1. Evaluate the reporting of managerial accounting information in terms of ethical...

Question

1.
Evaluate the reporting of managerial accounting information in terms of ethical considerations, and identify the importance of ethical standards in a market economy.
Walter is a staff accountant for one of the stores in a retail chain. His manager, Steven, is evaluated based on year-end profits. He has asked Walter to record sales that occurred in the first several days of next year in this year’s records instead of next year’s. Walter knows that sales should be recorded in the period in which they occurred, but if he does not do what Steven asks, Steven will probably not recommend him for a raise, and might even fire him.
What should Walter do first? If that does not resolve the issue, what should Walter do next? If that does not resolve the issue either, what is the remaining course of action open to Walter? If some of next year’s sales are indeed reported this year, what harm might that cause and to whom?

2.
(Note: The General Factory activity cost pool's costs are allocated on the basis of direct labor hours.)
The predetermined overhead rate under the traditional costing system is closest to:
$37.46.
$21.60.
$13.17.
$270.66.

3.
The overhead cost per unit of Product B is based on the proportion of how much of the total overhead costs it consumes and how many units are produced. Based on this concept, under the traditional costingmethod, the overhead cost perunit of Product Bis closest to:
$54.13.
$7.49.
$4.32.
$2.63.

4.
The predetermined overhead rate (i.e., activity rate) for Activity 1 under the activity-based costing system is closest to:
$28.97.
$13.17.
$83.66.
$24.15

5.
When used to allocate manufacturing overhead to multiple products, activity based costing is likely to provide a more reliable cost allocation than a single plant-wide cost driver because:
In activity based costing, overhead rates are applied to the actual number of cost driver units consumed instead of an estimated number of cost driver units consumed.
Multiple cost drivers are used so that more appropriate measures can be used to allocate overhead costs.
Multiple activities enables overhead rates to be based on actual costs instead of estimated costs.
Activity based costing is acceptable for financial statement reporting in accordance with U.S. GAAP, whereas overhead allocation by a single cost driver is not sufficiently accurate.

6.
Apply various techniques for analyzing mixed costs into variable vs. fixed components, and use the results to predict costs at forecasted levels of activity
Anaconda Mining Company shipped 9,000 tons of copper concentrate for $450,000 in March and 11,000 tons for $549,000 in April. Shipping costs for 12,000 tons to be shipped in May would be expected to be:
$548,780.
$549,020.
$594,000.
$598,500

7.
Which of the following is true about the high-low, scattergraph, and least squares regression methods of analyzing mixed costs?
The high-low method is more accurate than the least squares regression method because it requires only two data points.
High-low and least squares regression provide the same results but the high-low method is simpler to use.
Least squares regression is more accurate than high-low because it makes use of all available data points.
High-low and least squares regression provide the same results but both are more complex than the scattergraph method.

8.
The linear equation Y = a + bx is often used to express cost formulas. In this equation:
the b term represents variable cost per unit of activity.
the a term represents variable cost in total.
the x term represents total cost.
the Y term represents total fixed cost

9.
Within the relevant range of activity, variable cost per unit will:
increase in proportion with the level of activity.
remain constant.
vary inversely with the level of activity.
none of the above.

10.
Analyze accounting data by application of cost-volume-profit concepts.
George Company sells one product at a price of $20 per unit. Variable expenses are 60 percent of sales, and fixed expenses are $20,000.
The amount of sales required to break even is:
$2,500
$12,000
$33,333
$50,000

13.
In a contribution income statement:
gross margin is the difference between sales revenue and the cost of goods sold.
all fixed costs are grouped together and subtracted from gross profit.
contribution margin equals the sum of net income plus all fixed expenses.
contribution margin equals the difference between sales revenue and fixed costs.

14.
Evaluate operational budgeting in terms of the process by which it is implemented and its possible benefits to the organization
Which of the following is not a benefit of budgeting?
It reduces the need for tracking actual cost activity.
It sets benchmarks for evaluation performance.
It uncovers potential bottlenecks.
It formalizes a manager's planning efforts.

15.
Self-imposed participatory budgets:
are not subject to review by higher levels of management since to do so would contradict the participative aspect of the budgeting processing.
are not subject to review by higher levels of management except in specific cases where the input of higher management is required.
originate at the lowest level and are subject to review by higher levels of management.
are not critical to the success of a budgeting program.

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1. Evaluate the reporting of managerial accounting information in terms of ethical considerations, and identify the importance of ethical standards in a market economy. Walter is a staff accountant...

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