FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 21: Cost Allocation and Performance Measurement

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 61

Multiple Choice

Review LaterAdd Note

Review Later

Plans that identify costs and expenses under each manager's control prior to the reporting period are called:

A) Cost accounting systems.
B) Managerial accounting systems.
C) Responsibility accounting systems.
D) Responsibility accounting budgets.
E) Activity-based accounting systems.

F) None of the above
G) B) and C)

Correct Answer

verified

Show Answer

Question 62

Multiple Choice

Review LaterAdd Note

Review Later

Allocations of joint product costs can be based on the relative sales values of the products:

A) And never on the relative physical quantities of the products.
B) Plus an adjustment for future excess margins.
C) And not on any other basis.
D) At the "split-off point".
E) Only if the products contain both direct and indirect costs.

F) None of the above
G) All of the above

Correct Answer

verified

Show Answer

Question 63

Multiple Choice

Review LaterAdd Note

The most useful allocation basis for the departmental costs of an advertising campaign for a storewide sale is likely to be:

A firm produces and sells two products, Mica and Plax. The following information is available relating to setup costs (a part of factory overhead) : Using number of setups as the activity base, the amount of setup cost allocated to each unit of product for Mica and Plax, respectively is:

Costs that the manager does not have the power to determine or at least strongly influence are:

A selling department is usually evaluated as a profit center.

In a responsibility accounting system:

Regardless of the system used in departmental cost analysis:

In producing oat bran, the joint cost of milling the oats into bran, oatmeal, and animal feed is considered a direct cost to the oat bran, because the oat bran cannot be produced without incurring the joint cost.

A __________________________ helps control costs and expenses and evaluates managers' performance by assigning costs and expenses to the managers responsible for controlling them.

An expense that does not require allocation between departments is a(n) :

Larabee Company produces two types of product, flat and round, on the same production line. For the current period, the company reports the following data. Larabee's controller wishes to apply activity-based costing (ABC) to allocate the $60,000 of overhead costs incurred by the two product lines to see whether cost per unit would change markedly from that reported above. She has collected the following information. She has also collected the following information about the cost drivers for each category (cost pool) and the amount of each driver used by the two product lines. Assign these three overhead cost pools to each of the two products using ABC. Show each overhead cost allocation by product and the total overhead allocated to each product. Determine average cost per unit for each of the two products using ABC. (Round your answer to 2 decimal places.) Which overhead cost allocation method would you recommend to the controller?

Community Technical College allocates administrative costs to its teaching departments based on the number of students enrolled, while maintenance and utilities are allocated based on square feet of classrooms. Based on the information below, what is the total amount of expenses allocated to each department (rounded to the nearest dollar) if administrative costs for the college were $150,000, maintenance expenses were $70,000, and utilities were $85,000?

A sawmill bought a shipment of logs for $40,000. When cut, the logs produced a million board feet of lumber in the following grades. Compute the cost to be allocated to Type 1 and Type 2 lumber, respectively, if the value basis is used. Type 1 - 400,000 bd. ft. priced to sell at $0.12 per bd. ft. Type 2 - 400,000 bd. ft. priced to sell at $0.06 per bd. ft. Type 3 - 200,000 bd. ft. priced to sell at $0.04 per bd. ft.

Mace Department store allocates its service department expenses to its various operating (sales) departments. The following data is available: The following information is available for its three operating (sales) departments: What is the total expense allocated to Department B?

A sawmill paid $70,000 for logs that produced 200,000 board feet of lumber in 3 different grades and amounts as follows: Compute the portion of the $70,000 joint cost to be allocated to No. 2 Common.

Naples operates a retail store and has two service departments and two operating departments, Shoes and Clothing. During the current year, the departments had the following direct expenses and occupied the flowing amount of floor space. The advertising department developed and aired 150 spots. Of these spots, 60 spots were for Shoes and 90 spots were for Clothing. The store sold $1,500,000 of merchandise during the year; $675,000 in Shoes and $825,000 in Clothing. Indirect expenses include rent, utilities, and insurance expense. Total indirect expenses of $220,000 are allocated to all departments. Prepare a departmental expense allocation spreadsheet for Naples. The spreadsheet should assign (1) direct expenses to each of the four departments, (2) allocate the indirect expenses to each department on the basis of floor space occupied, (3) the advertising department's expenses to the two operating departments on the basis of ad spots placed promoting each department's products, (4) the administrative department's expenses based on the amount of sales. Complete the departmental expense allocation spreadsheet below. Provide supporting computations for the expense allocations below the spreadsheet.

Baker Corporation has two operating departments, Machining and Assembly, and an office. The three categories of office expenses are allocated to the two departments using different allocation bases. The following information is available for the current period: The amount of the total office expenses that should be allocated to Assembly for the current period is:

Investment center managers are evaluated on their use of center assets to generate income.

An activity-based costing system usually involves a fewer number of allocations compared with a traditional cost allocation system.