Question 1

(Appendix 11A)What will be the total appraisal cost appearing on the quality cost report?

Accepted Answer

A)  $79,000. 
B)  $127,000. 
C)  $140,000. 
D)  $157,000. 
A)  $79,000. 
B)  $127,000. 
C)  $140,000. 
D)  $157,000.

Question 2

What was the operating income in Year 1?

Accepted Answer

A)  $90,000. 
B)  $135,000. 
C)  $140,000. 
D)  $150,000. 
A)  $90,000. 
B)  $135,000. 
C)  $140,000. 
D)  $150,000.

Question 3

For the past year,Largo Company recorded sales of $750,000 and average operating assets of $375,000.What margin did Largo Company need to earn to achieve an ROI of 15%?

Accepted Answer

A)  2.00% 
B)  7.50% 
C)  9.99% 
D)  15.00% 
A)  2.00% 
B)  7.50% 
C)  9.99% 
D)  15.00%

Question 4

The following data are available for the South Division of Redride Products,Inc.and the single product it makes:  
How many units must South sell each year to have an ROI of 16%?

Accepted Answer

A)  52,000 units. 
B)  65,000 units. 
C)  240,000 units. 
D)  1,300,000 units.Note: Students will need to have an understanding of CVP analysis from chapter 4. 
A)  52,000 units. 
B)  65,000 units. 
C)  240,000 units. 
D)  1,300,000 units.Note: Students will need to have an understanding of CVP analysis from chapter 4.

Question 5

(Appendix 11A)When an intermediate market price for a transferred item exists,it represents a lower limit on the charge that should be made on transfers between divisions.

Accepted Answer

A) True 
 B)False

Question 6

Division B had an ROI last year of 15%.The division's minimum required rate of return is 10%.If the division's average operating assets last year were $450,000,what was the division's residual income for last year?

Accepted Answer

A)  $22,500. 
B)  $37,500. 
C)  $45,000. 
D)  $67,500. 
A)  $22,500. 
B)  $37,500. 
C)  $45,000. 
D)  $67,500.

Question 7

What was the minimum required rate of return for the past year?

Accepted Answer

A)  8%. 
B)  12%. 
C)  36%. 
D)  40%. 
A)  8%. 
B)  12%. 
C)  36%. 
D)  40%.

Question 8

For the past year,what was the minimum required rate of return?

Accepted Answer

A)  11%. 
B)  12%. 
C)  13%. 
D)  14%. 
A)  11%. 
B)  12%. 
C)  13%. 
D)  14%.

Question 9

What were Division A's sales?

Accepted Answer

A)  $125,000. 
B)  $200,000. 
C)  $400,000. 
D)  $625,000. 
A)  $125,000. 
B)  $200,000. 
C)  $400,000. 
D)  $625,000.

Question 10

(Appendix 11A)Assume again that the company uses the step-down method.What would be the total amount of cost allocated from the two Service Departments to the Operating Departments for the year?

Accepted Answer

A)  $254,000. 
B)  $850,000. 
C)  $1,450,000. 
D)  $1,704,000. 
A)  $254,000. 
B)  $850,000. 
C)  $1,450,000. 
D)  $1,704,000.

Question 11

(Appendix 11A)Under the direct method of allocation,what would be the amount of Custodial Services cost allocated to the Cutting Department?

Accepted Answer

A)  $0. 
B)  $96,000. 
C)  $100,800. 
D)  $112,000. 
A)  $0. 
B)  $96,000. 
C)  $100,800. 
D)  $112,000.

Question 12

(Appendix 11A)What will be the total appraisal cost appearing on the quality cost report?

Accepted Answer

A)  $102,000. 
B)  $108,000. 
C)  $121,000. 
D)  $247,000. 
A)  $102,000. 
B)  $108,000. 
C)  $121,000. 
D)  $247,000.

Question 13

(Appendix 11A)Prevention costs and appraisal costs are incurred in an effort to keep poor quality of conformance from occurring.

Accepted Answer

A) True 
 B)False

Question 14

(Appendix 11A)Suppose that Division A has ample idle capacity to handle all of Division B's needs without any increase in fixed costs and without cutting into sales to outside customers.If Division B continues to purchase parts from an outside supplier rather than from Division A,what will be the effect on the operating income of the company as a whole?

Accepted Answer

A)  Lower by $30,000 each period. 
B)  Lower by $10,000 each period. 
C)  Higher by $15,000 each period. 
D)  Lower by $35,000 each perioD.
(24 - 18)* 5,000 = $30,000 (Lower by $30,000 each period). 
A)  Lower by $30,000 each period. 
B)  Lower by $10,000 each period. 
C)  Higher by $15,000 each period. 
D)  Lower by $35,000 each perioD.
(24 - 18)* 5,000 = $30,000 (Lower by $30,000 each period).

Question 15

(Appendix 11A)Under the direct method of allocation,what would be the predetermined overhead rate for the year in the Assembly Department? (Round your final answer to the nearest two decimal places)

Accepted Answer

A)  $3.17. 
B)  $3.67. 
C)  $18.17. 
D)  $18.67. 
A)  $3.17. 
B)  $3.67. 
C)  $18.17. 
D)  $18.67.

Question 16

Assuming that sales and operating income remain the same,which of the following statements about a company's return on investment is correct?

Accepted Answer

A)  It will increase if operating assets increase. 
B)  It will decrease if operating assets decrease. 
C)  It will decrease if turnover decreases. 
D)  It will decrease if turnover increases. 
A)  It will increase if operating assets increase. 
B)  It will decrease if operating assets decrease. 
C)  It will decrease if turnover decreases. 
D)  It will decrease if turnover increases.

Question 17

(Appendix 11A)Falstaff Company's quality cost report is to be based on the following data:   
Required:
Prepare a quality cost report in good form with separate sections for prevention costs,appraisal costs,internal failure costs,and external failure costs.

Accepted Answer

The answer of (Appendix 11A)Falstaff Company's quality cost report is...

Question 18

(Appendix 11A)What will be the total external failure cost appearing on the quality cost report?

Accepted Answer

A)  $54,000. 
B)  $95,000. 
C)  $175,000. 
D)  $328,000. 
A)  $54,000. 
B)  $95,000. 
C)  $175,000. 
D)  $328,000.

Question 19

(Appendix 11A)Division X makes a part that it sells to customers outside of the company.Data concerning this part appear below:  
Division Y of the same company would like to use the part manufactured by Division X in one of its products.Division Y currently purchases a similar part made by an outside company for $70 per unit and would substitute the part made by Division X.Division Y requires 5,000 units of the part each period.Division X can already sell all of the units it can produce on the outside market.What should be the lowest acceptable transfer price from the perspective of Division X?

Accepted Answer

A)  $16. 
B)  $50. 
C)  $66. 
D)  $75. 
A)  $16. 
B)  $50. 
C)  $66. 
D)  $75.

Question 20

(Appendix 11A)Suppose the transfer of posts to the Lamp Division will cut into sales to outside customers by 15,000 units.What is the lowest transfer price that would not reduce the operating income of the Post Division?

Accepted Answer

A)  $0.90. 
B)  $1.35. 
C)  $1.41. 
D)  $1.75. 
A)  $0.90. 
B)  $1.35. 
C)  $1.41. 
D)  $1.75.

(Appendix 11A)What will be the total appraisal cost appearing on the quality cost report?

What was the operating income in Year 1?

For the past year,Largo Company recorded sales of $750,000 and average operating assets of $375,000.What margin did Largo Company need to earn to achieve an ROI of 15%?

The following data are available for the South Division of Redride Products,Inc.and the single product it makes: How many units must South sell each year to have an ROI of 16%?

(Appendix 11A)When an intermediate market price for a transferred item exists,it represents a lower limit on the charge that should be made on transfers between divisions.

Division B had an ROI last year of 15%.The division's minimum required rate of return is 10%.If the division's average operating assets last year were $450,000,what was the division's residual income for last year?

What was the minimum required rate of return for the past year?

For the past year,what was the minimum required rate of return?

What were Division A's sales?

(Appendix 11A)Assume again that the company uses the step-down method.What would be the total amount of cost allocated from the two Service Departments to the Operating Departments for the year?

(Appendix 11A)Under the direct method of allocation,what would be the amount of Custodial Services cost allocated to the Cutting Department?

(Appendix 11A)What will be the total appraisal cost appearing on the quality cost report?

(Appendix 11A)Prevention costs and appraisal costs are incurred in an effort to keep poor quality of conformance from occurring.

(Appendix 11A)Under the direct method of allocation,what would be the predetermined overhead rate for the year in the Assembly Department? (Round your final answer to the nearest two decimal places)

Assuming that sales and operating income remain the same,which of the following statements about a company's return on investment is correct?

(Appendix 11A)Falstaff Company's quality cost report is to be based on the following data: Required: Prepare a quality cost report in good form with separate sections for prevention costs,appraisal costs,internal failure costs,and external failure costs.

(Appendix 11A)What will be the total external failure cost appearing on the quality cost report?

(Appendix 11A)Suppose the transfer of posts to the Lamp Division will cut into sales to outside customers by 15,000 units.What is the lowest transfer price that would not reduce the operating income of the Post Division?

Managerial Accounting and the Business Environment

Cost Terms, Concepts, and Classifications

Cost Behaviour: Analysis and Use

Cost-Volume-Profit Relationships

Systems Design: Job-Order Costing

Systems Design: Process Costing

Activity-Based Costing: a Tool to Aid Decision Making

Variable Costing: a Tool for Management

Budgeting

Standard Costs and Overhead Analysis

Relevant Costs for Decision Making

Capital Budgeting Decisions

Financial Statement Analysis Online

Filters

Exam 11: Reporting for Control

(Appendix 11A)What will be the total appraisal cost appearing on the quality cost report?

What was the operating income in Year 1?

For the past year,Largo Company recorded sales of $750,000 and average operating assets of $375,000.What margin did Largo Company need to earn to achieve an ROI of 15%?

The following data are available for the South Division of Redride Products,Inc.and the single product it makes: How many units must South sell each year to have an ROI of 16%?

(Appendix 11A)When an intermediate market price for a transferred item exists,it represents a lower limit on the charge that should be made on transfers between divisions.

Division B had an ROI last year of 15%.The division's minimum required rate of return is 10%.If the division's average operating assets last year were $450,000,what was the division's residual income for last year?

What was the minimum required rate of return for the past year?

For the past year,what was the minimum required rate of return?

What were Division A's sales?

(Appendix 11A)Assume again that the company uses the step-down method.What would be the total amount of cost allocated from the two Service Departments to the Operating Departments for the year?

(Appendix 11A)Under the direct method of allocation,what would be the amount of Custodial Services cost allocated to the Cutting Department?

(Appendix 11A)What will be the total appraisal cost appearing on the quality cost report?

(Appendix 11A)Prevention costs and appraisal costs are incurred in an effort to keep poor quality of conformance from occurring.

(Appendix 11A)Under the direct method of allocation,what would be the predetermined overhead rate for the year in the Assembly Department? (Round your final answer to the nearest two decimal places)

Assuming that sales and operating income remain the same,which of the following statements about a company's return on investment is correct?

(Appendix 11A)Falstaff Company's quality cost report is to be based on the following data: Required: Prepare a quality cost report in good form with separate sections for prevention costs,appraisal costs,internal failure costs,and external failure costs.

(Appendix 11A)What will be the total external failure cost appearing on the quality cost report?

(Appendix 11A)Suppose the transfer of posts to the Lamp Division will cut into sales to outside customers by 15,000 units.What is the lowest transfer price that would not reduce the operating income of the Post Division?

Managerial Accounting and the Business Environment

Cost Terms, Concepts, and Classifications

Cost Behaviour: Analysis and Use

Cost-Volume-Profit Relationships

Systems Design: Job-Order Costing

Systems Design: Process Costing

Activity-Based Costing: a Tool to Aid Decision Making

Variable Costing: a Tool for Management

Budgeting

Standard Costs and Overhead Analysis

Relevant Costs for Decision Making

Capital Budgeting Decisions

Financial Statement Analysis Online

Filters