Deck 7: Analyzing Total Payroll Department Costs

Question 1

The accounting rate of return fails to consider the:

A) Project's basic profitability
B) Return of initial investment
C) Timing of cash flows
D) All of the above

Answer 1

Timing of cash flows

Question 2

Which term describes difference between the actual price of inputs and the standard price of inputs?

A) Price variance
B) Standard cost variance
C) Inflation index adjustment
D) Materials price index

Answer 2

Price variance

Question 3

Generally, the budgeting process concludes with the preparation of the:

A) Cash budget
B) Production budget
C) Selling expense budget
D) Budgeted financial statements

Answer 3

Budgeted financial statements

Question 4

Which of the following items is not typically considered in the development of the cash budget?

A) Selling expenses
B) Depreciation Expense
C) Administrative expenses
D) Purchases

Question 5

______________ is when the product loses market acceptance.

A) The start-up stage
B) The growth stage
C) The maturity stage
D) The decline stage

Question 6

Buckhannon Jewelry Company is in the process of selecting cost drivers that could be used as the bases for allocating various service department costs to its three production divisions: Cutting, Milling and Finishing.
Required: Select the most appropriate allocation base for each type of service department cost described in (a) through (j). Select from among the four allocation bases in the following list. In recording your answer, use the abbreviations provided in the list. Some allocation bases will be used for more than one answer.
List of Possible Choices of Allocation Bases
EMP = Number of Employees
UPC = Units of Production Capacity
SQF = Square Footage Occupied
POH = Budgeted Production Department Overhead

-Cost of operating a cafeteria that services all employees

A) EMP
B) UPC
C) SQF
D) POH

Question 7

Buckhannon Jewelry Company is in the process of selecting cost drivers that could be used as the bases for allocating various service department costs to its three production divisions: Cutting, Milling and Finishing.
Required: Select the most appropriate allocation base for each type of service department cost described in (a) through (j). Select from among the four allocation bases in the following list. In recording your answer, use the abbreviations provided in the list. Some allocation bases will be used for more than one answer.
List of Possible Choices of Allocation Bases
EMP = Number of Employees
UPC = Units of Production Capacity
SQF = Square Footage Occupied
POH = Budgeted Production Department Overhead

-Total payroll department costs

A) EMP
B) UPC
C) SQF
D) POH

Question 8

Buckhannon Jewelry Company is in the process of selecting cost drivers that could be used as the bases for allocating various service department costs to its three production divisions: Cutting, Milling and Finishing.
Required: Select the most appropriate allocation base for each type of service department cost described in (a) through (j). Select from among the four allocation bases in the following list. In recording your answer, use the abbreviations provided in the list. Some allocation bases will be used for more than one answer.
List of Possible Choices of Allocation Bases
EMP = Number of Employees
UPC = Units of Production Capacity
SQF = Square Footage Occupied
POH = Budgeted Production Department Overhead

-Fixed costs necessary to maintain upkeep of the water service

A) EMP
B) UPC
C) SQF
D) POH

Question 9

Buckhannon Jewelry Company is in the process of selecting cost drivers that could be used as the bases for allocating various service department costs to its three production divisions: Cutting, Milling and Finishing.
Required: Select the most appropriate allocation base for each type of service department cost described in (a) through (j). Select from among the four allocation bases in the following list. In recording your answer, use the abbreviations provided in the list. Some allocation bases will be used for more than one answer.
List of Possible Choices of Allocation Bases
EMP = Number of Employees
UPC = Units of Production Capacity
SQF = Square Footage Occupied
POH = Budgeted Production Department Overhead

-Cost of health services

A) EMP
B) UPC
C) SQF
D) POH

Question 10

Buckhannon Jewelry Company is in the process of selecting cost drivers that could be used as the bases for allocating various service department costs to its three production divisions: Cutting, Milling and Finishing.
Required: Select the most appropriate allocation base for each type of service department cost described in (a) through (j). Select from among the four allocation bases in the following list. In recording your answer, use the abbreviations provided in the list. Some allocation bases will be used for more than one answer.
List of Possible Choices of Allocation Bases
EMP = Number of Employees
UPC = Units of Production Capacity
SQF = Square Footage Occupied
POH = Budgeted Production Department Overhead

-Variable cost of the Utilities Department

A) EMP
B) UPC
C) SQF
D) POH

Question 11

Buckhannon Jewelry Company is in the process of selecting cost drivers that could be used as the bases for allocating various service department costs to its three production divisions: Cutting, Milling and Finishing.
Required: Select the most appropriate allocation base for each type of service department cost described in (a) through (j). Select from among the four allocation bases in the following list. In recording your answer, use the abbreviations provided in the list. Some allocation bases will be used for more than one answer.
List of Possible Choices of Allocation Bases
EMP = Number of Employees
UPC = Units of Production Capacity
SQF = Square Footage Occupied
POH = Budgeted Production Department Overhead

-Hiring costs of the Human Resources Department. (Each producing division typically experiences similar percentage manpower increases)

A) EMP
B) UPC
C) SQF
D) POH

Question 12

Buckhannon Jewelry Company is in the process of selecting cost drivers that could be used as the bases for allocating various service department costs to its three production divisions: Cutting, Milling and Finishing.
Required: Select the most appropriate allocation base for each type of service department cost described in (a) through (j). Select from among the four allocation bases in the following list. In recording your answer, use the abbreviations provided in the list. Some allocation bases will be used for more than one answer.
List of Possible Choices of Allocation Bases
EMP = Number of Employees
UPC = Units of Production Capacity
SQF = Square Footage Occupied
POH = Budgeted Production Department Overhead

-Custodial Costs

A) EMP
B) UPC
C) SQF
D) POH