A+ Answers

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  1. Cost drivers are: A. activities that cause costs to increase as the activity increases B. accounting techniques and practices used to control costs. C. accounting reimbursements used to evaluate whether performance is proceeding according to plan. D. a mechanical basis, such as machine hours, computer time, or factory square footage, used to assign costs to activities. E. None of the above.
  2. Which of the following costs is both a prime cost and a conversion cost?

3 The cost of the direct labor will be treated as an expense on the income statement when the resulting:

  1. A Company incurred a total cost of $8,600 to produce 400 units of pulp. Each unit of pulp required five (5) direct labor hours to complete. What is the total fixed cost if the variable cost was $1.50 per direct labor hour? .
  2. The term “relevant range” as used in cost accounting means the range over which: E. none of the above
  3. Cost A is a fixed cost, while B is a variable cost. During the current year, the volume of output has decreased. In terms of cost per unit of output, we would expect that:
  4. Which of the following changes to a company’s contribution income statement will always lower the break-even point (either in units or in dollars)?

8.. What are the transfers-out from the Finished Goods Inventory called?

  1. An equivalent unit of conversion costs is equal to the amount of conversion costs required to:
  2. The what is considered the main benefit and risk of a standard costing approach:
  3. In an ABC costing system there are many potential benefits, but there can be many reasons why they fail. Which of the following is typically NOT a reason for failure:
  1. Internal controls include all of the following except: A using contingent compensation plans.
  2. Residual income is a performance evaluation that is used in conjunction with, or instead of, return on investment (ROA). In many cases, residual income is preferred to ROA because
  3. Why would GM want to transfer price products between sub component and production divisions

10 Points

Explain the difference between the engineering method of cost estimation and the account analysis method. What is are a risks and benefit of using each approach

The Fast Process Manufacturing Company produces a single product in a single processing department. The material is added when 25% of the conversion costs have been added.The Work-in-Process Inventory account on April 30th includes the following information: During the month, the company finished and transferred 72,000 units out of the Work-in-Process Inventory. 9,000 units were in process at the beginning of the month and were 40% complete. 8,000 units were in process at the end of the month, and were 70% complete. The company uses weighted-average process costing. Required (use 2 decimal places for computations): continued on next page

6: 5 Points: Continued on next page1. Explain the concept of using transfer pricing as a management measurement tool 737 final pg 14

  1. Explain why it is required for cross border transactions and two ways to calculate the value of the goods crossing the border.

Bonus Question: Can add 3 points: When considering a situation like the midnight journal. Name three key considerations that should be considered if you were the CFO and how you would handle the situation.