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MCQ-20 1.Cost allocation is:




Question;Question 1;Cost allocation is;The;process of tracking both direct and indirect costs associated with a cost;object;The;process of determining the actual cost of the cost object;The;assignment of indirect costs to the chosen cost object;A;function of cost tracing;Question 2;Which;one of the following items is a direct cost???;Customer-service;costs of a multiproduct firm, Product A is the cost object.?;Printing;costs incurred for payroll check processing, payroll check processing is the cost;object.?;The;salary of a maintenance supervisor in a multiproduct manufacturing plant;Product B is the cost object.?;Utility;costs of the administrative offices, the accounting department is the cost;object.?;Question 3;Variable costs;Are;always indirect costs;Increase;in total when the actual level of activity increases;Include;most personnel costs and depreciation on machinery;Can;always be traced directly to the cost object;Question 4;The;Singer Company manufactures several different products. Unit costs associated;with Product ICT101 are as follows:?What are the variable costs per unit associated with;Product ICT101?;Direct;materials $60 $60;Direct;manufacturing labor 10 10;Variable;manufacturing overhead 18 18;Fixed;manufacturing overhead 32 32;Sales;commissions (2% of sales) 4 4;Administrative;salaries 16 16;Total 92 $140;??;?????;a.;$18 c. $88;b.;$22 d. $92;Question 5;Cost-volume-profit;analysis is used primarily by management:??;As;a planning tool?;For;control purposes?;To;prepare external financial statements?;Tto;attain accurate financial results;Question 6;Operating;income calculations use:??;Net;income?;Income;tax expense?;Cost;of goods sold and operating costs?;Non-operating;revenues and non-operating expenses?;Question 7;Contribution;margin equals:??;Revenues;minus period costs?;Revenues;minus product costs?;Revenues;minus variable costs?;Revenues;minus fixed costs;Question 8;Holly's;Ham, Inc. sells hams during the major holiday seasons. During the current year;11,000 hams were sold resulting in $220,000 of sales revenue, $55,000 of;variable costs, and $24,000 of fixed costs.?Contribution margin per ham is:?;?;$5.00;?;$15.00?;$20.00;?;None;of these answers are correct.?;Question 9;The;actual indirect-cost rate is calculated by:??;Dividing;actual total indirect costs by the actual total quantity of the cost-allocation;base.?;Multiplying;actual total indirect costs by the actual total quantity of the cost-allocation;base.?;Dividing;the actual total quantity of the cost allocation base by actual total indirect;costs.?;Multiplying;the actual total quantity of the cost allocation base by actual total indirect;costs.?;Question 10;O'Reilly;Enterprises manufactures digital video equipment. For each unit $2,950 of;direct material is used and there is $2,000 of direct manufacturing labor at;$20 per hour. Manufacturing overhead is;applied at $35 per direct manufacturing labor hour. Calculate the cost of each unit.??;A. $4,950, B. $9,950, C. $8,450, D. $11,950;Question 11;Joni's;Kitty Supplies applies manufacturing overhead costs to products at a budgeted;indirect-cost rate of $60 per direct manufacturing labor-hour. A retail outlet;has requested a bid on a special order of the Toy Mouse product. Estimates for;this order include: Direct materials $40,000, 500 direct manufacturing;labor-hours at $20 per hour, and a 20% markup rate on total manufacturing;costs.?Manufacturing;overhead cost estimates for this special order total:?;?;$10,000;?;$30,000;?;$36,000;?;None;of these answers is correct.;Question 13;ABC;systems create:?;?;One;large cost pool?;Homogenous;activity-related cost pools?;Activity-cost;pools with a broad focus?;activity-cost;pools containing many direct costs?;Question 16;Activity-based;costing systems provide better product costs when they:??;Employ;more activity-cost drivers?;Employ;fewer activity-cost drivers?;Identify;and cost more indirect cost differences among products?;Always;yield more accurate product costs than traditional systems;Question 17;Quality;management provides an important competitive edge because it:??;Reduces;costs?;Increases;customer satisfaction?;Often;results in substantial savings and higher revenues in the short run?;All;of these answers are correct.;Question 18;An;example of a nonfinancial measure for customer satisfaction is:??;Average;manufacturing time for key products?;Contribution;margin?;Percentage;of products that fail soon after delivery?;Number;of employees trained on managing bottleneck operations;Question 19;A;tool which indicates how frequently each type of defect occurs is a:??;Control;chart?;Pareto;diagram?;Cause-and-effect;diagram?;Fishbone;diagrams;Question 20;An;important difference between financial measures of quality and nonfinancial;measures of quality is that:?;?;Financial;measures of quality tend to be useful indicators of future long-term;performance, while nonfinancial measures have more of a short-term focus?;Nonfinancial;measures of quality tend to be useful indicators of future long-term;performance, while financial measures of quality have more of a short-term;focus?;Nonfinancial;measures are generally too subjective to have any long-term value?;None;of these answers is correct.?;Question 12;Bauer;Manufacturing uses departmental cost driver rates to allocate manufacturing;overhead costs to products. Manufacturing overhead costs are allocated on the;basis of machine-hours in the Machining Department and on the basis of direct;labor-hours in the Assembly Department. At the beginning of 20X3, the following;estimates were provided for the coming year;Machining Assembly;Direct;labor-hours 30,000 60,000 60,000;Machine-hours;80,000 20,000 20,000;Direct;labor cost $500,000 $900,000 $900,000;Manufacturing;overhead costs $420,000 $240,000 $240,000;The accounting records of the company show the;following data for Job #316:?;?;Machining Assembly;Direct;labor-hours 120 70 70;Machine-hours 60 5 5;Direct;material cost $300 $200 $200;Direct;labor cost $100 $400 $400;For;Bauer Manufacturing, what is the annual manufacturing overhead cost-allocation;rate for the Machining Department???;$4.00;?;$4.20;?;A.;$4.00, B.$4.20;C. $4.67;D. $5.25 $4.67?;$5.25;?;Question 15;Velshi;Printers has contracts to complete weekly supplements required by forty-six;customers.;For;the year 2010, manufacturing overhead cost estimates total $840,000 for an;annual production capacity of 12 million pages.?For 2010 Velshi Printers has decided to evaluate the use;of additional cost pools.;After;analyzing manufacturing overhead costs, it was determined that number of design;changes, setups, and inspections are the primary manufacturing overhead cost;drivers.?The;following information was gathered during the;analysis;Cost;Pool Manufacturing;Overhead Costs Activity Level Activity Level;Design;changes;$120,000 300 design;changes;300 design changes;Setups $640,000 5,000 setups;5,000 setups;Inspections;$80,000 5,000;setups;8,000 inspections;Total;manufacturing overhead costs;$840,000;During;2010, two customers, Money Managers and Hospital Systems, are expected to use the;following printing services;Activity Money;Managers Hospital;Systems;Pages 60,000 76,000;Design;changes 10 0;Setups 20 10;Inspections 30 38;What is the cost driver rate if manufacturing overhead costs;are considered one large cost pool and are assigned based on 12 million pages;of production capacity???;A. $0.10 per;page;B. $0.07 per page;C. $0.70 per;page;D. $0.05 per;page


Paper#51895 | Written in 18-Jul-2015

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