Question # 00003400 Posted By: spqr Updated on: 11/11/2013 01:44 AM Due on: 11/29/2013
Subject Accounting Topic Accounting Tutorials:
Question

51. WriterOne Inc. manufactures ball point pens that sell at wholesale for \$0.80 per unit. Budgeted production in both 2009 and 2010 was 8,000 units. There was no beginning inventory in 2009. The following data summarized the 2009 and 2010 operations:

Full costing operating income for 2009 is calculated to be:

A. \$149.

B. \$430.

C. \$655.

D. \$1,030.

E. \$1,180.

52. WriterOne Inc. manufactures ball point pens that sell at wholesale for \$0.80 per unit. Budgeted production in both 2009 and 2010 was 8,000 units. There was no beginning inventory in 2009. The following data summarized the 2009 and 2010 operations:

Full costing operating income for 2010 is calculated to be:

A. \$149.

B. \$430.

C. \$655.

D. \$1,030.

E. \$1,180.

53. WriterOne Inc. manufactures ball point pens that sell at wholesale for \$0.80 per unit. Budgeted production in both 2009 and 2010 was 8,000 units. There was no beginning inventory in 2009. The following data summarized the 2009 and 2010 operations:

Variable costing operating income for 2009 is calculated to be:

A. \$149.

B. \$430.

C. \$655.

D. \$1,030.

E. \$1,180.

54. WriterOne Inc. manufactures ball point pens that sell at wholesale for \$0.80 per unit. Budgeted production in both 2009 and 2010 was 8,000 units. There was no beginning inventory in 2009. The following data summarized the 2009 and 2010 operations:

Variable costing operating income for 2010 is calculated to be:

A. \$149.

B. \$430.

C. \$655.

D. \$1,030.

E. \$1,180.

55. The value stream income statement can be compared to:

A. Value chain analysis.

B. The contribution income statement.

C. A streamlined production process.

D. A streamlined accounting system.

56. The six steps Ittner and Larcker propose for maximizing the value of nonfinancial measures when using a balanced scorecard include all the following except:

A. Continually refine the model.

B. Assess outcomes.

C. Gather data.

D. Base actions on the data.

E. Base actions on the findings.

57. The balanced scorecard is particularly important in difficult economic times because:

A. Financial measures are even more important.

B. Nonfinancial measures are even more important.

C. Financial measures may be distorted.

D. Nonfinancial measures may be distorted.

58. The value stream income statement provides the following information not usually contained in the contribution income statement:

A. Contribution by CPC.

B. Contribution by profit center.

C. A separate accounting for the effect of inventory change on profit.

D. A separate accounting for the effect of productivity change on profit.

59. Tokless Inc. planned and manufactured 400,000 units of its single product in 2010, its first year of operations. Variable manufacturing costs were \$50 per unit of production. Planned and fixed manufacturing costs were \$800,000. Marketing and administrative costs (all fixed) were \$600,000 in 2010. Tokless Inc. sold 195,000 units of product in 2010 at \$65 per unit. Sales for 2010 are calculated to be:

A. \$9,750,000.

B. \$12,675,000.

C. \$13,000,000.

D. \$13,900,000.

E. \$20,000,000.

60. Tokless Inc. planned and manufactured 400,000 units of its single product in 2010, its first year of operations. Variable manufacturing costs were \$50 per unit of production. Planned and fixed manufacturing costs were \$800,000. Marketing and administrative costs (all fixed) were \$600,000 in 2010. Tokless Inc. sold 195,000 units of product in 2010 at \$65 per unit. Full costing operating income for 2010 is calculated to be:

A. \$1,525,000.

B. \$1,850,000.

C. \$1,935,000.

D. \$2,260,000.

E. \$2,750,000.

61. Tokless Inc. planned and manufactured 400,000 units of its single product in 2010, its first year of operations. Variable manufacturing costs were \$50 per unit of production. Planned and fixed manufacturing costs were \$800,000. Marketing and administrative costs (all fixed) were \$600,000 in 2010. Tokless Inc. sold 195,000 units of product in 2010 at \$65 per unit. Variable costing operating income for 2010 is calculated to be:

A. \$1,525,000.

B. \$1,850,000.

C. \$1,935,000.

D. \$2,260,000.

E. \$2,750,000.

62. Profit center income statements are most meaningful to managers when they are prepared:

A. On a full cost basis.

B. On a cost behavior basis.

C. On a cash basis.

D. In a single-step format.

E. In a multiple-step format.

63. A unit of an organization is referred to as a profit center if it has:

A. Authority to make decisions affecting the major determinants of profit, including the power to choose its markets and sources of supply.

B. Authority to make decisions affecting the major determinants of profit, including the power to choose its markets and sources of supply and significant control over the amount of invested capital.

C. Authority to make decisions over the most significant costs of operations, including the power to choose the sources of supply.

D. Authority to provide specialized support to other units within the organization.

E. Responsibility for combining material, labor, and other factors of production into a final output.

64. A unit of an organization is referred to as an investment center if it has:

A. Authority to make decisions affecting the major determinants of profit, including the power to choose its markets and sources of supply.

B. Authority to make decisions affecting the major determinants of profit, including the power to choose its markets and sources of supply and significant control over the amount of invested capital.

C. Authority to make decisions over the most significant costs of operations, including the power to choose the sources of supply.

D. Authority to provide specialized support to other units within the organization.

E. Responsibility for developing markets for and selling the output of the organization.

65. Of most relevance in deciding how or which costs should be assigned to an SBU is the degree of:

A. Avoidability.

B. Causality.

C. Controllability.

D. Reliability.

66. A significant problem in comparing profitability measures among companies is the:

A. Lack of general agreement over which profitability measure is best.

B. Differences in the size of the companies.

C. Differences in the accounting methods used by the companies.

D. Differences in the dividend policies of the companies.

E. Effect of interest rates on net income.

67. The most important objective of a strategic performance measurement system is:

A. Budgeting.

B. Motivation.

C. Authority.

D. Variances.

E. Pricing.

68. What costs are treated as product costs under variable costing?

A. Only variable costs.

B. Only variable production costs.

C. All variable costs.

D. All variable and fixed manufacturing costs.

69. Inventory under the variable costing method includes:

A. Direct materials cost, direct labor cost, but no factory overhead cost.

B. Direct materials cost, direct labor cost, and variable factory overhead cost.

C. Prime cost but not conversion cost.

D. Prime cost and all conversion cost.

70. In an income statement prepared using the variable costing method, which of the following terms should appear?

A. A

B. B

C. C

D. D

71. Other things being equal, income computed by the variable costing method will exceed that computed by the full costing method if:

A. Units produced exceed units sold.

B. Units sold exceed units produced.

C. Fixed manufacturing costs increase.

D. Variable manufacturing costs increase.

72. Home Products Inc has failed to reach its planned activity level during its first two years of operation. The following table shows the relationship between units produced, sales, and normal activity for these years and the projected relationship for Year 3. All prices and costs have remained the same for the last two years and are expected to do so in Year 3. Income has been positive in both Year 1 and Year 2.

Because Home Products uses a full costing system, one would predict operating income for Year 3 to be:

A. Greater than operating income under variable costing.

B. Less than year 2.

C. The same as operating income under variable costing.

D. Less than the operating income under variable costing.

73. A company's operating income was \$70,000 using variable costing for a given period. Beginning and ending inventories for that period were 45,000 units and 50,000 units, respectively. Ignoring income taxes, if the fixed overhead application rate was \$8.00 per unit, what would operating income have been using full costing?

A. \$30,000.

B. \$140,000.

C. \$110,000.

D. \$100,000.

E. Cannot be determined from the information given.

74. A company had income of \$50,000 using variable costing for a given period. Beginning and ending inventories for that period were 80,000 units and 90,000 units, respectively. If the fixed overhead application rate were \$10.00 per unit, what would operating income have been using full costing?

A. \$(50,000).

B. \$170,000.

C. \$150,000.

D. \$0.

E. Cannot be determined from the information given.

75. The balanced scorecard is widely used in performance evaluation and management control. In which regions around the world is it most and least, respectively, commonly used?

A. Europe, Asia

C. U.S. and Canada, South and Central America

D. South and Central America, Europe

76. Operating income reported under full costing will exceed operating income reported under variable costing for a given period if:

A. Production equals sales for that period.

B. Production exceeds sales for that period.

C. Sales exceed production for that period.

77. A company's operating income recently increased by 30% while its inventory increased in a given year. Which of the following accounting methods would be most likely to produce the favorable income results?

A. Full costing.

B. Direct costing.

C. Variable costing.

D. Standard direct costing.

78. During January, Lang, Inc. produced 10,000 units of product with costs as follows:

What is Lang's unit cost for January, calculated on the variable costing basis?

A. \$6.20.

B. \$7.20.

C. \$7.50.

D. \$8.50.

E. \$9.50.

79. In the principal-agent model, the manager is modeled as having all of the following elements except:

A. Risk aversion

B. Outcomes of actions

C. Provides effort

D. Decision Making

80. During October, Rover Industries produced 35,000 units of product with costs as follows:

What is Rover's unit cost for October, calculated on the variable costing basis?

A. \$3.25.

B. \$3.75.

C. \$4.00.

D. \$4.50.

E. \$5.00.

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1. ## Solution: general business data bank

Tutorial # 00003214 Posted By: spqr Posted on: 11/11/2013 02:52 AM
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