principles of cost accounting

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1. An effective cost control system should include: A. An established plan of objectives and goals to be achieved. B. Regular reports showing the difference between goals and actual performance. C.... Specific assignment of duties and responsibilities. D. All of these are correct. 2. To effectively control materials, a business must maintain: A. Limited access. B. Combination of duties. C. Safety stock. D. None of these are correct. 3. Janet is the purchasing agent at Frameco Manufacturing. Her duties include vendor selection and ordering materials. Due to a recent economic downturn and resulting cut backs, Janet has been assigned the additional duty or preparing receiving reports after comparing the goods received to the purchase order. This is an example of: A. unlimited access to materials. B. independence of assigned functions. C. misappropriation of assets. D. a lack of segregation of duties. 4. Marley Company hired a consultant to help improve its operations. The consultant’s report stated that Marley’s inventory levels are excessive and cited several negative consequences to Marley as a result. Which of the following was not cited in the report? A. Possible other uses for working capital now tied up in inventory B. Production stoppages due to parts not being available C. Higher property taxes and insurance costs D. Large quantities of obsolete materials 5. The data used to calculate the order point include all of the following except: A. the costs of placing an order. B. the rate at which the material will be used. C. the estimated time interval between the placement and receipt of an order. D. the estimated minimum level of inventory needed to protect against stockouts. lOMoARcPSD|319 010 54 6. Murphy Company uses 2,000 yards of material each day to make hats. It usually takes five days from the time Murphy orders the material to when it is received. If Murphy’s desired safety stock is 6,000 yards, what is Murphy’s order point? A. 6,000 yards B. 8,000 yards C. 10,000 yards D. 16,000 yards 7. What is the objective of the economic order quantity (EOQ) model for inventory? A. To minimize order costs or carrying costs, whichever are higher B. To minimize order costs or carrying costs and maximize the rate of inventory turnover C. To minimize the total order costs and carrying costs over a period of time D. To order sufficient quantity to economically meet the next period's demand 8. Order costs would include all of the following except: A. Receiving clerk’s wages. B. Storeroom keeper’s wages. C. Purchasing department’s telephone bill. D. Transportation in. 9. Expected annual usage of a particular raw material is 1,200,000 units, and standard order size is 10,000 units. The invoice cost of each unit is $145, and the cost to place one purchase order is $105. The estimated annual order cost is: A. $12,000. B. $17,400. C. $12,600. D. $800,000. 10. Carrying costs would include all of the following except: A. Warehouse rent. B. Inspection employees’ wages. C. Losses due to obsolescence. D. Property taxes. [Show More]

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