Strayer JWI530 Week 6 Knowledge Check Latest 2020 JULY

JWI530 FINANCIAL MANAGEMENT I

Week 6 Knowledge Check

Question 1Financial accounting is primarily externally directed, meaning financial accounting’s main function is informing external stakeholders such as lenders, shareholders and governmental agencies. Managerial accounting, on the other hand, is primarily internally directed, meaning managerial accounting is directed towards helping leadership and management operate the business on a day-to-day basis. Which of the following is NOT true?

Answers:            

A. Variable or direct costing is allowed for financial reporting purposes under both GAAP and IFRS.

B. Managerial accounting is essential to determining product and service pricing.

C. Inventory is an asset to both financial and managerial accountants.

D. Standard costs are not very important to most financial accountants.

Question 2Match each term to its definition.

Question             Match   Selected Match

Job costing

Process costing

Bill of materials

Standard costing

All Answer Choices

A. A management tool that estimates the overall cost of production, assuming normal operations.

B. Collecting costs for a manufacturing process that's geared to producing products in individual lots and assigning cost to those jobs.

C. Collecting all costs incurred in a continuous process, then averaging the costs over all units produced.

D. A list of all the parts and components that go into manufacturing a product, including any raw material.

Question 3Match each cost to its cost driver.

Question             Match   Selected Match

Cost of wood for wood-burning pizza oven

Cost of machine lubricants

Cost of round steel bars

Cost of jet fuel for an airliner

All Answer Choices

A. Baking pizzas

B. Flying the airliner

C. Producing Screws

D. Running machine

Question 4The ABC Company, maker of birdhouses is looking at different ways of allocating shared costs (overhead). The Cost Accountant has been provided the following data for the past month:

 Birdhouse Models           Quantity Produced          Total Machine Hours     Total Labor Hours

 Basic     100         10           25

 Standard             100         20            40

 Deluxe 25           40           60

The Spend pools are provided as:

Material: $3000

Direct Labor: $5000

Overhead: $2000

If Overhead is allocated based on the activity of Quantity Produced, how much of the $2,000 cost will be allocated to the Deluxe Birdhouse?

A. $222

B. $888

C. $960

D. $1,142

Question 5Bill Williams is an engine tech for a Ford dealership and is assigned to the service department. Here is a table of costs associated with the dealership and Bill’s engine repair job today:

 Engine parts      $       675

 Gasket, oil, and other fluids       $       113

 Standard Labor Costs    $       700

 Expensible tools              $         48

 Service Write Up Wages              $    1,366

 Radio Advertising            $       850

 Parking lot paving project            $    9,850

 Quality Inspection Dept.              $    5,248

Which is of the following is not true?

Answers:            

A. Direct costs on this job are $1,536.

B. The dealership is most likely using job costing.

C. Shared costs of $6,614 were incurred today.

D. All of the parking lot paving costs will be allocated to each vehicle repaired in the facility today.

Question 6Standard costing and budgeting systems create variances which enables managers to use management by exception principles. Which of the following is true about management by exception?

Answers:            

A. Is the same as managing by walking around, which was pioneered by the Japanese.

B. Material price variances can be ignored unless exceptionally high.

C. Variances reduce the number of data points a manager must consider each day.

D. In a union facility, labor usage variances are not controllable.

Question 7The ABC Company, maker of birdhouses is looking at different ways of allocating shared costs (overhead). The Cost Accountant has been provided the following data for the past month:

 Birdhouse Models           Quantity Produced          Total Machine Hours     Total Labor Hours

 Basic     100         10           25

 Standard             100         20            40

 Deluxe 25           40           60

The Spend pools are provided as:

Material: $3000

Direct Labor: $5000

Overhead: $2000

If Overhead is allocated based on the activity of Total Machine Hours, how much of the $2,000 cost will be allocated to the Deluxe Birdhouse?

Answers:            

A. $1,142

B. $222

C. $960

D. $888

Question 8All costs are fixed in the short-term, and all costs are variable in the long-term.

Answers:            

True

False

Explanation: Costs are expired expenditures. For example, raw material inventory is an expenditure classified on the balance sheet as an asset. It becomes a cost once used and enters into product. The reason this statement is true is that, even in the long-term, a lease on a production facility will expire. That expiration transforms what was a fixed cost into a variable cost again. Even direct costs, such as raw material, can be fixed in the short term. This is true because we may have entered into a purchasing contract specifying the price of a raw material for a period of time.

Question 9 Match each term to its corresponding definition.

Question             Match   Selected Match

Conversion costs

Variable costs

Fixed costs

Semi-fixed costs

All Answer Choices

A. Costs that increase in relation to sales but at a slower pace and have a combination of types of costs.

B. Costs that essentially remain unchanged even when sales increase.

C. Costs that increase in direct relation to sales volume.

D. The sum of all the direct labor and manufacturing overhead costs that belong to a department and process.

Question 10Match each cost with its corresponding definition.

Direct materials

Manufacturing Overhead

Direct Labor

All Answer Choices

A. Salary of Stamping Department Supervisor

B. Metal sheets for stamping truck fenders

C. Stamping machine operator producing truck fenders