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ACG 2071 FINAL EXAM REVIEW GAME SHOW
Note that quantitative multiple choice questions on the actual final exam will have multiple choices from which to select the correct answer.
1.The overhead volume variance is favorable whenA.more units are produced than were originally planned.B.actual overhead costs are less than the flexible budget.C.the predetermined overhead rate was set too low.D.there are units remaining in ending inventory.
2. Red Stripe Bakery makes a variety of brownies for upscale restaurants in the Jacksonville area. The company’s best-selling brownie is the fudge deluxe. Red Stripe’s recipe requires 12 ounces of flour, 8 ounces of fudge, and 1 ounce of walnuts per batch. The standard direct materials costs are $0.80 per pound of flour, $4.00 per pound of chocolate, and $5.60 per pound of walnuts. The brownies require 6 minutes of direct labor for mixing and 3 minutes of direct labor for baking. The standard labor rates in those departments are $12.00 per DLH and $13.00 per DLH, respectively. Variable overhead is applied at a rate of $10 per direct labor hour. Fixed overhead is applied at a rate of $22 per direct labor hour. How much is the standard cost of the fudge deluxe?
3.The standard price for materials is often determined byA.a financial analyst who is following the company.B.a union labor contract.C.price lists provided by suppliers.D.multiplying the number of units needed by the actual cost.
4.The difference between standard costs and budgeted costs is that standard costs
A.refer to a single unit while budgeted costs refer to the cost, at standard, for the total number of budgeted units.
B.are calculated under ideal conditions, while budgeted costs are calculated for attainable conditions.C.are calculated for material while budgeted costs are calculated for labor.
D.are part of the management accounting system, while budgets are part of the financial accounting system.
5. Which of the following best describes one impact of undercosting?
A.It is a common goal of all companies that allows a company to show larger profit margins.
B. Undercosting some products will lead to overcosting other products, which is acceptable because total costs and profits are the same.
C.Undercosting may cause a company to price it products less than what is necessary to make a profit.
D. It can cause activity levels to fluctuate.
Use the following information for questions 6-11.
Nelson Manufacturing produces baseball equipment. The standard cost of producing one unit of model XHR is: Material (3.50 ounces at $1.30 per ounce)$4.55 Labor (0.30 hour at $12.00 per hour) 3.60 Overhead 2.20 Total$10.35At the start of 2008, Nelson’s planned to produce 80,000 units during the year. Annual fixed overhead is budgeted at $56,000 and the standard for variable overhead is $1.50 per unit.
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