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Question;(TCO 1) Which of the following is a sign that an ABC system;may be useful?;Operations staff agrees with accountants;about the costs of manufacturing and marketing products and services.;There are small amounts of indirect costs.;Products make diverse demands on resources;because of differences in volume, process steps, batch size, or complexity.;Products a company is less suited to produce;and sell show small profits.;Question 2. Question;(TCO 1) Merriamn Company;provides the following ABC costing information;Activities Total;Costs Activity-cost drivers;Account inquiry hours $400,000 10,000 hours;Account billing lines $280,000 4,000,000 lines;Account verification accounts $150,000 40,000;accounts;Correspondence letters $;50,000 4,000 letters;Total costs $880,000;The above activities are used by Department A and B as;follows;Department;A Department B;Account inquiry hours 2,000;hours 4,000 hours;Account billing lines 400,000;lines 200,000 lines;Account verification accounts 10,000 accounts 8,000;accounts;Correspondence letters 1,000;letters 1,600 letters;How much of account verification costs will be assigned to;Department A?;$14,000;$150,000;$10,000;$37,500;Question 3. Question;(TCO 2) Examples of;nonfinancial budgets include all of the following EXCEPT;cash collections from customers.;units sold.;units manufactured.;number of new products introduced.;Question 4. Question;(TCO 2) White planned to use;$82 of material per unit but actually used $80 of material per unit, and;planned to make 1,200 units but actually made 1,000 units. The flexible-budget variance is;$2,000 favorable.;$14,000 unfavorable.;$16,400 unfavorable.;$2,400 favorable.;Question 5. Question;(TCO 3) Which of the following;does NOT represent a cause-and-effect relationship?;It makes sense that if a complex product has;a large number of parts, it will take longer to assemble than a simple product;with fewer parts.;Material costs increase as the number of;units produced increases.;A company is charged 40 cents for each;brochure printed and mailed.;Utility costs increase at the same time that;insurance costs increase.;Question 6. Question;(TCO 4) Relevant costs in a;make-or-buy decision of a part include;setup overhead for the manufacture of the;product using the outsourced part.;currently used manufacturing capacity that;has alternative uses.;annual plant insurance that will remain the;same.;corporate office costs that will be allocated;differently.;Question 7. Question;(TCO 5) The theory of;constraints is used for cost analysis when;a manufacturing company produces multiple products and uses multiple;manufacturing facilities and/or machines.;using a long-term time horizon.;operating costs are assumed fixed.;All of the above;Question 8. Question;(TCO 5) Schmidt Corporation;produces a part that is used in the manufacture of one of its products. The costs associated with the production of;10,000 units of this part are as follows;Direct materials $45,000;Direct labor 65,000;Variable factory overhead 30,000;Fixed factory overhead 70,000;Total costs $210,000;Of the fixed factory overhead costs, $30,000 is avoidable.;Phil Company has offered to sell 10,000 units of the same;part to Schmidt Corporation for $18 per unit.;Assuming there is no other use for the facilities, Schmidt should;make the part, as this would save $3 per;unit.;buy the part, as this would save $3 per unit.;buy the part, as this would save the company;$30,000.;make the part, as this would save $1 per;unit.;Points Received: 5 of 5;Comments;Question 9. Question;(TCO 3) The cost function y =;100 + 10X;has a slope coefficient of 100.;is a nonlinear.;has an intercept of 100.;represents a fixed cost.;Question 10. Question;(TCO 4) Sunk costs;are relevant.;are differential.;are ignored when evaluating alternatives.;have future implications.;(TCO 1) For each of the following drivers identify an;appropriate activity.;a. # of machines;b. # of setups;c. # of inspections;d. # of orders;e. # of runs;f. # of bins or;aisles;g. # of engineers;Question 2. Question;(TCO 2) Lubriderm Corporation;has the following budgeted sales for the next six-month period;Month Unit Sales;June 90,000;July 120,000;August 210,000;September 150,000;October 180,000;November 120,000;There were 30,000 units of finished goods in inventory at;the beginning of June. Plans are to have;an inventory of finished products that equal 20% of the unit sales for the next;month.;Five pounds of materials are required for each unit;produced. Each pound of material costs;$8. Inventory levels for materials are;equal to 30% of the needs for the next month.;Materials inventory on June 1 was 15,000 pounds.;Prepare production budgets in units for July, August, and;September.;Question 3. Question;(TCO 3) Patrick Ross, the;president of Ross's Wild Game Company, has asked for information about the cost;behavior of manufacturing overhead costs.;Specifically, he wants to know how much overhead cost is fixed and how;much is variable. The following data are;the only records available;Month;Machine-hours Overhead;Costs;February;1,700;$20,500;March;2,800;22,250;April 1,000 19,950;May;2,500;21,500;June;3,500 23,950;Using the high-low method, determine the overhead cost;equation. Use machine-hours as your cost;driver.;Question 4. Question;(TCO 5) Collier Bicycles has;been manufacturing its own wheels for its bikes. The company is operating at 100% capacity;and variable manufacturing overhead is charged to production at the rate of 30%;of direct labor cost. The direct materials;and direct labor cost per unit to make the wheels are $1.50 and $1.80;respectively. Normal production is;200,000 wheels per year.;A supplier offers to make the wheels at a price of $4;each. If the bicycle company accepts;this offer, all variable manufacturing costs will be eliminated, but the;$42,000 of fixed manufacturing overhead being charged to the wheels will have;to be absorbed by other products.;a. Prepare an;incremental analysis for the decision to make or buy the wheels.;b. Should Collier;Bicycles buy the wheels from the outside supplier? Justify your answer.


Paper#38165 | Written in 18-Jul-2015

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