DEVRY ACCT434 WEEK 1 AND WEEK 2 QUIZ

(TCO 1) Production-cost cross-subsidization results from

: allocating indirect costs to multiple
products.

assigning traced costs to each product.

assigning costs to different products using
varied costing systems within the same organization.
assigning broadly averaged costs across
multiple products without recognizing amounts of resources used by which
products.

Question 2. Question
: (TCO 1) Building or plant
security is an example of

: unit-level costs.

batch-level costs.

product-sustaining costs.

facility-sustaining costs.

Question 3. Question
: (TCO 1) Evaluating customer
reaction of the trade-off of giving up some features of a product for a lower
price would best fit which category of management decisions under
activity-based management?

: Pricing and product-mix decisions

Cost reduction decisions

Design decisions

Discretionary decisions

Question 4. Question
: (TCO 1) Overcosting of a
product is MOST likely to result from

: misallocating direct labor costs.

overpricing the product.

undercosting another product.

understating total product costs.

Question 5. Question
: (TCO 1) The MOST likely
example of a batch-level cost is

: utility costs.

machine repairs.

product-designing costs.

setup costs.

Question 6. Question
: (TCO 1) Which method of
allocation probably best estimates actual overhead costs used? Why?

: Single direct labor-hours cost driver because
it is best to allocate total costs uniformly to individual jobs.
Single direct labor-hours cost driver because
it is easiest to analyze and interpret.
Three activity-cost drivers because they best
reflect the relative consumption of resources.
Three activity-cost drivers because product
costs can be significantly cross-subsidized.

Question 7. Question
: (TCO 1) Activity-based
management (ABM) includes decisions about all EXCEPT

: pricing and product mix.

smoothing costs.

reducing costs.

improving processes.

Question 8. Question
: (TCO 1) Activity-based costing
information

: should be used when services place similar
demands on resources.
usually results in peanut-butter costing.

will yield inaccurate cost numbers when
products are similar.
may assist in improving product design and
efficiency.

Question 9. Question
: (TCO 1) Products make diverse
demands on resources because of differences in all of the following EXCEPT

: volume.

selling price.

batch size.

complexity.

Question 10. Question
: (TCO 1) Dalrymple Company
produces a special spray nozzle. The
budgeted indirect total cost of inserting the spray nozzle is $80,000. The budgeted number of nozzles to be inserted
is 40,000. What is the budgeted indirect
cost allocation rate for this activity?

: $0.50

$1.00

$1.50

$2.00

Instructor Explanation: $80,000 / 40,000 = $2.00

Chapter 5, Page 142-143

WEEK 2

QUIZ

(TCO 2) Operating budgets and financial budgets

: have nothing to do with the master budget.

are prepared after the master budget.

combined, form the master budget.

are prepared before the master budget.

Question 2. Question
: (TCO 2) The time coverage of a
budget should be

: shorter rather than longer.

cover design through manufacture and sale of
the product.
guided by the purpose of the budget.

one year.

Question 3. Question
: (TCO 2) Financial budgets
include the

: administrative costs budget.

capital expenditures budget.

production budget.

marketing costs budget.

Question 4. Question
: (TCO 2) A feature of a
standard-costing system is that the costs of every product or service planned
to be worked on during the period can be computed at the start of that
period. This feature of standard costing
makes it possible to

: maintain actual costs as an integral part of
the costing system.
use a simple recording system.

eliminate routine reports.

justify eliminating the budgeting process.

Question 5. Question
: (TCO 2) A variance is

: the difference between a budgeted amount and
a standard amount.
the gap between an actual result and a
benchmark amount.
the required number of inputs for one
standard output.
the difference between an actual result and a
budgeted amount.

Question 6. Question
: (TCO 2) Which of the following
statements is true about overhead cost variance analysis using activity-based
costing?

:
Overhead cost variances are calculated for
output-unit level costs only.
Overhead cost variances are calculated for
variable manufacturing overhead costs only.
A four-variance analysis can be conducted.

Activity-based costing uses input measures
for all activities, resulting in the inability to do flexible budgets needed
for variance analysis.
I

Question 7. Question
: (TCO 2) Fixed overhead costs
include

: the cost of sales commissions.

property taxes paid on plant facilities.

indirect materials.

energy costs.

Question 8. Question
: (TCO 2) Katie Enterprises
reports the year-end information from 20X8 as follows: Sales (70,000 units)
$560,000; Cost of goods sold 210,000; Gross margin 350,000; Operating expenses
200,000; Operating income $150,000.
Katie is developing the 20X2 budget.
In 20X2, the company would like to increase selling prices by 4%, and as
a result expects a decrease in sales volume of 10%. All other operating expenses are expected to
remain constant. Assume that COGS is a
variable cost and that operating expenses are a fixed cost. What is budgeted cost of goods sold for 20X2?

:
$189,000

$196,560

$218,400

$210,000

Question 9. Question
: (TCO 2) Hester Company budgets
on an annual basis for its fiscal year.
The following beginning and ending inventory levels (in units) are planned
for the fiscal year of July 1, 20×2, through June 30, 20×3.
July 1,
20×2 June 30, 20×3
Raw material (note) 40,000 10,000
Work in process 8,000 8,000
Finished goods 30,000 5,000
(note) Three units of raw material are needed to produce
each unit of finished product.
If 450,000 finished units were to be manufactured during the
20×2-20×3 fiscal year by Hester Company, the units of raw material needed to be
purchased would be

:
1,350,000.

1,360,000.

1,320,000.

1,330,000.

Question 10. Question
: (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, 60% are collected in the month of sale and the remainder in
the month following the sale. Cost of
purchases of inventory each month are 70% of the next month’s projected total
sales. ll purchases of inventory are on
account; 25% 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

: $448,000.

$437,000.

$431,600.

$328,000.

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