Você está na página 1de 31

Q1: Baldwin Printing Company uses a job order costing system and applies overhead based on machine hours.

A total of
150,000 machine hours have been budgeted for the year. During the year, an order for 1,000 units was completed and incurred
the following.

The accountant calculated the inventory cost of this order to be $4.30 per unit. The annual budgeted overhead in dollars was:

$577,500.

$600,000.

$660,000.

$645,000.
The correct answer is: $600,000.
The total inventory cost, or total manufacturing cost, per unit of $4.30 is made up of direct materials cost, direct labor cost and
manufacturing overhead cost.
Total manufacturing cost = direct materials cost + direct labor cost + manufacturing overhead cost
The direct materials cost per unit = $1,000 / 1,000 units = $1.00 per unit
The direct labor cost per unit = $1,500 / 1,000 units = $1.50 per unit
Therefore, 4.30 = $1.00 + $1.50 + manufacturing overhead cost
Manufacturing overhead cost = $1.80 per unit
Use the following formula to calculate the overhead rate, which you will then use to calculate the budgeted overhead cost:
Manufacturing overhead cost per unit = (Machine hours)(overhead rate) / (# units)
$1.80 = (450 machine hours)(overhead rate) / (1,000 units)
($1.80)(1,000 units) = (450 machine hours)(overhead rate)
1,800 = (450 machine hours)(overhead rate)
Overhead rate = 1,800 / 450 = $4

Now, calculate the budgeted overhead cost:
Overhead rate = (budgeted overhead cost) / (total budgeted machine hours)
$4 = (budgeted overhead cost) / (150,000 machine hours)
Budgeted overhead cost = $4 * 150,000 = $600,000



Q33: Logo Inc. has two data services departments (the Systems Department and the Facilities Department) that provide
support to the companys three production departments (Machining Department, Assembly Department, and Finishing
Department). The overhead costs of the Systems Department are allocated to other departments on the basis of computer
usage hours. The overhead costs of the Facilities Department are allocated based on square feet occupied (in thousands). Other
information pertaining to Logo is as follows.

Logo employs the step-down method of allocating service department costs and begins with the Systems Department. Which
one of the following correctly denotes the amount of the Systems Departments overhead that would be allocated to the
Facilities Department and the Facilities Departments overhead charges that would be allocated to the Machining Department?

Systems to Facilities = $20,000, Facilities to Machining = $20,000

Systems to Facilities = $19,355, Facilities to Machining = $20,578

Systems to Facilities = $20,000, Facilities to Machining = $24,000

Systems to Facilities = $0, Facilities to Machining = $20,000
The correct answer is: $20,000 and $24,000.
The amount of the Systems Departments overhead that would be allocated to the Facilities Department is calculated as
follows:
Systems Dept overhead allocated to Facilities Dept = [(number of Facilities computer usage hours)(Systems Dept overhead
cost)] / (number of computer usage hours used by all departments except System)
Systems Dept overhead allocated to Facilities Dept = *(900 hours)($200,000)+ / (9,000 hours) = $20,000
The Facilities Department now has $120,000 to allocate to the three production departments.
The Facilities Departments overhead charges that would be allocated to the Machining Department are
as follows:
Facilities Dept overhead to be allocated to Machining Dept = ($120,000)(2,000 square feet occupied by
machining) / (10,000 square feet occupied by the three production departments)
Facilities Dept overhead to be allocated to Machining Dept = $24,000


Q34: Which of the following uses the correct stages and correctly orders activity-based costing two-
stage allocation?

Resource cost assignment of overhead costs to activity cost pools; activity cost assignment of
activity costs to cost objects.

Volume cost assignment of volume-based cost drivers to volume cost pools; activity cost
assignment of activity costs to cost objects.

Resource cost assignment of activity costs to activity cost pools; volume cost assignment of volume
costs to cost objects.

Activity cost assignment of activity costs to cost objects; resource cost assignment of overhead
costs to activity cost pools.
The correct answer is: Resource cost assignment of overhead costs to activity cost pools; activity cost
assignment of activity costs to cost objects.
Resource costs or overhead is assigned to cost pools using resource cost assignment and then, based on
how a cost object uses resources, transfers costs from cost pools to cost objects such as products,
services, or customers.

















Q50: When comparing absorption costing with variable costing, the difference in operating income can
be explained by the difference between the

* Source: Retired ICMA CMA Exam Questions

units sold and the units produced, multiplied by the unit sales price.

ending inventory in units and the beginning inventory in units, multiplied by the unit sales price.

units sold and the units produced, multiplied by the budgeted variable manufacturing cost per unit.

ending inventory in units and the beginning inventory in units, multiplied by the budgeted fixed
manufacturing cost per unit.



Ending inventory in units and the beginning inventory in units, multiplied by the budgeted fixed
manufacturing cost per unit. The difference in operating income when comparing absorption costing
with variable costing can be explained by taking the ending inventory in units and the beginning
inventory in units, multiplied by the budgeted fixed manufacturing cost per unit.
















Q56: Bluebird Enterprises has two production departments (P1 and P2) and two service departments
(S1 and S2). A breakdown of current period costs and service usage for each department is as follows:



If Bluebird uses the step method for allocating service costs, allocating service department S1 first, what
are the total service costs allocated to the two production departments (P1 and P2)?

$19,800 to P1 and $24,200 to P2

$24,400 to P1 and $19,600 to P2

$20,800 to P1 and $23,200 to P2

$25,000 to P1 and $19,000 to P2

The correct answer is: $24,400 to P1 and $19,600 to P2
The step-down method allocates some of the service performed for other service departments. In this
case, S1 services are allocated to S2, P1 and P2, and then S2 costs ($20,000 + amount allocated from S1)
are allocated to P1 and P2 evenly instead of including S1 because the step-down method does not
allocate costs to departments that already allocated their own costs. Calculation is as follows:








Q57: The primary purpose for allocating common costs to joint products is to determine

* Source: Retired ICMA CMA Exam Questions

The inventory cost of joint products for financial reporting.

Whether or not one of the joint products should be discontinued.

The variance between budgeted and actual common costs.

The selling price of a by-product.


The inventory cost of joint products for financial reporting. The primary purpose for allocating common
costs to joint products is to determine the inventory cost of joint products for financial reporting.


















Q58: A firm wants to study how changing the steps for an operation can lower the overall cost of the
operation. Which of the following will help the firm achieve its goals?

Volume analysis for volume-based cost drivers

Activity analysis for activity-based cost drivers

Relevant range analysis

Variable costing

The correct answer is: Activity analysis for activity-based cost drivers
Firms use an activity analysis to determine a detailed description of each type of activity. Each step
becomes a different cost driver. The intent is to determine how changing the steps will change the
overall cost of the operation.


















Q63: Which of the following statements best characterizes value-chain analysis?

It promotes formulating a generic strategy.

It emphasizes a firm's functions.

It adopts a process perspective.

It examines a firm's hierarchal structure.



The correct answer is: It adopts a process perspective.
Value chain analysis (VCA) adopts a process perspective. Because a value chain desegregates the firm
into distinct strategic activities, organizations are able to use value chain analysis to determine where in
the operations, from design to distribution and customer service, customer value can be enhanced and
costs lowered. In this way, VCA helps to identify sources of profitability and to understand the costs of
the related activities and processes. VCA looks at activities differently than do the formal hierarchy of
existing functions. Also, it should support implementing the firm's generic strategy, not formulating it.















Q65: Valyn Corporation employs an absorption costing system for internal reporting purposes; however,
the company is considering using variable costing. Data regarding Valyn's planned and actual operations
for the calendar year are presented below.


The planned per unit cost figures shown in the above schedule were based on Valyn producing and
selling 140,000 units. Valyn uses a predetermined manufacturing overhead rate for applying
manufacturing overhead to its product; thus, a combined manufacturing overhead rate of $9.00 per unit
was employed for absorption costing purposes. Any over- or under applied manufacturing overhead is
closed to the Cost of Goods Sold account at the end of the reporting year.

The beginning finished goods inventory for absorption costing purposes was valued at the previous
year's planned unit manufacturing cost which was the same as the current year's planned unit
manufacturing cost. There are no work-in-process inventories at either the beginning or the end of the
year. The planned and actual unit selling price was $70.00 per unit.
Valyn Corporation's total fixed costs charged to cost of goods sold and income under the absorption
costing basis were

$2,095,000.

$2,030,000.

$2,055,000.

$2,120,000.



The correct answer is: $2,095,000.

Total fixed costs charged to cost of goods sold and income =Actual fixed selling expenses +Actual fixed
administrative expenses + fixed overhead in cost of goods sold

Total fixed costs charged to cost of goods sold and income = $980,000 + $425,000 + fixed overhead in
cost of goods sold

Fixed expenses in cost of goods sold = fixed portion of applied overhead in cost of goods sold + fixed
overhead budget variance
Predetermined overhead rate for fixed portion = 700, 0000 = 5
140,000
F.o.H
Actual
715,000

Applied
Rate X Actual Production
5 X 130,000 = 650,000

65,000 under applied F.O.H , therefore it will charged to Cost of goods sold .
Fixed cost in sales unit = 5X 125,000 = 625,000
Fixed over head cost = 625,000+65,000= 690,000
Total Fixed cost charged to cost of goods sold and income = 980,000+425,000+ 690,000 = 2,095,000










Q88: Valyn Corporation employs an absorption costing system for internal reporting purposes;
however, the company is considering using variable costing. Data regarding Valyn's planned and actual
operations for the calendar year are presented below.



The planned per unit cost figures shown in the above schedule were based on Valyn producing and
selling 140,000 units. Valyn uses a predetermined manufacturing overhead rate for applying
manufacturing overhead to its product; thus, a combined manufacturing overhead rate of $9.00 per unit
was employed for absorption costing purposes. Any over- or under 45applied manufacturing overhead is
closed to the Cost of Goods Sold account at the end of the reporting year.

The beginning finished goods inventory for absorption costing purposes was valued at the previous
year's planned unit manufacturing cost which was the same as the current year's planned unit
manufacturing cost. There are no work-in-process inventories at either the beginning or the end of the
year. The planned and actual unit selling price was $70.00 per unit.
Valyn Corporation's actual manufacturing contribution margin for the year calculated under the variable
costing basis was

$4,375,000.

$5,500,000.

$5,625,000.

$4,200,000.


The correct answer is: $5,625,000.

Manufacturing contribution margin is calculated as follows:
Manufacturing contribution margin = sales variable cost of goods sold

Sales revenue is calculated by multiplying the $70 price per unit by the number of units sold, which is
125,000. So, total sales revenue = $70(125,000) = $8,750,000.

Product costs using variable costing consist of direct material, direct labor, and variable indirect
manufacturing costs (variable overhead).

Therefore, Valyns product cost per unit using variable costing is calculated as follows:
Unit product cost (variable costing) = direct materials cost per unit + direct labor cost per unit + variable
manufacturing overhead cost per unit
Unit product cost (variable costing) = $12 + $9 + $4 = $25 per unit

Variable cost of goods sold = (cost of goods sold per unit)(number of units sold)
Variable cost of goods sold = $25(125,000) = $3,125,000
Manufacturing contribution margin = $8,750,000 - $3,125,000 = $5,625,000
















Q66: Select between job order and process costing for what is best suited to each of the following
products:
I. Skyscraper
II. Magazine
III. Check processing
IV. Advertising campaign
V. Car repair

Job order costing for II and III; process costing for I, IV, and V.

Job order costing for I, IV, and V; process costing for II and III.

Job order costing for I, II and IV; process costing for III and V.

Job order costing for III and IV; process costing for I, II and V.


The correct answer is: Job order costing for I, IV, and V; process costing for II and III.

Job order costing is best for specific custom jobs, including capital asset construction (the skyscraper) in
the manufacturing sector and advertising campaigns and repair jobs in the service sector.
Process costing is best for large numbers of nearly identical products or services such as magazines in
the manufacturing sector and check processing in the service sector.











Q68: Colt Company uses a weighted-average process cost system to account for the cost of producing a
chemical compound. As part of production, Material B is added when the goods are 80% complete.
Beginning work-in-process inventory for the current month was 20,000 units, 90% complete. During the
month, 70,000 units were started in process, and 65,000 of these units were completed. There were no
lost or spoiled units. If the ending inventory was 60% complete, the total equivalent units for Material B
for the month was

90,000 units.

65,000 units.

70,000 units.

85,000 units.



The correct answer is: 65,000 units.
The weighted-average method assumes that all units and costs are current (i.e., there is no beginning
inventory). Therefore, the 65,000 units completed are assumed to have been started and finished during
the month, requiring 65,000 equivalent units of Material B. The ending inventory is 60% complete, and,
therefore, has no Material B (Material B is added at the 80% point).












Q82: All of the following are examples of items to be found in a just-in-time (JIT) production
system except


Strong supplier relationships requiring careful screening.

Specialized workers stressing work-force expertise.

Use of manufacturing cells that group similar processes and minimize handling costs.

Reduced manufacturing lead time and setup time to run smaller batches.




The correct answer is: specialized workers stressing work-force expertise.
JIT production systems stress multi skilled workers who are cross-trained using job sharing and other
means to keep the work force flexible.
















Q84: Throughput contribution is defined as sales revenue minus

direct materials costs minus operating costs.

direct materials, direct labor, and variable manufacturing costs.

direct materials costs.

operating expenses.




The correct answer is: direct materials costs.

Throughput contribution is defined as sales revenue minus direct material costs. Throughput
contribution recognizes that the major manufacturing variable cost is direct material. Direct material
usually represents over 50% of product costs in most manufacturing operations. While direct labor is
defined as the labor that is expended on producing the product, it is often viewed as a fixed cost, since it
does not always respond to changes in production volume, and is therefore excluded from the
throughput contribution calculation.












Q91:
Fitzpatrick Corporation uses a joint manufacturing process in the production of two products, Gummo
and Xylo. Each batch in the joint manufacturing process yields 5,000 pounds of an intermediate
material, Valdene, at a cost of $20,000.
Each batch of Gummo uses 60% of the Valdene and incurs $10,000 of separate costs. The resulting 3,000
pounds of Gummo sells for $10 per pound.
The remaining Valdene is used in the production of Xylo which incurs $12,000 of separable costs per
batch. Each batch of Xylo yields 2,000 pounds and sells for $12 per pound.
Fitzpatrick uses the net realizable value method to allocate the joint material costs. The company is
debating whether or not to process Xylo further into a new product, Zinten, which would incur an
additional $4,000 in costs and sell for $15 per pound. If Zinten is produced, income would increase by:

$26,000.

$5,760.

$14,000.

$2,000.


The correct answer is: $2,000.
The increase in income from producing Zinten is calculated by taking the $30,000 market value of Zinten
(2,000 pounds at $15 per pound) and subtracting both the $24,000 market value of Xylo (2,000 pounds
at $12 per pound) and the $4,000 in additional processing costs.
Increase in income = $30,000 - $24,000 - $4,000 = $2,000
The joint costs and their allocation are sunk and are therefore, irrelevant.







Q92:
Absorption costing and variable costing are two different methods of assigning costs to units produced.
Of the five cost items listed below, identify the one that is not correctly accounted for as a product cost.

direct labor cost-part of product cost under absorption cost: yes; part of product cost under
variable cost: yes

packaging and shipping costs-part of product cost under absorption cost: yes; part of product cost
under variable cost: yes

insurance on factory-part of product cost under absorption cost: yes; part of product cost under
variable cost: no

manufacturing supplies-part of product cost under absorption cost: yes; part of product cost under
variable cost: yes


The correct answer is: packaging and shipping costs-part of product cost under absorption cost: yes; part
of product cost under variable cost: yes.

Under absorption costing, product costs consist of direct material, direct labor, and indirect
manufacturing costs (both variable and fixed overhead).

Under variable costing, product costs consist of direct material, direct labor, and variable indirect
manufacturing costs (variable overhead).

Packaging costs, if the packaging is an integral part of the product, are considered to be direct material
costs under both absorption and variable costing.

However, shipping costs are not classified as product costs under either costing system. They are a part
of marketing and selling costs under both absorption costing and variable costing, and they are
expensed in the period during which they are incurred.







Q94:
Cotton Company has two service departments and three operating departments. In allocating service
department costs to the operating departments, which of the following three methods (direct, step-
down, reciprocal) will result in the same amount of service department costs being allocated to each
operating department, regardless of the order in which the service department costs are allocated?

* Source: Retired ICMA CMA Exam Questions

Direct and step-down methods only.

Direct and reciprocal methods only.

Direct method only.

Step-down and reciprocal methods only.


Direct and reciprocal methods only. Direct and reciprocal methods of cost allocating will result in the
same amount of service department costs being allocated to each operating department, regardless of
the order in which the service department costs are allocated.














Q28: Ardmore Enterprises uses a standard cost system in its small appliance division. The standard cost
of manufacturing one unit of Zeb is as follows.



The budgeted variable factory overhead rate is $3 per labor hour, and the budgeted fixed factory
overhead is $27,000 per month. During May, Ardmore produced 1,650 units of Zeb compared to a
normal capacity of 1,800 units. The actual cost per unit was as follows.



The flexible budget overhead variance for May is

$2,415 favorable.

$1,920 unfavorable.

$1,920 favorable.

$330 unfavorable.
The correct answer is: $1,920 favorable.

The flexible budget overhead variance is calculated as follows:

Flexible budget overhead variance= (the actual overhead the budgeted overhead for the actual
output)
The actual overhead is $39,930.
The budgeted overhead for the actual output = Fixed overhead + Variable overhead
= $27,000 + ($3/direct labor hour)(3 direct labor hours per unit)(1,650 units)
= $27,000 + $14,850 = $41,850

Flexible budget overhead variance = $39,930 $41,850 = -$1,920 or $1,920 favorable.
It is favorable because the actual overhead is less than the flexible budget (less was spent than was
budgeted, so that makes it a favorable variance).


Q30: According to the theory of constraints, all of the following activities help to relieve the problem of
a bottleneck in operations except

* Source: Retired ICMA CMA Exam Questions

shifting products that do not have to be made on bottleneck machines to non-bottleneck
machines.

reducing setup time at the bottleneck operation.

increasing the efficiency of operations at non-bottleneck machines.

eliminating idle time at the bottleneck operation.

Correct answer: increasing the efficiency of operations at non-bottleneck machines.
Eliminating idle time and reducing setup time at the bottleneck operations, in addition to shifting
products that do not have to be made on bottleneck machines to non-bottleneck machines are all
activities to help to relieve the problem of a bottleneck according to the Theory of Constraints.
















Q35: Which of the following is a limitation of a materials requirement planning (MRP) system?

Minimizes machine setup time

Potential inventory accumulation -

Relies on demand forecasts

Additional inventory on hand to cover orders should product be damaged or lost



The correct answer is: Potential inventory accumulation.

Since MRP is used to plan production and inventory levels based upon sales forecasts and forecasts are
subject to variability, there is always the possibility that the system will lead to over-production of
products and/or to purchasing too much raw materials and too many purchased parts.

Potential: possible














Q39:
According to capacity management principles, which of the following actions would generally be
the least viable solution for a firm faced with increasing the capacity of a manufacturing process to
address long-term demand forecasts?

Hiring additional staff

Building another factory

Seeking new channels of distribution

Leasing additional space



The correct answer is: Seeking new channels of distribution
Capacity management typically involves strategic aspects (e.g., building another factory), tactical aspects
(e.g., leasing additional space), and operational aspects (e.g., additional staff). Automation and robots
generally are applied to the performance of a variety of repetitive tasks but may not necessarily result in
long-term capacity gains.















Q40:
A company desiring to achieve dramatic improvements in customer relationship management would
most likely undertake

kaizen.

business process reengineering.

benchmarking.

total quality management.


The correct answer is: business process reengineering.
By definition, business process reengineering (BPR) is the fundamental analysis and radical redesign of
business processes within and between enterprises to achieve dramatic improvements in performance
measures. BPR promotes the idea that sometimes wiping the slate clean and radically redesigning and
reorganizing an enterprise is necessary to lower costs and increase the quality of a product or service.












Q42:


Accountant, which one of the following represents a major disadvantage of business process
reengineering?

* Source: Retired ICMA CMA Exam Questions

It results in heavier maintenance for legacy systems.

It often results in a decreased use of centralized data bases.

The focus is, to a large extent, on short-term results.

Internal control mechanisms are often disassembled.


Correct answer: Internal control mechanisms are often disassembled. Business process reengineering
includes a focus on short-term results, a decreased use of centralized data bases, and results in a heavier
maintenance of legacy systems













Q44:


A company wants to perform an in-depth analysis of its best and worst practices, compare these results
to other companies, and form a long-term plan for strategic quality improvement. What sort of analysis
is this company performing?

Benchmarking analysis

Quality audit

Gap analysis

Cause-and-effect diagrams

The correct answer is: Quality audit
A quality audit involves all of the elements mentioned in the question.
















Q45:


Henry Manufacturing, which uses direct labor hours to apply overhead to its product line, undertook an
extensive renovation and modernization program two years ago. Manufacturing processes were
reengineered, considerable automated equipment was acquired, and 60% of the companys nonunion
factory workers were terminated.

Which of the following statements would apply to the situation at Henry?

I. The companys factory overhead rate has likely increased.
II. The use of direct labor hours seems to be appropriate.
III. Henry will lack the ability to properly determine labor variances.
IV. Henry has likely reduced its ability to quickly cut costs in order to respond to economic downturns.

* Source: Retired ICMA CMA Exam Questions

I, II, III, and IV.

I and IV only.

II and IV only.

I and III only.


I and IV only. In this situation, Henrys manufacturing process was reengineered and it can be assumed
that overhead costs were likely increased. And due to the new automated equipment that was acquired,
Henry terminated 60% of nonunion factory workers, lowering those overhead costs. Henry has likely
reduced its ability to quickly cut costs in order to respond to economic downturns.







Q54:


Based on discussions with former customers, a company determines that sales have been lost due to the
lengthy turnaround time and inflexible pricing in their proposal and bid process. Which of the following
internal activities could not be used to improve the closing ratio?

Benchmarking best practices

Activity-based management(ABM)

Process reengineering

Activity-based costing (ABC)


The correct answer is: Activity-based costing (ABC)
Activity-based costing is a methodology that recognizes causal relationships of cost drivers to activities.
All the others attempt to improve processes that are deemed important from the customer's
perspective (such as turnaround time and special pricing options).













Q60:


An organization will directly gain all of the following benefits from the theory of constraints (TOC)
methodology except

increased profitability.

assessment of long-term product profitability.

improved quality of products and services.

reduced bottlenecks.


The correct answer is: assessment of long-term product profitability.
The TOC attempts to improve throughput in an organization's processes. TOC considers how to improve
short-term profitability by focusing on production constraints and plausible short-term product-mix
adjustments. TOC, with its short-term orientation, does not focus on long-term costing and profitability.














Q67:


Which of the following would be the best choice for Timely, Inc., a producer of surface-mount chips
(SMC), when it wants to benchmark average call waiting time in its customer service?

The average call waiting time of a competing manufacturer that is a customer service leader

Internal benchmarks created by reducing current average call waiting time at Timely, Inc.

A minimum call waiting time set by a consultant that tracked "best" call waiting times at Timely,
Inc.

The average call waiting time for the SMC industry overall


The correct answer is: The average call waiting time of a competing manufacturer that is a customer
service leader
Benchmarks should be for related industries (manufacturers) but should also focus on the best levels for
the item being benchmarked instead of simply on a competitor or historical company results.














Q70:


A company using just-in-time (JIT) production omits the journal entry for work-in-process inventory
because little or no inventory remains in this stage. Which of the following costing systems does this
company use?

Activity-based costing

Operation costing

Sequential tracking

Backflush costing


The correct answer is: Backflush costing
Backflush costing is a costing system tailored for JIT production systems that allows manufacturers to
omit some or all of the journal entries for the production cycle.