Question 1

Departmental income statements are prepared for operating as well as service departments.

Accepted Answer

A) True 
 B)False

Question 2

Belgrade Lakes Properties is developing a golf course subdivision that includes 225 home lots; 100 lots are golf course lots and will sell for $95,000 each; 125 are street frontage lots and will sell for $65,000.The developer acquired the land for $1,800,000 and spent another $1,400,000 on street and utilities improvement.Compute the amount of joint cost to be allocated to the golf course lots using value basis.

Accepted Answer

A) $1,724,800. 
B) $1,777,920. 
C) $2,018,920. 
D) $1,422,080. 
E) $1,475,200. 
A) $1,724,800. 
B) $1,777,920. 
C) $2,018,920. 
D) $1,422,080. 
E) $1,475,200.

Question 3

Joint costs are a group of several costs incurred in producing or purchasing a single product.

Accepted Answer

A) True 
 B)False

Question 4

A retail store has three departments,1,2,and 3,and does general advertising that benefits all departments.Advertising expense totaled $50,000 for the year,and departmental sales were as follows.Allocate advertising expense to Department 2 based on departmental sales. Department 1…………………………..$110,000
Department 2………………………….. 213,750
Department 3………………………….. 151,250

Accepted Answer

A) $11,000. 
B) $14,000. 
C) $16,667. 
D) $22,500. 
E) $50,000. 
A) $11,000. 
B) $14,000. 
C) $16,667. 
D) $22,500. 
E) $50,000.

Question 5

Advertising expense can be reasonably allocated to departments on the basis of sales.

Accepted Answer

A) True 
 B)False

Question 6

The following is a partially completed lower section of a departmental expense allocation spreadsheet for Stoneham.It reports the total amounts of direct and indirect expenses for the four departments.Purchasing department expenses are allocated to the operating departments on the basis of purchase orders.Maintenance department expenses are allocated based on square footage.Compute the amount of Purchasing department expense to be allocated to Assembly.

Accepted Answer

A) $6,400. 
B) $9,900. 
C) $8,100. 
D) $14,400. 
E) $25,600. 
A) $6,400. 
B) $9,900. 
C) $8,100. 
D) $14,400. 
E) $25,600.

Question 7

Allocations of joint product costs can be based on the relative sales values of the products:

Accepted Answer

A) And never on the relative physical quantities of the products. 
B) Plus an adjustment for future excess margins. 
C) And not on any other basis. 
D) At the "split-off point". 
E) Only if the products contain both direct and indirect costs. 
A) And never on the relative physical quantities of the products. 
B) Plus an adjustment for future excess margins. 
C) And not on any other basis. 
D) At the "split-off point". 
E) Only if the products contain both direct and indirect costs.

Question 8

The most useful allocation basis for the departmental costs of an advertising campaign for a storewide sale is likely to be:

Accepted Answer

A) Floor space of each department. 
B) Relative number of items each department had on sale. 
C) Number of customers to enter each department. 
D) An equal amount of cost for each department. 
E) Proportion of sales of each department. 
A) Floor space of each department. 
B) Relative number of items each department had on sale. 
C) Number of customers to enter each department. 
D) An equal amount of cost for each department. 
E) Proportion of sales of each department.

Question 9

Evaluation of the performance of a department involves only financial measures.

Accepted Answer

A) True 
 B)False

Question 10

A retail store has three departments,A,B,and C,each of which has four full-time employees.The store does general advertising that benefits all departments.Advertising expense totaled $90,000 for the current year,and departmental sales were:
Department A……………… $356,250
Department B……………… 641,250
Department C……………… 427,500
How much advertising expense should be allocated to each department?

Accepted Answer

The answer of A retail store has three departments,A,B,and C,each...

Question 11

Match between columns
                        Premises: Indirect expenses
Joint cost
Controllable costs
Cost center
Investment center
Direct expenses
Profit center

Accepted Answer

The Answer of Costs incurred to produce two or more is...

Question 12

Describe the two-stage allocation of overhead costs.

Accepted Answer

The two stages are: (1)service departmen

Question 13

A profit center:

Accepted Answer

A) Incurs costs, but does not directly generate revenues. 
B) Incurs costs and directly generates revenues. 
C) Has a manager who is evaluated solely on efficiency in controlling costs. 
D) Incurs only indirect costs and directly generates revenues. 
E) Incurs only indirect costs and generates revenues. 
A) Incurs costs, but does not directly generate revenues. 
B) Incurs costs and directly generates revenues. 
C) Has a manager who is evaluated solely on efficiency in controlling costs. 
D) Incurs only indirect costs and directly generates revenues. 
E) Incurs only indirect costs and generates revenues.

Question 14

A __________________________ helps control costs and expenses and evaluates managers' performance by assigning costs and expenses to the managers responsible for controlling them.

Accepted Answer

responsibi

Question 15

The process of preparing departmental income statements starts with allocating service departments.

Accepted Answer

A) True 
 B)False

Question 16

A sawmill paid $70,000 for logs that produced 200,000 board feet of lumber in 3 different grades and amounts as follows:
  Compute the portion of the $70,000 joint cost to be allocated to No.2 Common.

Accepted Answer

A) $ 0. 
B) $17,500. 
C) $23,333. 
D) $35,000. 
E) $70,000. 
A) $ 0. 
B) $17,500. 
C) $23,333. 
D) $35,000. 
E) $70,000.

Question 17

With respect to cycle time,companies strive to reduce non-value added time in order to improve ________________________.

Accepted Answer

The answer of With respect to cycle time,companies strive to...

Question 18

Investment center managers are usually evaluated using performance measures

Accepted Answer

A) that combine income and assets. 
B) that combine income and capital. 
C) based on assets only. 
D) based on income only. 
E) that combine assets and capital. 
A) that combine income and assets. 
B) that combine income and capital. 
C) based on assets only. 
D) based on income only. 
E) that combine assets and capital.

Question 19

Joint costs can be allocated either using a physical basis or a value basis.

Accepted Answer

A) True 
 B)False

Question 20

Data pertaining to a company's joint production for the current period follows:
A B
Quantities produced…………………. 200 lbs.100 lbs.
    Processing cost after
Products are separated…………….. $1,100 $400
Market value at point
Of separation………………………. $8/lb. $16/lb.
Compute the cost to be allocated to Product A for this period's $660 of joint costs if the value basis is used.

Accepted Answer

A) $330.00. 
B) $440.00. 
C) $220.00. 
D) $194.12. 
E) $484.00. 
A) $330.00. 
B) $440.00. 
C) $220.00. 
D) $194.12. 
E) $484.00.

Departmental income statements are prepared for operating as well as service departments.

Joint costs are a group of several costs incurred in producing or purchasing a single product.

Advertising expense can be reasonably allocated to departments on the basis of sales.

Allocations of joint product costs can be based on the relative sales values of the products:

The most useful allocation basis for the departmental costs of an advertising campaign for a storewide sale is likely to be:

Evaluation of the performance of a department involves only financial measures.

Describe the two-stage allocation of overhead costs.

A profit center:

A __________________________ helps control costs and expenses and evaluates managers' performance by assigning costs and expenses to the managers responsible for controlling them.

The process of preparing departmental income statements starts with allocating service departments.

A sawmill paid $70,000 for logs that produced 200,000 board feet of lumber in 3 different grades and amounts as follows: Compute the portion of the $70,000 joint cost to be allocated to No.2 Common.

With respect to cycle time,companies strive to reduce non-value added time in order to improve ________________________.

Investment center managers are usually evaluated using performance measures

Joint costs can be allocated either using a physical basis or a value basis.

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets, natural Resources, and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Capital Budgeting and Managerial Decisions

Time Value of Money B

Activity-Based Costing C

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Exam 24: Performance Measurement and Responsibility Accounting

Departmental income statements are prepared for operating as well as service departments.

Joint costs are a group of several costs incurred in producing or purchasing a single product.

Advertising expense can be reasonably allocated to departments on the basis of sales.

Allocations of joint product costs can be based on the relative sales values of the products:

The most useful allocation basis for the departmental costs of an advertising campaign for a storewide sale is likely to be:

Evaluation of the performance of a department involves only financial measures.

Describe the two-stage allocation of overhead costs.

A profit center:

A __________________________ helps control costs and expenses and evaluates managers' performance by assigning costs and expenses to the managers responsible for controlling them.

The process of preparing departmental income statements starts with allocating service departments.

A sawmill paid $70,000 for logs that produced 200,000 board feet of lumber in 3 different grades and amounts as follows: Compute the portion of the $70,000 joint cost to be allocated to No.2 Common.

With respect to cycle time,companies strive to reduce non-value added time in order to improve ________________________.

Investment center managers are usually evaluated using performance measures

Joint costs can be allocated either using a physical basis or a value basis.

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets, natural Resources, and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Capital Budgeting and Managerial Decisions

Time Value of Money B

Activity-Based Costing C

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