Topics 1-5 Practice MCQs and solutions

Topics 1-5 Practice MCQs and solutions - Accounting...

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Accounting (Managerial) 530 Revision MCQs (Topics 1 – 5) 1.E Which of the following accounts would be a period cost rather than a product cost? A) Depreciation on manufacturing machinery. B) Maintenance on factory machines. C) Production manager's salary. D) Direct Labor. E) Freight outward. 2.B The difference between variable costs and fixed costs is A) Unit variable costs fluctuate and unit fixed costs remain constant. B) Unit variable costs are fixed over the relevant range and unit fixed costs are variable. C) Total variable costs are constant over the relevant range, while fixed costs change in the long-term. D) Total variable costs are variable over the relevant range but fixed in the long-term, while fixed costs never change. E) Unit variable costs change in varying increments, while unit fixed costs change in equal increments. 3.B Which of the following costs is both a prime cost and a conversion cost? A) direct materials B) direct labor C) manufacturing overhead D) administrative costs E) marketing costs 4. B Which of the following is not a characteristic of job costing? A) Each job is distinguishable from other jobs. B) Identical units are produced on an ongoing basis. C) Job cost data are used for setting prices and bids. D) It is not possible to compare actual costs with estimated costs. Use the following data for Xanatos Ltd to answer questions 5-6: Estimated manufacturing overhead for 2006 $30,000 Estimated direct labor hours for 2006 2,000 At Xanatos Ltd, two jobs were worked on during 2006: Job A-101 and Job A-102. The number of direct labor hours spent on Job A-101 and Job A-102 were 1,200 and 1,000, respectively. The actual manufacturing overhead was $37,000. 5. A What is the predetermined manufacturing overhead rate per direct labor hour for the year? A) $15 B) $20 C) $25 D) $30 E) some other answer _______________ 1
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6. B What was the amount of manufacturing overhead applied to Job A-101? A) $16,000 B) $18,000 C) $24,000 D) $44,000 E) some other answer _______________ 7. B Manufacturing overhead applied on the basis of direct labor hours was $120,000, while actual manufacturing overhead incurred was $124,000 for the month of April. Which of the following is always true given the statement above? A) Overhead was over-applied by $4,000. B) Overhead was under-applied by $4,000. C) Actual direct labor hours exceeded budgeted direct labor hours. D) Actual direct labor hours were less than budgeted direct labor hours. 8. C Which of the following statements is true? A) One of the lessons learned from activity-based costing (ABC) is that all costs are really a function of volume. B) The primary purpose of the plant-wide and department allocation methods is allocating direct costs to specific products. C)
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This note was uploaded on 08/26/2011 for the course ACCOUNTING 211 taught by Professor Min during the Three '11 term at Curtin.

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Topics 1-5 Practice MCQs and solutions - Accounting...

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