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| 1 | |
Some mass service entities would use: |
| | A) | a job costing system |
| | B) | a hybrid costing system |
| | C) | an operations costing system |
| | D) | a process costing system |
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| 2 | |
A firm that is most likely to implement a service costing system is: |
| | A) | a professional service firm operating in a competitive environment that allows cost-plus pricing |
| | B) | a professional service firm operating in a stable, non-competitive environment that allows cost-plus pricing |
| | C) | a mass services firm |
| | D) | a service shop firm operating in a cost-plus environment, producing relatively few services and having relatively low indirect costs |
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| 3 | |
Millicent Company, a management consulting firm, included a balance of $25 000 in its work in process inventory. This balance of $25 000 represented a consulting project that had extended over a period of five months and had not been billed to the client. This would be described as: |
| | A) | the correct treatment of work in process inventory for a service firm under AASB 102 Inventories |
| | B) | the incorrect treatment of work in process inventory for a service firm under AASB 102 Inventories |
| | C) | the incorrect treatment of work in process for a service firm since work in process inventory does not exist for a service firm |
| | D) | the incorrect treatment of work in process inventory for a service firm since the balance of $25 000 should be included in Millicent Company’s accounts receivable balance |
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| 4 | |
Service costing systems are implemented to: |
| | A) | meet external financial accounting requirements |
| | B) | meet stock market listing requirements |
| | C) | meet creditors’ requirements |
| | D) | meet management’s needs |
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| 5 | |
Hollywood Cinema Complex is located in a large regional shopping centre. Despite the wide variety of patrons—from those that are interested in family movies to those that are interested in adult movies—the service of providing movie entertainment involves two processes—the purchase of movie tickets and the projection of the movie—that are the same for all patrons. The annual costs of these two processes are listed below: Cost | Ticket sales | Projection | Staff salaries | $128 000 | $435 000 | Equipment depreciation | 5 000 | 50 000 | Equipment/premises insurance | 6 000 | 20 000 | Movie hire | 0 | 3 228 000 | Premises rental | 0 | 750 000 | Telephone | 6 000 | 2 000 | Consumables | 5 000 | 15 000 |
During the year, Hollywood Cinema Complex entertained 1 500 000 cinema patrons. The cost per patron for ticket sales is: |
| | A) | $0.10 |
| | B) | $3.00 |
| | C) | $1.00 |
| | D) | $0.01 |
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| 6 | |
Hollywood Cinema Complex is located in a large regional shopping centre. Despite the wide variety of patrons—from those that are interested in family movies to those that are interested in adult movies—the service of providing movie entertainment involves two processes—the purchase of movie tickets and the projection of the movie—that are the same for all patrons. The annual costs of these two processes are listed below: Cost | Ticket sales | Projection | Staff salaries | $128 000 | $435 000 | Equipment depreciation | 5 000 | 50 000 | Equipment/premises insurance | 6 000 | 20 000 | Movie hire | 0 | 3 228 000 | Premises rental | 0 | 750 000 | Telephone | 6 000 | 2 000 | Consumables | 5 000 | 15 000 |
During the year, Hollywood Cinema Complex entertained 1 500 000 cinema patrons. The cost per patron for projection is: |
| | A) | $0.10 |
| | B) | $3.00 |
| | C) | $3.10 |
| | D) | $0.30 |
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| 7 | |
Hollywood Cinema Complex is located in a large regional shopping centre. Despite the wide variety of patrons—from those that are interested in family movies to those that are interested in adult movies—the service of providing movie entertainment involves two processes—the purchase of movie tickets and the projection of the movie—that are the same for all patrons. The annual costs of these two processes are listed below: Cost | Ticket sales | Projection | Staff salaries | $128 000 | $435 000 | Equipment depreciation | 5 000 | 50 000 | Equipment/premises insurance | 6 000 | 20 000 | Movie hire | 0 | 3 228 000 | Premises rental | 0 | 750 000 | Telephone | 6 000 | 2 000 | Consumables | 5 000 | 15 000 |
During the year, Hollywood Cinema Complex entertained 1 500 000 cinema patrons. The total cost per patron is: |
| | A) | $3.00 |
| | B) | $3.10 |
| | C) | $0.31 |
| | D) | $0.031 |
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| 8 | |
Brunswick Company purchases furniture for resale. The January 1 beginning inventory cost $1 500 000, the cost of the ending inventory December 31 was $2 300 000, and the cost of goods sold was $7 200 000. During the year, Brunswick had furniture sales totalling $10 600 000.
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The total cost of furniture purchases made by Brunswick during the year was: |
| | A) | $9 500 000 |
| | B) | $800 000 |
| | C) | $7 200 000 |
| | D) | $8 000 000 |
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| 9 | |
The salaries of Purchasing Department staff employed in a merchandising business are classified as: |
| | A) | a customer support cost |
| | B) | an upstream cost |
| | C) | a marketing cost |
| | D) | a production/delivery cost |
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| 10 | |
Which costs dominate in many service firms? |
| | A) | Direct labour. |
| | B) | Fixed overhead. |
| | C) | Variable overhead. |
| | D) | Indirect costs. |
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