Week 8 Final Exam Complete Solution

Question: #6310

Week 8 - Final Exam complete solution correct answer key

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)

        $0.50
        $1.00
        $1.50
        $2.25

Question 3.3. (TCO 2) Fixed overhead costs include (Points : 5)

        the cost of sales commissions.
        property taxes paid on plant facilities.
        indirect materials.
        energy costs.

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)

        $448,000.
        $414,500.
        $431,600.
        $328,000.

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
        Conference method

Question 8.8. (TCO 4) Sunk costs (Points : 5)

Solution: #6319

Week 8 Final Exam Complete Solution

Week 8 : Week 8 - Final Exam Final 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) $0.50 $1.00 $1.50 $2.25 Question 3.3. (TCO 2) Fixed overhead costs include (Points : 5) the cost of sales commissions. property taxes paid on plant facilities. indirect materials. energy costs. 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) $448,000. $414,500. $431,600. $328,000. 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 Conference method Question 8.8. (TCO 4) Sunk costs (Points : 5) are relevant to all decisions. have future implications. are future costs. are past costs. Question 9.9. (TCO 5) Throughput contribution equals revenues minus (Points : 5) operating costs. direct material costs of goods sold. direct material costs and minus operating costs. direct material and direct labor costs. Question 10.10. (TCO 5) Producing more nonbottleneck output (Points : 5) allows for the maximization of overall contribution. creates less pressure for the bottleneck workstations. creates more inventory and increases throughput contribution. creates more inventory, but does not increase throughput contribution. Question 11.11. (TCO 6) What type of cost is the result of an event that results in more than one product or service simultaneously? (Points : 5) Byproduct cost Joint c...