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

Corporate-sustaining costs are costs of activities to support individual customers,regardless of the number of units or batches of product delivered to the customer.

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.For the contribution margin,what is the total flexible-budget variance?

There is a direct cause-and effect relationship between division-sustaining costs and customer or sales manager's actions.

The static-budget variance will be favorable,when ________.

Woodruff Flowering Plants provides the following information for the month of May: What is the budgeted contribution margin per composite unit for the budgeted mix? (Round any intermediary calculations two decimal places. )

When the cost pools are homogeneous which of the following will be true?

More insight into the static-budget variance can be gained by subdividing it into ________.

Advances in information-gathering technology make it more likely that multiple cost-pool systems will pass the cost-benefit test.

Archoid's Flowering Plants provides the following information for the month of May: For May,the company will report a(n)________.(Round any intermediary calculations two decimal places. )

Which of the following customer related costs are NOT economically feasible to trace but are related to a customer?

To guide cost allocation decisions,the benefits-received criterion ________.

While allocating corporate costs to divisions ________.

More insight into the sales-volume variance can be gained by subdividing it into ________.

How can a company's revenues and costs differ across customers?

The Fortise Corporation manufactures two types of vacuum cleaners,the Victor for commercial building use and the House-Mate for residences.Budgeted and actual operating data for the year 2017 were as follows: What is the total static-budget variance in terms of the contribution margin?

NOT allocating some corporate costs to divisions and products results in which of the following?

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 actual contribution margin for the month?

The chart used to express customer profitability is called the whale curve because it is backward-bending at the point where customers start to become unprofitable and thus resembles a humpback.

A composite unit is a hypothetical unit with weights based on the mix of individual units.

A company sets up cost pools for indirect cost allocation.Management sees clear cause-and-effect relationships between the incurrence of costs and the chosen the cost-allocation base.What other common relationships or basis with a cost allocation base might management utilize to allocate costs?