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55. Application of overhead to work in process in a standard costing system is based upon: a. actual hours times the predetermined rate. b. standard hours allowed for the output of the period. c. actual hours times the standard rate. d. normal costing.
Average Rating 0 out of 5 stars. 0 votes.You must log in to submit a review.55. Application of overhead to[…]
Read more“40. The following information pertains to Clove Co. for the year ending December 31, 19×2: Budgeted sales $1,000,000 Breakeven sales 700,000 Budgeted contribution margin 600,000 Clove’s margin of safety is a. $300,000 b. $400,000 c. $500,000 d. $800,000”,”1Margin of Safety = budgeted sales – breakeven sales = 1,000,000 – 700,000 = $300
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Read more“56. RedRock Company uses flexible budgeting for cost control. RedRock produced 10,800 units of product during October, incurring indirect material costs of $13,000. Its master budget for the year reflected indirect material costs of $180,000 at a production volume of 144,000 units. A flexible budget for October production would reflect indirect material costs of: a. $13,000. b. $13,500. c. $13,975. d. $11,700. e. $15,000.”,”2Indirect materials per unit from the budget = Indirect Material Costs / Production Volume = 180,000 = $1.25 /unit 144,000Flexible budget:Units of product x Indirect materials per unit = Indirect material costs10,800 x $1.25 = $13
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Read more41. Advocates of variable costing argue that a. fixed production costs should be added to inventory because such costs have future service potential and therefore are inventoriable as an asset. b. fixed production costs should be capitalized as an asset and amortized over future periods when benefits from such costs are expected to be received. c. fixed production costs should be charged to the period incurred unless sales do not equal production in which case any difference should be capitalized as an asset and amortized over future periods. d. fixed production costs should be charged to the period incurred in all cases since such costs cannot be avoided in the future.
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Read more57. Which of the following statements regarding return on investment is true? a. An increase in sales would affect the margin but not the turnover. b. JIT purchasing and JIT manufacturing could adversely affect the return on investment of companies adopting these methods. c. Accelerating the collection of accounts receivable and using cash collected to pay short-term creditors could help to increase the return on investment. d. The term operating assets is defined as plant and equipment for purposes of calculating return on investment.
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Read more“42. Which of the following are considered to be a product cost under absorption costing? I. Variable manufacturing overhead. II. Fixed manufacturing overhead. III. Selling and administrative expenses. a. I, II, and III. b. I and III. c. I and II. d. I.”
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Read more58. Net operating income is defined as: a. net income plus interest and taxes. b. sales minus variable expenses. c. sales minus variable expenses and traceable fixed expenses. d. contribution margin minus traceable and common fixed expenses.
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Read more“43. When production exceeds sales, net income reported under variable costing generally will be a. greater than net income reported under absorption costing. b. less than net income reported under absorption costing c. equal to net income reported under absorption costing. d. higher or lower because no generalization can be made.”
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Read more“59. In the decision to replace an old machine with a new machine, which of the following would be considered a relevant cost? a. The book value of the old equipment. b. Depreciation expense on the old equipment. c. The loss on the disposal of the old equipment. d. The current disposal price of the old equipment.”
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