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51) Which of the following concepts is most compatible with absorption costing in a manufacturing environment? A) "the whole world is the market and the whole world is the competitor" B) niche marketing C) flexible manufacturing D) continuous improvement E) matching revenue to expense for financial reporting 52) When comparing the operating incomes between absorption costing.
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Use the information below to answer the following question(s). The Monroe Company uses the high-low method to estimate the cost function. The information for the current year is provided below. Machine HoursLabour Costs Highest observation of cost driver240$4,000 Lowest observation of cost driver1102,960 11) What is Monroe Company's slope coefficient per machine hour? A) $26.91 B) $18.00 C) $16.67 D) $10.00 E).
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10.7   Describe quality control and its implications as a cost driver. 1) The number of defects in units shipped to customers as a percentage of total units shipped, is a non-financial measure. 2) Costs of quality (COQ) reports usually do not consider opportunity costs. 3) Costs of Quality (COQ) are classified into.
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25) Carl Clarkson and Lenny Lenid have been assigned to review the costs of quality at the Sprotton Chemicals Ltd. for the month of September. All amounts are in thousands (000's). Cost ItemAmount Product testing$350 Clean up of toxic spills within the plant$14,200 Employee training$200 Quality Engineering$675 Supplies used in testing$500 Statistical Process Control$1,750 Payments on lawsuits from.
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76) Ace Products sells its products for $22 each. Unit manufacturing costs are: direct materials, $4.00; direct manufacturing labour, $6.00; and variable manufacturing overhead, $3.00. Total fixed manufacturing overhead costs are $60,000 and marketing expenses are $2.00 per unit plus $20,000 per year. The current production level is 25,000 units.
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Answer the following question(s) using the information below. Peggy's Pillows produces and sells a decorative pillow for $75.00 per unit. In the first month of operation, 2,000 units were produced and 1,750 units were sold. Actual fixed costs are the same as the amount budgeted for the month. Other information.
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11) Absorption-costing income statements cannot easily differentiate between variable and fixed costs. 12) The period-to-period change in operating income under variable costing is driven by unit level of sales, if the fixed costs are constant. 13) Variable costing will generally report less operating income than absorption costing when the inventory level decreases. 14).
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9.5   Explain breakeven under each of the two costing policies. 1) The break-even points are the same under both variable costing and absorption costing. 2) The break-even point under absorption costing depends on the: fixed costs, contribution margin per unit, unit level sales, unit level of production, and overhead cost rate. 3).
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10.5   Explain nonlinear cost functions 1) An "economy of scale" function is an example of a linear cost function. 2) A step cost function is an example of a linear function. 3) A nonlinear cost function A) has two constants and a single slope. B) does not effectively describe the behaviour of outside the.
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11) Brandt Cheque Encoders employs 30 individuals. Ten employees are paid $10 per hour for 173 hours a month and the rest are salaried employees paid $6,000 a month. How would total costs of personnel be classified? A) variable and fixed B) a fixed cost within a relevant range C) a variable cost.
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31) Absorption costing is also known as A) direct costing. B) full absorption costing. C) non-traditional costing. D) manufacturing costing. E) variable costing. 32) Variable costing regards fixed manufacturing overhead as A) an unexpired cost. B) an inventoriable cost. C) a period expense. D) a product cost. E) a deferred asset. Use the information below to answer the following question(s). Beauty Supply.
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28) Tessmer Manufacturing Company produces inventory in a highly automated assembly plant in Windsor, Ontario. The automated system is in its first year of operation and management is still unsure of the best way to estimate the overhead costs of operations for budgetary purposes. For the first six months of.
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Use the information below to answer the following question(s).   Car Tunes produces car radios. Actual fixed manufacturing overhead is the same as the budgeted amount, $330,000. Production in September increased by 10% over the previous month's production. August production was 5,000 radios. The production level is the same as the budgeted.
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85) Megredy Company prepared the following absorption costing income statement for the year ended May 31, 2016. Sales (16,000 units)$320,000 Cost of goods sold216,000 Gross margin$104,000 Selling and administrative expenses46,000 Operating income$58,000 Additional information follows: Selling and administrative expenses include $1.50 of variable cost per unit sold. There was no beginning inventory, and 17,500 units were produced..
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9.4   Distinguish throughput costing from variable costing and absorption costing, and explain differences in operating income under each costing policy. 1) Throughput costing treats all costs as period costs. 2) Throughput costing provides more incentive to produce inventory than does absorption costing. 3) Throughput costing is also referred to as super-variable costing. 4).
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32) A corporation can measure its quality performance by using financial or nonfinancial measures of quality. Discuss the merits of each method and whether the use of one precludes the use of the other. 33) Wilson's Language School manufactures CDs and DVDs to teach English as a Second Language. Wilson has.
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82) The following data are available for Ruggles Company for the year ended September 30, 2016. Sales: 24,000 units at $50 each$ 1,200,000 Expected and actual production:30,000 units Manufacturing costs incurred: Variable:$525,000 Fixed:$372,000 Nonmanufacturing costs incurred: Variable:$144,800 Fixed:$77,400 Beginning inventories: none Required: a.Determine operating income using the variable costing approach. b.Determine operating income using the absorption costing approach. c.Explain why the income was.
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10.2   Explain the importance of causality in estimating cost functions. 1) A cause-and-effect relationship, relative to cost drivers and resulting costs, may develop because of physical relationships, contractual relationships, or implicit relationships. 2) The selection of the best measure of benefit will depend upon the corresponding change in the cost pool. 3) There.
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10.4   Outline the steps in estimating a cost function. 1) There is poor goodness of fit if the predicted values do not match actual cost observation. 2) Cross-sectional data pertain to the same entity over successive past periods. 3) The advantage of the high-low method when compared to regression analysis is that it.
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35) The Gangwere Company has assembled the following data pertaining to certain costs that cannot be easily identified as either fixed or variable. Gangwere Company has heard about a method of measuring cost functions called the high-low method and has decided to use it in this situation. MonthCostHours January$40,0003,500 February24,4002,000 March31,2802,450 April36,4003,000 May44,1603,900 June42,4003,740 Required: Using the high-low method.
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11) Which of the following is NOT included in customer response time? A) order delivery time B) order manufacturing time C) order waiting time D) order receipt time E) order opening time 12) Manufacturing lead time includes A) all indirect time. B) waiting time. C) marketing time. D) time to process the customer's order to delivery. E) all indirect time and.
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31) As part of his job as cost analyst, Max Thompson collected the following information concerning the operations of the Machining Department: ObservationMachine-hoursTotal Operating Costs January4,000$45,000 February4,60049,500 March3,80045,750 April4,40048,000 May4,50049,800 Required: a.Use the high-low method to determine the estimating cost function with machine-hours as the cost driver. b.If June's estimated machine-hours total 4,200, what are the total estimated.
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11) Try-Us-First Motors manufactures and sells off-road vehicles. The September sales were $6,000,000. Monthly design costs are $112,000 and rework is running at $75,000 per month. Its painting department is fully automated and requires substantial inspection to keep the machines operating properly. An improperly painted vehicle is very expensive to.
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21) In absorption costing, all nonmanufacturing costs are subtracted from gross margin. 22) Direct costing is a perfect way to describe the variable-costing inventory method. 23) Period-to-period changes in operating income under absorption costing are driven by variations in both the unit level of sales and the unit level of.
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88) You are the management accountant for the West coast division of a musical instrument manufacturing company. There are three manufacturing plants in your division. Each plant manager was given decision making authority in terms of production, as long as income for their plant kept on pace. The manager at.
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9.2   Explain how the choice of denominator affects capacity management, costing, pricing, and performance evaluation. 1) Theoretical capacity is rarely used to calculate the budgeted fixed manufacturing cost per case because it departs significantly from the real capacity available to a company. 2) The downward demand spiral for a company is the.
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10.6   Describe the impact of time as a cost driver. 1) The customer response time reveals how quickly customers respond to a company's new products. 2) Customer response time is the time between when a company first markets a new product, and when sales exceed supplies on hand (test inventory). 3) Uncertainty about.
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10.1   Use standard mathematical notation to specify a cost function that can be graphed as a straight line. 1) A linear cost function is a function in which the graph of total costs versus a single cost driver forms a straight line, within the relevant range. 2) When estimating linear cost functions,.
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10.3   Understand the various methods of cost estimation. 1) The account analysis method estimates cost functions by classifying various cost accounts as variable, fixed, or mixed with respect to the identified level of activity. 2) All of the following are approaches to cost estimation EXCEPT A) the account analysis method. B) the conference method. C).
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9.3   Distinguish absorption from variable costing; prepare and explain the differences in operating income under each costing policy. 1) Full product costs under absorption costing include only inventoriable costs and upstream costs. 2) Variable costing includes all direct manufacturing costs and all manufacturing overhead costs. 3) Companies using absorption costing do not need.
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73) Amalgamated Glass and Mirror Inc. had sales of 37,500 units and production of 50,000 units. Other information for the year included: Direct manufacturing labour$375,000 Variable manufacturing overhead200,000 Direct materials300,000 Variable selling expenses200,000 Fixed administrative expenses200,000 Fixed manufacturing overhead400,000 There was no beginning inventory. Required: a.Compute the ending finished goods inventory under both absorption and variable costing. b.Compute the cost.
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24) Wallace's Wrench Company manufactures socket wrenches. For next month the vice-president of production plans on producing 4,400 wrenches per day. The company can produce as many as 5,000 wrenches per day, but are more likely to produce 4,500 per day. The demand for wrenches for the next three years.
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11) Which cost estimation method is being used by Penny's TV and Appliance Store? A) the industrial engineering method B) the conference method C) the high-low method D) the quantitative analysis method E) the account analysis method Use the information below to answer the following question(s). Raymaster is a small computer software.
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32) Brix, Inc. prepares frozen food for fast-food restaurants. It has two workstations, cooking and assembly. The cooking station is limited by the cooking time of the food. Assembly is limited by the speed of the workers. Assembly normally waits on food from cooking. Because the demand has increased in.
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11) Practical capacity is based on which of the following assumptions? A) that absorption costing is used B) that variable costing is used C) Production will occur at peak efficiency all the time. D) Production will occur at peak capacity where feasible (e.g., except for maintenance downtime, repairs, holidays, etc.). E) Production can never occur.
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11) The marketing manager's performance evaluation is most fair when based on a denominator level using A) practical capacity. B) theoretical capacity. C) master-budget capacity. D) normal capacity. E) supply capacity. 12) Explain how using master-budget capacity utilization for setting prices can lead to a downward demand spiral. 13) Should a company with.
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  9.1   Identify the factors important to choosing the denominator level used to calculate fixed overhead allocation rates. 1) Using either the theoretical capacity or practical capacity as the denominator-level concept will result in the same production-volume variance. 2) Determining the "right" level of capacity is an important strategic decision. 3) Both theoretical and.
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