Management Accounting and Finance Test

Gabe's Auto produces and sells an auto part for $30.00 per unit. In 2010, 100,000 parts were

Overhead costs are not in proportion to the production output because of the method they are using. This leads to inaccurate pricing and costing decisions. An Activity Based Costing System would help find the real relationship between the products produced and overhead.

Accounts receivable (net) increased by $500,000 during the year. This increase has what effect on cash flow?

3. Briefly describe how the current production cost assignment system works. What are the consumption ratios (activity percentages) for assigning manufacturing overhead to each product at present?

No partial credit is available for multiple choice questions. Be sure to put your answers to the multiple

Glaser Health Products manufactures medical items for the health care industry. Production involves machining, assembly and painting. Finished units are then packed and shipped. The financial controller is interested to introduce an activity-based costing (ABC) system to allocate (or distribute) indirect costs to products. Indirect costs, as distinct from direct costs, cannot be unambiguously linked to specific products. The controller would like to calculate product costs based on ABC for planning and control, not inventory valuation.

|Q| In the surgical care unit, the nurse is attending the needs of the client who has Kock pouch for urinary diversion. Which one of the following nursing interventions is most effective in decreasing the likelihood of urinary tract infection of the client?

The Alex Miller Corporation operates one central plant that has two divisions, the Flashlight Division and the Night Light Division. The following data apply to the coming budget year:

ACC/561 Final Examination Study GuideThis study guide will prepare you for the Final Examination you will complete in the final week. It contains practice questions, which are related to each week’s objectives. In addition, refer to each week’s readings and your student guide as study references for the Final Examination.

Issued a credit to a customer for the return of a bike. The bike was returned to inventory.

1. Use the Overhead Cost Activity Analysis in Exhibit 5 and other data on manufacturing

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Activity-based management, activity-based costing and continuous improvement, all these help in the improvement of the efficiency in manufacturing, better control of overhead costs and the accurate costing of products. With this in mind, We disagree with the advice that Chuck Davis, the firm’s controller, gave Leonard Bryner. The traditional way of costing produce average costs that severely overstated or understated. Without the accurate costs, the firm would not be able to price properly their products and that would be damaging to the firm. With activity-based costing and management, all costs are accounted for with the help activity-drivers and overhead costs are decreased. In turn, the costs that the firm has for their products are more accurate and pricing is much easier.

3. Assume that cost of goods sold for a company consists only of variable costs and gross margin is = (revenue – cost of goods sold)/revenue. Which of the following is true

The management accounting information system uses objective information; the financial accounting system uses subjective information.