CMA p1 Cost management test1. Value chain analysis can be described as the process of
Sales dollars., Direct labor costs, Machine hours., Direct labor hours.,
2. The work cell concept relates to
fixed factory overhead of $560,000 and a lower hourly rate for variable overhead., fixed factory overhead of $560,000 and the same hourly rate for variable overhead., fixed factory overhead of $560,000 and a higher hourly rate for variable overhead., variable overhead of less than $180,000 and a lower hourly rate for variable overhead.,
3. - * Columbia Company produces two products that are serviced by two support areas. Columbia uses the reciprocal method to allocate support area costs to the products with information as follows. Support Area 1 Support Area2 Product 1 Product 2 Allocation base Hours used Square feet Area 1 hours used 5,000 120,000 75,000 Space occupied 3,000 40,000 20,000 Direct costs $350,000 $200,000 What additional information does Columbia need in order to complete the cost allocation?
depreciation on the printing equipment., wages paid to the production supervisor., rent on the warehouse containing the finished books inventory., fire insurance on the printing facilities,
4. A company has the following budget formula for annual electricity expense in its shop: Expense = $7,200 %2b (Units produced × $0.60) If management expects to produce 20,000 units during February, the appropriate monthly flexible budget allowance for the purpose of performance evaluation should be
Direct costs of Products 1 and 2., Hours used by Support Area 1 and the space occupied by Support Area 2., Order in which the support areas will be allocated., No additional information is needed,
5. The budget for one of Simpson Company’s products is as follows. Sales $10,000,000 Materials and labor 4,000,000 Fixed manufacturing overhead 1,500,000 Sales commissions 500,000 Advertising (fixed) 200,000 Other marketing costs (fixed) 800,000 Allocated administrative costs 2,000,000 Income $ 1,000,000 The budgeted contribution margin for this product is a.
Step-down method., Direct method., Reciprocal method., Activity-based method.,
6. Companies that adopt just-in-time purchasing systems often experience
is a simpler costing method to use., reduces product undercosting or overcosting. mix questions , eliminates indirect cost application to products., identifies the non-value added costs of production.,
7. The managers of Rochester Manufacturing are discussing ways to allocate the cost of service departments, such as Quality Control and Maintenance, to the production departments. To aid them in this discussion, the controller has provided the following information Quality Control Maintenance Machining Assembly Total Budgeted overhead costs before allocation $350,000 $200,000 $400,000 $300,000 $1,250,000 Budgeted machine hours -- -- 50,000 -- 50,000 Budgeted direct labor hours -- -- -- 25,000 25,000 Budgeted hours of service: Quality Control -- 7,000 21,000 7,000 35,000 Budgeted hours of service: Maintenance 10,000 -- 18,000 12,000 40,000 If Rochester Manufacturing uses the step-down method of allocating service costs beginning with quality control, the maintenance costs allocated to the assembly department would be
$40/hr. $10/hr , $10/hr. $40/hr. , $100/hr. $50/hr. , $50/hr. $100/hr.,
8. Process value analysis is a key component of activity-based management that links product costing and
.$162,000, $108,000, $70,000, $200,000,
9. Huntley Company has two departments, Machining and Assembly, at its Milwaukee plant. This year%27s budget for the plant contained the following information. Machining Assembly Manufacturing overhead $4,000,000 $2,000,000 Direct labor hours 100,000 200,000 Machine hours 40,000 40,000 If the Milwaukee plant allocates manufacturing overhead based on machine hours, which of the following represents the allocation rates? Machining Assembly
. Identifying options. , Analyzing the behavior of competitors., Forecasting long-term demand. , Avoiding industry overcapacity,
10. When using throughput costing, inventoriable costs would include only
$7,200, $12,000, $12,600, $19,200,
11. *Using absorption costing, Langdon Company’s income for October was $250,000. Langdon began the month with 10,000 units in finished goods inventory that contained $30,000 of fixed manufacturing overhead costs. During October, the company produced 330,000 units and sold 325,000 units. The fixed manufacturing overhead for October totaled $990,000. If Langdon Company used variable costing, its income for October would be
Fewer deliveries from suppliers, A greater need for inspection of goods as the goods arrive help students assimilate material , Less need for linkage with a vendor’s computerized order entry system., A reduction in the number of suppliers.,
12. *A large company is in the process of allocating service department costs to revenuegenerating departments. Under which one of the following allocation methods will the amount allocated to each revenue-generating department be different if the order in which service department costs are allocated is different?
Overhead rates based on broad averages, Continuous improvement , Accumulation of heterogeneous cost pools. , Reduction of the number of cost pools,
13. Sonimad Sawmill Inc. (SSI) purchases logs from independent timber contractors and processes the logs into the following three types of lumber products. Studs for residential building (e.g., walls, ceilings). Decorative pieces (e.g., fireplace mantels, beams for cathedral ceilings). Posts used as support braces (e.g., mine support braces, braces for exterior fences around ranch properties). These products are the result of a joint sawmill process that involves removal of bark from the logs, cutting the logs into a workable size (ranging from 8 to 16 feet in length), and then cutting the individual products from the logs, depending upon the type of wood (pine, oak, walnut, or maple) and the size (diameter) of the log. The joint process results in the following costs and output of products for a typical month. Joint production costs: Materials (rough timber logs) $ 500,000 Debarking (labor and overhead) 50,000 Sizing (labor and overhead) 200,000 Product cutting (labor and overhead) 250,000 Total joint costs $1,000,000 Product yield and average sales value on a per unit basis from the joint process are as follows. Product Monthly Output Fully Processed Sales Price Studs 75,000 $ 8 Decorative pieces 5,000 100 Posts 20,000 20 The studs are sold as rough-cut lumber after emerging from the sawmill operation without further processing by SSI. Also, the posts require no further processing. The decorative pieces must be planed and further sized after emerging from the SSI sawmill. This additional processing costs SSI $100,000 per month and normally results in a loss of 10%25 of the units entering the process. Without this planning and sizing process, there is still an active intermediate market for the unfinished decorative pieces where the sales price averages $60 per unit. REQUIRED: A. Based on the information given for Sonimad Sawmill Inc., allocate the joint processing costs of $1,000,000 to each of the three product lines using the 1. relative sales value method at split-off. 2. physical output (volume) method at split-off. 3. estimated net realizable value. B. Prepare an analysis for Sonimad Sawmill Inc. to compare processing the decorative pieces further as they presently do, with selling the rough-cut product immediately at split-off and recommend which action the company should take. Be sure to provide all calculations.
material requirements planning, throughput costing., enterprise resource planning.,
14. What is the key strategic issue when a firm is considering capacity expansion?
direct material, direct labor, variable manufacturing overhead, and fixedmanufacturing overhead costs., direct material, direct labor, and variable manufacturing overhead costs., direct material and direct labor costs., direct material costs.,
15. Hill Stand Company is currently performing a cost of quality analysis of its Memphis facilities. The following are costs compiled by the facility accountant. Inspection $1,500 Warranty repair 2,800 Testing of new materials 400 Product testing 950 Abnormal spoilage 645 Scrap 150 Preventive equipment maintenance 590 Liability claims 1,870 Rework 1,285 Hill Stand’s total internal failure cost is
Depreciation of inspection equipment, Returns and allowances, Net cost of scrap., Final product testing and inspection.,
16. Which one of the following would be classified as an internal failure cost on a quality cost report?
comparing levels of performance against the best levels of performance in similarcompanies., tracking business function costs, from initial R%26D to final customer support, overseveral years., budgeting on the expectation that labor per unit will decline as units of productionincrease., analyzing the sequence of business functions in which customer usefulness is added toproducts or services.,
17. *A company has budgeted overhead costs at its normal capacity based on machine hours. Variable factory overhead is $180,000; and fixed factory overhead is $560,000. If the firm operates at a slightly lower rate of activity, it will expect total
$2,080., $2,785. build your own quiz , $4,945., $5,955.,
18. *A capital-intensive manufacturer of large construction equipment has a manufacturing process that relies heavily on specialized machinery. This machinery is run by a relatively few number of highly skilled laborers. In determining its predetermined overhead rate, what allocation base should the company use?
$5,500,000., $5,300,000., $4,500,000., $3,000,000,
19. -* All of the following would be considered manufacturing overhead costs by a book publisher except
A.1. Relative sales value method at split-off Product Monthly Output Sales Price Split-off Value %25 of Sales Allocated Costs Studs 75,000 $ 8 $ 600,000 46.15%25 $ 461,539 Decorative pieces 5,000 60 300,000 23.08%25 230,769 Posts 20,000 , , create online activities ,