Question 1

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)

Accepted Answer

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

Question 2

______________ is when the product loses market acceptance.

Accepted Answer

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

Question 3

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

Accepted Answer

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

Question 4

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

Accepted Answer

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

Question 5

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

Accepted Answer

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

Question 6

The accounting rate of return fails to consider the:

Accepted Answer

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

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
-Custodial Costs

Accepted Answer

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
-Total payroll department costs

Accepted Answer

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

Question 9

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

Accepted Answer

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

Question 10

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

Accepted Answer

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

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
-Cost of health services

Accepted Answer

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
-Fixed costs necessary to maintain upkeep of the water service

Accepted Answer

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

Exam 7: Analyzing Total Payroll Department Costs

______________ is when the product loses market acceptance.

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

The accounting rate of return fails to consider the:

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

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