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UMUC MGMT640 final exam part II




Question;UMUC MGMT640 final exam part II;Maxx Inc. has provided the;following data from its activity-based costing system;Activity Cost Pools Total;Cost Total;Activity;Designing;products;$370,600 6,550;product design hours;Setting up;batches;$52,678;7366 batch set-ups;Assembling;products;$25,122 4,018;assembly hours;The activity rate for the;?designing products? activity cost pool is:Question;2 (1 point);Sasha Company allocates the;estimated $181,400 of its accounting department costs to its production and;sales departments since the accounting department supports the other two;departments particularly with regard to payroll and accounts payable functions.;The costs will be allocated based on the number of employees using the direct;method. Information regarding costs and employees follows;Department;Employees;Accounting;4;Production;29;Sales;14;How much of the accounting;department costs will be allocated to the production?Question;3 (1 point);Medusa Company allocates costs from the payroll department (S1) and the;maintenance department (S2) to the molding (P1), finishing (P2), and packaging;(P3) departments. Payroll department costs are allocated based on the number of;employees in the department and maintenance department costs are allocated;based on the number of square feet which the production department occupies;within the factory. Information about the departments is presented below;Number of;Number of Square;Department;Costs;Employees;Feet Occupied;Payroll (S1);$136,000;2;2,000;Maintenance (S2);$220,000;8;64,000;Molding (P1);70;100,000;Finishing (P2);44;60,000;Packaging (P3);22;40,000;Medusa uses the direct method to allocate costs. Round all answers to;the nearest dollar.;What amount of the payroll department costs will be allocated to the molding;department?Question;4 (1 point);The Manassas Company has 55 obsolete keyboards that are;carried in inventory at a cost of $9,600. If these keyboards are upgraded at a;cost of $7,400, they could be sold for $19,300. Alternatively, the keyboards;could be sold ?as is? for $8,900.;What is the net advantage or disadvantage of;re-working the keyboards?;Your Answer;Question 4 options;Sol;Q5;Ritz Company sells fine collectible;statues and has implemented activity-based costing. Costs in the shipping;department have been divided into three cost pools. The first cost pool;contains costs that are related to packaging and shipping and Rand has;determined that the number of boxes shipped is an appropriate cost driver for;these costs. The second cost pool is made up of costs related to the final;inspection of each item before it is shipped and the cost driver for this pool;is the number of individual items that are inspected and shipped. The final;cost pool is used for general operations and supervision of the department and;the cost driver is the number of shipments. Information about the department is;summarized below;Cost Pool;Total Costs;Cost Driver;Annual Activity;Packaging and shipping;$164,700;Number of boxes shipped;24,000 boxes;Final inspection;$200,600;Number of individual items shipped;98,900 items;General operations and supervision;$84,300;Number of orders;8,100 orders;During the period, the Far East sales;office generated 684 orders for a total of 6,120 items. These orders were;shipped in 1,474 boxes. What amount of shipping department costs should be;allocated to these sales?;Sol;Q6;Baller Financial is a banking;services company that offers many different types of checking accounts. The;bank has recently adopted an activity-based costing system to assign costs to;their various types of checking accounts. The following data relate to the;money market checking accounts, one of the popular checking accounts, and the;ABC cost pools;Annual number of accounts = 57,000 accounts Checking account cost;pools;Cost Pool;Cost;Cost Drivers;Returned check costs;$2,900,000;Number of returned checks;Checking account reconciliation costs;54,000;Number of account reconciliation requests;New account setup;645,000;Number of new accounts;Copies of cancelled checks;380,000;Number of cancelled check copy requests;Online banking web site maintenance;189,000;Per product group (type of account);Annual activity information related;to cost drivers;Cost Pool;All Products;Money Market Checking;Returned check;200,000 returned checks;18,000;Check reconciliation costs;380,000 checking account;420;New accounts;53,000 new accounts;15,000;Cancelled check copy requests;93,000 cancelled check;60,000;Web site costs;2 types of accounts;1;Calculate the overhead cost per;account for the Money Market Checking.;Sol;Q7;Sosa Company has $39 per;unit in variable costs and $1,900,000 per year in fixed costs. Demand is;estimated to be 138,000 units annually.;What is the price if a;markup of 35% on total cost is used to determine the price?;Q8;Bob's Company sells one;product with a variable cost of $5 per unit. The company is unsure what price;to charge in order to maximize profits. The price charged will also affect the;demand. If fixed costs are $100,000 and the following chart represents the;demand at various prices, what price should be charged in order to maximize;profits?;Units Sold Price;30,000 $10 40,000 $9 50,000;$8 60,000 $7;Question 26 options;A. $10;B. $9;C, $8;D. $7;Explain.;Question;9 (1 point);A retailer purchased some trendy;clothes that have gone out of style and must be marked down to 30% of the;original selling price in order to be sold. Which of the following is a;sunk cost in this situation?;Question 9 options;the original selling price;the anticipated profit;the original purchase price;the current selling price;Question;10 (1 point);Carlton Products Company has;analyzed the indirect costs associated with servicing its various customers in;order to assess customer profitability. Results appear below;Cost Pool;Annual;Cost;Cost Driver;Annual;Driver Quantity;Processing electronic orders;$1,000,000;Number of orders;500,000;Processing non-electronic orders;$2,000,000;Number of orders;400,000;Picking orders;$3,000,000;Number of different products;ordered;800,000;Packaging orders;$1,500,000;Number of items ordered;50,000,000;Returns;$2,000,000;Number of returns;50,000;If all costs were assigned to;customers based on the number of items ordered, what would be the cost per item;ordered?;Your Answer;Question 10 options;Sol;Question;11 (1 point);Costa Company has a capacity of;40,000 units per year and is currently selling 35,000 for $400 each. Barton;Company has approached Costa about buying 2,000 units for only $300 each. The;units would be packaged in bulk, saving Costa $20 per unit when compared to the;normal packaging cost. Normally, Costa has a variable cost of $280 per unit.;The annual fixed cost of $2,000,000 would be unaffected by the special order.;What would be the impact on profits if Costa were to accept this special order?;Question 11 options;Profits would increase $40,000.;Profits would increase $60,000.;Profits would decrease $200,000.;Profits would increase $80,000;Question 12 (1 point);A company has $6.10 per unit in;variable costs and $4.3 per unit in fixed costs at a volume of 50,000 units. If;the company marks up total cost by 0.45, what price should be charged if 63.000;units are expected to be sold?;Your Answer;Question 12 options;Question;13 (1 point);Customer profitability analysis;might result in;Question 13 options;dropping some customers that are;unprofitable.;lowering price or offering;incentives to profitable customers.;giving incentives to all customers;to place orders online.;All of the above.;Question 14 (1 point);The Estrada Company uses cost-plus;pricing with a 0.31 mark-up. The company is currently selling 100,000 units at;$12 per unit. Each unit has a variable cost of $5.10. In addition, the company;incurs $189,300 in fixed costs annually. If demand falls to 73,700 units and;the company wants to continue to earn a 0.31 return, what price should the;company charge.;Q15;A new product is being designed by an;engineering team at Golem Security. Several managers and employees from the;cost accounting department and the marketing department are also on the team to;evaluate the product and determine the cost using a target costing methodology.;An analysis of similar products on the market suggests a price of $135 per;unit. The company requires a profit of 30 percent of selling price. How much is;the target cost per unit?;Q16;A company using activity based pricing marks up;the direct cost of goods by 0.22 plus charges customers for indirect costs;based on the activities utilized by the customer. Indirect costs are charged as;follows: $7.3 per order placed, $2.6. per separate item ordered, $26.9 per;return. A customer places 8 orders with a total direct cost of $2800, orders 281;separate items, and makes 4 returns. What will the customer be charged?;Q 17;A law firm uses activity-based;pricing. The company?s activity pools are as follows: Cost Pool Annual;Estimated Cost Cost Driver Annual Driver Quantity Consultation 185,000 Number;of consultations 90 consultations Administrative Costs 131,000 Admin labor;hours 98,00 labor hours Client Service 97,000 Number of clients 120 clients The;firm had two consultations with this client and required 130 administrative;labor hours. What additional costs will be charged to this customer?


Paper#49048 | Written in 18-Jul-2015

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