Bush Enterprises adopts Strategic activity-based costing and management techniques
which would most likely shift the mix of activities and products away from
A.less profitable to more profitable applications.
B.less complex to more complex applications.
C.high volume to low volume applications.
D.less prestigious to more prestigious applications.
Which of the following is a statistical method that estimates the relation between cost
drivers and costs?
A.regression analysis.
B.account analysis.
C.engineering methods.
D.All of the answers are correct.
Columbia Hospital for Women charges for labor and delivery room overhead based on
hours of use. The following data represents the annual budget for the labor and delivery
room:
The total hours of labor and delivery room care expected for the year is 300,000 hours.
If a patient spends 4 hours in the labor and delivery room, what is the total overhead
costs that would be charged?
A.$80.00
B.$40.00
C.$20.00
D.$ 4.00
According to the agency theory of motivation, which of the following are agency costs?
A.the costs incurred by agents to control principal’s actions.
B.the costs to the agents if principals pursue interests that are not in the interests of the
agents.
C.rewards, penalties, monitoring devices, and audits.
D.All of the answers are correct.
Deering Company is contemplating an expansion program based on the following
budget data:
Calculate the budgeted break-even point in sales dollars.
A.$200,000
B.$210,000
C.$270,000
D.$330,000
Framing Division
The Framing Division had the following data:
Refer to the Framing Division. What is the return on investment for Year 2009?
A.10%.
B.16%.
C.20%.
D.24%.
Which statement is true concerning committed costs?
A.Committed costs continue regardless of production level.
B.Committed costs are the same as discretionary costs.
C.Committed costs are always non-value added.
D.Committed costs are always fixed costs.
Which of the following methods of estimating costs is most useful when input/output
relationships are well defined and fairly stable over time.
A.Engineering method
B.Account analysis
C.Visual curve-fitting
D.Regression
Operating leverage is high in firms with:
Fixed Costs Variable Costs Contribution Margin Per Unit
A. small proportion high proportion high
B. high proportion small proportion high
C. small proportion high proportion low
D. high proportion small proportion low
The Caesar Company manufactures picnic tables. The company’s Southeastern plant
has changed from a labor-intensive operation to a robotics environment. As a result,
management is considering changing from a direct-labor based overhead rate to an
activity-based cost method. The controller has chosen the following activity cost pools
and cost drivers for the factory overhead:
REQUIRED:
a. Compute the overhead rate for each cost driver.
b. An order for 10 large picnic tables had the following requirements:
Number of purchase orders 6
Number of set-ups 25
Number of product tests 8
Machine hours 150
How much overhead would be assigned to this order?
c. What could management do to reduce the overhead costs assigned to these tables?
What would be the impact on company net income of reducing overhead assigned to
the tables?
Which of the following is true of Managerial Accounting?
A.Complies with Securities and Exchange Commission rules and regulations.
B.Uses cost-benefit analysis to determine the amount of detail presented.
C.Prepares general-purpose reports for people outside an organization.
D.Presents summary historical data in compliance with generally accepted accounting
principles.
Engine Division
The Engine Division provides engines for the Tractor Division of a company. The
standard unit costs for Engine Division are as follows:
Refer to the Engine Division. What is the transfer price based on full cost plus a markup
of 30 percent?
A.$2,925.
B.$585.
C.$2,760.
D.$2,730.
When making deferred awards to divisional managers and below, recent research has
found that companies usually defer the award for only
A.one year or less.
B.one to two years.
C.three to five years.
D.five to ten years.
Applied overhead in a bank. On January 1, a bank estimated its production capacity to
be 950 million units and used that estimate to compute its predetermined overhead rate
of $0.012 per transaction (one unit = one transaction). The units produced for the four
quarters follow:
Required:
a. Compute the amount of total overhead applied under normal costing for each quarter.
b. What was the estimated overhead for the year for the predicted capacity of 950
million units?
How do many management accountants measure waste in the organization?
A.By determining waiting time.
B.By determining direct materials.
C.By determining direct labor
D.By determining manufacturing overhead.
Explain the differences between resources used and the resources supplied, and measure
unused resource capacity.
What is your favorite restaurant? What are some of the value-added costs that you
believe the restaurant incurs and why?
Yipann Corporation is reviewing an investment proposal. The initial costs as well as
other related data for each year are presented in the schedule below. The cash flows are
all assumed to take place at the end of the year. All salvage value of the investment at
the end of each year is equal to its net book value, and there will be no salvage value at
the end of the investment’s life.
Investment Proposal
Yipann uses a 24 percent after-tax target rate of return for new investment proposals.
The discount figures for a 24 percent rate of return are given below:
What is the net present value of the investment proposal?
Describe ISO 9000 and comment on its importance. Also comment on other quality
awards available.
Julianna Company
Julianna Company budgets on an annual basis for its fiscal year. The following
beginning and ending inventory levels (in units) are planned for the fiscal year of July
1, 20X1 through June 30, 20X2.
Two (2) units of raw material are needed to produce each unit of finished product.
Refer to Julianna Company. If Julianna were to manufacture 500,000 finished units
during the 20X1-20X2 fiscal year, what is the number of units of raw material Julianna
needs to purchase?
Able Company
Able Company expects to begin the coming year with 12,000 units of product X in the
inventory of finished goods. It expects to sell 130,000 units of the product and end the
year with 15,800 units in finished goods inventory. Five pounds of material A go into
each unit of product X. The company expects to have 2,000 pounds of material A on
hand at the beginning of the coming year and wished to end the year with 3,400 pounds
in inventory.
Refer to Able Company. Calculate the number of units of product X that the company
must manufacture in carrying out these plans.
How do firms use the balanced scorecard to measure performance?
Wilkens Company
Wilkens Company wants to determine the cost behavior pattern of maintenance costs.
Wilkens has decided to use linear regression by employing the equation y = a + bx for
maintenance costs. The prior year’s data regarding maintenance hours and costs, and the
results of the regression analysis are given in the data below.
Average cost per hour $9.00
Refer to the Wilkens Company. What is the percentage of the total variance that can be
explained by the regression equation?
Describe in detail the six factors that companies using JIT find essential for JIT to work.