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1. Activity-based costing systems and traditiona...

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1. Activity-based costing systems and traditional costing systems will produce the same results for product cost and profitability, although they use different methods of calculation. (Points : 1) True False 2. The first step in the activity-based costing system is to identify each activity and its total indirect cost. (Points : 1) True False 3. Peterson Company has both fixed and variable costs. If the volume doubles, the total fixed costs will double. (Points : 1) True False 4. Peterson Company has both fixed and variable costs. If the volume doubles, the total variable costs will double. (Points : 1) True False 5. Brannon Company manufactures ceiling fans and uses an activity-based costing system. Each ceiling fan consists of 20 separate parts totaling $95 in direct materials, and requires 2.5 hours of machine time to produce. There are no direct labor costs. Additional information follows: Activity Allocation Base Cost Allocation Rate Materials handling Number of parts $ .08 Machining Machine hours $7.20 Assembling Number of parts $.35 Packaging Number of finished units $2.70 What is the total manufacturing cost per ceiling fan? (Points : 1) $125.75 $121.13 $115.32 $124.30 None of these is correct 6. Two main benefits of activity-based costing are more accurate product cost information and more detailed information on costs of activities and the drivers of these costs. (Points : 1) True False 7. Jurassic Manufacturers produces flooring material. Fixed costs are $5,000 per month. Sales price for one unit of product is $50, and the variable cost per unit is $30. If Jurassic wishes to earn an operating income of $5,000, how many units need to be sold? (Points : 1) 500 300 450 350 8. Activity-based management refers to using activity-based cost information to make decisions that increase profits while satisfying customers' needs. (Points : 1) True False 9. Jurassic Manufacturers produces flooring material. Fixed costs are $5,000 per month. Sales price for one unit of product is $50, and the variable cost per unit is $30. If Jurassic wishes to earn an operating income of $2,000, how many units need to be sold? (Points : 1) 270 300 320 350 10. Equival Company wishes to sell truck axles to car manufacturers. The current market price of the axles is $400, and Equival knows it must accept the market price. Currently, it costs the company $330 to produce each axle. The company wishes to make a profit equal to 20% of the price. Which of the following strategies should Equival adopt to achieve its objective? (Points : 1) Raise the price to $410. Reduce its production costs by $10 per unit. Increase the production costs by $20 per unit. Use advertising to increase the volume of sales.

 

Paper#7784 | Written in 18-Jul-2015

Price : $25
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