Exam 14: Cost Allocation, customer-Profitability Analysis, and Sales-Variance Analysis

A price discount is the reduction in selling price below list selling price to encourage customers to purchase more quantities.

The sales-mix variance will be unfavorable when which of the following occurs?

Allocation of corporate-sustaining costs is useful for which of the following?

The sales-mix variance will be favorable when ________.

Woodruff Flowering Plants provides the following information for the month of May: For May,Woodruff will report a(n)________.

To guide cost allocation decisions,the cause-and-effect criterion ________.

The benefits of implementing a more-complex cost allocation system are relatively easy to quantify for application of the cost-benefit approach.

To improve customer profitability,companies should track which of the following?

Which of the following classifications would be the most relevant for the costs incurred to process orders?

For companies in which full allocation is not followed,which of the following is true of corporate sustaining costs?

Which of the following is true about discontinuing an unprofitable customer?

Which of the following is an example of division-sustaining costs?

A customer cost hierarchy categorizes costs related to customers into different cost pools on the basis of different ________.

Sales-mix variance = $300,000 (F),sales-quantity variance = $250,000 (F),flexible-budget variance = $120,000 (F),market-size variance = $80,000 (U),calculate the sales-volume variance.

The sales-quantity variance will be unfavorable when which of the following occurs?

Colise Services is a repair-service company specializing in small household jobs.Each client pays a fixed monthly service fee based on the number of rooms in the house.Records are kept on the time and material costs used for each repair.The following profitability data apply to five customers: Required: a.Compute the operating income for each of the five customers. b.What options should Colise Services consider in light of the customer-profitability results? c.What problems might Colise Services encounter in accurately estimating the operating costs of each customer?

If deciding whether to eliminate a distribution channel,allocating corporate-sustaining costs to distribution channels ________.

The difference between budgeted contribution margin per composite unit for the actual mix and the budgeted contribution margin per composite unit for the budgeted mix is the ________.

Capity Tea Products has an exclusive contract with British Distributors.Calamine and Capity are two brands of teas that are imported and sold to retail outlets.The following information is provided for the month of March: Budgeted and actual fixed corporate-sustaining costs are $1,850 and $2,300,respectively.What is the contribution margin for the flexible budget?

A financial analyst for Simon Manufacturing prepared the following report: What is the cumulative customer-level operating income as a percentage of customer level operating income for the top 4 most profitable (operating income)customers?