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University of Waterloo
Accounting & Financial Management
AFM 102
Steve Spencer

1. Both financial and managerial accounting rely on the same underlying financial data but there are major differences. Managerial Accounting: a) Emphasizes financial consequences of past activities b) Emphasizes precision c) Emphasizes relevance d) Must follow GAAP 2. Which of the following is NOT one of the three board categories of managers' decisions: a) Planning b) Strategy c) Directing Motivation d) Control 3. Robert Smith earns $16 per hour assembling products. For each hour over 40 he works in a week, he is paid time-and-a-half. During a given week, he worked 45 hours and had no idle time. How much of his weekly wages would be charged to the manufacturing overhead account? a) $80 b) $45 c) $40 d) $120 4. For a lamp manufacturing company, the cost of the insurance on its vehicles that deliver lamps to customers is best described as a: a) Prime cost b) Manufacturing overhead c) Period cost d) Differential cost of a lamp 5. What is the outcome if the cost of goods sold is greater than the cost of goods manufactured? a) Work-in-process inventory has decreased during the period b) Finished goods inventory has increased during the period c) Total manufacturing cost must be greater than cost of goods manufactured d) Finished goods inventory has decreased during the period 6. In terms of a job-order costing system, how is immaterial over application of manufacturing overhead handled? a) Allocate the over-applied proportionally to work-in-process, finished goods, and cost of goods sold b) Allocate the over-applied to work-in-process c) Allocate the over-applied to cost of goods sold d) Allocate the over-applied to finished goods 7. Which of the following costs is often important indecision-making, but is omitted from conventional accounting records? a) Fixed cost b) Sunk cost c) Indirect cost d) Opportunity cost 8. Last month, when 10,000 units of a product were manufactured, the cost per unit was $60. At this level of activity, variable costs were 50% of total unit costs. If 10,500 units are manufactured next month and cost behaviour patterns remain unchanged, how will costs be affected? a) Total variable costs will remain unchanged b) Fixed cost will increase in total c) Variable cost per unit will increase d) Total cost per unit will decrease 9. In a normal job-order costing system, the journal entry to record the application of overhead cost to jobs includes which of the following? a) A credit to the Work in Process inventory account b) A credit to the Manufacturing Overhead account c) A debit to Cost of Goods Sold d) A debit to the Manufacturing Overhead account 10. Which of the following activity levels is the clerical activity associated with processing purchase orders to produce an order for a standard product? a) Unit-level activity b) Batch-level activity c) Product-level activity d) Organization-sustaining activity 11. Which of the following statements about overhead allocation based of volume alone is correct? a) It is a key aspect of the activity-based costing model b) It will systematically over cost high-volume products and under cost low-volume products c) It will systematically overcost low-volume products and undercost high-volume products d) It must be used e
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