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

The Conity Corporation has an Electric Mixer Division and an Electric Lamp Division.Of a $13,000,000 bond issuance,the Electric Mixer Division used $9,500,000 and the Electric Lamp Division used $3,500,000 for expansion.Interest costs on the bond totaled $975,000 for the year.What amount of interest costs should be allocated to the Electric Mixer Division? (Round any intermediary calculations two decimal places and your final answer to the nearest dollar. )

The static-budget variance is the difference between ________.

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

To guide cost allocation decisions,the fairness or equity criterion ________.

If one of five distribution channels is discontinued,corporate-sustaining costs such as general administration costs will most likely be reduced by 20%.

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 sales-volume variance in terms of the contribution margin?

Managers use a customer-profitability analysis report to ensure that ________.

What actions might be taken with an unprofitable customer?

In cost allocation,R&D costs are used to ________.

Which cost-allocation criterion is most likely to subsidize poor performers at the expense of the best performers?

Customer-profitability analysis is the reporting and assessment of revenues earned from customers and the costs incurred to earn those revenues.

The Conity Corporation has an Electric Mixer Division and an Electric Lamp Division.Of a $16,000,000 bond issuance,the Electric Mixer Division used $9,600,000 and the Electric Lamp Division used $6,400,000 for expansion.Interest costs on the bond totaled $1,000,000 for the year.What amount of interest costs should be allocated to the Electric Lamp Division? (Round any intermediary calculations two decimal places and your final answer to the nearest dollar. )

Superior Electronics manufactures TVs and DVDRs.During April,the following activities occurred: Required: Compute the following variances in terms of the contribution margin. a.Determine the total sales-mix variance. b.Determine the total sales-quantity variance. c.Determine the total sales-volume variance.

With the use of a bar chart,the number of "unprofitable" customers and the magnitude of their losses are apparent.

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 contribution margin for the flexible budget? (Round intermediary calculations to the nearest dollar. )

Dartmouth Building Products Inc.provides the following information. Corporate advertising costs = $860,000 Division A - $4,900,000 Division B - $19,600,000 Number of ads run on Division A products 600 Number of ads run on Division B products 4400 Assume that customers with higher revenues benefited more from corporate advertising costs than customers with lower revenues.What is the allocated corporate costs for Division B?

Which of the following criteria has the presumption that the more-profitable divisions have a greater ability to absorb corporate administration costs?

Allocating all corporate costs motivates division managers to examine how corporate costs are planned and controlled.

All customers are equally important to a company and should receive equal levels of attention.

Price discounts are influenced by ________.