A company could have a favorable raw material quantity variance because: less fi

Question

A company could have a favorable raw material quantity variance because: less finished goods units were produced than planned. higher-quality materials were purchased, causing less waste. the labor force was improperly trained, causing more waste. the cost per unit of the materials was less than planned. The type of cost that could cause a difference between income using absorption costing and income using variable costing is: fixed administrative expenses. fixed manufacturing overhead. variable selling expenses. variable manufacturing overhead. Which of the following statements about activity-based costing is false? Activity-based costing can be used for manufacturing, administrative, or selling costs. Activity-based costing categories costs as unit-level, batch-level, product-level, or organization-sustaining. Activity-based costing requires a two-sage allocation of costs. Activity-based costing is most appropriate for a firm that produces similar products that use similar resources. A capital budgeting project should be accepted if: its internal rate of return is less than the company's cost of capital. the net present value is positive. the payback period is equal to the estimated life of the project. the initial cash outflows are equal to or less than the initial cash inflows. Morgan Company purchased a machine last month for $10,000; this machine could be sold today for $6,000. Morgan has just become aware of a newer model of this machine that would cost $11,000 today. Both machines will incur operating costs of $4,000 per year. The relevant costs in deciding whether to keep the old machine or buy the new machine are: the $10,000 cost of the old machine and the $11,000 cost of the new machine. the $6,000 current selling price of the old machine and the $11,000 cost of the new machine. the $10,000 cost of the old machine and the $4,000 annual operating costs. the $11,000 cost of the new machine and the $4,000 annual operating costs.

Explanation / Answer

6. A company should have a favourable raw material quantity variance because:

     d. cost per unit of the materials was less than planned

7. Type of cost that would cause difference between income using absorption costing and income using variable costing:

b.Fixed Manufacturing overhead

8. Following statements about activity based costing is false

d. Activity based costing is most appropriate for firm that produces similar products that use similar resources

9. A capital budgeting project has to be accepted if

b. Net present value is positive

10. Relevant costs to keep old machine or buy new machine

b. 6000 current selling price of old machine and 11000 cost of new machine

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