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ACT 5704 ? WEB and WEB 2




Question;Name;Section;ACT 5704 ? WEB and WEB 2;Cost Accounting;Summer Term, 2013;Quiz Two;Chapters 7, 8, 10, 11, 14 ? 16;100 Points;Instructions: Type your name above in the space;provided. Answer the following;multiple-choice questions by typing the best answer in the space provided;below. Do not submit the complete Quiz ?;only submit this answer sheet. Each;question is worth 6 2/3 points. You may;use your textbook but you are not allowed to discuss the Quiz with anyone. Good luck!;1.;2.;3.;4.;5.;6.;7.;8.;9.;10.;11.;12.;13.;14.;15.;Use;the following to answer questions 1 and 2;Spacer;Company has two service departments and two operating departments. Budgeted;costs and budgeted activity in the various departments for last year are shown;below;Custodial;Cutting;Assembly;Services;Cafeteria;Department;Department;Departmental costs.........;$50,400;$28,000;$120,000;$200,000;Square feet occupied......;500;1,000;4,000;5,000;Number of employees....;10;15;75;100;Machine-hours................;10,000;15,000;Service;department costs are allocated to operating departments with the costs of;Custodial Services allocated on the basis of square feet of space occupied and;the costs of the Cafeteria on the basis of number of employees. The;departmental costs for the cutting and assembly departments are overhead costs.;Predetermined overhead rates in the Cutting and Assembly departments are based;on machine-hours.;1. Assume that the company uses the direct;method of allocation. The predetermined overhead rate in the Assembly;Department would be closest to;A) $16.27;B) $15.00;C) $15.87;D) $16.00;2. Assume that the company uses the step method;of allocation with Custodial Services allocated first. The amount of Custodial;Services cost allocated to the Assembly Department would be;A) $0;B) $28,000;C) $24,000;D) $25,200;3. Product;X-47 is one of the joint products in a joint manufacturing process. Management;is studying whether to sell X-47 at the split-off point or to process X-47;further into Xylene. The following data have been gathered;Selling price of X-47;I.;Variable cost of processing X-47 into Xylene.;II. The;avoidable fixed costs of processing X-47 into Xylene.;III.The;selling price of Xylene.;IV.The;joint cost of the process from which X-47 is produced.;Which of the above items are relevant in a decision of;whether to sell the X-47 as is or process it further into Xylene?;A) I, II, and IV.;B) I, II, III, and IV.;C) II, III, and V.;D) I, II, III, and V.;4. Robot;Inc. has some material that originally cost $73,500. The material has a scrap;value of $45,600 as is, but if reworked at a cost of $6,600, it could be sold;for $58,100. What would be the incremental effect on the company's overall;profit of reworking and selling the material rather than selling it as is as;scrap?;A) -$22,000;B) -$67,600;C) $5,900;D) $51,500;5.;Candle Corporation is preparing a bid for a special order that would;require 880 liters of material R9S. The company already has 280 liters of this;raw material in stock that originally cost $6.20 per liter. Material R9S is;used in the company's main product and is replenished on a periodic basis. The;resale value of the existing stock of the material is $5.45 per liter. New;stocks of the material can be readily purchased for $6.20 per liter. What is;the relevant cost of the 880 liters of the raw material when deciding how much;to bid on the special order?;A) $5,456;B) $5,006;C) $4,796;D) $5,456;6. Oz Corporation is a;specialty component manufacturer with idle capacity. Management would like to;use its extra capacity to generate additional profits. A potential customer has;offered to buy 2,300 units of component OTB. Each unit of OTB requires 9 units;of material G58 and 7 units of material H66. Data concerning these two;materials follow;Material;Units in Stock;Original Cost Per;Unit;Current Market;Price Per Unit;Disposal Value;Per Unit;G58;18,940;$4.40;$4.65;$4.35;H66;15,700;$6.10;$6.50;$4.80;Material G58 is in use in many of the company's products;and is routinely replenished. Material H66 is no longer used by the company in;any of its normal products and existing stocks would not be replenished once;they are used up.;What would be the relevant cost of the materials, in;total, for purposes of determining a minimum acceptable price for the order for;product OTB?;A) $189,890;B) $174,215;C) $168,533;D) $200,905;7. When the activity level is expected to;decline within the relevant range, what effects would be anticipated with;respect to each of the following?;Fixed;costs per unit;Variable;costs per unit;A);Increase;Increase;B);Increase;No;change;C);No;change;No;change;D);No;change;Increase;8. Shipping costs at;Columbia Mining Company are a mixture of variable and fixed components. The company shipped 8,000 tons of coal for;$400,000 in shipping costs in February and 10,000 tons for $499,000 in March. Assuming;that this activity is within the relevant range, expected shipping costs for;11,000 tons would be;A) $548,500;B) $544,500;C) $422,222;D) $554,000;9. To allocate corporate costs to;divisions, the allocation base used should;A) be an output unit-level base;B) combine administrative costs and;human resource management costs;C) have the best cause-and-effect;relationship with the costs;D) allocate the full costs;10. The XTRA Appliance Manufacturing Corporation;manufactures two vacuum cleaners, the Standard and the Super. The following;information was gathered about the two products;Standard Super;Budgeted sales in units 3,200 800;Budgeted selling price $600 $1,700;Budgeted contribution margin per unit $420 $1,100;Actual sales in units 3,500 1,500;Actual selling price $650 $1,680;What;is the total sales-quantity variance in terms of the budgeted contribution;margin?;A);$220,000 favorable;B);$340,000 favorable;C);$556,000 favorable;D);$896,000 favorable;Use;the following information for Questions 11 and 12.;Jet;Equipment uses a flexible budget for its indirect manufacturing costs. For;2013, the company anticipated that it would produce 18,000 units with 3,500;machine-hours and 7,200 employee days. The costs and cost drivers were to be as;follows;Fixed Variable Cost driver;Product handling $30,000 $0.40 per unit;Inspection 8,000 8.00 per 100 unit batch;Utilities 400 4.00 per 100 unit batch;Maintenance 1,000 0.20 per;machine-hour;Supplies 5.00 per employee day;During;the year, the company processed 20,000 units, worked 7,500 employee days, and;had 4,000 machine-hours. The actual costs for 2013 were;Actual;costs;Product handling $36,000;Inspection 9,000;Utilities 1,600;Maintenance 1,200;Supplies 37,500;11.;The static budget overhead variances total;A);$2,800 U;B);$2,800 F;C);$160 F;D);$160 U;12.;The flexible budget overhead variances total;A);$2,800 U;B);$2,800 F;C);$160 F;D);$160 U;Use the following information for;Questions 13 ? 15.;Chloe Industries manufactures one product;and uses a standard costing system. The;following relates to the production of the product for the month of;October: Budgeted Fixed Overhead;$100,000, Budgeted Variable Overhead $150,000, Budgeted Production in Units 10,000;Actual Fixed Overhead $110,000, Actual Variable Overhead $185,000, Actual Units;Produced 11,000, Budgeted Direct Labor Hours 10,000, Actual Direct Labor Hours;11,500, Standard Number of Direct Labor Hours per Unit of Output is 1. The activity to allocate overhead is direct;labor hours.;continued;13. The variable overhead spending;(budget) variance is;A) $20,000 F;B) $12,500 F;C) $20,000 U;D) $12,500 U;14.;The fixed overhead volume variance is;A) $15,000 F;B) $10,000 F;C) $15,000 U;D) $10,000 U;15. The variable overhead efficiency;variance is;A) $10,000 F;B) $10,000 U;C) $7,500 F;D) $7,500 U


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