Question 1

Which of the following is NOT a factor to the success of just-in-time systems?

Accepted Answer

A)  The focus on quality 
B)  Inflexible production operations 
C)  Short production cycle times 
D)  Smooth flow of production

Question 2

Allen Crabb Corporation had the following activities, traceable costs, and physical flow of driver units:
  The above activities are used by departments X and Y as follows:
 
-How much of the correspondence cost will be assigned to Department X?

Accepted Answer

A)  $5,000 
B)  $50,000 
C)  $25,000 
D)  None of the above

Question 3

Which of the following is the least likely alternative to be used to allocate costs?

Accepted Answer

A)  Use a different cost driver for each cost pool. 
B)  Allocate all costs evenly to all other departments. 
C)  Allocate some cost pools using cost drivers and leave other cost pools unallocated. 
D)  Use one cost driver to allocate all department costs.

Question 4

Service departments are responsible for providing services directly to customers.

Accepted Answer

A) True 
 B)False

Question 5

Dorpinghaus Corp. manufactures two models of its telephones, a standard and a deluxe model. Three activities have been identified as cost drivers and the related costs pooled together to arrive at the following information:
 
-If activity-based costing is used, then the product setup cost for the standard model would be

Accepted Answer

A)  $51,429. 
B)  $68,571. 
C)  $1,071. 
D)  $120,000.

Question 6

Upjohn Company manufactures four products from a joint process. Joint costs for the year amounted to $350,000. The following data are also available:
 
-Assuming the physical-units method of allocating joint costs, the amount of joint costs allocated to product Y would be

Accepted Answer

A)  $172,536. 
B)  $99,400. 
C)  $122,500. 
D)  $24,648.

Question 7

John Gordan Company had the following activities, traceable costs, and physical flow of driver units:
  The above activities are used by departments A and B as follows:
 
-How much of the account billing cost will be assigned to Department B?

Accepted Answer

A)  $14,000 
B)  $140,000 
C)  $7,000 
D)  None of the above

Question 8

Stohr Company has two departments, New and Old. Central costs are allocated to the two departments in various ways. Relevant information is presented below:
 
-If total rent expense is $80,000 and it is allocated on the basis of square footage, the amount allocated to the New Department should be

Accepted Answer

A)  $13,333. 
B)  $20,000. 
C)  $56,000. 
D)  $60,000.

Question 9

John Gordan Company had the following activities, traceable costs, and physical flow of driver units:
  The above activities are used by departments A and B as follows:
 
-What is the cost per driver unit for the correspondence activity?

Accepted Answer

A)  $40.00 
B)  $0.07 
C)  $3.75 
D)  $12.50

Question 10

Boone Manufacturing has two production departments, Mixing and Finishing, served by one maintenance department. Budgeted fixed costs for the maintenance department for 20X3 were $20,000, and the variable cost per labour hour was $3.00. Other relevant data for 20X3 are as follows:
  Actual maintenance department costs for 20X3 were $24,000 fixed and $50,000 variable.
S1U1P1*S1S1P0in labour hours
-The amount of fixed maintenance costs allocated to the Finishing Department should be

Accepted Answer

A)  $12,000. 
B)  $ 8,000. 
C)  $ 9,333. 
D)  $ 7,500.

Question 11

Use the following information to answer item(s) below.
Meesen Inc. operates two support departments (A and B) and two producing departments (C and D). Budgeted costs and normal activity levels are given below.  The costs of Department A are allocated on the basis of number of employees, and the costs of Department B are allocated on the basis of maintenance hours.
-If Department C uses machine hours to allocate overhead to units of product, the overhead rate per machine hour for Department C would be

Accepted Answer

A)  $35.67. 
B)  $29.00. 
C)  $32.66. 
D)  $39.67.

Question 12

A unit within an organization responsible for producing the products or services that are sold to customers.

Accepted Answer

The answer of A unit within an organization responsible for...

Question 13

Dorpinghaus Corp. manufactures two models of its telephones, a standard and a deluxe model. Three activities have been identified as cost drivers and the related costs pooled together to arrive at the following information:
 
-If activity-based costing is used, then the total amount of overhead allocated to the standard model would be

Accepted Answer

A)  $297,320. 
B)  $480,000. 
C)  $160,000. 
D)  $182,680.

Question 14

Bare Company manufactures four products from a joint process. Joint costs for the year amounted to $140,000. The following data are also available:
 
-Assuming the relative-sales-value method of allocating joint costs, the amount of joint costs allocated to product B would be

Accepted Answer

A)  $35,840.00. 
B)  $48,124.80. 
C)  $30,800.00. 
D)  $20,160.00.

Question 15

If the step-down method is used, Department A costs allocated to Department C would be

Accepted Answer

A)  $60,649. 
B)  $62,769. 
C)  $62,980. 
D)  $69,280.

Question 16

The time from initiating production to delivering the goods to the customer is referred to as

Accepted Answer

A)  just-in-time. 
B)  non-value-added time. 
C)  production cycle time. 
D)  cost measuring time.

Question 17

Direct-labour hours are not a very good measure of the cause of costs in modern, highly automated departments.

Accepted Answer

A) True 
 B)False

Question 18

Identifies how management's decisions affect costs, by first measuring the resources used in performing the organization's activities and then assessing the effects on costs of changes in those activities.

Accepted Answer

The answer of Identifies how management's decisions affect costs, by...

Question 19

A method for allocating service department costs that ignores other service departments when any given service department's costs are allocated to the revenue-producing departments is called the

Accepted Answer

A)  direct method. 
B)  indirect method. 
C)  step-down method. 
D)  step-up method.

Question 20

Accounting is an example of a producing department.

Accepted Answer

A) True 
 B)False

Exam 5: Cost Allocation and Activity-Based Costing Systems

Which of the following is NOT a factor to the success of just-in-time systems?

Allen Crabb Corporation had the following activities, traceable costs, and physical flow of driver units: The above activities are used by departments X and Y as follows: -How much of the correspondence cost will be assigned to Department X?

Which of the following is the least likely alternative to be used to allocate costs?

Service departments are responsible for providing services directly to customers.

Upjohn Company manufactures four products from a joint process. Joint costs for the year amounted to $350,000. The following data are also available: -Assuming the physical-units method of allocating joint costs, the amount of joint costs allocated to product Y would be

John Gordan Company had the following activities, traceable costs, and physical flow of driver units: The above activities are used by departments A and B as follows: -How much of the account billing cost will be assigned to Department B?

Stohr Company has two departments, New and Old. Central costs are allocated to the two departments in various ways. Relevant information is presented below: -If total rent expense is $80,000 and it is allocated on the basis of square footage, the amount allocated to the New Department should be

John Gordan Company had the following activities, traceable costs, and physical flow of driver units: The above activities are used by departments A and B as follows: -What is the cost per driver unit for the correspondence activity?

A unit within an organization responsible for producing the products or services that are sold to customers.

Bare Company manufactures four products from a joint process. Joint costs for the year amounted to $140,000. The following data are also available: -Assuming the relative-sales-value method of allocating joint costs, the amount of joint costs allocated to product B would be

If the step-down method is used, Department A costs allocated to Department C would be

The time from initiating production to delivering the goods to the customer is referred to as

Direct-labour hours are not a very good measure of the cause of costs in modern, highly automated departments.

Identifies how management's decisions affect costs, by first measuring the resources used in performing the organization's activities and then assessing the effects on costs of changes in those activities.

A method for allocating service department costs that ignores other service departments when any given service department's costs are allocated to the revenue-producing departments is called the

Accounting is an example of a producing department.