Michael & Co.expects overhead costs of $60,000 per month and direct production costs of $24 per unit.The estimated production activity for the current accounting period is as follows: \[\begin{array} { l c r r r } & \text { 1st Quarter } & \text { 2nd Quarter } & \text { 3rd Quarter } & \text { 4th Quarter } \\ \text { Units produced } & 11,500 & 9,000 & 8,250 & 11,250 \end{array}\] The predetermined overhead rate based on units produced is: (Round the answer to 2 decimal places.)

A) $1.50 per unit. B) $2.67 per unit. C) $18.00 per unit. D) $42.00 per unit. A) $1.50 per unit. B) $2.67 per unit. C) $18.00 per unit. D) $42.00 per unit.

Exam 4: Cost Accumulation,tracing,and Allocation

Old Virginia Meat Processing Plant processes hogs to produce three joint products: bacon,sausage,and pork chops.The company incurs common processing costs of $100,000 per batch.Each batch yields 15,000 pounds of bacon,18,000 pounds of sausage,and 7,000 pounds of pork chops.Pork chops can be sold for $3.00 per pound.The bacon and sausage products are sold at the split-off point for $3.25 per pound and $3.50 per pound,respectively. Required: 1)Allocate Old Virginia's joint costs using pounds produced as the allocation base.(Do not round intermediate calculations.) 2)Allocate Old Virginia's joint costs using the relative sales value at split-off method.(Do not round intermediate calculations.) 3)Assume that the pork chops are processed further after the split-off point at an additional cost of $4,000 and that joint costs are allocated based on pounds produced.What would be the total cost assigned to pork chops?

(Essay)

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Question 101

The split-off point is the point at which individual products resulting from a joint process can be identified.

(True/False)

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Question 102

It is possible that the same cost might be direct with respect to one cost object but indirect with respect to another cost object.

(True/False)

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Question 103

A company's total profit can be affected by the method used to allocate joint costs.

(True/False)

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Question 104

Selection of a cost driver depends on:

(Multiple Choice)

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Question 105

Because Fenwick Company has significant swings in its monthly production,the best way to allocate its plant manager's $58,000 annual salary is to allocate 1/12^th of the cost each month.

(True/False)

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Question 106

A cost object is anything for which management desires a separate tracking of costs,while a cost driver is the factor that causes the cost object to increase or decrease.

(True/False)

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Question 107

Harrison Company expects to incur $600,000 in manufacturing overhead for the coming year.The company makes two products,A and B,and it has accumulated the following budget information for the products: Product A Product B Total Nurnber of units to be produced 10,000 5,000 15,000 Direct labor hours 25,000 5,000 30,000 Machine hours 15,000 30,000 45,000 Required: 1)Use direct labor hours as the cost driver to compute the allocation rate.Determine the amount of budgeted overhead to be allocated to each unit of product A.(Round to the nearest cent.) 2)Use machine hours as the cost driver to compute the allocation rate.Determine the amount of budgeted overhead to be allocated to each unit of product A.(Round to the nearest cent.) 3)How should Harrison decide between machine hours and direct labor hours as the cost driver for its manufacturing overhead?

(Essay)

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Question 108

Jiminez Company paid its annual property tax of $6,000 on its manufacturing facility in January.The company expects to make 4,000 units of product during the year.During January,300 units of product were produced.Based on this information:

(Multiple Choice)

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Question 109

Indirect costs are often pooled,and not allocated individually because:

(Multiple Choice)

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Question 110

Michael & Co.expects overhead costs of $60,000 per month and direct production costs of $24 per unit.The estimated production activity for the current accounting period is as follows: 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Units produced 11,500 9,000 8,250 11,250 The predetermined overhead rate based on units produced is: (Round the answer to 2 decimal places.)

(Multiple Choice)

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Question 111

The process of dividing a total cost into parts and assigning it to cost objects is known as:

(Multiple Choice)

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Question 112

Some costs that possibly could be traced directly to cost objects are nonetheless classified as indirect costs because:

(Multiple Choice)

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Question 113

Cobalt Company management has identified the following cost objects: Cost Object 1: The cost of operating the finishing department Cost Object 2: The cost of operating the factory Cost Object 3: The cost of a particular product made in June With respect to these cost objectives,how would rent paid by the finishing department for storage space be classified?

(Multiple Choice)

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Question 114

Joint products A and B emerge from common processing that costs $200,000 and yields 2,000 units of Product A and 1,000 units of Product B.Product A can be sold for $100 per unit.Product B can be sold for $120 per unit.How much of the joint cost will be assigned to Product A if joint costs are allocated on the basis of relative sales values? (Do not round intermediate calculations.)

(Multiple Choice)

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Question 115

The first step in cost accumulation is to identify cost objects.

(True/False)

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Question 116

How do you account for costs incurred before the split-off point? How do you account for costs incurred after the split-off point?

(Essay)

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Question 117

Parr Corporation makes three products,X,Y,and Z.Expected overhead costs for the coming year include: Depreciation on factory building \ 140,000 Factory utility costs 160,000 Supervisory salaries 250,000 Factory supplies Total Parr uses direct labor hours as the cost driver to allocate overhead costs.Budgeted direct labor hours for each product are: Product X,15,000 direct labor hours Product Y,10,000 direct labor hours Product Z,5,000 direct labor hours Required: 1)Determine the amount of manufacturing overhead that should be allocated to each of the three products. 2)Assume that each unit of Product X requires $40 in direct materials and three direct labor hours at a rate of $15 per hour.Calculate the budgeted or expected cost of each unit of X.

(Essay)

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Question 118

Jefferson Company expects to incur $450,000 in manufacturing overhead costs during the current year.Other budget information follows: Department A Department B Department C Direct labor hours 15,000 5,000 20,000 Machine hours 8,000 10,000 12,000 Required: 1)Use direct labor hours as the cost driver to compute the allocation rate.Determine the amount of budgeted overhead cost for each department. 2)Use machine hours as the cost driver to compute the allocation.Determine the amount of budgeted overhead cost for each department. 3)Assume that Department A manufactured a product that required 160 direct labor hours and 85 machine hours.If overhead is allocated based on direct labor hours,how much overhead would be allocated to this product? 4)Assume that Department A manufactured a product that required 160 direct labor hours and 85 machine hours.If overhead is allocated based on machine hours,how much overhead would be allocated to this product?

(Essay)

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Question 119

Which of the following is not a step in allocating indirect costs to cost objects?

(Multiple Choice)

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Question 120

Showing 101 - 120 of 159

The split-off point is the point at which individual products resulting from a joint process can be identified.

It is possible that the same cost might be direct with respect to one cost object but indirect with respect to another cost object.

A company's total profit can be affected by the method used to allocate joint costs.

Selection of a cost driver depends on:

Because Fenwick Company has significant swings in its monthly production,the best way to allocate its plant manager's $58,000 annual salary is to allocate 1/12^th of the cost each month.

A cost object is anything for which management desires a separate tracking of costs,while a cost driver is the factor that causes the cost object to increase or decrease.

Jiminez Company paid its annual property tax of $6,000 on its manufacturing facility in January.The company expects to make 4,000 units of product during the year.During January,300 units of product were produced.Based on this information:

Indirect costs are often pooled,and not allocated individually because:

The process of dividing a total cost into parts and assigning it to cost objects is known as:

Some costs that possibly could be traced directly to cost objects are nonetheless classified as indirect costs because:

The first step in cost accumulation is to identify cost objects.

How do you account for costs incurred before the split-off point? How do you account for costs incurred after the split-off point?

Which of the following is not a step in allocating indirect costs to cost objects?

Management Accounting and Corporate Governance

Cost Behavior, operating Leverage, and Profitability Analysis

Analysis of Cost, volume, and Pricing to Increase Profitability

Cost Management in an Automated Business Environment: ABC, ABM, and TQM

Relevant Information for Special Decisions

Planning for Profit and Cost Control

Performance Evaluation

Responsibility Accounting

Planning for Capital Investments

Product Costing in Service and Manufacturing Entities

Job-Order, process, and Hybrid Costing Systems

Financial Statement Analysis

Statement of Cash Flows

Filters

Exam 4: Cost Accumulation,tracing,and Allocation

The split-off point is the point at which individual products resulting from a joint process can be identified.

It is possible that the same cost might be direct with respect to one cost object but indirect with respect to another cost object.

A company's total profit can be affected by the method used to allocate joint costs.

Selection of a cost driver depends on:

Because Fenwick Company has significant swings in its monthly production,the best way to allocate its plant manager's $58,000 annual salary is to allocate 1/12th of the cost each month.

A cost object is anything for which management desires a separate tracking of costs,while a cost driver is the factor that causes the cost object to increase or decrease.

Jiminez Company paid its annual property tax of $6,000 on its manufacturing facility in January.The company expects to make 4,000 units of product during the year.During January,300 units of product were produced.Based on this information:

Indirect costs are often pooled,and not allocated individually because:

The process of dividing a total cost into parts and assigning it to cost objects is known as:

Some costs that possibly could be traced directly to cost objects are nonetheless classified as indirect costs because:

The first step in cost accumulation is to identify cost objects.

How do you account for costs incurred before the split-off point? How do you account for costs incurred after the split-off point?

Which of the following is not a step in allocating indirect costs to cost objects?

Management Accounting and Corporate Governance

Cost Behavior, operating Leverage, and Profitability Analysis

Analysis of Cost, volume, and Pricing to Increase Profitability

Cost Management in an Automated Business Environment: ABC, ABM, and TQM

Relevant Information for Special Decisions

Planning for Profit and Cost Control

Performance Evaluation

Responsibility Accounting

Planning for Capital Investments

Product Costing in Service and Manufacturing Entities

Job-Order, process, and Hybrid Costing Systems

Financial Statement Analysis

Statement of Cash Flows

Filters

Because Fenwick Company has significant swings in its monthly production,the best way to allocate its plant manager's $58,000 annual salary is to allocate 1/12^th of the cost each month.