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21) In an activity-cost pool A) a measure of the activity performed serves as the cost allocation base. B) the costs have a cause-and-effect relationship with the cost-allocation base for that activity. C) the cost pools are homogeneous over time. D) costs in a cost pool can always be traced directly to products. E) each.
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11) The cash budget is a schedule of expected cash receipts and disbursements that A) requires an aging of accounts receivable and accounts payable. B) is a self-liquidating cycle. C) is prepared immediately after the sales forecast. D) predicts the effect on the cash position at given levels of operations. E) is prepared by the.
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75) Edwards Company has the following projected account balances for June 30, 2015: Accounts payable$40,000Sales$800,000 Accounts receivable100,000Capital stock400,000 Depreciation, factory24,000Retained earnings? Inventories (5/31 & 6/30)180,000Cash56,000 Direct materials used200,000Equipment, net240,000 Office salaries80,000Buildings, net400,000 Insurance, factory4,000Utilities, factory16,000 Plant wages140,000Selling expenses60,000 Bonds payable160,000Maintenance, factory28,000 Required: a.Prepare a budgeted income statement for June 2015. b.Prepare a budgeted balance sheet as of June 30, 2015. 76) Russell.
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24) Listed below are elements of the master budget. Determine whether each budget is an operating budget or a financial budget. Place an O for operating budget or F for a financial budget. 1.Capital expenditures budget 2.Cost of goods sold budget 3.Revenues budget 4.Budgeted statement of cash flows 5.Distribution costs budget 6.Marketing costs budget 7.Cash budget 8.Direct materials.
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19) Explain how a top-selling product may actually result in losses for the company. 20) Explain how traditional (simple) cost systems, using a single unit-level cost rate, may distort product costs. 5.2   Identify and explain the problem of over- and undercosting. 1) When ever possible use the number of units produced.
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5.5   Explain the benefits of activity-based costing (ABC) systems for activity-based management (ABM). 1) Management can identify and evaluate new designs to improve performance by evaluating how product and process designs affect activities and costs. 2) Activity-based costing is not adaptable to merchandising organizations. 3) One of the aspects of ABM is eliminating.
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  6.1   Distinguish the long-term from the short-term benefits of budgets (pro forma financial statements). 1) A budget is a quantitative expression for a set time period of a proposed future plan of action by management. 2) The master budget summarizes all the financial and nonfinancial plans into a single document. 3) The master budget.
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45) For each of the following activities identify an appropriate activity-cost driver. a.machine maintenance b.machine setup c.quality control d.material ordering e.production scheduling f.warehouse expense g.engineering design 46) The plant manager has come to you, as the new management accountant, for assistance. The plant manufactures sailboards, operating two shifts per day. During March through July, a third shift.
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  5.1   Identify the basic elements of activity-based costing systems as distinguished from traditional systems, and explain how preventable undercosting and overcosting of products and services affects profitability. 1) Peanut butter costing involves assigning costs in a non uniform manner to reflect the different utilization of resources by different products or services. 2).
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11) A product that consumes a relatively high level of resources but is reported to have a relatively low cost, is an example of A) increased market share. B) product marketing. C) product undercosting. D) product overcosting. E) product sub-optimization. 12) Which of the following is a sign that a "smoothing out" costing system exists? A) Managers.
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6.3   Prepare a cash budget. 1) Beginning with the cash budget, each budget supporting the master budget follows step by step in logical fashion. 2) The cash budget helps avoid unnecessary idle cash and at the same time maintain minimum cash balances. 3) Cash receipts depend on collections of accounts payable, cash sales,.
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70) Gerdie Company has the following information: MonthBudgeted Sales March$50,000 April53,000 May51,000 June54,500 July52,500 In addition, the gross profit rate is 40% and the desired ending inventory level is 30% of next month's cost of sales. Required: Prepare a purchases budget for April through June. 71) The Doran Company prepared the following revenue budget: MonthBudgeted Sales March $250,000 April 265,000 May 255,000 June272,500 July 262,500 In addition,.
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25) Perry Company has gathered the following information: April 30, cash balance $90,000 Dividends paid in May$24,000 Cash expenditures in May for operating expenses$73,600 Amortization expense in May$9,000 Cash collections in May$178,000 Merchandise purchases paid in cash in May$112,400 Purchased equipment for cash in May$35,000 Perry desires to keep a minimum cash balance of $20,000. Required: Prepare a cash budget.
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30) What will be Fair Score Company's budgeted total cost of direct materials used in 2015? A) $3,400,000 B) $3,800,000 C) $3,600,000 D) $3,200,000 E) $3,155,000 31) What will be the Fair Score Company budgeted amount of cost of goods sold? A) $8,160,000 B) $6,800,000 C) $6,460,000 D) $6,120,000 E) $5,975,000 Use the information below to answer the following question(s). Layne Cedar manufactures.
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68) Budget Corporation has the following budgeted sales for the next six-month period: MonthUnit Sales September60,000 October 80,000 November140,000 December100,000 January120,000 February 80,000 There were 30,000 units of finished goods in inventory at the beginning of September. Plans are to have an inventory of finished products that equal 20 percent of the unit sales for the next month. Five.
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Use the information below to answer the following question(s). Marguerite Inc.. expects to sell 20,000 pool cues for $20.00 each. Direct materials costs are $2.00, direct manufacturing labour is $12.00, and manufacturing overhead is $0.80 per pool cue. Each pool cue requires 0.5 kilograms (kg) of material which is all added.
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63) Tripp Company sells three products with the following seasonal sales pattern: Products Quarter XYZ 140%  30%10% 230% 20%40% 320%   20%40% 4 10%   30%10% The annual sales budget shows forecasts for the different products and their expected selling price per unit as follows: ProductUnitsSelling Price X40,000$ 3 Y100,000$12 Z50,000$ 5 Required: Prepare a revenue budget in dollars for each quarter. Present each quarter.
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11) Product-sustaining (service-sustaining),and facility-sustaining costs are equivalent terms in ABC systems. 12) Understanding the hierarchy of costs is critical when allocating costs to products. 13) In a cost system that doe not consider the cost hierarchy unit-level measures can distort product costing because the demand for overhead resources may be driven by.
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41) Come-On-In Manufacturing produces two types of entry doors: Deluxe and Standard. The assignment basis for support costs has been direct labour dollars. For 2012, Come-On-In compiled the following data for the two products: DeluxeStandard Sales units50,000400,000 Sales price per unit$650.00$475.00 Direct material and labour costs per unit$180.00$130.00 Manufacturing support costs per unit$80.00$120.00 Last year,.
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Use the information below to answer the following question(s).   Berry's Boxes manufactures boxes. It expects to sell 20,000 boxes in 2015. The company had enough beginning inventory of direct materials to produce 24,000 units. Beginning inventory of finished units totalled 2,000 with a target ending inventory of 2,500 units. The boxes.
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47) Hans Sorensen, controller of Franklin Production, has the choice of allocating indirect manufacturing cost using either direct manufacturing labour hours or manufacturing machine hours. If he uses labour hours for the month of January, Product A receives $312,000 in manufacturing overhead charges and Product B receives $448,000. When machine.
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6.2   Prepare a master operating budget and all supporting budgets or schedules. 1) Budgets that change (rolling or continuous) motivate managers to look forward. 2) The financial budget is that part of the master budget that comprises the capital budget, cash budget, operating budget, and budgeted balance sheet. 3) The production budget of.
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16) The Guy Fawkes Company is noted for an exceptionally impressive line of Mardi Gras masks. Guy Fawkes has established the following selling and distribution support activity-cost pools and their corresponding activity drivers for the current year: ActivityCostCost driver Marketing$60,000$500,000 of sales Customer service20,0005,000 customer Order execution10,000100 orders Warehousing10,00050 product lines Required: a.Determine the activity-cost-driver rate for.
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66) Frame Antique manufactures picture frames. Sales for May are expected to be 20,000 units of various sizes. Historically, the average frame requires three metres of framing, one square metre of glass, and two square metres of backing. Beginning inventory includes 3,000 metres of framing, 1,000 square metres of glass,.
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11) The priority approach to budgeting is an incremental approach. 12) The actual data resulting from a strategy should be compared to budgeted results. 13) Planning the performance of the organization, providing a frame of reference, and investigating variances are part of the A) budgetary cycle. B) cash budget. C) financing budget. D) master budget. E) production.
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Use the information below to answer the following question(s). A transportation company provides bussing, limo and taxi service. The company charges: $350 per day for bussing service; $2.00 per kilometre for taxi service; and, $3.50 per kilometre for limo service. Two individual clients, the school board and the city government offices.
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50) ABC provides a cost-benefit analysis of the unequally shared benefits of a support activity. The technique also discloses the scope of business functions where cost control will have a positive effect. Required: Provide three benefits that the identification of the scope of cost control focused on different activity levels should lead.
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31) Engineering costs incurred to change product designs are which of the following? A) market-sustaining costs B) output unit-level costs C) batch-level costs D) product-sustaining (service-sustaining) costs E) facility-sustaining costs 32) Resources sacrificed on activities undertaken to support product lines are which of the following? A) market-sustaining costs B) output unit-level costs C) batch-level costs D) facility-sustaining costs E) product-sustaining (service-sustaining).
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41) Designing a new model of washing machine would be classified in the ABC cost hierarchy as a (an) A) output unit-level cost. B) batch-level cost. C) product-sustaining cost. D) facility-sustaining cost. E) period cost because it is not related to the cost hierarchy. 42) Analyze the two costing systems below and determine which one is.
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36) Asian Tools, a manufacturer of precision hand tools, is concerned with the apparent lack of controls over cost incurrence in its Hand Tool Division. The division has always used a plant-wide rate for allocating manufacturing overhead to its products. However, some products cost substantially more than competitors' retail prices.
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5.4   Assign costs using activity-based costing (ABC). 1) ABC systems seek a cost-allocation base that has a cause-and-effect relationship with costs in the cost pool. 2) Homogeneous cost pools and the choice of cost-allocation bases are not tied to the cost hierarchy. 3) The benefit of an ABC system is that it provides.
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77) Barrieland Merchandising Firm is developing its budgets for 2016. The 2015 income statement is as follows: Sales (100,000 units)$250,000 Less: Cost of goods sold150,000 Gross profit $100,000 Operating expenses (includes $10,000 of depreciation)60,000 Net income$40,000 Selling prices will increase by 10 percent and sales volume in units will decrease by 5 percent. The cost of goods.
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34) The Marionettes Company is noted for an exceptionally impressive line of Mardi Gras masks. Marionettes has established the following selling and distribution support activity-cost pools and their corresponding activity drivers for the year 2012: ActivityCostCost driver Marketing$30,000$500,000 of sales Customer service10,0005,000 customer Order execution5,000100 orders Warehousing5,00050 product lines Required: a.Determine the activity cost driver rate for.
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38) Cocoa Pet Corporation manufactures two models of grooming stations, a standard and a deluxe model. The following activity and cost information has been compiled: Number ofNumber ofNumber of ProductSetupsComponentsDirect labour Hours Standard330650 Deluxe750150 Indirect costs:    $20,000$60,000 Required: Assume a traditional (simple) costing system applies the $80,000 of overhead costs based on direct labour hours. a.What is.
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43) Whitman Printing Ltd. has contracts to complete weekly supplements required by its' customers. For the current year, manufacturing overhead cost estimates total $336,000 for an annual production capacity of 12 million pages. Whitman Printing decided to evaluate the use of additional cost pools. After analyzing manufacturing overhead costs, it was.
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Answer the following question(s) using the information below. Ernsting Printers has contracts to complete weekly supplements required by forty-six customers. For the year 2015, manufacturing overhead cost estimates total $420,000 for an annual production capacity of 12 million pages. For 2015 Ernsting Printers has decided to evaluate the use of additional cost.
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45) In the monthly management meeting, each manager was asked to come up with suggestions for controlling costs. Some managers favoured a simple across-the-board cut in expenditures, with every department accepting the same percentage reduction in their budget. This was supported by several managers as the fairest means to save.
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Answer the following question(s) using the information below. Products S5 and CP8 each are assigned $50.00 in indirect costs by a traditional costing system. An activity analysis revealed that although production requirements are identical, S5 requires 45 minutes less setup time than CP8. 28) Compared to an activity-based cost system, CP8 is.
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Match the cost driver in the right column below to the appropriate function in the left column. A) Number of customers B) Number of purchase orders C) Number of invoices D) Number of desktop computers E) Number of shipments F) Number of employees 52) Purchasing 53) Billing 54) Shipping 55) Computer Support 56) Personnel 57) Customer Service .
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28) The following information pertains to Amigo Corporation: MonthSalesPurchases July$30,000$10,000 August34,00012,000 September38,00014,000 October42,00016,000 November48,00018,000 December60,00020,000 Cash is collected from customers in the following manner: Month of sale* 30% Month following sale50% Two months following sale15% Amount uncollectible5 % * Customers paying in the month of sale receive a 2% cash discount. 40% of purchases are paid for in cash in the month of purchase,.
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6.4   Contrast responsibility against controllability. 1) Responsibility accounting is a budgeting system that measures the plans and objectives of managers. 2) Performance reports for responsibility centres may include uncontrollable costs if they are segregated from controllable costs. 3) A controllable cost is a cost that is not subject to the influence of a.
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21) Winnie and Pooh have just purchased a small honey manufacturing company that was having financial difficulties. After a brief operating period, they decided that the company's main problem was lack of any financial planning. The company made a good product and market potential was great. Required: Explain why a company needs.
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Use the information below to answer the following question(s).   Boone Hobbies, a wholesaler, has a sales budget for next month of $600,000. Cost of units sold is expected to be 40 percent of sales. All units are paid for in the month following purchase. The beginning inventory of units is $20,000,.
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37) What are three possible ways to dispose of underallocated or overallocated overhead costs at the end of a fiscal year? Briefly comment on the theoretical correctness or incorrectness of each method. 38) Why does the Manufacturing Overhead Control account (debit) need to equal the Manufacturing Control account (credit)? What will.
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5.3   Apply the cost hierarchy to develop and activity-based costing (ABC) system. 1) An ABC system results in a better measure of the nonuniformity of a company's resources by jobs, products, or services than by using broad averages to assign costs. 2) By defining activities and identifying the costs of performing each.
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40) Aunt Ethel's Fancy Cookie Company manufactures and sells three flavors of cookies: Macaroon, Sugar, and Buttercream. The batch size for the cookies is limited to 1,000 cookies based on the size of the ovens and cookie molds owned by the company. Based on budgetary projections, the information listed below.
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