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Please provide detailed explanations. Advanced Cost Accounting

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Advanced Cost Accounting;1) Promoting the idea of continually finding ways to help organizations;make the right decisions to create more customer value at lower cost is;an example of the characteristic of the;A) Attitude of effective cost management;B) Variance analysis of effective cost management;C) Technique of effective cost management;D) Philosophy of effective cost management;Answer;Use the information below for questions 2 & 3. Mannix Company has;gathered the following data related to its production process of two of;its products for the week ended April 30;Model #100 B #250C;Quantity produced 60 100;Unit-level material cost $ 42,000 $ 100,000;Variable conversion cost 72,000 300,000;Total direct costs $114,000 $ 400,000;Indirect costs;Indirect manufacturing cost 163,200 272,000;Indirect operating cost 255,000 425,000;Total indirect costs 418,200 697,000;Total costs $532,200 $1,097,000;2) The absorption cost per unit for product #250C was;A) $1,900;B) $9,760;C) $6,970;D) $6,720;Answer;3) The costs above that appear to be allocated rather than traced are;A) Unit level material costs.;B) Variable conversion costs.;C) Indirect production costs only.;D) All indirect costs.;Answer;4) If the amount of Transfers Out exceeds the amount of Transfers In of;an inventory account during the period;A) The inventory balance will increase;B) The inventory balance will decrease;C) The inventory balance will remain the same;D) Additional information is needed to determine the answer;Answer;5) Setup labor costs required for setting up equipment for flexible;production facilities for manufacturing would be an example of;A) Unit-level activity;B) Batch-level activity;C) Product-level activity;D) Customer-level activity;Answer;6) Measuring the costs of current process activities involves five;steps. Which of the following is the first step?;A) Identify cost driver bases and measure activity cost driver rates.;B) Assign activity costs to products, jobs or services by multiplying;the use of cost driver base by the cost driver rate.;C) Identify and measure the different levels of resource spending.;D) Measure the costs of individual activities.;Answer;7) Which of the following factors can result in some customers being;more profitable than others?;A) Ordering in small quantities;B) Frequent changing of orders;C) Needing special parts or engineering design;D) All of the above are factors.;Answer;8) Which of the following is a prevention activity in controlling;quality?;A) Designing products for manufacturability;B) Inspecting machines;C) Statistical process control;D) Field testing;Answer;9) Which of the following is true of abnormal spoilage?;A) It is prorated between cost of goods sold and inventory.;B) It is normally treated as a part of good units produced.;C) It is normally written off as an expense in the period incurred.;D) It is considered to be part of production.;Answer;10) Scotia Credit Checks produces two styles of credit reports;Individual and Corporate. The difference between the two is the amount;of background information and data collection required. The Corporate;report uses more skilled personnel because additional checking and data;are required. The relevant figures for the year just completed follow;Total support service costs to be allocated are $3,200,000.;Allocation base Individual Corporate;Data purchased $40,000 $80,000;Research hours 24,000 30,000;Interview hours 1,000 10,000;Number of reports 16,000 3,000;Which cost-allocation based would the manager of the Individual;Department prefer the most?;A) Data purchased;B) Research hours;C) Interview hours;D) Number of reports;Answer;11) Which of the following costs would most likely be classified as;variable, assuming the account analysis approach to cost estimation is;used?;A) Indirect material.;B) Supervisory salaries.;C) Equipment maintenance.;D) Building occupancy costs.;Answer;12) Under what conditions will the FIFO method produce the same cost of;goods manufactured as the weighted-average method?;A) When there is no ending inventory;B) When the beginning and ending inventories are both 50% complete;C) When there is no beginning inventory;D) When the beginning and ending inventories are equal;Answer;13) Victoria Cross Company produces various types of candies. Several;candies could be sold at the split-off point or processed further and;sold in a different form after further processing. The candies are;produced in a joint processing operation with $500,000 of joint;processing costs monthly, which are allocated based on pounds produced.;Information concerning this process for a recent month appears below;Candy type Number of Price per pound Further Price after;pounds at split-off processing processing;costs further;Sweet Meats 50,000 $4 $75,000 $5.00;Chocolate Delight 100,000 $8 $30,000 $8.50;Minty Wonders 25,000 $3 $20,000 $3.50;Based on the information presented, which of the products should be;processed further?;A) Sweet Meats only;B) Chocolate Delight only;C) Minty Wonders only;D) Both Sweet Meats and Minty Wonders;Answer;14) Which of the following is not a reason to justify the allocation of;support services?;A) Tax reporting requirements;B) Influencing behavior of employees;C) To trace costs to the activity that created the costs;D) Cost based contracts;Answer;15) Which of the following statements is false regarding the use of;multiple cost pools?;A) Using more pools generally results in better cost allocations.;B) Designing and maintaining a system with multiple pools can be;complex and costly.;C) The use of Activity-Based-Accounting will almost always require;multiple cost pools.;D) All support service costs are generally allocated using a single;cost pool.;Answer;16) In the cost estimation equation TC = F + VX, which of the variables;would be considered the cost driver?;A) TC);B) F.;C) V.;D) X.;Answer;17) The extended value chain;A) Is a set of linked operations or processes that begins with;obtaining resources and ends with providing products or services that;customers value.;B) Is a related set of tasks, manual or automated, that transforms;inputs into identifiable outputs.;C) Encompasses how companies obtain their resources and distribute;their products and services, possibly using the services of other;organizations.;D) Is a technique for identifying opportunities for improvement and;measuring the effects of proposed improvements by comparing both the;costs and benefits of a proposal.;Answer;18) In a job-order costing system, the entry to record the completion of;jobs would be recorded with a;A) Debit to Finished Goods Inventory and a credit to Cost of goods sold;B) Debit to Finished Goods Inventory and credit to Work-in-Process;Inventory;C) Debit to Work-in-Process Inventory and credit to Finished Goods;Inventory;D) Debit to Cost of Goods Sold inventory and credit to Finished Goods;Inventory;Answer;19) Which of the following is not a basic step that is used to determine;the cost of goods using Activity- Based Costing?;A) Identify and classify the activities related to the company's;products.;B) Calculate a cost-driver rate for each activity.;C) Classify all costs into variable and fixed cost behavior.;D) Assign activity costs to products.;Answer;20) The most appropriate cost driver base to allocate the salaries of;the two mechanics under Activity-Based Costing would be;A) The number of bottle caps and jar covers produced.;B) The number of setups.;C) The number of hours spent on each setup.;D) The number of setup mechanics.;Answer;21) Which of the following would not be important to the successful;implementation of activity-based costing and management in a large;organization?;A) Personal computers and spreadsheet programs for each employee;B) Three to four person cross-functional teams with a commitment of at;least four months time.;C) Management commitment;D) Education and training programs for all employees;Answer;22) Elton Industries desires a return on sales of 20%. Their current;sales revenue is $10,000,000 and their current return on sales is 15%.;Assuming sales remain the same, to achieve their desired target profit;they must reduce their costs by;A) $500,000;B) $1,500,000;C) $2,000,000;D) None of the above;Answer;23) Linden Company developed the following information for its first;quarter cost of quality report;Sales $2,800,000;Cost of goods sold $1,680,000;Disposing of scrap $ 117,600;Quality training $ 42,000;Inspecting materials on delivery $ 140,000;Performance reviews $ 35,000;Resolving customer complaints $ 15,960;Certifying suppliers $ 70,000;The total cost of prevention activities for Linden Company is;A) $147,000;B) $112,000;C) $229,600;D) $252,000;Answer;24) Which of the following statements is false about ABC pilot programs?;A) They are usually small scale;B) They test the feasibility of a proposed change;C) They require major use of resources;D) They are recommended for any major, systematic change in an;organization;Answer;25) Period costs;A) Do not become part of the value of inventory for financial or tax;reporting.;B) Become part of the value of inventory for financial reporting but;not tax reporting.;C) Become part of the value of inventory for tax reporting but not;financial reporting.;D) Are the same as indirect manufacturing costs.;Answer

 

Paper#25161 | Written in 18-Jul-2015

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