2 quizzes (BADM 2010)

2 multiple choice quizzes, 35 questions each. I would like them completed. 2nd year uni course. half theory half calculations.

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Chapter 7 1. Costs incurred at which of the following activity levels should NOT be allocated to products for decision-making purposes?  A. Unit-level activities. B. Batch-level activities. C. Product-level activities. D. Organization-sustaining activities.   2. Testing a prototype of a new product is an example of an activity at which of the following levels?  A. Unit-level activity. B. Batch-level activity. C. Product-level activity. D. Organization-sustaining activity. 3. Setting up equipment is an example of an activity at which of the following levels?  A. Unit-level activity. B. Batch-level activity. C. Product-level activity. D. Organization-sustaining activity.  4. Which of the following activity levels is an example of the clerical activity associated with processing purchase orders to produce an order for a standard product?  A. Unit-level activity. B. Batch-level activity. C. Product-level activity. D. Organization-sustaining activity.   5. Worker recreational facilities are examples of costs that would ordinarily be considered to be incurred at which of the following activity levels?  A. Unit-level activity. B. Batch-level activity. C. Product-level activity. D. Organization-sustaining activity. 6. Arranging for a shipment of a number of different products to a customer is an example of an activity at which of the following levels?  A. Unit-level activity. B. Batch-level activity. C. Customer-level activity. D. Organization-sustaining activity.   7. Human resource management is an example of an activity at which of the following levels?  A. Unit-level activity. B. Product-level activity. C. Batch-level activity. D. Organization-sustaining activity.    8. Which of the following would be classified as a product-level activity?  A. Machine setup for a batch of a standard product. B. Cafeteria facilities available to and used by all employees. C. Human resource management. D. Advertising a product. 9. Why may departmental overhead rates NOT correctly assign overhead costs?  A. Because of the use of direct labour hours in allocating overhead costs to products rather than machine time or quantity of materials. B. Because of the high correlation between direct labour hours and the incurrence of overhead costs. C. Because of the over-reliance on volume as a basis for allocating overhead costs where products differ regarding the number of units produced, lot size, or complexity of production. D. Because of the difficulties associated with identifying cost pools for the first stage of the allocation process.     10. Which of the following statements about overhead allocation based on volume alone is correct?  A. It is a key aspect of the activity-based costing model. B. It will systematically overcost high-volume products and undercost low-volume products. C. It will systematically overcost low-volume products and undercost high-volume products. D. It must be used for external financial reporting.     11. What is a duration driver?  A. A simple count of the number of times an activity occurs. B. An activity measure that is used for the life of the company. C. A measure of the amount of time required to perform an activity. D. An activity measure that is used for the life of an activity-based costing system.   12. What is a transactiondriver?  A. An event that causes a transactionto begin. B. A measure of the amount of time required to perform an activity. C. An event that causes a transactionto end. D. A simple count of the number of times an activity occurs.     13. Which of the following is NOT a limitation of activity-based costing?  A. Maintaining an activity-based costing system is more costly than maintaining a traditional direct labour-based costing system. B. Changing from a traditional direct labour-based costing system to an activity-based costing system changes product margins and other key performance indicators used by managers. Such changes are often resisted by managers. C. In practice, most managers insist on fully allocating all costs to products, customers, and other costing objects in an activity-based costing system. This results in overstated costs. D. More accurate product costs may result in increasing the selling prices of some products.       14.  Paul Company has two products: A and B. The company uses activity-based costing. The estimated total cost and expected activity for each of the company's three activity cost pools are as follows:   Expected Activity Activity Cost Pool Estimated Cost Product A Product B Total Activity 1 $22,000 400 100 500 Activity 2 16,240 380 200 580 Activity 3 14,600 500 250 750 The activity rate under the activity-based costing system for Activity 3 is closest to which of the following?  A. $19.47. B. $28.87. C. $58.40. D. $70.45. 15. Selena Company has two products: A and B. The company uses activity-based costing. The estimated total cost and expected activity for each of the company's three activity cost pools are as follows:   Expected Activity Activity Cost Pool Estimated Cost Product A Product B Total Activity 1 $17,600 800 300 1,100 Activity 2 12,000 500 200 700 Activity 3 26,000 800 400 1,200 The activity rate under the activity-based costing system for Activity 3 is closest to which of the following?  A. $18.53. B. $21.67. C. $46.33. D. $65.00.  Acton Company has two products: A and B. The annual production and sales of Product A is 800 units and of Product B is 500 units. The company has traditionally used direct labour hours as the basis for applying all manufacturing overhead to products. Product A requires 0.3 direct labour hours per unit, and Product B requires 0.2 direct labour hours per unit. The total estimated overhead for next period is $92,023. The company is considering switching to an activity-based costing system for the purpose of computing unit product costs for external reports. The new activity-based costing system would have three overhead activity cost pools-Activity 1, Activity 2, and General Factory-with estimated overhead costs and expected activity as follows:   Expected Activity Activity Cost Pool Estimated Overhead Cost Product A Product B Total Activity 1 $14,487 500 600 1,100 Activity 2 64,800 2,500 500 3,000 General Factory 12,736 240 100 340 Total $92,023     (Note: The General Factory activity cost pool's costs are allocated on the basis of direct labour hours.)   16. The predetermined overhead rate under the traditional costing system is closest to which of the following?  A. $13.17. B. $21.60. C. $37.46. D. $270.66. 17. The overhead cost per unit of Product B under the traditional costing system is closest to which of the following?  A. $2.63. B. $4.32. C. $7.49. D. $54.13.  18. The predetermined overhead rate (i.e., activity rate) for Activity 1 under the activity-based costing system is closest to which of the following?  A. $13.17. B. $24.15. C. $28.97. 19. The overhead cost per unit of Product A under the activity-based costing system is closest to which of the following?  A. $11.24. B. $70.79. C. $81.20. D. $86.97. Abel Company uses activity-based costing. The company has two products: A and B. The annual production and sales of Product A is 200 units and of Product B is 400 units. There are three activity cost pools, with estimated costs and expected activity as follows:   Expected Activity Activity Cost Pool Estimated Cost Product A Product B Total Activity 1 $16,660 600 100 700 Activity 2 18,450 1,100 700 1,800 Activity 3 9,731 60 160 220 20. The predetermined overhead rate (i.e., activity rate) for Activity 2 under the activity-based costing system is closest to which of the following?  A. $10.25. B. $16.77. C. $24.91. D. $26.36.   21. The cost per unit of Product B is closest to which of the following?  A. $17.69. B. $41.58. C. $74.73. D. $81.53.   22. The cost per unit of Product A is closest to which of the following?  A. $27.91. B. $56.38. C. $141.04. D. $70.52.    Accola Company uses activity-based costing. The company has two products: A and B. The annual production and sales of Product A is 1,100 units and of Product B is 700 units. The direct production costs (material and labour) for Product A are $110,600 and for B is $70,000. There are three activity cost pools for overhead, with estimated costs and expected activity as follows:   Expected Activity Activity Cost Pool Estimated Cost Product A Product B Total Activity 1 $18,270 600 500 1,100 Activity 2 35,891 1,600 300 1,900 Activity 3 48,796 440 420 860   23. The activity rate for Activity 3 is closest to which of the following?  A. $26.67. B. $56.74. C. $116.18. D. $119.72.   24. The overhead cost per unit of Product A is closest to which of the following?  A. $22.70. B. $47.89. C. $57.20. D. $59.23.   25. The total annual production cost for Product B is closest to which of the following?  A. $37,816. B. $107,802. C. $65,231. D. $70,000.

Quiz Chapter’s 3 & 8 Multiple Choice Questions 1. Expense A is a fixed cost; expense B is a variable cost. During the current year, the activity level has increased but is still within the relevant range. In terms of cost per unit of activity, you would expect which of the following statements to be true?  A. Expense A has remained unchanged. B. Expense B has decreased. C. Expense A has decreased. D. Expense B has increased. 2. Which costs will change with a decrease in activity within the relevant range?  A. Total fixed costs and total variable costs. B. Unit fixed cost and total variable costs. C. Unit variable cost and unit fixed cost. D. Unit fixed cost and total fixed costs. 3. Within the relevant range of activity, how will variable cost per unit behave?  A. It will increase in proportion with the level of activity. B. It will remain constant. C. It will vary inversely with the level of activity. D. Its behaviour cannot be determined without additional information.    4. What will result from an increase in the activity level within the relevant range?  A. An increase in fixed cost per unit. B. A proportionate increase in total fixed costs. C. An unchanged fixed cost per unit. D. A decrease in fixed cost per unit.     5. What does the term "relevant range" mean?  A. The range within which costs may fluctuate. B. The range within which a particular cost formula is valid. C. The range within which production may vary. D. The range within which the relevant costs are incurred.     6. The linear equation Y = a + bX is often used to express cost formulas. Which of the following representations in this equation is correct?  A. The b term represents variable cost per unit of activity. B. The a term represents variable cost in total. C. The X term represents total costs. D. The Y term represents total fixed costs.  7. Which of the following is an example of a discretionary fixed cost?  A. Insurance. B. Taxes on real estate. C. Management training. D. Amortization of buildings and equipment.  8. Which of the following is an example of a committed fixed cost?  A. A training program for salespersons. B. Executive travel expenses. C. Property taxes on the factory building. D. New product research and development. 9. What are discretionary fixed costs?  A. They vary directly and proportionately with the level of activity. B. They have a long-term planning horizon, generally encompassing many years. C. They are made up of plant, equipment, and basic organizational costs. D. None of these options.  10. What are committed fixed costs?  A. They vary directly and proportionately with the level of activity. B. They have a long-term planning horizon, generally encompassing several years. C. They are made up of plant, equipment, and basic organizational costs. D. They can be reduce in the short run with minimal damage to the long-run organizational objectives   11. In describing the cost formula equation Y = a + bX, which of the following statements is correct?  A. The X term is the dependent variable. B. The a term is the fixed component. C. In the high-low method, the b term equals change in activity divided by change in costs. D. As the X term increases, the Y term decreases.     12. Which of the following best describes the contribution approach to the income statement?  A. It organizes costs on a functional basis. B. It shows data based on the cost behavior aspect of fixed and variable. C. It shows a contribution margin rather than an operating income figure at the bottom of the statement. D. It can be used only by manufacturing companies.  13. Contribution margin is the excess of revenues over which of the following?  A. Cost of goods sold. B. Manufacturing cost. C. All direct costs. D. All variable costs.  14. Which of the following is an example of a cost that is variable with respect to the number of units produced and sold?  A. Insurance on the headquarters building. B. Power to run production equipment. C. Supervisory salaries. D. Amortization of factory facilities. 15. What is an activity base?  A. It is the largest single category of cost in a company. B. It is a fixed cost that cannot be avoided. C. It is a measure of whatever causes a variable cost to be incurred D. It is an indirect cost that is essential to the business. 16. At the end of last year, Lee Company had 30,000 units in its ending inventory. Every year, Lee Company's variable production costs are $10 per unit, and its fixed manufacturing overhead costs are $5 per unit. The company's operating income for the year was $12,000 higher under variable costing than under absorption costing. Given these facts, what must have been the number of units of product in inventory at the beginning of the year?  A. 27,600 units. B. 28,800 units. C. 32,400 units. D. 42,000 units.     17. During the last year, Moore Company's total variable production costs were $10,000, and its total fixed manufacturing overhead costs were $6,800. The company produced 5,000 units during the year and sold 4,600 units. There were no units in the beginning inventory. Which of the following statements is true?  A. The operating income under absorption costing for the year will be $800 higher than operating income under variable costing. B. The operating income under absorption costing for the year will be $544 higher than operating income under variable costing. C. The operating income under absorption costing for the year will be $544 lower than operating income under variable costing. D. The operating income under absorption costing for the year will be $800 lower than operating income under variable costing. 18. Last year, Ben Company's operating income under absorption costing was $4,400 lower than its operating income under variable costing. The company sold 8,000 units during the year, and its variable costs were $8 per unit, of which $3 was variable selling expense. Fixed manufacturing overhead was $1 per unit in beginning inventory under absorption costing. Ending inventory was zero. How many units did the company produce during the year?  A. 3,600 units. B. 7,120 units. C. 7,450 units. D. 12,400 units. 19. Last year, Stephen Company had 20,000 units in its ending inventory. During the year, Stephen Company's variable production costs were $12 per unit. The fixed manufacturing overhead cost was $8 per unit in the beginning inventory. The company's operating income for the year was $9,600 higher under variable costing than it was under absorption costing. Given these facts, what must have been the number of units of product in the beginning inventory last year?  A. 18,800 units. B. 19,200 units. C. 19,520 units. D. 21,200 units.  Aaker Company, which has only one product, has provided the following data concerning its most recent month of operations: Selling Price $99 Units in Beginning Inventory 0 Units Produced 6,300 Units Sold 6,000 Units in ending inventory 300 Variable Cost per unit: Direct Materials $12 Direct Labour $42 Variable Manufacturing Overhead $6 Variable Selling and Administrative $6 Fixed Costs: Fixed Manufacturing Overhead $170,100 Fixed Selling and Administrative $24,000 20 What is the unit product cost for the month under variable costing?  A. $60. B. $66. C. $87. D. $93. 21. What is the unit product cost for the month under absorption costing?  A. $60. B. $66. C. $87. D. $93. 22. What is the total contribution margin for the month under the variable costing approach?  A. $27,900. B. $72,000. C. $198,000. D. $234,000.   23. What is the total gross margin for the month under the absorption costing approach?  A. $12,000. B. $72,000. C. $98,100. D. $198,000. 24. What is the total period cost for the month under the variable costing approach?  A. $60,000. B. $170,000. C. $194,100. D. $230,100.   25. What is the total period cost for the month under the absorption costing approach?  A. $24,000. B. $60,000. C. $170,100. D. $230,100.   26. What is the operating income (loss) for the month under variable costing?  A. ($14,100). B. $3,900. C. $8,100. D. $12,000.   27. What is the operating income (loss) for the month under absorption costing?  A. ($14,100). B. $3,900. C. $8,100. D. $12,000.  Last year, Walsh Company manufactured 25,000 units and sold 22,000 units. Production costs were as follows: Direct materials $100,000 Direct Labour 75,000 Variable manufacturing overhead 50,000 Fixed manufacturing overhead 75,000 Total sales were $440,000, total variable selling and administrative expenses were $110,000, and total fixed selling and administrative expenses were $45,000. There was no beginning inventory. Assume that direct labour is a variable cost.   28. Under absorption costing, what was the unit product cost?  A. $9.00. B. $12.00. C. $13.40. D. $14.00.   29. Under absorption costing, what was the gross margin?  A. $21,000. B. $66,000. C. $176,000. D. $242,000.   30. What was the contribution margin per unit?  A. $6.00. B. $8.00. C. $11.00. D. $15.00. 31. Under variable costing, what was the total amount of fixed manufacturing cost in the ending inventory?  A. $0. B. $9,000. C. $14,400. D. $27,000.  32. Under absorption costing, what was the total amount of fixed manufacturing cost in the ending inventory?  A. $0. B. $9,000. C. $14,400. D. $27,000. 33. What was the operating income under variable costing?  A. $2,000. B. $9,000. C. $12,000. D. $21,000.   34. What was the operating income under absorption costing?  A. $2,000. B. $9,000. C. $12,000. D. $21,000. 35. Which of the following costs/expenses is included in product costs under both absorption costing and variable costing?  A. Supervisory salaries. B. Office equipment depreciation. C. Variable manufacturing costs. D. Variable selling expenses.  

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