CPA Business Environment and Concepts (BEC) : Operations Management: Cost Accounting
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Example Questions
Example Question #1 : Operations Management: Cost Accounting
The differences between standard hours at standard wage rates and actual hours at standard wage rates is referred to as which of the following types of variances
Direct labor spending
Indirect labor spending
Labor usage
Labor rate
Labor usage
The difference between standard hours at standard wage rates and actual hours at standard rates is the labor usage/efficiency variance.
Example Question #1 : Cost Accounting Variance Formulas
Which of the following types of variances would a purchasing manager most likely influence?
Direct labor efficiency
Direct labor rate
Direct materials price
Direct materials quantity
Direct materials price
The direct materials price variance could be used to monitor purchasing manager performance.
Example Question #1 : Operations Management: Cost Accounting
Which of the following standard costing variances would be least controllable by a production supervisor?
Labor efficiency
Overhead volume
Material usage
Overhead efficiency
Overhead volume
The overhead volume variance is a function of the budgeted amount of overhead based on standard hours. The production supervisor has little control over established standard and budgeted amounts.
Example Question #1 : Operations Management: Cost Accounting
The only sales variance listed below that does not use contribution margin to compute results is:
Market size variance
Sales price variance
Sales volume variance
Market share variance
Sales price variance
The sales price variance does not use contribution margin.
Example Question #1 : Cost Accounting Variance Formulas
The production volume variance is due to:
A significant shift in the mix and yield of direct labor relative to the static budget
Efficient or inefficient use of variable overhead
Difference from the planned level of the base used for overhead allocation and the actual level achieved
]Inefficient or efficient use of direct labor hours
Difference from the planned level of the base used for overhead allocation and the actual level achieved
The production volume variance is due to the difference from the planned level of the based used for overhead allocation and the actual level achieved.
Example Question #1 : Cost Accounting Variance Formulas
The cost of goods manufactured would generally not include which of the following?
Selling costs
Overhead
Direct labor
Direct materials
Selling costs
Selling costs are not relevant for the goods a firm manufactures, rather this would be relevant for the cost of goods sold.
Example Question #1 : Operations Management: Cost Accounting
A company would most benefit from using an activity-based costing system as opposed to a traditional costing system under which of the following conditions?
When indirect costs are a high percentage of total costs
When batch level and product sustaining costs are immaterial
When different products use the different activities of the department in the same proportions
When each department within the company has a single activity
When indirect costs are a high percentage of total costs
When indirect costs are a high percentage of total costs, a company would benefit from an ABC system where costs can be broken out for further analysis.
Example Question #2 : Operations Management: Cost Accounting
In joint product costing and analysis, which one of the following costs is relevant when deciding the point at which a product should be sold in order to maximize profits?
Separable costs after the split off point
Join costs to the split off point
The company president's salary
Purchase costs of the materials required for the joint product
Separable costs after the split off point
In order to maximize profits, separable costs after the split-off point are relevant under a joint product costing system.
Example Question #3 : Job Costing
Which of the following is not an external failure cost?
Warranty costs
Liability claims
Tooling changes
Lost customers
Tooling changes
All of these costs except for tooling changes would be included as external failure costs.
Example Question #3 : Operations Management: Cost Accounting
Conversion cost pricing:
Places minimal emphasis on the cost of materials used in manufacturing a product.
Could be used when the customer furnishes the material used in manufacturing a product.
Places heavy emphasis on indirect costs and disregards consideration of direct costs.
Places heavy emphasis on direct costs and disregards consideration of indirect costs.
Could be used when the customer furnishes the material used in manufacturing a product.
Conversion cost pricing could be used when the customer furnishes the material used in manufacturing a product.
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