Exam 14: Cost Allocation, Customer-Profitability Analysis, and Sales-Variance Analysis

For each cost pool listed select an appropriate allocation base from the list below. An allocation base may be used only once. Assume a manufacturing company. Allocation bases for which the information system can provide data: 1.Number of employees per department 2.Employee wages and salaries per department 3.Number of sales orders 4.Hours of operation of each production department 5.Machine hours by department 6.Operations costs of each department 7.Hours of computer use per month per department 8.Number of units sold Cost pools: ________a.Vice President of Finance's office expenses ________b.Computer operations used in conjunction with manufacturing ________c.Personnel Department ________d.Sales-order costs ________e.Energy costs

To allocate corporate costs to divisions, the ideal situation would be for the allocation base to ________.

What are the two components of the sales-quantity variance?

The Corata Appliance Manufacturing Corporation manufactures two vacuum cleaners, the Standard and the Super. The following information was gathered about the two products: What is the budgeted sales-mix percentage for the Standard and the Super vacuum cleaners, respectively?

Which of the following is true about the process of making cost allocations?

The sales-volume variance is the difference between ________.

All customers are equally important to a company and should receive equal levels of attention.

An unfavorable sales-mix variance would most likely be caused by which of the following?

Which of the following illustrates a purpose for allocating costs to cost objects?

The ability-to-bear criterion is considered superior when the purpose of cost allocation is motivation.

Which of the following criteria has the presumption that the more-profitable divisions have a greater ability to absorb corporate administration costs?

Flexible budget contribution margin is equal to ________.

Managers use a customer-profitability analysis report to ensure that ________.

A customer cost hierarchy categorizes costs related to customers into different cost pools on the basis of different ________.

A financial analyst for Simon Manufacturing prepared the following report: Which of the following conclusions can be drawn from the report?

Dropping an unprofitable customer will ________.

Tracking price discounts by customer and by salesperson helps improve customer profitability.

Additional insight can be gained by dividing the sales-volume variance into the sales-mix variance and the sales-quantity variance.

Which of the following classifications would the cost of visiting customers would most likely fit into?

More insight into the sales-volume variance can be gained by subdividing it into ________.