Week 8 - Final Exam complete solution correct answer key
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Question 1.1. (TCO 1) A significant limitation of activity-based costing is the (Points : 5)
attention given to indirect cost allocation.
many necessary calculations.
operations staff's attitude toward the accounting staff.
use it makes of technology.
Question 2.2. (TCO 1) Ireland Company produces a special spray nozzle. The budgeted indirect total cost of inserting the spray nozzle is $180,000. The budgeted number of nozzles to be inserted is 80,000. What is the budgeted indirect cost allocation rate for this activity? (Points : 5)
Question 3.3. (TCO 2) Fixed overhead costs include (Points : 5)
the cost of sales commissions.
property taxes paid on plant facilities.
Question 4.4. (TCO 2) Information pertaining to Brenton Corporation's sales revenue is presented in the following table:
February March April
Cash Sales $160,000 $150,000 $120,000
Credit Sales 300,000 400,000 280,000
Total Sales $460,000 $550,000 $400,000
Management estimates that 5% of credit sales are not collectible. Of the credit sales that are collectible, 75% are collected in the month of sale and the remainder in the month following the sale. Cost of purchases of inventory each month are 80% of the next month's projected total sales. All purchases of inventory are on account; 50% are paid in the month of purchase, and the remainder is paid in the month following the purchase.
Brenton's budgeted total cash receipts in April are
(Points : 5)
Question 5.5. (TCO 2) Budgeting provides all of the following except (Points : 5)
a means to communicate the organization's short-term goals to its members.
support for the management functions of planning and coordination.
a means to anticipate problems.
an ethical framework for decision making.
Question 6.6. (TCO 3) The cost function y = 1,000 + 5X (Points : 5)
represents a fixed cost.
is not a straight line.
has an intercept of 1,000.
has a slope coefficient of 1,000.
Question 7.7. (TCO 3) Which cost estimation method uses a formal mathematical method to develop cost functions based on past data? (Points : 5)
Quantitative analysis method
Industrial engineering method
Account analysis method