please see attachment: multiple choice questions Acme, Inc. had overhead of $310,000 during the year when $260,000 in labor costs were incurred. Estimates at the start of the year for overhead and labor costs were $300,000 for overhead and $250,000 for labor costs. The predetermined overhead rate would be: 101.67% 104.00% 120.00% 83.33% Albany Industries produces two products. Information about the products is as follows: Product 1 Product 2 Units sold & produced 4,000 10,000 selling price per unit $15 $13 variable cost per unit 9 8 The company's fixed costs totaled $70,000, of which $15,000 can be directly traced to Product 1 and $40,000 can be directly traced to Product 2. The effect on the firm's profits if Product 2 is dropped would be a: $10,000 increase. $35,000 increase. $35,000 decrease. $10,000 decrease. The theory of constraints focuses on maximizing throughput contribution margin while minimizing all of the following except: selling expenses per unit sold. production bottlenecks. investment in buildings. investment in inventories. Which of the following statements is (are) true regarding product costing? (A) Individual product costs are relevant for managerial decision-making but irrelevant for preparing the financial statements. (B) A common decision facing managers is determining the price at which to sell their product or provide their services. Only A is true. Only B is true. Both A and B are true. Neither A nor B is true. Agreement among business competitors to set prices at a particular level is known as: predatory pricing. target pricing. peak-load pricing. price fixing. Chetek Industries manufactures 15,000 components per year. The manufacturing cost of the components was determined to be as follows: Direct Materials $150,000 Direct Labor $240,000 Variable Manufacturing overhead $90,000 Fixed Manufacturing overhead $120,000 TOTAL $600,000 Assume that the fixed manufacturing overhead reflects the cost of Chetek's manufacturing facility. This facility cannot be used for any other purpose. An outside supplier has offered to sell the component to Chetek for $34. If Chetek Industries purchases the component from the outside supplier, the effect on income would be a: $30,000 decrease. $30,000 increase. $90,000 decrease. $90,000 increase. The loan department of a financial corporation makes loans to businesses. The costs of processing these loans are often several thousand dollars. All loans are initially evaluated using the same financial analysis software, but some require outside services such as appraisals and legal services. Which is the most appropriate costing system for the loan department? job-order costing process costing operation costing batch costing Differential costs are: (CMA adapted) the difference in total costs that result from selecting one choice instead of another. the profit foregone by selecting one choice instead of another. a cost that continues to be incurred in the absence of activity. a cost common to all choices in questions and not clearly allocable to any of them. A system that provides information about the costs of processes, products, and services used and produced by an organization is a continuous flow process. cost management system. two-stage allocation system. operation costing. The MNK Company has gathered the following information for a unit of its most popular product: direct materials $6 direct labor $3 overhead (40%) $5 cost to manufacture $14 desired markup (50%) $7 target selling price $21 The above cost information is based on 4,000 units. A foreign distributor has offered to buy 1,000 units at a price of $16 per unit. This special order would not disturb regular sales. Variable shipping and other selling expenses would be an additional $1 per unit for the special order. If the special order is accepted, MNK's operating profits will increase by: $1,000. $1,600. $2,000. $4,000. $5,000. The following direct labor information pertains to the manufacture of product Glu: time required to make one unit 2hrs number of direct workers 50 number of productive hours per week, per worker 40 weekly wages per worker $500 workers benefits treated as direct labor cost 20% of wages What is the standard direct labor cost per unit of product Glu? (CPA adapted) $30 $24 $15 $12 The Speedy Delivery Service is considering the expansion of its business into afternoon retail delivery service. This would require an additional $25,000 in labor costs per month. Company-owned vehicles now used to make morning deliveries to local manufacturers could be used in the afternoons to make retail deliveries. However, it is estimated that an additional $10,000 would be required per month for gas, oil, and maintenance. It is further estimated that the retail delivery use of the trucks would be allocated 45% of the existing $13,000 fixed vehicle costs. What is the differential delivery cost per month for expanding into the retail delivery market? $25,000 $35,000 $39,500 $40,850 For which of the following businesses would the job order cost system be appropriate? law office crude oil refinery baby formula manufacturer soft drink producer Lo-crete produces quick setting concrete mix. Production of 200,000 tons was started in April, 190,000 tons were completed. Material costs were $3,152,000 for the month while conversion costs were $591,000. There was no beginning work-in-process; the ending work-in-process was 70% complete. What is the cost of the product that remains in work-in-process? $591,000 $131,005 $187,150 $133,000 Slurpy produces soft drinks and sodas. Production of 100,000 liters was started in February, 85,000 liters were completed. Material costs were $38,220 for the month while conversion costs were $16,380. There was no beginning work-in-process; the ending work-in-process was 40% complete. What is the cost of the product that remains in work-in-process? $16,380 $51,000 $3,600 $9,000 For the past five years, the Selin Company has produced and sold frequency meters to genetics labs throughout the United States. Recently, a strong competitor has entered the market and Selin is considering whether it should continue to produce and sell the frequency meters. The following information has been gathered to assist management in their decision: A) Sales volume (units) is estimated to drop by 25% once the competitor becomes fully operational. B) The equipment used to produce the meters was purchased five-years ago for $1,500,000. C) The space now used to produce the meters would be reallocated to eliminate the need to rent warehouse space. D) Three of the employees who produce meters would be reassigned to the oscillator division. Which of the items listed above is (are) relevant to the decision to continue the production and sale of the frequency meters? A and C. B and C. C and D. A, B, and D. B, C, and D. The Regal Baking Company is considering the expansion of its business into door-to-door delivery service. This would require an additional $12,500 in labor costs per month. Company-owned vehicles now used to make morning deliveries to restaurants could be used in the afternoons to make the home deliveries. However, it is estimated that an additional $5,000 would be required per month for gas, oil, and maintenance. It is further estimated that the home delivery use of the trucks would be allocated 45% of the existing $6,500 fixed vehicle costs. What is the differential delivery cost per month for expanding into the home delivery market? $12,500 $17,500 $19,750 $20,425 The predetermined manufacturing overhead rate for the year was 140% of direct labor cost; employees were paid $17.50 per hour. If the estimated direct labor hours were 15,000, what was the estimated manufacturing overhead? $210,000 $187,500 $262,500 $367,500 A target cost is computed as: cost to manufacture plus a desired markup. cost to manufacture plus designated selling expenses. market willingness to pay minus cost to manufacture. market willingness to pay minus desired profit. In the cost equation TC = F + VX, X is best described as the: costs that do not vary with changes in the activity level. costs that do vary with changes in the activity level. total cost estimate at a particular activity level. activity level used to estimate the total cost. The Shapely Company uses the high-low method to determine its cost equation. The following information was gathered for the past year: machine hours direct labor cost busiest month, june 14,000 $200,000 slowest month, dec. 6,000 $120,000 If Shapely expects to use 10,000 machine hours next month, what are the estimated direct labor costs? $160,000 $180,000 $175,000 $150,000 The Shapely Company uses the high-low method to determine its cost equation. The following information was gathered for the past year: machine hours direct labor cost busiest month, june 14,000 $200,000 slowest month, dec. 6,000 $120,000 What are the direct labor costs per machine hour? $20.00 $16.00 $14.29 $10.00 Hagler's Toupees has the following machine hours and production costs for the last six months of last year: month machine hours production cost july 15,000 $12,075 aug 13,500 10,800 sept 11,500 9,580 oct 15,500 12,080 nov 14,800 11,692 dec 12,100 9,922 If Hagler expects to incur 14,000 machine hours in January, what will be the estimated total production cost using the high-low method? (Round your intermediate calculations to 3 decimal places and final answer to 1 decimal place.) $8,750.00 $11,142.50 $22,400.00 $10,889.10 A cost driver is defined as: (CMA adapted) the largest cost in a manufacturing process. a fixed cost that cannot be avoided. the significant factor in developing a new product. an indirect cost that cannot be traced to a particular cost objective but is essential to the business. a causal factor that increases the total cost of a cost objective. Which of the following statements is (are) true regarding cost behaviors? (A) In general, accounting records accumulate cost information according to its behavior. (B) Cost behaviors are the most important consideration in managerial decision making. only A is true. only B is true. Both A and B are true. Neither A nor B is true. The term "relevant range" as used in cost accounting means the range over which: relevant costs are incurred. costs may fluctuate. cost relationships are valid. cost data is available. Engineering cost estimates are usually based on operating conditions that are considered: optimal. practical. attainable. historical. realistic. The cost accountants at the Doering Company regressed total overhead costs and direct labor hours for the past 30-months and reported the following results: slope= $41.27 intercept= $596.36 correlation coefficient= .934 What is the estimated overhead cost if 225 direct labor hours are expected to be used in the upcoming period? (rounded to the nearest whole dollar) $10,534 $9,882 $9,230 $8,617 In the standard regression equation of y = a + bx, the letter a is best described as the: independent variable. dependent variable. slope of the equation. intercept of the equation.
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