Question 1

One of the main objectives of cost allocation is to value inventory.

Accepted Answer

A) True 
 B)False  True

Question 2

To allocate central costs, a company could use all of the following cost drivers EXCEPT the

Accepted Answer

A)  revenue of each division. 
B)  cost of goods sold by each division. 
C)  total assets of each division. 
D)  total period costs of each division. 
A)  revenue of each division. 
B)  cost of goods sold by each division. 
C)  total assets of each division. 
D)  total period costs of each division. D

Question 3

The cost pool should be a quantifiable measure of what causes costs.

Accepted Answer

A) True 
 B)False  False

Question 4

Stohr Company has two departments, New and Old. Central costs are allocated to the two departments in various ways. Relevant information is presented below:
  
-If total rent expense is $192,000 and it is allocated on the basis of square footage, the amount allocated to the Old Department should be

Accepted Answer

A)  $57,600. 
B)  $160,000. 
C)  $144,000. 
D)  $48,000. 
A)  $57,600. 
B)  $160,000. 
C)  $144,000. 
D)  $48,000.

Question 5

City Company has two service departments, Maintenance and Personnel, as well as two production departments, Mixing and Finishing. Maintenance costs are allocated based on square footage while personnel costs are allocated based on number of employees. The following information has been gathered for the current year:
  
-If the step-down method of allocating costs is used, and the Personnel Department renders the greatest service, then the total amount of overhead that would be allocated from Maintenance to Finishing is

Accepted Answer

A)  $6,000. 
B)  $8,357. 
C)  $6,750. 
D)  $8,142. 
A)  $6,000. 
B)  $8,357. 
C)  $6,750. 
D)  $8,142.

Question 6

Which of the following is NOT likely to be a cost driver?

Accepted Answer

A)  Production orders 
B)  Material requisitions 
C)  Cost accountant's labour hours 
D)  Product inspections 
A)  Production orders 
B)  Material requisitions 
C)  Cost accountant's labour hours 
D)  Product inspections

Question 7

Estimates relating to a job that Meesen Inc. plans to bid on are as follows:   The estimate for the cost of the job would be

Accepted Answer

A)  $2,393. 
B)  $2,288. 
C)  $1,481. 
D)  $3,081. 
A)  $2,393. 
B)  $2,288. 
C)  $1,481. 
D)  $3,081.

Question 8

Stohr Company has two departments, New and Old. Central costs are allocated to the two departments in various ways. Relevant information is presented below:
  
-If total payroll processing costs are $40,000 and they are allocated on the basis of number of employees, the amount allocated to the Old Department should be

Accepted Answer

A)  $28,000. 
B)  $12,000. 
C)  $30,000. 
D)  $33,333. 
A)  $28,000. 
B)  $12,000. 
C)  $30,000. 
D)  $33,333.

Question 9

Stumbo Company has two production departments, Cutting and Assembling, served by one maintenance department. Budgeted fixed costs for the maintenance department for 20X3 were $60,000, and the variable cost per labour hour was $2.00. Other relevant data for 20X3 are as follows:
   Actual maintenance department costs for 20X3 were $64,000 fixed and $120,000 variable.
S1U1P1*S1S1P0in labour hours
-The amount of variable maintenance costs allocated to the Assembling Department should be

Accepted Answer

A)  $56,000. 
B)  $64,000. 
C)  $50,000. 
D)  $48,000. 
A)  $56,000. 
B)  $64,000. 
C)  $50,000. 
D)  $48,000.

Question 10

Which of the following statements regarding by-products is FALSE?

Accepted Answer

A)  A by-product is not individually identifiable until the split-off point. 
B)  A by-product is the same as a joint product. 
C)  By-products have relatively insignificant total sales value. 
D)  Only separable costs are allocated to by-products. 
A)  A by-product is not individually identifiable until the split-off point. 
B)  A by-product is the same as a joint product. 
C)  By-products have relatively insignificant total sales value. 
D)  Only separable costs are allocated to by-products.

Question 11

Berlau Corp. manufactures two models of its curling iron, a standard and a deluxe model. Three activities have been identified as cost drivers and the related costs pooled together to arrive at the following information:   Required: Assuming activity-based costing is used, allocate each cost pool to each model.

Accepted Answer

The answer of Berlau Corp. manufactures two models of its...

Question 12

Dorpinghaus Corp. manufactures two models of its telephones, a standard and a deluxe model. Three activities have been identified as cost drivers and the related costs pooled together to arrive at the following information:
  
-If activity-based costing is used, then the total amount of overhead allocated to the deluxe model would be

Accepted Answer

A)  $182,680. 
B)  $297,320. 
C)  $480,000. 
D)  $320,000. 
A)  $182,680. 
B)  $297,320. 
C)  $480,000. 
D)  $320,000.

Question 13

A unit within an organization that provides essential support services for producing departments.

Accepted Answer

The answer of A unit within an organization that provides...

Question 14

Stanley Corp. manufactures two models of its roasting pans, a standard and a deluxe model. Three activities have been identified as cost drivers and the related costs pooled together to arrive at the following information:
  
-If activity-based costing is used, then the product setup cost for the standard model would be

Accepted Answer

A)  $12,857. 
B)  $17,143. 
C)  $1,071. 
D)  $1,866. 
A)  $12,857. 
B)  $17,143. 
C)  $1,071. 
D)  $1,866.

Question 15

Bare Company manufactures four products from a joint process. Joint costs for the year amounted to $140,000. The following data are also available:
  
-Assuming the relative-sales-value method of allocating joint costs, the amount of joint costs allocated to product E would be

Accepted Answer

A)  $40,600.00. 
B)  $64,444.40. 
C)  $58,000.00. 
D)  $35,280.00. 
A)  $40,600.00. 
B)  $64,444.40. 
C)  $58,000.00. 
D)  $35,280.00.

Question 16

In activity-based costing, costs are classified as either direct or indirect.

Accepted Answer

A) True 
 B)False

Question 17

A group of individual costs that is allocated to cost objectives using a single cost driver is known as a

Accepted Answer

A)  cost allocation base. 
B)  cost pool. 
C)  joint cost. 
D)  by-product. 
A)  cost allocation base. 
B)  cost pool. 
C)  joint cost. 
D)  by-product.

Question 18

Actual costs should always be used when allocating service department costs.

Accepted Answer

A) True 
 B)False

Question 19

The goal of a cost accounting system is to measure the cost of developing, producing, selling and distributing particular products or services.

Accepted Answer

A) True 
 B)False

Question 20

Use the following information to answer item(s) below.
Meesen Inc. operates two support departments (A and B) and two producing departments (C and D). Budgeted costs and normal activity levels are given below.   The costs of Department A are allocated on the basis of number of employees, and the costs of Department B are allocated on the basis of maintenance hours.
-If Department D uses direct labour hours to allocate overhead to units of product, the overhead rate per direct labour hour for Department D would be

Accepted Answer

A)  $22.93. 
B)  $18.13. 
C)  $16.80. 
D)  $16.00. 
A)  $22.93. 
B)  $18.13. 
C)  $16.80. 
D)  $16.00.

One of the main objectives of cost allocation is to value inventory.

To allocate central costs, a company could use all of the following cost drivers EXCEPT the

The cost pool should be a quantifiable measure of what causes costs.

Stohr Company has two departments, New and Old. Central costs are allocated to the two departments in various ways. Relevant information is presented below: -If total rent expense is $192,000 and it is allocated on the basis of square footage, the amount allocated to the Old Department should be

Which of the following is NOT likely to be a cost driver?

Estimates relating to a job that Meesen Inc. plans to bid on are as follows: The estimate for the cost of the job would be

Which of the following statements regarding by-products is FALSE?

A unit within an organization that provides essential support services for producing departments.

Bare Company manufactures four products from a joint process. Joint costs for the year amounted to $140,000. The following data are also available: -Assuming the relative-sales-value method of allocating joint costs, the amount of joint costs allocated to product E would be

In activity-based costing, costs are classified as either direct or indirect.

A group of individual costs that is allocated to cost objectives using a single cost driver is known as a

Actual costs should always be used when allocating service department costs.

The goal of a cost accounting system is to measure the cost of developing, producing, selling and distributing particular products or services.

Management Accounting and Management Decisions

Cost Behaviour and Cost-Volume Relationships

Measurement of Cost Behaviour

Cost Management Systems

Job-Costing Systems

Process-Costing Systems

Relevant Information and Decision Making: Marketing Decisions

Relevant Information and Decision Making: Production Decisions

Capital Budgeting Decisions

The Master Budget

Flexible Budgets and Variance Analysis

Management Control Systems, the Balanced Scorecard, and Responsibility Accounting

Management Control in Decentralized Organizations

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Exam 5: Cost Allocation and Activity-Based Costing Systems

One of the main objectives of cost allocation is to value inventory.

To allocate central costs, a company could use all of the following cost drivers EXCEPT the

The cost pool should be a quantifiable measure of what causes costs.

Stohr Company has two departments, New and Old. Central costs are allocated to the two departments in various ways. Relevant information is presented below: -If total rent expense is $192,000 and it is allocated on the basis of square footage, the amount allocated to the Old Department should be

Which of the following is NOT likely to be a cost driver?

Estimates relating to a job that Meesen Inc. plans to bid on are as follows: The estimate for the cost of the job would be

Which of the following statements regarding by-products is FALSE?

A unit within an organization that provides essential support services for producing departments.

Bare Company manufactures four products from a joint process. Joint costs for the year amounted to $140,000. The following data are also available: -Assuming the relative-sales-value method of allocating joint costs, the amount of joint costs allocated to product E would be

In activity-based costing, costs are classified as either direct or indirect.

A group of individual costs that is allocated to cost objectives using a single cost driver is known as a

Actual costs should always be used when allocating service department costs.

The goal of a cost accounting system is to measure the cost of developing, producing, selling and distributing particular products or services.

Management Accounting and Management Decisions

Cost Behaviour and Cost-Volume Relationships

Measurement of Cost Behaviour

Cost Management Systems

Job-Costing Systems

Process-Costing Systems

Relevant Information and Decision Making: Marketing Decisions

Relevant Information and Decision Making: Production Decisions

Capital Budgeting Decisions

The Master Budget

Flexible Budgets and Variance Analysis

Management Control Systems, the Balanced Scorecard, and Responsibility Accounting

Management Control in Decentralized Organizations

Filters