Parker Division had revenue of $250,000, operating profit of $10,000, and a division
investment of $100,000. The investment turnover is
A.0.04
B.2.50
C.4.00
D.0.25
Provide the missing data in the following situations:
Use the following information to answer the following questions. Magnolia
Company makes products B546 and C245. Information for overhead costs and for the
two products appears below. The company makes 100,000 units of product B546 each
year and 20,000 units of product C245.
What will be the total overhead cost of product B546 if all overhead is assigned using
ABC and each activity above is treated as a separate pool?
A.$8.60 per unit
B.$18.00 per unit
C.$15.00 per unit
D.$47.00 per unit
Which statement best describes the balanced scorecard?
A.A causal model for lead and lag indicators of performance.
B.A replacement for zero-based budgeting.
C.A product of zero-sum game theory.
D.A tool to evaluate customer profitability.
Which of the following are resources supplied to an activity in activity-based costing?
A.the expenditures for the activity.
B.actual resource usage.
C.estimated resource usage.
D.unused resource capacity.
Calculate margin of safety using the following assumptions:
A.1,000 units
B.$500,000
C.1,750 units
D. 750 units
Your supervisor at a consulting firm asks you to allocate the time you actually spent on
jobs now in danger of exceeding their cost estimates to other jobs less likely to overrun
cost estimates. Which of the following statements is true?
A.This practice misleads managers who rely on accurate cost information for pricing,
cost control, and other decisions.
B.This practice cheats people who may be paying for a job on a cost-plus-fee basis,
where the job has cost less than the producer claims.
C.This practice avoids the appearance of cost overruns on some jobs and is unethical.
D.All of the answers are correct.
The Samantha Manufacturing Company produces 1,000 units of Product A and 1,000
units of Product B. Currently, it uses a traditional cost system using direct labor hours,
but is considering an activity-based cost system. It wants to know what the cost of
inspection would be for both products assuming the following:
REQUIRED:
Break-even and target profits; volume defined in sales dollars. The manager of
Hsu’s Carryout Express estimates operating costs for the year will total $230,000 for
fixed costs.
Required:
a. Find the break-even point in sales dollars with a contribution margin ratio of 40
percent.
b. Find the break-even point in sales dollars with a contribution margin ratio of 20
percent.
c. Find the sales dollars required with a contribution margin ratio of 50 percent to
generate a profit of $150,000.
Which of the following is/are a step in the theory of constraints?
A.Recognize that the bottleneck resource determines the throughput contribution of the
product.
B.Search for and find the bottleneck resource by identifying resources with large
quantities of inventory waiting to be worked on.
C.Subordinate all non-bottleneck resources to the bottleneck resource and increase
bottleneck efficiency and capacity.
D.All of the answers are correct.
KF Company
KF Company uses standard costing. The company reported the following information
for the current period:
Refer to KF Company. Calculate the variable overhead price variance.
A.$1,000 U
B.$ 500 F
C.$1,000 F
D.$ 500 U
Which formula correctly identifies the predetermined indirect cost rate in an
activity-based costing system?
A.Actual indirect cost divided by the actual volume of the allocation base.
B.Estimated indirect cost divided by the actual volume of the allocation base.
C.Actual cost divided by the estimated volume of the allocation base.
D.Estimated indirect cost divided by the estimated volume of the allocation base.
A method for allocating joint-process costs is based on
A.opportunity costs.
B.outlay costs.
C.indirect costs.
D.physical measures.
Use the following information to answer the following questions. Magnolia
Company makes products B546 and C245. Information for overhead costs and for the
two products appears below. The company makes 100,000 units of product B546 each
year and 20,000 units of product C245.
Use the information from the Magnolia Company and assume that Activity Based
Costing is used, with each activity in its own cost pool. What is the rate per setup that
should be used to assign set up cost to the two products?
A.$900 per set up
B.$400 per set up
C.$100 per set up
D.$200,000 per set up
Managerial accountants would most likely assist organizations in the performance of all
of the following functions except:
A.Monitoring, evaluating, and rewarding performance.
B.The preparation of income tax returns.
C.Planning and decision-making.
D.The assignment of decision-making authority over company assets.
Which of the following statements regarding joint cost allocation is not true?
A.The sales value of the end products is the most common method used to allocate joint
costs.
B.Inventory cost and cost of goods sold computations for internal reporting purposes
require joint cost allocation.
C.Inventory cost and cost of goods sold computations for external reporting purposes
require joint cost allocation.
D.Joint cost allocation is unnecessary in deciding to sell or process further beyond the
split-off point.
What does the term €just-in-time€ refer to?
A.factories built just in time to meet production needs.
B.machinery placed in service just in time to begin production.
C.materials received from suppliers just in time for production needs.
D.All of the answers are correct.
Which of the following statements is true?
A.JIT requires workers to immediately correct a process making defective units.
B.JIT requires hiding of defective units.
C.JIT requires debiting various inventory accounts as goods are processed.
D.JIT requires crediting various inventory accounts as goods are processed.