Question 1

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

Accepted Answer

A)  $70,000. 
B)  $97,000. 
C)  $110,000. 
D)  $119,000. 
A)  $70,000. 
B)  $97,000. 
C)  $110,000. 
D)  $119,000.

Question 2

The salary paid to a store manager is a traceable fixed expense of the store.

Accepted Answer

A) True 
 B)False

Question 3

(Appendix 11A)Assume that the company uses the step-down method of allocating Service Department costs to Operating Departments,and Building and Grounds costs are allocated first.How much Personnel Department cost would be allocated to Operating Department A?

Accepted Answer

A)  $0. 
B)  $90,000. 
C)  $92,430. 
D)  $205,400. 
A)  $0. 
B)  $90,000. 
C)  $92,430. 
D)  $205,400.

Question 4

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

Accepted Answer

A)  $104,000. 
B)  $147,000. 
C)  $166,000. 
D)  $247,000. 
A)  $104,000. 
B)  $147,000. 
C)  $166,000. 
D)  $247,000.

Question 5

What was the return on investment?

Accepted Answer

A)  12.5%. 
B)  20.0%. 
C)  25.0%. 
D)  40.0%. 
A)  12.5%. 
B)  20.0%. 
C)  25.0%. 
D)  40.0%.

Question 6

For the past year,what was the turnover?

Accepted Answer

A)  2. 
B)  4. 
C)  10. 
D)  25.200,000/100,000 = 2 
A)  2. 
B)  4. 
C)  10. 
D)  25.200,000/100,000 = 2

Question 7

There is a growing trend toward greater centralization for effective control as more businesses go global.

Accepted Answer

A) True 
 B)False

Question 8

(Appendix 11A)Which of the following would be classified as an internal failure cost on a quality cost report?

Accepted Answer

A)  Rework labour and overhead. 
B)  Technical support provided to suppliers. 
C)  Quality improvement projects. 
D)  Systems development. 
A)  Rework labour and overhead. 
B)  Technical support provided to suppliers. 
C)  Quality improvement projects. 
D)  Systems development.

Question 9

Service departments,such as accounting,finance,general administration,legal,and personnel,are usually considered to be cost centres.In addition,manufacturing facilities are often considered to be cost centres.

Accepted Answer

A) True 
 B)False

Question 10

The IT Corporation produces and markets two types of electronic calculators: Model 11 and Model 12.The following data were gathered on activities last month:   
Required:
a.Prepare a segmented income statement in the contribution format for last month,showing both "Amount" and "Percent" columns for the company as a whole and for each model.
b.Why might it be very difficult to calculate separate break-even sales for each model?
c.Refer to the original data and,if necessary,the results of the segmented income statement prepared in part (a)above.Calculate the total break-even sales (in both units AND dollars)for last month,assuming that none of the fixed production costs and fixed selling expenses is traceable.Allocate the total break-even sales between the two models.
d.Again,refer to the original data and,if necessary,the results of the segmented income statement prepared in part (a)above.Calculate the total break-even sales (in both units AND dollars)for last month,assuming that the "allocated" amounts of the company's administrative expenses are actually traceable.Allocate the total break-even sales between the two models.
e.How reasonable are the total break-even sales numbers calculated in parts (c)and (d)given the actual results for last month?

Accepted Answer

a. @#IMG-DLM& 
b.All fixed expenses have to be tra

Question 11

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

Accepted Answer

A)  $64,000. 
B)  $113,000. 
C)  $121,000. 
D)  $124,000. 
A)  $64,000. 
B)  $113,000. 
C)  $121,000. 
D)  $124,000.

Question 12

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

Accepted Answer

A)  $103,000. 
B)  $145,000. 
C)  $151,000. 
D)  $155,000. 
A)  $103,000. 
B)  $145,000. 
C)  $151,000. 
D)  $155,000.

Question 13

For the past year,what was the return on investment?

Accepted Answer

A)  15.75%. 
B)  20.50%. 
C)  25.00% 
D)  31.25%. 
A)  15.75%. 
B)  20.50%. 
C)  25.00% 
D)  31.25%.

Question 14

(Appendix 11A)Total costs in the Personnel Department are $900,000 per year.Under the step-down method,the costs of the Personnel Department are allocated before the costs of the Engineering Department are allocated.What would be the amount of this cost allocated to the Engineering Department under the step-down method,rounded to the nearest dollar?

Accepted Answer

A)  $0. 
B)  $81,000. 
C)  $83,505. 
D)  $92,046. 
A)  $0. 
B)  $81,000. 
C)  $83,505. 
D)  $92,046.

Question 15

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

Accepted Answer

A)  $128,000. 
B)  $165,000. 
C)  $185,000. 
D)  $196,000. 
A)  $128,000. 
B)  $165,000. 
C)  $185,000. 
D)  $196,000.

Question 16

A company had the following results last year: sales,$700,000;return on investment,28%;and margin,8%.What were the average operating assets last year?

Accepted Answer

A)  $200,000. 
B)  $540,000. 
C)  $2,450,000. 
D)  $2,500,000. 
A)  $200,000. 
B)  $540,000. 
C)  $2,450,000. 
D)  $2,500,000.

Question 17

Sales and average operating assets for Company P and Company Q are given below:  
What is the margin that each company (Company P and Company Q,respectively)will have to earn in order to generate a return on investment of 20%?

Accepted Answer

A)  2.5% and 5%. 
B)  8% and 4%. 
C)  12% and 16%. 
D)  50% and 100%. 
A)  2.5% and 5%. 
B)  8% and 4%. 
C)  12% and 16%. 
D)  50% and 100%.

Question 18

(Appendix 11A)Which of the following statements about reciprocal service department costs is correct?

Accepted Answer

A)  They are allocated to producing departments under the direct method but not allocated to producing departments at all under the step-down method. 
B)  They are allocated to producing departments under the step-down method but not allocated to producing departments at all under the direct method. 
C)  They are not allocated to producing departments under either the direct or the step-down methods. 
D)  They are allocated to producing departments under both the direct and step-down methods. 
A)  They are allocated to producing departments under the direct method but not allocated to producing departments at all under the step-down method. 
B)  They are allocated to producing departments under the step-down method but not allocated to producing departments at all under the direct method. 
C)  They are not allocated to producing departments under either the direct or the step-down methods. 
D)  They are allocated to producing departments under both the direct and step-down methods.

Question 19

(Appendix 11A)Total costs in the Personnel Department are $900,000 per year.Under the step-down method,the costs of the Personnel Department are allocated before the costs of the Engineering Department are allocated.What would be the amount of Personnel Department cost that would be allocated to Producing Department 2 under the step method,rounded to the nearest dollar?

Accepted Answer

A)  $0. 
B)  $261,000. 
C)  $269,072. 
D)  $296,591. 
A)  $0. 
B)  $261,000. 
C)  $269,072. 
D)  $296,591.

Question 20

What is Company A's residual income?

Accepted Answer

A)  $9,000. 
B)  $21,000. 
C)  $24,000. 
D)  $45,000. 
A)  $9,000. 
B)  $21,000. 
C)  $24,000. 
D)  $45,000.

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

The salary paid to a store manager is a traceable fixed expense of the store.

(Appendix 11A)Assume that the company uses the step-down method of allocating Service Department costs to Operating Departments,and Building and Grounds costs are allocated first.How much Personnel Department cost would be allocated to Operating Department A?

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

What was the return on investment?

For the past year,what was the turnover?

There is a growing trend toward greater centralization for effective control as more businesses go global.

(Appendix 11A)Which of the following would be classified as an internal failure cost on a quality cost report?

Service departments,such as accounting,finance,general administration,legal,and personnel,are usually considered to be cost centres.In addition,manufacturing facilities are often considered to be cost centres.

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

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

For the past year,what was the return on investment?

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

A company had the following results last year: sales,$700,000;return on investment,28%;and margin,8%.What were the average operating assets last year?

Sales and average operating assets for Company P and Company Q are given below: What is the margin that each company (Company P and Company Q,respectively)will have to earn in order to generate a return on investment of 20%?

(Appendix 11A)Which of the following statements about reciprocal service department costs is correct?

What is Company A's residual income?

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

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Exam 11: Reporting for Control

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

The salary paid to a store manager is a traceable fixed expense of the store.

(Appendix 11A)Assume that the company uses the step-down method of allocating Service Department costs to Operating Departments,and Building and Grounds costs are allocated first.How much Personnel Department cost would be allocated to Operating Department A?

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

What was the return on investment?

For the past year,what was the turnover?

There is a growing trend toward greater centralization for effective control as more businesses go global.

(Appendix 11A)Which of the following would be classified as an internal failure cost on a quality cost report?

Service departments,such as accounting,finance,general administration,legal,and personnel,are usually considered to be cost centres.In addition,manufacturing facilities are often considered to be cost centres.

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

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

For the past year,what was the return on investment?

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

A company had the following results last year: sales,$700,000;return on investment,28%;and margin,8%.What were the average operating assets last year?

Sales and average operating assets for Company P and Company Q are given below: What is the margin that each company (Company P and Company Q,respectively)will have to earn in order to generate a return on investment of 20%?

(Appendix 11A)Which of the following statements about reciprocal service department costs is correct?

What is Company A's residual income?

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

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