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Eden Company manufactures two products, Brights and Dulls, from

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Eden Company manufactures two products, Brights and Dulls, from a joint process. A production run costs $50,000 and results in 250 units of Brights and 1,000 units of Dulls. Both products must be processed past the split-off point, incurring separable costs of $60 per unit for Brights and $40 per unit for Dulls. The market price is $250 for Brights and $200 for Dulls.;What is the gross profit for Dulls assuming the constant gross margin percentage method is used?;A) $120,000;B) $150,000;C) $37,500;D) $200,000;12.;A company incurred $40,000 of common fixed costs and $60,000 of common variable costs. These costs are to be allocated to Departments A and B. Data on capacity provided and capacity used are as follows;Capacity Provided;Capacity Used;Department;in Hours;in Hours;A;400;320;B;240;320;Assume that common fixed costs are to be allocated to Departments A and B on the basis of capacity provided and that common variable costs are to be allocated to Departments A and B on the basis of capacity used. The fixed and variable costs allocated to Department A are;Fixed Variable;A) $25,000 $37,500;B) $25,000 $30,000;C) $20,000 $37,500;D) $20,000 $30,000;13.;Which of the following would be the most appropriate base for allocating the costs of the housekeeping department?;A) machine hours;B) direct labor hours;C) number of employees;D) square feet;14.;Oaks Company has two support departments, Maintenance Department (MD) and Personnel Department (PD), and two producing departments, P1 and P2. The Maintenance Department costs of $30,000 are allocated on the basis of standard service used. The Personnel Department costs of $4,500 are allocated on the basis of number of employees. The direct costs of Departments P1 and P2 are $9,000 and $15,000, respectively.;Data on standard service hours and number of employees are as follows;MD;PD;P1;P2;Standard service hours used;100;50;300;150;Number of employees;10;20;90;90;Direct labor hours;50;50;250;250;What are the total overhead costs associated with P2 after allocating the Maintenance and Personnel Departments using the direct method?;A) $37,250;B) $25,000;C) $15,000;D) $27,250;15.;Which of the following industries would most likely have joint costs in production?;A) flour milling;B) dairy products;C) commercial fishing;D) all of the above;16.;Morris Manufacturing Company has two support departments, Maintenance Department and Personnel Department, and two producing departments, X and Y. The Maintenance Department costs of $30,000 are allocated on the basis of standard service used. The Personnel Department costs of $4,500 are allocated on the basis of number of employees. The direct costs of Departments X and Y are $9,000 and $15,000, respectively.;Data on standard service hours and number of employees are as follows;Maint.;Person.;Dept.;Dept.;Dept.;Dept.;X;Y;Standard service hours used;100;75;600;300;Number of employees;50;100;150;150;Direct labor hours;125;125;500;250;What are the total overhead costs associated with Department Y after allocating the Maintenance and Personnel Departments using the direct method?;A) $27,250;B) $15,000;C) $25,000;D) $17,250;17.;Figure 7-2;Wilson and Lewis, a large law firm, utilizes an internal centralized printing center to serve its three departments: Individuals, Corporate, and Trust. The costs of the printing department include fixed costs of $69,190 (salaries and machine rentals) and variable costs of $.04 per page printed (paper and toner). Total estimated print pages amount to 330,000 pages. This is based on 130,000 pages from the Individual area, 165,000 from the Corporate area, and 35,000 from the Trust area.;Refer to Figure 7-2. If total pages printed actually amounted to 340,000 which of the following statements is correct?;A) the printing costs allocated to the Corporate, Individual, and Trust areas would total $85,000;B) the printing department would expect to incur costs of $82,790;C) any extra amount charged is due to the fixed costs being treated as if they are variable costs;D) all of the above are correct;18.;Which of the following is NOT a benefit of the costs of support departments being allocated to production departments?;A) The allocation assists producing departments use of support departments at a more efficient level;B) Allocation of support department costs encourages managers of production departments to monitor the performance of the support departments;C) The allocation helps each production department select the correct level of support service consumption;D) Management will use the information to support out-sourcing all support services;19.;The following information pertains to Yoder Corporation;Support Departments;Producing Departments;Personnel;Maintenance;Fabrication;Assembly;Budgeted overhead;$80,000;$144,000;$280,000;$320,000;Direct labor hours;4,000;5,000;16,000;20,000;Machine hours;-;-;24,000;16,000;Number of employees;16;20;60;100;Yoder Corporation does not divide costs into fixed and variable components. Personnel costs are allocated based on the number of employees, and maintenance costs are allocated based on machine hours.;Predetermined overhead rates for fabrication and assembly are based on direct labor hours.;If the direct method is used to allocate support department costs, the predetermined overhead rate for the Fabrication Department (rounded to two decimal places) is;A) $28.80.;B) $5.40.;C) $7.28.;D) $24.78.;20.;Which of the following industries would most likely have joint costs in production?;A) new home construction;B) oil production;C) meat processing;D) both c and b

 

Paper#26528 | Written in 18-Jul-2015

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