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Accounting Week 4 Quiz

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Question;Question 11. Inventory values calculated using variable costing as opposed to absorption costing will generally beequal.less.greater.twice as much.2 points Question 21. Figure 7-5.Rizzo Manufacturing produces two types of cameras: 35mm and digital. The cameras are produced using one continuous process. Four activities have been identified: machining, setups, receiving, and packing. Resource drivers have been used to assign costs to each activity. The overhead activities, their costs, and the other related data are as follows:Product Machine Hours Setups Receiving Orders Packing Orders35mm 10,000 100 200 400Digital 10,000 250 800 2,000Costs $60,000 $40,000 $8,000 $24,000Refer to Figure 7-5. Calculate a consumption ratio for setups on the digital cameras.0.6880.7300.7000.7140.5002 points Question 31. Figure 8-9.The following information pertains to Stark Corporation:Beginning inventory 0 unitsEnding inventory 5,000 unitsDirect labor per unit $20Direct materials per unit 16Variable overhead per unit 4Fixed overhead per unit 10Variable selling costs per unit 12Fixed selling costs per unit 16Refer to Figure 8-9. What is the value of ending inventory using the variable costing method?$310,000$250,000$200,000$390,0002 points Question 41. Figure 8-3.Martin Company uses 625 units of a part each year. The cost of placing one order is $8, the cost of carrying one unit in inventory for a year is $4. Refer to Figure 8-3. Martin has decided to begin ordering 40 units at a time. What is the average annual carrying cost of Martin's new policy?$80$60$160$4$902 points Question 51. Figure 7-3.Hamilton Company manufactures engines. Hamilton produces all the parts necessary for its engines except for one electronic component, which is purchased from two local suppliers: Traynor Inc. and Bello Company. Both suppliers are reliable and rarely deliver late, however, Traynor sells the component for $10.00 per unit and Bello sells the same component for $8.95. Hamilton purchases 70% of its components from Bello, because of the lower price. The total annual demand is 75,000 units.I. Activity Data Activity CostInspecting components (sampling only) $ 190,000Reworking products (due to failed component) $2,254,000Warranty work (due to failed component) $1,723,000II. Supplier Data Traynor BelloInc. CompanyUnit Purchase Price $10.00 $8.95Units Purchased 22,500 52,500Sampling Hours 50 2,450Rework hours 135 3,625Warranty hours 475 6,000Refer to Figure 7-3. Calculate the total activity cost per component associated with using Traynor Inc., as the supplier.$15.75$10.00$19.38$20.00$22.802 points Question 61. Figure 7-3.Hamilton Company manufactures engines. Hamilton produces all the parts necessary for its engines except for one electronic component, which is purchased from two local suppliers: Traynor Inc. and Bello Company. Both suppliers are reliable and rarely deliver late, however, Traynor sells the component for $10.00 per unit and Bello sells the same component for $8.95. Hamilton purchases 70% of its components from Bello, because of the lower price. The total annual demand is 75,000 units.I. Activity Data Activity CostInspecting components (sampling only) $ 190,000Reworking products (due to failed component) $2,254,000Warranty work (due to failed component) $1,723,000II. Supplier Data Traynor BelloInc. CompanyUnit Purchase Price $10.00 $8.95Units Purchased 22,500 52,500Sampling Hours 50 2,450Rework hours 135 3,625Warranty hours 475 6,000Refer to Figure 7-3. Calculate the activity rate for reworking products based on rework hours. Round to the nearest whole dollar.$599 per hour$595 per hour$602 per hour$605 per hour$622 per hour2 points Question 71. The inventory cost that can include lost sales, cost of expediting, and cost of interrupted production is calledordering cost.carrying cost.stockout cost.setup cost.storing cost.2 points Question 81. To calculate an activity rate, the ____ of each activity must be determined.practical capacityexpenditure levelprocessing ratiovalue2 points Question 91. Activity-based management attempts toidentify and eliminate all unnecessary activities.increase the efficiency of necessary activities.add new activities that increase value.do all of these.2 points Question 101. Which of the following is not a traditional reason for carrying inventory?to satisfy customer demandto avoid shutting down manufacturing facilitiesto buffer against unreliable production processesto hedge against future price increasesall of these are traditional reasons for carrying inventory2 points Question 111. Figure 8-5.Sanders Company has the following information for last year:Selling price $190 per unitVariable production costs $52 per unit producedVariable selling and admin. expenses $18 per unit soldFixed production costs $240,000Fixed selling and admin. expenses $180,000Units produced 12,000Units sold 7,000There were no beginning inventories. Refer to Figure 8-5. What is the income for Sanders using the absorption costing method?$520,000$480,000$1,200,000$500,0002 points Question 121. Complying with the filing requirements of the IRS is an example of arecreational activity.discretionary activity.recommended activity.required activity.2 points Question 131. Figure 7-4.Honeydew Company produces two products, a high end laptop computer under the label Bunsen Laptops, and an inexpensive desktop computer under the label Beaker Computers. The two products use two overhead activities, with the following costs:Setting up equipment $ 2,000Machining 12,000The controller has collected the expected annual prime costs for each product, the machine hours, the setup hours, and the expected production.Bunsen BeakerDirect Labor $20,000 $5,000Direct Materials 15,000 4,000Units 2,000 2,000Machine hours 750 1,500Setup hours 50 50Refer to Figure 7-4. Calculate the overhead cost per unit for Bunsen Laptops, using a plantwide rate based on direct labor costs.$9.63 per laptop$22.45 per laptop$5.60 per laptop$7.22 per laptop$7.50 per laptop2 points Question 141. The formula for total carrying cost isnumber of orders per year? cost of placing an order.number of orders per year/cost of placing an order.average number of units in inventory? cost of carrying one unit in inventory.average number of units in inventory/cost of carrying one unit in inventory.ordering cost + carrying cost.2 points Question 151. The formula for ordering cost is thenumber of orders per year? cost of placing an order.number of orders per year/cost of placing an order.average number of units in inventory? cost of carrying one unit in inventory.average number of units in inventory/cost of carrying one unit in inventory.ordering cost + carrying cost.2 points Question 161. Figure 7-3.Hamilton Company manufactures engines. Hamilton produces all the parts necessary for its engines except for one electronic component, which is purchased from two local suppliers: Traynor Inc. and Bello Company. Both suppliers are reliable and rarely deliver late, however, Traynor sells the component for $10.00 per unit and Bello sells the same component for $8.95. Hamilton purchases 70% of its components from Bello, because of the lower price. The total annual demand is 75,000 units.I. Activity Data Activity CostInspecting components (sampling only) $ 190,000Reworking products (due to failed component) $2,254,000Warranty work (due to failed component) $1,723,000II. Supplier Data Traynor BelloInc. CompanyUnit Purchase Price $10.00 $8.95Units Purchased 22,500 52,500Sampling Hours 50 2,450Rework hours 135 3,625Warranty hours 475 6,000Refer to Figure 7-3. Calculate the activity rate for inspecting components based on sampling hours.$78 per hour$72 per hour$77.25 per hour$80 per hour$76 per hour2 points Question 171. Receiving provides 12,000 receiving hours and costs $60,000 per year. What is the activity rate for receiving?$14 per receiving hour$5 per receiving hour$4 per receiving hour$4.50 per receiving hourcannot be determined from this information2 points Question 181. Figure 8-5.Sanders Company has the following information for last year:Selling price $190 per unitVariable production costs $52 per unit producedVariable selling and admin. expenses $18 per unit soldFixed production costs $240,000Fixed selling and admin. expenses $180,000Units produced 12,000Units sold 7,000There were no beginning inventories. Refer to Figure 8-5. What is the cost of ending inventory for Sanders using the variable costing method?$300,000$280,000$120,000$260,0002 points Question 191. Figure 8-1.Last year, Fabre Company produced 20,000 units and sold 18,000 units at a price of $12. Costs for last year were as follows:Direct materials $25,000Direct labor 35,000Variable factory overhead 12,000Fixed factory overhead 37,000Variable selling expense 9,000Fixed selling expense 7,500Fixed administrative expense 15,500Fixed factory overhead is applied based on expected production. Last year, Fabre expected to produce 20,000 units. Refer to Figure 8-1. What is operating income for last year under absorption costing?$41,000$67,520$85,900$111,300$45,0002 points Question 201. Costs incurred when products and services prior to being delivered do not conform to specifications or customer needs areprevention costs.appraisal costs.a different category of quality-related costs.external failure costs.internal failure costs.

 

Paper#43202 | Written in 18-Jul-2015

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