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MCQ-20 1.Cost allocation is:

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Question 1;Cost allocation is;The process of tracking both direct and indirect costs associated with a cost object;The process of determining the actual cost of the cost object;The assignment of indirect costs to the chosen cost object;A function of cost tracing;Question 2;Which one of the following items is a direct cost???;Customer-service costs of a multiproduct firm, Product A is the cost object.?;Printing costs incurred for payroll check processing, payroll check processing is the cost object.?;The salary of a maintenance supervisor in a multiproduct manufacturing plant, Product B is the cost object.?;Utility costs of the administrative offices, the accounting department is the cost object.?;Question 3;Variable costs;Are always indirect costs;Increase in total when the actual level of activity increases;Include most personnel costs and depreciation on machinery;Can always be traced directly to the cost object;Question 4;The Singer Company manufactures several different products. Unit costs associated with Product ICT101 are as follows:?What are the variable costs per unit associated with Product ICT101?;Direct materials $60 $60;Direct manufacturing labor 10 10;Variable manufacturing overhead 18 18;Fixed manufacturing overhead 32 32;Sales commissions (2% of sales) 4 4;Administrative salaries 16 16;Total 92 $140;???????;a. $18 c. $88;b. $22 d. $92;Question 5;Cost-volume-profit analysis is used primarily by management:??;As a planning tool?;For control purposes?;To prepare external financial statements?;Tto attain accurate financial results;Question 6;Operating income calculations use:??;Net income?;Income tax expense?;Cost of goods sold and operating costs?;Non-operating revenues and non-operating expenses?;Question 7;Contribution margin equals:??;Revenues minus period costs?;Revenues minus product costs?;Revenues minus variable costs?;Revenues minus fixed costs;Question 8;Holly's Ham, Inc. sells hams during the major holiday seasons. During the current year 11,000 hams were sold resulting in $220,000 of sales revenue, $55,000 of variable costs, and $24,000 of fixed costs.?Contribution margin per ham is:?;?;$5.00?;$15.00?;$20.00?;None of these answers are correct.?;Question 9;The actual indirect-cost rate is calculated by:??;Dividing actual total indirect costs by the actual total quantity of the cost-allocation base.?;Multiplying actual total indirect costs by the actual total quantity of the cost-allocation base.?;Dividing the actual total quantity of the cost allocation base by actual total indirect costs.?;Multiplying the actual total quantity of the cost allocation base by actual total indirect costs.?;Question 10;O'Reilly Enterprises manufactures digital video equipment. For each unit $2,950 of direct material is used and there is $2,000 of direct manufacturing labor at $20 per hour. Manufacturing overhead is applied at $35 per direct manufacturing labor hour. Calculate the cost of each unit.??;A. $4,950, B. $9,950, C. $8,450, D. $11,950;Question 11;Joni's Kitty Supplies applies manufacturing overhead costs to products at a budgeted indirect-cost rate of $60 per direct manufacturing labor-hour. A retail outlet has requested a bid on a special order of the Toy Mouse product. Estimates for this order include: Direct materials $40,000, 500 direct manufacturing labor-hours at $20 per hour, and a 20% markup rate on total manufacturing costs.?Manufacturing overhead cost estimates for this special order total:?;?;$10,000?;$30,000?;$36,000?;None of these answers is correct.;Question 13;ABC systems create:?;?;One large cost pool?;Homogenous activity-related cost pools?;Activity-cost pools with a broad focus?;activity-cost pools containing many direct costs?;Question 16;Activity-based costing systems provide better product costs when they:??;Employ more activity-cost drivers?;Employ fewer activity-cost drivers?;Identify and cost more indirect cost differences among products?;Always yield more accurate product costs than traditional systems;Question 17;Quality management provides an important competitive edge because it:??;Reduces costs?;Increases customer satisfaction?;Often results in substantial savings and higher revenues in the short run?;All of these answers are correct.;Question 18;An example of a nonfinancial measure for customer satisfaction is:??;Average manufacturing time for key products?;Contribution margin?;Percentage of products that fail soon after delivery?;Number of employees trained on managing bottleneck operations;Question 19;A tool which indicates how frequently each type of defect occurs is a:??;Control chart?;Pareto diagram?;Cause-and-effect diagram?;Fishbone diagrams;Question 20;An important difference between financial measures of quality and nonfinancial measures of quality is that:?;?;Financial measures of quality tend to be useful indicators of future long-term performance, while nonfinancial measures have more of a short-term focus?;Nonfinancial measures of quality tend to be useful indicators of future long-term performance, while financial measures of quality have more of a short-term focus?;Nonfinancial measures are generally too subjective to have any long-term value?;None of these answers is correct.?;Question 12;Bauer Manufacturing uses departmental cost driver rates to allocate manufacturing overhead costs to products. Manufacturing overhead costs are allocated on the basis of machine-hours in the Machining Department and on the basis of direct labor-hours in the Assembly Department. At the beginning of 20X3, the following estimates were provided for the coming year;Machining Assembly;Direct labor-hours 30,000 60,000 60,000;Machine-hours 80,000 20,000 20,000;Direct labor cost $500,000 $900,000 $900,000;Manufacturing overhead costs $420,000 $240,000 $240,000;The accounting records of the company show the following data for Job #316:??;Machining Assembly;Direct labor-hours 120 70 70;Machine-hours 60 5 5;Direct material cost $300 $200 $200;Direct labor cost $100 $400 $400;For Bauer Manufacturing, what is the annual manufacturing overhead cost-allocation rate for the Machining Department???;$4.00?;$4.20?;A. $4.00, B.$4.20;C. $4.67;D. $5.25 $4.67?;$5.25?;Question 15;Velshi Printers has contracts to complete weekly supplements required by forty-six customers.;For the year 2010, manufacturing overhead cost estimates total $840,000 for an annual production capacity of 12 million pages.?For 2010 Velshi Printers has decided to evaluate the use of additional cost pools.;After analyzing manufacturing overhead costs, it was determined that number of design changes, setups, and inspections are the primary manufacturing overhead cost drivers.?The following information was gathered during the;analysis;Cost Pool Manufacturing Overhead Costs Activity Level Activity Level;Design changes $120,000 300 design changes 300 design changes;Setups $640,000 5,000 setups 5,000 setups;Inspections $80,000 5,000 setups 8,000 inspections;Total manufacturing overhead costs $840,000;During 2010, two customers, Money Managers and Hospital Systems, are expected to use the following printing services;Activity Money Managers Hospital Systems;Pages 60,000 76,000;Design changes 10 0;Setups 20 10;Inspections 30 38;What is the cost driver rate if manufacturing overhead costs are considered one large cost pool and are assigned based on 12 million pages of production capacity???;A. $0.10 per page;B. $0.07 per page;C. $0.70 per page;D. $0.05 per page

 

Paper#18560 | Written in 18-Jul-2015

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