Question 1

How can a department manager's salary be characterized?

Accepted Answer

A) direct cost of the department,but indirect to the units the department produces. 
B) process cost of the department,but indirect to the units the department produces. 
C) indirect cost of the department,but direct to the units the department produces. 
D) variable cost of the department,but direct to the units the department produces. 
A) direct cost of the department,but indirect to the units the department produces. 
B) process cost of the department,but indirect to the units the department produces. 
C) indirect cost of the department,but direct to the units the department produces. 
D) variable cost of the department,but direct to the units the department produces.

Question 2

Manufacturing companies are required to allocate joint-process costs in the valuation of inventories and cost of goods sold for

Accepted Answer

A) financial reporting,only. 
B) tax reporting,only. 
C) managerial reporting,only. 
D) both financial and tax reporting. 
A) financial reporting,only. 
B) tax reporting,only. 
C) managerial reporting,only. 
D) both financial and tax reporting.

Question 3

The costing process that (1)measures each service department's resource spending by unit,batch,product,customer,or facility,then (2)identifies and measures the activities demanded by other departments that require support-service spending,then (3)identifies appropriate cost-driver bases and calculates cost-driver rates,and finally allocates service department costs based on other departments' usage of cost-driver bases,is called the

Accepted Answer

A) usage method. 
B) activity-based method. 
C) step method. 
D) cost driver method. 
A) usage method. 
B) activity-based method. 
C) step method. 
D) cost driver method.

Question 4

A method for allocating joint-process costs is based on

Accepted Answer

A) opportunity costs. 
B) outlay costs. 
C) indirect costs. 
D) physical measures. 
A) opportunity costs. 
B) outlay costs. 
C) indirect costs. 
D) physical measures.

Question 5

Stephanie Company
Stephanie Company has two production departments: D and J.Stephanie also has 3 service departments: Personnel,Administration,and Shipping.Shipping costs are allocated on the basis of number of packages,while Personnel and Administration costs are allocated using number of employees.Assume that the ranking of the benefits provided is in the order listed below.
 
Refer to Stephanie Company.Using the step method,what amount of Shipping costs is allocated to Department D (rounded to the nearest $)?

Accepted Answer

A) $304,348 
B) $500,000 
C) $524,570 
D) $629,484 
A) $304,348 
B) $500,000 
C) $524,570 
D) $629,484

Question 6

Why are service department costs allocated to producing departments?

Accepted Answer

Service departments provide services to

Question 7

Stephanie Company
Stephanie Company has two production departments: D and J.Stephanie also has 3 service departments: Personnel,Administration,and Shipping.Shipping costs are allocated on the basis of number of packages,while Personnel and Administration costs are allocated using number of employees.Assume that the ranking of the benefits provided is in the order listed below.
 
Refer to Stephanie Company.Using the direct method,what amount of Administration costs is allocated to Department D (rounded to the nearest $)?

Accepted Answer

A) $ 97,561 
B) $320,000 
C) $400,000 
D) $444,444 
A) $ 97,561 
B) $320,000 
C) $400,000 
D) $444,444

Question 8

Stephanie Company
Stephanie Company has two production departments: D and J.Stephanie also has 3 service departments: Personnel,Administration,and Shipping.Shipping costs are allocated on the basis of number of packages,while Personnel and Administration costs are allocated using number of employees.Assume that the ranking of the benefits provided is in the order listed below.
 
Refer to Stephanie Company.Using the step method,what amount of Administration costs is allocated to Department D (rounded to the nearest $)?

Accepted Answer

A) $ 97,561 
B) $216,216 
C) $273,115 
D) $409,673 
A) $ 97,561 
B) $216,216 
C) $273,115 
D) $409,673

Question 9

Lamar Company has two production departments and a maintenance department.In addition,the company keeps other costs for the general plant in a separate account.The estimated cost data for Year 1 follow:
   
The general plant services the three departments in the following proportions: 50 percent (Department 1);30 percent (Department 2);20 percent (Maintenance).
Required:
Allocate maintenance costs based on maintenance hours.Allocate maintenance department and general plant costs to the production departments.Use the step method,starting with general plant costs.

Accepted Answer

(Allocating overhead. )
 @#IMG-DLM&_TB2144_00 (a)T

Question 10

Why is activity-based costing used to allocate service department costs?

Accepted Answer

A) To improve allocations of production department costs to production departments. 
B) To improve allocations of production department costs to service departments. 
C) To improve allocations of service department costs to production departments. 
D) None of the answers is correct. 
A) To improve allocations of production department costs to production departments. 
B) To improve allocations of production department costs to service departments. 
C) To improve allocations of service department costs to production departments. 
D) None of the answers is correct.

Question 11

Joint-process cost allocations arise from the need to assign joint-process costs to

Accepted Answer

A) a single product manufactured from a common input. 
B) a single product manufactured from two or more common inputs. 
C) two or more products manufactured from a common input. 
D) two or more products manufactured from two or more common inputs. 
A) a single product manufactured from a common input. 
B) a single product manufactured from two or more common inputs. 
C) two or more products manufactured from a common input. 
D) two or more products manufactured from two or more common inputs.

Question 12

Companies do not allocate common costs to departments and products for which of the following reasons:

Accepted Answer

A) to develop product cost information for purposes of pricing and bidding. 
B) contract cost reimbursement. 
C) motivation. 
D) dumping excess inventories on the market. 
A) to develop product cost information for purposes of pricing and bidding. 
B) contract cost reimbursement. 
C) motivation. 
D) dumping excess inventories on the market.

Question 13

Useful Tool Company
Useful Tool Company has two service departments (General Factory and Repair)and two operating departments (Fabrication and Assembly).Management has decided to allocate repair costs on the basis of the area (square feet)in each department and to allocate General Factory on the basis of labor hours worked by the employees in each of their respective departments.
The following data appear in the company records for the current period:
   
The company allocates the costs from the General Factory Department first.
Refer to the Useful Tool Company.Using direct labor hours as the base and the direct method of allocation,what is the overhead rate for the Assembly Department?

Accepted Answer

(a)& (b)

Question 14

Stephanie Company
Stephanie Company has two production departments: D and J.Stephanie also has 3 service departments: Personnel,Administration,and Shipping.Shipping costs are allocated on the basis of number of packages,while Personnel and Administration costs are allocated using number of employees.Assume that the ranking of the benefits provided is in the order listed below.
 
Refer to Stephanie Company.Using the step method,what amount of Shipping costs is allocated to Department J (rounded to the nearest $)?

Accepted Answer

A) $304,348 
B) $500,000 
C) $524,570 
D) $629,484 
A) $304,348 
B) $500,000 
C) $524,570 
D) $629,484

Question 15

Waterbury Box Company
General Factory Administration and Maintenance are service departments in the Waterbury Box Company.Management has decided to allocate maintenance costs on the basis of the area in each department and general factory administration costs on the basis of labor hours the employees worked in each of their respective departments.
The following data appears in the company records for the current period:
   
Refer to the Waterbury Box Company.What are the total service department costs allocated using each method?

Accepted Answer

Using the direct method,a tota

Question 16

Why are joint-process costs allocated?

Accepted Answer

Companies allocate joint-proce

Question 17

Stephanie Company
Stephanie Company has two production departments: D and J.Stephanie also has 3 service departments: Personnel,Administration,and Shipping.Shipping costs are allocated on the basis of number of packages,while Personnel and Administration costs are allocated using number of employees.Assume that the ranking of the benefits provided is in the order listed below.
 
Refer to Stephanie Company.Using the step method,what amount of Personnel costs is allocated to Department D (rounded to the nearest $)?

Accepted Answer

A) $ 73,171 
B) $100,000 
C) $105,263 
D) $240,000 
A) $ 73,171 
B) $100,000 
C) $105,263 
D) $240,000

Question 18

The service department cost allocation methodology that begins with the service department that receives the smallest dollar amount of service from the other service departments has its costs allocated to the other service and production departments,then distributes the total costs of the service department receiving the next smallest amount of service from other service departments,and so on is called the

Accepted Answer

A) wave method. 
B) activity-based method. 
C) step method. 
D) pass along method. 
A) wave method. 
B) activity-based method. 
C) step method. 
D) pass along method.

Question 19

To identify costs that relate to a specific product,what allocation base should be chosen?

Accepted Answer

A) One that does not have a cause and effect relationship. 
B) One that has a causal relationship. 
C) One that considers variable costs but not fixed costs. 
D) One that considers direct materials and direct labor but not factory overhead. 
A) One that does not have a cause and effect relationship. 
B) One that has a causal relationship. 
C) One that considers variable costs but not fixed costs. 
D) One that considers direct materials and direct labor but not factory overhead.

Question 20

Stephanie Company
Stephanie Company has two production departments: D and J.Stephanie also has 3 service departments: Personnel,Administration,and Shipping.Shipping costs are allocated on the basis of number of packages,while Personnel and Administration costs are allocated using number of employees.Assume that the ranking of the benefits provided is in the order listed below.
 
Refer to Stephanie Company.Using the direct method,what amount of Shipping costs is allocated to Department J (rounded to the nearest $)?

Accepted Answer

A) $ 63,636 
B) $318,182 
C) $381,818 
D) $450,000 
A) $ 63,636 
B) $318,182 
C) $381,818 
D) $450,000

How can a department manager's salary be characterized?

Manufacturing companies are required to allocate joint-process costs in the valuation of inventories and cost of goods sold for

A method for allocating joint-process costs is based on

Why are service department costs allocated to producing departments?

Why is activity-based costing used to allocate service department costs?

Joint-process cost allocations arise from the need to assign joint-process costs to

Companies do not allocate common costs to departments and products for which of the following reasons:

Why are joint-process costs allocated?

To identify costs that relate to a specific product,what allocation base should be chosen?

Fundamental Concepts

Measuring Product Costs

Activity-Based Management

Strategic Management of Costs,quality,and Time

Cost Drivers and Cost Behavior

Financial Modeling for Short-Term Decision Making

Differential Cost Analysis for Operating Decisions

Capital Expenditure Decisions

Profit Planning and Budgeting

Profit and Cost Center Performance Evaluation

Investment Center Performance Evaluation

Incentive Issues

Filters

Exam 13: Allocating Costs to Responsibility Centers

How can a department manager's salary be characterized?

Manufacturing companies are required to allocate joint-process costs in the valuation of inventories and cost of goods sold for

A method for allocating joint-process costs is based on

Why are service department costs allocated to producing departments?

Why is activity-based costing used to allocate service department costs?

Joint-process cost allocations arise from the need to assign joint-process costs to

Companies do not allocate common costs to departments and products for which of the following reasons:

Why are joint-process costs allocated?

To identify costs that relate to a specific product,what allocation base should be chosen?

Fundamental Concepts

Measuring Product Costs

Activity-Based Management

Strategic Management of Costs,quality,and Time

Cost Drivers and Cost Behavior

Financial Modeling for Short-Term Decision Making

Differential Cost Analysis for Operating Decisions

Capital Expenditure Decisions

Profit Planning and Budgeting

Profit and Cost Center Performance Evaluation

Investment Center Performance Evaluation

Incentive Issues

Filters