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Study Resources (Accounting)

28) Should a company allocate its corporate costs to divisions? 1) Customers making large contributions to the profitability of the company should: A) be treated the same as other customers because all customers are important B) receive a higher level of attention from the company than less profitable customers C).
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Answer the following questions using the information below: Buzz's Educational Software Outlet sells two or more of the video games as a single package. Managers are keenly interested in individual product-profitability figures. Information pertaining to three bundled products and the stand-alone prices is as follows: Stand-Alone Selling Price Cost Package Packaged Price Reading Fun $25 $3.60 1. Reading Fun &.
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Answer the following questions using the information below: Michelle's Flowering Plants provides the following information for the month of May: ActualBudget Tulips GeraniumsTulips Geraniums Sales in units3,9003,6004,5003,000 Contribution margin per unit$11$18$10$20 34) What is the budgeted contribution margin per composite unit for the actual mix? A) $13.80 B) $14.00 C) $14.36 D) $14.80 35) What is the budgeted.
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Answer the following questions using the information below: The Sarasota Corporation manufactures two types of vacuum cleaners, the Victor for commercial building use and the House-Mate for residences. Budgeted and actual operating data for the year 2012 were as follows: Static Budget        Victor  House-Mate     Total Number sold5,00020,00025,000 Contribution margin$1,500,000$3,000,000$4,500,000 Actual Results       Victor  House-Mate     Total Number sold4,00028,00032,000 Contribution margin$1,280,000$3,920,000$5,200,000 44) What is the contribution margin.
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11) Under the fairness criterion, cost allocation is NOT viewed as a reasonable means of establishing a selling price. 12) When using the cause-and-effect criterion, cost drivers are selected as the cost allocation bases. 13) The ability-to-bear criterion is considered superior when the purpose of cost allocation is motivation. 14) The.
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42) Campaign Printing has two service departments, S1 and S2, and two production departments, P1 and P2. The data for May were as follows: Services provided to: Activity Costs S1 S2 P1 P2 S1 $90,000 10% 40% 50% S2 $60,000 20% 55% 25% Fixed Costs P1 $360,000 P2 $520,000 Required: a.Set up algebraic equations in linear form for each activity. b.Determine total costs for each department by solving the equations from part (a).
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1) When the purpose of cost allocation is to provide information for economic decisions or to motivate managers and employees, the best criteria are: A) the cause-and-effect and the ability-to bear criteria B) the cause-and-effect and the benefits-received criteria C) the benefits-received and the fairness criteria D) the fairness and the ability-to-bear criteria 2) To.
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61) Richard's Electronics manufactures TVs and DVDRs. During April, the following activities occurred:                              TVs  DVDRs Budgeted units sold17,64066,360 Budgeted contribution margin per unit$45$78 Actual units sold20,00080,000 Actual contribution margin per unit$50$79 Required: Compute the following variances in terms of the contribution margin. a.Determine the total sales-mix variance. b.Determine the total sales-quantity variance. c.Determine the total.
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40) Gotham University offers only high-tech graduate-level programs. Gotham has two principal operating departments, Engineering and Computer Sciences, and two support departments, Facility and Technology Maintenance and Enrollment Services. The base used to allocate facility and technology maintenance is budgeted total maintenance hours. The base used to allocate enrollment services.
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1) ________ occurs where revenues, related but NOT traceable to individual products, are assigned to those individual products. A) Revenue tracing B) Revenue allocation C) Stand-alone pricing D) Reciprocal pricing 2) An example of a revenue object is a: A) customer B) specific product C) division of a company D).
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11) Allocating common costs is clear-cut and can best be achieved by using the stand-alone cost-allocation method. 12) The stand-alone cost allocation method ranks the individual users of a cost object in order of users most responsible for a common cost and then uses these rankings to allocate the costs among.
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9) Price discounts must be uniform among all customers. 10) There are two elements that influence customer profitability ? revenues and costs. 11) Companies that only record the invoice price can usually track the magnitude of price discounting. 12) A customer cost hierarchy categorizes costs related to customers into different cost.
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1) In analyzing customer-level indirect costs, which category of the customer-cost hierarchy would you NOT consider? A) distribution-channel costs B) customer output-unit-level costs C) customer-sustaining costs D) customer batch-level costs 2) An advantage of using a bar chart to visualize customer profitability is that: A) differences in commissions paid to sales persons stand out B).
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1) When budgeted cost-allocations rates are used: A) variations in actual usage by one division affect the costs allocated to other divisions B) the manager of the supplier division bears the risk of unfavorable cost variances C) user divisions pay for costs that exceed budgeted amounts D) user divisions pay.
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19) Handy-Man Services is a repair-service company specializing in small household jobs. Each client pays a fixed monthly service fee based on the number of rooms in the house. Records are kept on the time and material costs used for each repair. The following profitability data apply to five customers: Customer.
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6) Costs incurred to handle each unit sold would most likely be classified as a: A) customer output unit-level cost B) customer batch-level cost C) customer-sustaining cost D) corporate-sustaining cost 7) The cost of the manager of a retail distribution channel would most likely be classified as a: A) customer-sustaining cost B) distribution-channel.
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31) The direct method allocates each support department's costs to operating departments only. 32) The direct allocation method incorporates mutual services provided among all support departments. 33) Budgeted amounts for a support department will always exceed complete reciprocated costs for that department. 34) The direct allocation method provides key information.
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11) Which purpose of cost allocation is used to cost inventories for reporting to tax authorities? A) to provide information for economic decisions B) to motivate managers and other employees C) to justify costs or compute reimbursement D) to measure income and assets for reporting to external parties 12) Indirect costs are costs that CANNOT.
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54) A favorable sales-mix variance arises when the actual sales-mix percentage exceeds the budgeted sales-mix percentage. 55) A composite unit is a hypothetical unit with weights based on the mix of individual units. 56) The sales-mix variance can be explained in terms of the budgeted contribution margin per composite unit of.
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51) For each of the following methods of allocating joint costs, give a positive or a negative aspect of selecting each one to allocate joint costs. a.sales value at splitoff b.estimated net realizable value method c.the constant gross margin method d.a physical measure such as volume 52) Sugar Cane Company processes sugar cane into.
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23) Power Company has been unhappy with the financial accounting variances that its cost accounting system has been producing, because its managers believe that there is more to evaluating an operation than just examining accounting numbers. Therefore, it has started gathering data to assist in the examination of nonfinancial results.
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63) The Omega Corporation manufactures two types of vacuum cleaners: the ZENITH for commercial building use and the House-Helper for residences. Budgeted and actual operating data for the year 20X5 are as follows: Static Budget      ZENITH   House-Helper        Total Number sold15,00060,00075,000 Contribution margin$3,750,000$12,000,000$15,750,000 Actual Results      ZENITH   House-Helper        Total Number sold16,50038,50055,000 Contribution margin$6,200,000$10,200,000$16,400,000 Required: Compute the sales-mix variance and the sales-quantity variance by type of.
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Answer the following questions using the information below: The Gows Company processes unprocessed goat milk up to the splitoff point where two products, condensed goat milk and skim goat milk result. The following information was collected for the month of October: Direct Materials processed:130,000 gallons (shrinkage was 10%) Production:condensed goat milk52,200 gallons skim goat.
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18) The three major corporate cost categories are treasury, human resource management, and corporate administration costs. 19) Allocating all corporate costs motivates division managers to examine how corporate costs are planned and controlled. 20) Companies that want to calculate the full cost of products must allocate all corporate costs to indirect-cost pools.
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11) If a dual-rate cost-allocation method is used, what amount of copying facility costs will be allocated to the Operations Department? Assume budgeted usage is used to allocate fixed copying costs and actual usage is used to allocate variable copying costs. A) $60,490 B) $59,890 C) $57,000 D) $56,400 Answer the following questions.
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11) Loss-causing customers: A) should be dropped B) should be evaluated for ways to become profitable customers C) should be retained because each customer adds to long-run profitability D) do not exist because additional customer sales always increase profits 12) Customers are more valuable when they are all of the.
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Answer the following questions using the information below: Alfred, owner of Hi-Tech Fiberglass Fabricators, Inc., is interested in using the reciprocal allocation method. The following data from operations were collected for analysis: Budgeted manufacturing overhead costs: Plant MaintenancePM (Support Dept)$350,000 Data ProcessingDP (Support Dept)$ 75,000 MachiningM (Operating Dept)$225,000 CappingC (Operating Dept)$125,000 Services furnished: By Plant Maintenance (budgeted labor-hours): to.
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7) The step-down allocation method: A) typically begins with the support department that provides the highest percentage of its total services to other support departments B) recognizes the total amount of services that support departments provide to each other C) allocates complete reciprocated costs D) offers key input for outsourcing.
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1) The method that allocates costs in each cost pool using the same rate per unit is known as the: A) incremental cost-allocation method B) reciprocal cost-allocation method C) single-rate cost allocation method D) dual-rate cost-allocation method 2) The dual-rate cost-allocation method classifies costs in each cost pool into a:.
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65) Why would a manager perform customer-profitability analysis? 66) What actions might be taken with an unprofitable customer? 1) More insight into the flexible-budget variance for direct materials can be gained by subdividing it into the direct materials: A) mix and volume variances B) market-share and market-size variances C) mix.
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41) The net realizable value (NRV) method allocates joint costs to joint products produced during the accounting period on the basis of their relative NRV—final sales value plus separable costs. 42) The net realizable value method is generally used for products or services that are processed and after splitoff additional value.
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28) The Alex Miller Corporation operates one central plant that has two divisions, the Flashlight Division and the Night Light Division. The following data apply to the coming budget year: Budgeted costs of the operating the plant for 10,000 to 20,000 hours: Fixed operating costs per year$240,000 Variable operating costs$10per hour Practical capacity20,000hours per year Budgeted.
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