UAS AKMEN

WAKTU 105 MENIT

1. The first step in planning and control is

a) Preparation of the budget
b) Performance evaluation
c) Strategic planning
d) Setting long term objective
2. Which of the following is true about budgets?
a. Budgets are financial plans for the future
b. Budgets identify objectives and actions needed to achieve them
c. Budgets should be tighly linked to the strategic plan
d. All of the above
3. Financial budgeting refers to
a. All budgets of the firm
b. Budgets for cash flow
c. Budgets for sales
d. Budgets for production
4. The budget that is comprehensive financial plan for the organization as a whole is called a
a. Capital budget
b. Master budget
c. Comprehensive budget
d. Continous budget
5. In the production budget, the total units to be produced is computed as
a. Expected sales – desired ending inventory – beginning inventory
b. Expected sales + desired ending inventory + beginning inventory
c. Expected sales – desired ending inventory + beginning inventory
d. Expected sales + desired ending inventory – beginning inventory
6. The production budget
a. Summarizes the cost of producing units for the budget period
b. Is calculated based on the sales budget and the desired ending inventory
c. Specifies the required overhead
d. Specifies the required direct labor hours
7. Which budget is prepared without dollar amounts?
a. Direct materials purchases budget
b. Overhead budget
c. Production budget
d. All of the above
8. Which of the following is usually prepared before the direct materials purchases budget?
a. production budget
b. cash budget
 c. proforma income statement
d. proforma balance sheet
9. the cash budget must be prepared before you can complete the
a. schedule of cash receipts
b. sales budget
c. production budget
d. budgeted balance sheet
10. which of the following is not key feature of a budgetary system that promotes positive
managerial performance?
a. Frequent feedback on performance
b. A single measure of performance
c. Monetary and non monetary incentives
d. Participative budgeting

Figure 8-1

Projected sales for Sommers Inc for next year and beginning and ending inventory data are as follows:

Sales 50,000 units

Beginning inventory 4,000 units

Desired ending inventory 8,000 units

The selling price is $40 per unit. Each unit requires four pounds of material which costs $6 per pound.
The beginning inventory of raw materials is 12,000 pounds. The company wants to have 3,000 pounds of
material in inventory at the end of the year

11. Refer to Figure 8-1, Sommers Inc budgeted sales would be

a. $2,160,000
b. $2,320,000
c. $2,480,000
d. $2,000,000
12. Nichols company sells a product for $20. Budgeted sales for the first quarter of the current year
are as follows :
Budgeted sales
January $80,000
February $50,000
March $90,000
The company wants to maintain an inventory of finished units equal to 30 percent of the
following months sales and 1,000 units are on hand at the beginning of the year.
Each unit requires two pounds of raw material costing $1 per pound. The company maintains a
raw materials inventory equal to 10 percent of the following months production needs
Budgeted production in units for February would be
a. 2,500
 b. 3,100
c. 3,850
d. 4,600
13. Diely company has the following sales budget
July August September
Budgeted sales $105,000 $211,000 $134,000
Credit sales represent 80 percent of budgeted sales. On credit sales 20 percent is collected in
the month of the sale, 60 percent in the month after the sale and the remaining 15 percent is
collected two months after the sale. Five percent of all sales are uncollectible and written off.
Cah receipts from sales in September amounted to
a. $169,150
b. $135,320
c. $107,200
d. $162,120

Figure 8-11
Adams company uses an activity based costing system. Four activities were identified. The inspection
activity uses the number of setups as its cost driver. The following budget information is available for
this activity :
Fixed costs per month $80,000
Variable cost per setup $1,800
The company expects to have 25 setups in march

14. Refer to figure 8-11, if the company expects the 25 setups in the month of March, what would
be the total budgeted costs of the inspection activity?
a. $80,000
b. $125,000
c. $45,000
d. $132,500
15. Incremental and constant increases in the efficiency of an existing process is
a. A process creation
b. A process innovation
c. A process improvement
d. None of the above
16. Which of the following is not true about process value analysis
a. Process value analysis is fundamental to activity based responsibility accounting
b. Process value analysis is focuses on accountability for activities rather than costs
c. Process value analysis is emphasizes the maximization of individual performance
d. All of the above are true
17. Which is driver analysis important?
a. To reveal the root cause of an activity so that action can be taken to improve the activity
b. To determine the cost driver so that activity based costing can be implemented
c. To determine all of the activity inputs
 d. None of the above
18. An activity analysis is used to determine
a. The activities an organization performs
b. How many people perform activities
c. The time and resources required to perform activities
d. All of the above
19. Kaizen costing is
a. Continous improvement with the objective of cost reduction
b. Characterized by constant improvements to existing processes and products
c. Characterized by incremental improvement to existing processes and products
d. All of the above
20. Which of the following describes a kaizen cost reduction process
a. It has two process cycles, namely continous improvement and maintenance
b. It includes a kaizen standard, which is an ideal standard
c. A maximum standard is set for future performance based on the current kaizen standard
attained
d. Both a and c
21. Which of the following anticipates the emerging and potential needs of customers and creates
new products and services to satisfy those needs?
a. The innovation process
b. The operations process
c. The postsales process
d. None of the above
22. Cycle time is the time it takes to
a. Collect the account after the sale
b. Turn inventory over
c. Deliver the product after it is sold
d. Produce one unit of product
23. Cycle time is calculated as
a. Total production time/Number of units sold
b. Total production time/Number of units produced
c. Total production time/Number of units in inventory
d. Total production time/Number of direct labor hours used
24. A company has five days of finished goods inventory on hand to avoid stockouts. The carrying
costs of the inventory average $5,000 per day
Nonvalue added costs would be
a. $0
b. $1,000
c. $5,000
d. $25,000
Figure 10-7
A company keeps 15 days of raw materials inventory on hand to avoid shutdowns due to raw materials
shortages. Carrying costs average $2,500 per day. A competitor keeps 12 days of inventory on hand, and
the competitors carrying costs average $1,500 per day.
25. Refer to figure 10-7. Value added costs would be
a. $0
b. $2,500
c. $15,000
d. $37,500

Figure 10-9
The Derek company has developed ideal standards for four activities : labor,materials,inspection and
receiving
Information is as follows :
activity Activity driver SO AO SP

Labor 50,000 56,000 $6

materials pounds 100,000 105,000? 5

inspection Inspection hours 0 40,000 4

receiving orders 150 190 150

The actual prices paid per unit of each activity driver were equal to the standard prices
26. Refer to figure 10-9. Dereks value added costs for inspection would be
a. $160,000
b. $140,000
c. $20,000
d. $0
27. The following information relates to the main product of the Walton Corporation:

Unit production cost

Unit life cycle cost

Unit whole life cost

Sales price per unit

Waltons postpurchase cost of the product must be

a. $2
b. $3
c. $4
d. $5
 28. How is external failure cost different between the product quality cost model and the
environmental quality cost model?
a. Both models treat external failure cost the same way
b. An external failure cost is a non value added cost in the product quality cost model
c. All external failure cost are paid by the company and a third party in the environmental
quality cost model
d. None of the above are correct
29. According to evidence from case studies by the world resource institute, environmental costs
are what percent of a firms total operating costs?
a. 20% or more
b. 10% to 20%
c. 0% to 10%
d. None of the above
30. Of the three types of environmental benefits,ongoing savings produced in prior years are called
a. Income
b. Current savings
c. Cost avoidance
d. None of the above
31. Of the three life cycle assessment stages,which one assesses the environmental effects of
competing designs and provides a relative ranking of those effects
a. Inventory analysis
b. Impact analysis
c. Improvement analysis
d. None of the above

Figure 12-2
At the end of this year, Sheridan company identified the following costs in its accounting records as
environmentally related

Last year

Inefficient materials usage $100,000

Treatment and disposal of toxic waste 600,000

Cleanup of contaminated soil 300,000

Testing for contamination 200,000

Operation of pollution control equipment 240,000

Maintenance of pollution control equipment 60,000

Environmental studies 90,000

Evaluation and selection of suppliers 20,000

 Training (environmentally related) 35,000

32. Refer to figure 12-2. What is the total of Sheridans environmental detection activities?
a. $210,000
b. 200,000
c. 240,000
d. None of the above

Figure 12-4
Willowby company manufactures a number of products, two of which are widgets and gadgets. The
following environmental activities have been identified and the following costs have been associated
with the two products
widgets gadgets

Units produced 800,000 900,000

Packaging materials(cartons) 600,000 200,000

Energy usage (kilowatt hours) 700,000 300,000

Toxic releases (cubic feet) 400 50

Pollution control (machine hours) 90,000 10,000

Cost of activities

Using packaging materials $800,000

Using energy 380,000

Releasing toxins(fines) 900,000

Operating pollution control equipment 680,000

33. Refer to figure 12-4. What is the environmental cost per unit for widgets
a. $2.8475
b. $2.515
c. $2.0825
d. None of the above
34. Advantages of decentralization include all of the following EXCEPT
 a. Divisional management is able to react to changing market conditions more rapidly than top
management
b. Divisional management is a source of personel for promotion to top management positions
c. Decentralization can motivate divisional managers
d. Decentralization permits divisional management to concentrate on firm problems and long
range planning

Figure 13-11
The component usually sells for $35 in the external market. The Simonds division is capable of producing
500,000 components per year; however,only 400,000 components are expected to be sold next year.
The variable selling expenses are avoidable if the component is sold internally
The Allen division has been buying the same component from an external supplier for $34 each. The
allen division expects to use 50,000 units of the component next year. The manager of the allen division
has offered to buy 50,000 units from Simonds division for $22,5 each

39. refer to figure 13-11. The maximum transfer price that the allen division would be willing to pay is
a. $20
b. $25
c. $26.5
d. $34
40. when variable costing is used, the income statemenr is usually prepared using
a) A contribution margin format
b) A functional format
c) An operational format
d) All of the above
41. which of the following would be considered a segment?
a) Division
b) Product line
c) Sales territory
d) All of the above
42. Segmen margin is equal to
a) Sales less variable costs
b) Sales less variable costs and direct fixed costs
c) Sales less variable costs and indirect fixed costs
d) Sales less cost of goods sold
43. companies that assess the profitability of various customer groups
a) Can more accurately target their markets
b) Can increase profits
c) May find that some customers are unprofitable
d) All of the above are true

Figure 15-2
Belanna industries began operations on January 1. The company sells a single product for $7 per unit
During the year 50,000 units were produced and 45,000 units were sold. There was no work-in-process
inventory at December 31
Budgeted and actual costs for the year were as follows:
Fixed costs Variable costs

Direct materials 0 $1.4 per unit produced

Direct labor 0 $1.7 per unit produced

Manufacturing overhead $80,000 $0.6 per unit produced

Selling and administrative expenses $35,000 $0.5 per unit produced

44. Refer to figure 15-2. Belanna cost of ending finished goods inventory under variable costing would
be
a) $18,500
b) $23,500
c) $26,500
d) $21,000

Figure 15-6
Hammer corporation uses an actual cost system and produces a single product. Information about the
product for the past year is as follows :
Product X

Production (units) 200,000

Sales (units) 160,000

Selling price $18

Machine hours 82,000

Manufacturing costs :

Direct materials $200,000

Direct labor

Variable overhead

Fixed overhead

Non manufacturing costs :

Variable selling $120,000

Fixed selling 60,000

There were no beginning inventories of product X (Round amounts to two decimal places)

45. Refer to figure 15-6. If Hammer uses absorption costing, COGS would be
a) $1,129,600
b) $2,060,000
c) $1,081,600
d) $1,600,000

46. Beeline industries produces two products. Information about the product is as follow :
Item 38B Item 40F

Unit produced and sold 1,000 4,000

Selling price per unit $25 $20

Variable expenses per unit $15 $12

The company’s fixed costs totaled $40,000 of which $8,000 can be avoided if item 38B is dropped and
$25,000 can be avoided if item 40F is dropped
The segment margin for item 40F is
a. $3,200
b. $7,000
c. ($2,000)
d. $10,000

47. Merlin corporation is considering discontinuing its pellinore division due to decreasing demand for
Pellinore’s main product. Cost associated with the pellinore division are as follow :
Variable manufacturing expenses $100,000

Variable selling expenses 20,000

Direct fixed expenses 60,000

Allocated common fixed expenses 72,000

How much fixed cost can be avoided if the pellinore division is discontinued?
a. $12,000
b. $60,000
c. $72,000
d. $132,000

48. Refer to figure 15-10. Tori’s segment margin for the furniture division is
a. ($10,000)

b. $10,000

c. $30,000

d. $100,000

54. Biggers company expects the following results for next accounting period:

Sales $240,000

Variable costs $135,000

Fixed costs $40,000

Expected production and sales 3000 units

The sales manager believes sales could be increased by 400 units if advertising expenditures
were increased by $10,000. If advertising expenditures are increased and sales increase by 400
units, the effect on operating income would be

a. Decrese $4,000
b. Increase $4,000
c. Increase $22,000
d. Increase 30,000

55. Information about two products is as follows

Product C Product D

Selling price per unit $20 $25

Variable costs per unit 11 18

Contribution margin per unit $9 $7

The firm expects 60% of its sales (in units) to be product C (a sales mix of 6:4). Fixed costs are
expected to be $82,000. Break even in unit would be

Product C Product D

A 1,200 unit 800 unit

B 2,460 unit 1,312 unit

C 18,000 unit 14,000 unit

d 6,000 unit 4,000 unit

Figure 16-10

Projection for the coming year are as follows

Sales (4000 units) $50

Variable manufacturing cost per unit 10

Fixed manufacturing cost per unit 12

Variable selling and administrative cost per unit 4

Fixed selling and administrative cost per unit 8

56. refer to figure 16-10. Assume the degree of operating leverage is 2. If sales are expected to
increase by 20 percent in next year, profit would increase by

a. 50%
b. 40%
c. 10%
d. 4%

57. which of the following is NOT included in a tactical decision model?

a. define the problem and identify alternative solution

b. identify cost and benefit for each feasible alternative
c. assess qualitative factor
d. all of the above are included in the model

58. resources that are purchased before they are used and may or may not have unused
capacity are
a. committed resources
b. flexible resources
c. activity-based resources
d. none of the above

59. the automobile division of Saf-T-Co Insurance employs three claims processor capable of
processing 5,000 claims each. The division currently processes 12,000 claims. The manager has
recently been approached by two sister division. Division A would like the automobile division to
process approximately 2,000 claims. Division B would like the automobile division to process
approximately 5,000 claims. The automobile division would be compensated by division A or
division B for processing these claims. Assume that these are mutually exclusive alternative.
Claims processor salary cost is relevant for
a. the division A alternative only
b. the division B alternative only
c. both the division A and the division B alternative
d. neither the division A nor the division B alternative

60. Dumping is the term used to describe which of the following acts in international trade
a. predatory pricing
b. target pricing
c. price discrimination
d. price gouging

Figure 17-1
Galaxy industries manufactures 15,000 components per year. The manufacturing cost of these
components was determined to be as follows :
Direct materials $150,000

Direct labor 240,000

Variable manufacturing overhead 90,000

Fixed manufacturing overhead 120,000

total 600,000

61. refer to figure 17-1. Assume galaxy industries could avoid $45,000 of fixed manufacturing
overhead if it purchases the component from an outside supplier. An outside supplier has
offered to sell the component for $34. If galaxy purchases the component from supplier instead
of manufacturing the effect on income would be a
a. $60,000 increase
b. $10,000 increase
c. $100,000 decrease
d. $140,000 increase

Figure 17-5
The following information relates to a product produced by Victoria company

Direct materials $10

Direct labor 7

Variable overhead 6

Fixed overhead 8

Unit cost $31

Fixed selling cost are $1,000,000 per year. Variable selling cost of $4 per unit sold are added to
cover the transportation cost. Although production capacity is 600,000 units per year. Victoria
expects to produce only 400,000 units next year. The product normally sells for $40 each. A
 customer has offered to buy 60,000 units for $30 each. The customer will pay the transportation
charge on the units purchased

62. Refer to figure 17-5. If Victoria accepts the special order, the effect on income would be a
a. $60,000 increase
b. $180,000 incerase
c. $420,000 increase
d. $600,000 decrease

Figure 17-6
Missoula industries manufacturesa a product with the following costs per unit at the expected
production of 30,000 units :
Direct materials $5

Direct labor 15

Variable manufacturing overhead 8

Fixed manufacturing overhead 6

The company has the capacity to produce 60,000 units. The product regularly sells for $45. A wholesaler
has offered to pay $40 each for 2,000 units

63. Refer to Figure 17-6. If the special order is accepted, the effect on Missoula’s operating income
would be a
a. $24,000 increase
b. $34,000 increase
c. $10,000 decrease
d. $12,000 decrease

64. STA industries manufactures a product with the following cost per unit at the expected production of
40,000 units :
Direct materials $10

Direct labor 15

Variable manufacturing overhead 8

Fixed manufacturing overhead 13

The company has the capacity to produce 50,000 units. The product regularly sells for $60. A wholesaler
has offered to pay $50 each for 1,000 units
If the special order is accepted, the effect on operating income for STA Industries would be a
a. $17,000 increase
b. $14,000 increase
c. $4,000 increase
 d. $10,000 decrease

Figure 17-8
Ottawa Corporation produces two products from a joint process. Information about the two joint
product is as follows :
Product X Product Y

Anticipated production (in pounds) 2,000 4,000

Selling price per pound at split off $30 $16

Additional processing costs per pound after split off (all $15 $30
variable)

Selling price per pound after further processing $40 $50

The cost of the joint process is $85,000

65. Refer to Figure 17-8. Which Ottawa’s joint products should be sold at split off?
a. Product X only
b. Product Y only
c. Both Product X and Product Y
d. Neither Product X nor Product Y
66. Refer to Figure 17-8. Which Ottawa’s joint products sould be processed further?
a. Product X only
b. Product Y only
c. Both Product X and Product Y
d. Neither Product X nor Product Y

Figure 17-9
Information about three joint products is as follows :
Product A Product B Product C

Anticipated production (in pounds) 10,000 2,000 4,000

Selling price per pound at split off $10 $30 $16

Additional processing costs per pound after $6 $12 $24

split off (all variable)

Selling price per pound after further processing $20 $40 $50

The cost of the joint process is $120,000

67. Refer to Figure 17-9. If the firm is currently processing all three products beyond split off,the firms
income would be
 a. $300,000
b. $224,000
c. $180,000
d. $104,000

Figure 17-10
Information about three joint products is as follows :
Product A Product B Product C

Anticipated production (in pounds) 24,000 16,000 14,000

Selling price per pound at split off $16 $26 $48

Additional processing costs per pound after $8 $20 $20

split off (all variable)

Selling price per pound after further processing $20 $40 $70

The cost of the joint process is $280,000

68. Refer to Figure 17-10. Which of the joint products should be sold at split off?
a. Product A
b. Product B
c. Product C
d. Both product A and product B
69. JIT reduces lead times to meet delivery dates by
a. Reducing setup times
b. Expediting delivery to customers
c. Having more inventory available
d. Working overtime to fill orders
70. Which of the following is NOT acause of a production shutdown?
a. Machine failure
b. Defective inputs
c. Unavaibility on inputs
d. Government regulation
71. Given a choice, a manager should choose the product mix that
a. Maximizes profit
b. Maximizes sales revenue
c. Minimizes nonunit level-costs
d. Minimizes inventory costs

Figure 19-2
Hapsburg Manufacturing purchases components produces by little company in the manufacture of its
main product. For the next year, Hapsburg expects to use a total of 20,000 parts. Hapsburg typically
orders 2,000 units at a time. The cost of placing an order is $100 and average annual cost of carrying one
unit of inventory is $5
72. Refer to figure 19-2. Hapsburgs total ordering cost is
a. $1,000
b. $5,000
c. $10,000
d. $500

73. Refer to figure 19-2. Hapsburgs total carrying cost is

a. $100,000
b. $10,000
c. $50,000
d. $500

Figure 19-3
Cozy stoves produces wood burning stoves. In order to produce the frames for the stoves,special
equipment must be set up. The setup cost per frame is $40. The cost of carrying frames in inventory is
$5 per frame per year. The company produces 100,000 stoves per year

74. Refer to figure 19-3. Cozy stoves total carrying cost associated with the EOQ are
a. $3,612
b. $3,162
c. $506
d. $306
75. Brock manufacturing uses an average of 2,000 units per day, although usage can run as high as 2,500
units per day. If Brock maintains a recommended amount of safety stock and lead time is four days,
what is Brocks reorder point
a. 12,000 units
b. 10,000 units
c. 8,000 units
d. 2,000 units