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  Objective 1 1) Traditional cost systems use actual departments or cost centers for defining cost pools to accumulate and redistribute costs. 2) Activity-based cost systems use cost centers to accumulate costs. 3) Traditional cost systems are likely to overcost simple products with higher production volume. 4) The first step in designing an activity-based cost.

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Objective 7 1) (Appendix) The direct allocation method recognizes possible interactions between service departments when allocating service department's costs to production departments. 2) (Appendix) The direct method of allocating service department costs assigns indirect costs to products in two stages.  In the first stage, production department costs are allocated to the service.

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8) Do activity-based costing systems always provide more accurate product costs than conventional cost systems? Why or why not? 9) Transaction drivers, duration drivers, and intensity drivers. a. For machine maintenance, identify a transaction driver, a duration driver, and an intensity driver. b. Explain when the intensity driver should be used. c. Explain the.

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5) If a Balanced Scorecard's implementation team is really committed, they can initially develop the perfect scorecard. 6) The measurement of the objectives for the Balanced Scorecard: A) creates focus for the future. B) communicates an important message to all employees. C) focuses the entire organization on strategic implementation of company's outcomes. D) All of.

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74) Conecuh Sausage Company is considering replacing its giant sausage mixer with a new one. The following data have been compiled to evaluate the decision. Existing New Original cost $16,000 $20,000 Annual operating cost $8,000 $4,400 Remaining life 10 years 10 years Disposal value now $6,000 --- Salvage Value in 10 years 0 Required: a. What costs are relevant? b. What costs are sunk? c. What are the net cash.

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26) Alistar's Best reported the following for 2011: Revenues $16,000 Variable manufacturing costs $8,000 Variable nonmanufacturing costs $2,000 Fixed manufacturing costs $4,000 Fixed nonmanufacturing costs $1,200 Required: a. Compute the contribution margin. b. Compute the gross margin. c. Compute the operating income. 27) In 2011, SSPC Company has sales of 8,000 units at $10 each, variable costs totaling $20,000, and fixed costs of $30,000. In.

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Objective 5 1) ________ describe(s) specifically how success in achieving objectives in a Balanced Scorecard is determined. A) Measures B) The value proposition C) Targets D) The Balanced Scorecard 2) ________ establish the level of performance or rate of improvement required for a measure in the Balanced Scorecard. A) Critical success factors B) The value proposition C) The Balanced.

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Donnelly Company has three products, R2, R4, and R2D2. The following information is available: Product R2 Product R4 Product R2D2 Sales $30,000 $45,000 $12,000 Variable costs 18,000 24,000 7,500 Contribution margin 12,000 21,000 4,500 Fixed costs:    Avoidable 4,500 9,000 3,000    Unavoidable 3,000 4,500 2,700 Operating income $4,500 $7,500 $ (1,200) 53) Donnelly Company is thinking of dropping Product R2D2 because it is reporting a loss. Assuming Donnelly drops Product R2D2 and does not replace it, operating.

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EJL Herbal Remedies sells several products for an average price of $17 per unit. Average variable costs per unit are as follows: Direct material $5.00 Direct labor $1.00 Indirect manufacturing costs $0.50 Selling commissions $3.00 EJL's annual fixed costs total $82,500. 18) The contribution margin per unit is: A) $7.50. B) $10.50. C) $12. D) $14. 19) The number of units that.

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44) Elfie Enterprises uses three cost pools to allocate manufacturing overhead costs. The following estimates were provided for the coming year.                       Manufacturing Cost Pool           Overhead CostsCost driverActivity level Supervision of direct labor$320,000Direct labor hours800,000 Machine maintenance$120,000Machine hours960,000 Facility rent$200,000Square feet of area100,000      Total overhead costs$640,000 The accounting records show the Lacio Job consumed the following.

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29) Jeffrey's, Inc., sells a single product. The company's most recent income statement is given below. Sales $200,000 Less variable expenses (120,000) Contribution margin 80,000 Less fixed expenses (50,000) Net income $ 30,000   Required: a. Contribution margin ratio is _______________ b. Break-even point in total sales dollars is _______________ c. To achieve $40,000 in net income, sales must total _______________ d..

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Marine Industrial Coatings, Inc. is considering replacing its existing computer system with a new computer system. The new system can offer considerable savings in computer processing and inventory management costs. Information about the existing system and the new system follow: Existing Computer New Computer Original cost $10,000 $15,000 Annual operating cost $  3,500 $  2,000 Accumulated depreciation $  6,000 --- Current.

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Objective 4 1) Opportunity costs are implicit costs. 2) When a firm maximizes profits it will simultaneously minimize opportunity costs. 3) Sunk costs are always irrelevant costs for decision making. 4) An example of a sunk cost is the historical cost paid for equipment. 5) For decision-making, differential costs assist in choosing between alternatives. 6) For.

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Tony's Skate Corporation manufactures two models of skate boards: a standard and a deluxe model. The following activity and cost information has been compiled. Product Number of Setups Number of Components Number of total Direct Labor Hours Standard 20 10 375 Deluxe 30 15 225 Overhead costs $50,000 $70,000                                                                                     15) Assume a traditional costing system applies the $120,000 of overhead.

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11) Misleading product cost numbers are MOST likely the result of misallocating: A) direct material costs. B) direct manufacturing labor costs. C) overhead costs. D) All of the above are correct. 12) Undercosting of a product is MOST likely to result from: A) misallocating direct labor costs. B) underpricing the product. C) overcosting another product. D) understating total product.

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Objective 2 1) Product lines that produce different variations (models, styles, or colors) often require specialized activities that translate into lower overhead costs for each product line. 2) Specialized engineering drawings of products, product quality specifications and quality control testing, inventoried raw materials, and material control systems are examples of activities that.

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69) Kirkland Company manufactures a part for use in its production. When 10,000 units are produced, the costs per unit are: Direct materials $0.60 Direct manufacturing labor 3.00 Variable manufacturing support 1.20 Fixed manufacturing support 1.60     Total  $6.40 Mike Company has offered to sell to Kirkland Company 10,000 units of the part for $6.00 per unit. The.

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7) Cost-volume-profit analysis is used PRIMARILY by management: A) as a planning tool. B) for control purposes. C) to establish a target net income for next year. D) to attain extremely accurate financial results. 8) Contribution margin equals revenues minus: A) product costs. B) period costs. C) variable costs. D) fixed costs. 9) The break-even point is the level at.

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