Question 1

________ are costs incurred to produce or purchase two or more products at the same time.

Accepted Answer

The answer of ________ are costs incurred to produce or...

Question 2

Using the information below,compute the cycle efficiency:

Accepted Answer

A) 51 days. 
B) 87 days. 
C) 37 days. 
D) 52 days. 
E) 63 days. 
A) 51 days. 
B) 87 days. 
C) 37 days. 
D) 52 days. 
E) 63 days.

Question 3

Marks Corporation has two operating departments,Drilling and Grinding,and an office.The three categories of office expenses are allocated to the two departments using different allocation bases.The following information is available for the current period:  
 
-The amount of salaries that should be allocated to Drilling for the current period is:

Accepted Answer

A) $30,000. 
B) $18,000. 
C) $15,000. 
D) $10,000. 
E) $12,000. 
A) $30,000. 
B) $18,000. 
C) $15,000. 
D) $10,000. 
E) $12,000.

Question 4

Within an organizational structure,the person most likely to be evaluated in terms of controllable costs would be:

Accepted Answer

A) A payroll clerk. 
B) A cost center manager. 
C) A production line worker. 
D) A maintenance worker. 
E) A sales representative. 
A) A payroll clerk. 
B) A cost center manager. 
C) A production line worker. 
D) A maintenance worker. 
E) A sales representative.

Question 5

Evaluation of the performance of an investment center involves only financial measures.

Accepted Answer

A) True 
 B)False

Question 6

An accounting system that is set up to control costs and evaluate managers' performance by assigning costs to the managers responsible for controlling them is called a(n):

Accepted Answer

A) Cost accounting system. 
B) Managerial accounting system. 
C) Responsibility accounting system. 
D) Financial accounting system. 
E) Activity-based accounting system. 
A) Cost accounting system. 
B) Managerial accounting system. 
C) Responsibility accounting system. 
D) Financial accounting system. 
E) Activity-based accounting system.

Question 7

Return on investment is a useful measure to evaluate the performance of a cost center manager.

Accepted Answer

A) True 
 B)False

Question 8

The following data is available for the Janitorial Services Department of Glitterol Co.
 Required: Calculate departmental contribution to overhead for the Janitorial Services Department,including the department's contribution as a percentage of revenues.

Accepted Answer

The answer of The following data is available for the...

Question 9

All of the following are associated with reporting controllable costs except:

Accepted Answer

A) At lower levels,management have fewer controllable costs. 
B) Responsibility and control broaden for higher-level managers. 
C) Lower-level managers are responsible for detailed costs and so receive detailed reports. 
D) Uncontrollable costs are allocated equally. 
E) Higher-level managers receive summarized reports for focusing on broader issues. 
A) At lower levels,management have fewer controllable costs. 
B) Responsibility and control broaden for higher-level managers. 
C) Lower-level managers are responsible for detailed costs and so receive detailed reports. 
D) Uncontrollable costs are allocated equally. 
E) Higher-level managers receive summarized reports for focusing on broader issues.

Question 10

Division A makes a part that it sells to customers outside of the company.Data concerning this part appear below:   Division B of the same company would like to use the part manufactured by Division A in one of its products.Division B currently purchases a similar part made by an outside company for $38 per unit and would substitute the part made by Division A.Division B requires 5,000 units of the part each period.Division A has ample capacity to produce the units for Division B without any increase in fixed costs and without cutting into sales to outside customers.If Division A sells to Division B rather than to outside customers,the variable cost be unit would be $1 lower.What is the lowest acceptable transfer price Division A should accept?

Accepted Answer

A) $40 
B) $38 
C) $30 
D) $29 
E) $10 
A) $40 
B) $38 
C) $30 
D) $29 
E) $10

Question 11

Allocating joint costs to products using a value basis method is based on their relative:

Accepted Answer

A) Sales values. 
B) Direct costs. 
C) Gross margins. 
D) Total costs. 
E) Variable costs. 
A) Sales values. 
B) Direct costs. 
C) Gross margins. 
D) Total costs. 
E) Variable costs.

Question 12

Jarrett Department Store operates three departments (A,B and
C).If total costs of $4,500 are to be allocated on the basis of square feet of space (Dept.A = 1,500 Sq.Ft.; Dept.B = 900 Sq.Ft.; Dept.C = 600 Sq.Ft.)then Dept.A's share (in percent)of the $4,500 cost would be ________%; Dept.B would be ______%,and Dept.C would be ________%.The amount of cost allocated to Dept.C would be $________.

Accepted Answer

1,500 sq.ft./3,000 sq.ft.= 50%

Question 13

A company rents a small building with 10,000 square feet of space for $100,000 per year.The rent is allocated to the company's three departments on the basis of the value of the space occupied by each.Department One occupies 1,500 square feet of ground-floor space,Department Two occupies 3,500 square feet of ground-floor space,and Department Three occupies 5,000 square feet of second-floor space.If rent for comparable floor space in the neighborhood averages $15.00 per sq.ft.for ground-floor space and $10.00 per sq.ft.for second-floor space,what annual rent expense should be charged to each department?

Accepted Answer

The answer of A company rents a small building with...

Question 14

A lumber mill 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 if the value basis is used.

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 15

Define joint costs and explain how joint costs can be allocated.

Accepted Answer

Joint costs are costs incurred to produc

Question 16

The first three steps in preparing a departmental income statement are: (1)accumulate ________ of the department,(2)allocate ________ to the department,and (3)allocate ________ to the operating departments.

Accepted Answer

direct expenses; ind

Question 17

A department's direct expenses are usually considered uncontrollable costs.

Accepted Answer

A) True 
 B)False

Question 18

In a decentralized organization,decisions are made by managers throughout the company rather than by a few top executives.

Accepted Answer

A) True 
 B)False

Question 19

The following is a partially completed lower section of a departmental expense allocation spreadsheet for Brickland.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 Maintenance department expense to be allocated to Assembly.

Accepted Answer

A) $6,400. 
B) $9,900. 
C) $8,100. 
D) $9,000. 
E) $25,600. 
A) $6,400. 
B) $9,900. 
C) $8,100. 
D) $9,000. 
E) $25,600.

Question 20

Differential Chemical produced 10,000 gallons of Preon and 20,000 gallons of Paron.Joint costs incurred in producing the two products totaled $7,500.At the split-off point,Preon has a market value of $6.00 per gallon and Paron $2.00 per gallon.Compute the portion of the joint costs to be allocated to Preon if the value basis is used.

Accepted Answer

A) $2,500. 
B) $3,000. 
C) $4,500. 
D) $5,625. 
E) $1,500. 
A) $2,500. 
B) $3,000. 
C) $4,500. 
D) $5,625. 
E) $1,500.

Exam 22: Performance Measurement and Responsibility Accounting

________ are costs incurred to produce or purchase two or more products at the same time.

Using the information below,compute the cycle efficiency:

Within an organizational structure,the person most likely to be evaluated in terms of controllable costs would be:

Evaluation of the performance of an investment center involves only financial measures.

An accounting system that is set up to control costs and evaluate managers' performance by assigning costs to the managers responsible for controlling them is called a(n):

Return on investment is a useful measure to evaluate the performance of a cost center manager.

The following data is available for the Janitorial Services Department of Glitterol Co. Required: Calculate departmental contribution to overhead for the Janitorial Services Department,including the department's contribution as a percentage of revenues.

All of the following are associated with reporting controllable costs except:

Allocating joint costs to products using a value basis method is based on their relative:

A lumber mill 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 if the value basis is used.

Define joint costs and explain how joint costs can be allocated.

The first three steps in preparing a departmental income statement are: (1)accumulate ________ of the department,(2)allocate ________ to the department,and (3)allocate ________ to the operating departments.

A department's direct expenses are usually considered uncontrollable costs.

In a decentralized organization,decisions are made by managers throughout the company rather than by a few top executives.

Accounting in Business

Accounting for Business Transactions

Adjusting Accounts for Financial Statements

Accounting for Merchandising Operations

Inventories and Cost of Sales

Cash,fraud,and Internal Controls

Accounting for Receivables

Accounting for Long-Term Assets

Accounting for Current Liabilities

Accounting for Long-Term Liabilities

Corporate Reporting and Analysis

Reporting Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Costing and Analysis

Process Costing and Analysis

Activity-Based Costing and Analysis

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing and Analysis

Master Budgets and Performance Planning

Flexible Budgets and Standard Costs

Relevant Costing for Managerial Decisions

Capital Budgeting and Investment Analysis

Time Value of Money

Investments

Lean Principles and Accounting

Filters

The first three steps in preparing a departmental income statement are: (1)accumulate of the department,(2)allocate to the department,and (3)allocate to the operating departments.