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

The market-share variance is the difference in budgeted contribution margin for actual market size in units caused solely by actual market share being different from budgeted market share.

Price discounts must be uniform among all customers.

Bar charts and a whale curve are some of the common ways of displaying the results of customer-profitability analysis.

Capity Tea Products has an exclusive contract with British Distributors. Calamine and Capity are two brands of teas that are imported and sold to retail outlets. The following information is provided for the month of March: Budgeted and actual fixed corporate-sustaining costs are $1,850 and $2,300, respectively. What is the actual contribution margin for the month?

To analyze customer profitability, corporate-sustaining costs should be allocated to customers.

When there is a lesser degree of homogeneity, fewer cost pools are required to accurately explain the use of company resources.

The Fortise Corporation manufactures two types of vacuum cleaners, the Victor for commercial building use and the House-Mate for residences. Budgeted and actual operating data for the year 2017 were as follows: What is the total sales-mix variance in terms of the contribution margin? (Round any intermediary calculations two decimal places.)

Which of the following classifications would be the most appropriate for the cost of the manager of a retail distribution channel?

For companies in which full allocation is not followed, which of the following is true of corporate sustaining costs?

To guide cost allocation decisions, the ability to bear criterion ________.

If deciding whether to eliminate a distribution channel, allocating corporate-sustaining costs to distribution channels ________.

Companies that only record the invoice price can usually track the magnitude of price discounting.

With the use of a bar chart, the number of "unprofitable" customers and the magnitude of their losses are apparent.

The sales quantity variance is the difference between budgeted contribution margin based on actual units sold of all products at the budgeted mix, and contribution margin in the flexible budget.

Why do managers prepare cost-hierarchy-based operating incomes statements?

Allocating all corporate costs motivates division managers to examine how corporate costs are planned and controlled.

Capity Tea Products has an exclusive contract with British Distributors. Calamine and Capity are two brands of teas that are imported and sold to retail outlets. The following information is provided for the month of March: Budgeted and actual fixed corporate-sustaining costs are $1,850 and $2,300, respectively. For the contribution margin, what is the total flexible-budget variance?

An individual cost item can be simultaneously a direct cost of one cost object and an indirect cost of another cost object.

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 total sales-mix variance in terms of the contribution margin? (Round intermediary calculations to two decimal places.)

The Conity Corporation has an Electric Mixer Division and an Electric Lamp Division. Of a $13,000,000 bond issuance, the Electric Mixer Division used $9,500,000 and the Electric Lamp Division used $3,500,000 for expansion. Interest costs on the bond totaled $975,000 for the year. What amount of interest costs should be allocated to the Electric Mixer Division? (Round any intermediary calculations two decimal places and your final answer to the nearest dollar.)