record the purchase of raw materials on account using a job costing system would include a:

    

A. credit to work-in-process inventory. 

B. debit to accounts payable. 

C. debit to work-in-process inventory. 

D. debit to raw materials inventory.

Question-6

Kramer Company manufactures coffee tables and uses an activity-based costing system to allocate all manufacturing conversion costs. Each coffee table consists of 20 separate parts totaling $240 in direct materials, and each requires 5 hours of machine time to produce. Additional information follows.

  

Activity

 

Allocation Base

 

Cost Allocation Rate

 

Materials handling

 

Number of parts

 

$2.00 per part

 

Machining

 

Machine hours