7. Under ABC, which of the following types of activities would be regarded as in

Question

7. Under ABC, which of the following types of activities would be regarded as independent of the volume of production: A. Product-level activities. B. Unit-level activities C. Batch-level activities D. Customer-level activities E. None of these. 8. Which of the following steps would be seen as "last" in the implementation of activity based costing? A. Identify activities B. Identify traceable costs C. Determine per allocation rates D. Apply costs to objects E. None of these. (Essay) 9. Garrett, Inc., instituted a new process in October. During October, 9,000 units were started and 7,000 were transferred to finished goods. 2,000 remained in work in process at October 31. The work in process at October 31 was 100% complete as to material costs and 50% complete as to conversion costs. Material costs of $27,000 and conversion costs of $40,000 were charged in October. What were the total costs transferred to the finished goods inventory? (Essay) 10. One of Hartman Company's activity cost pools is inspecting, with estimated overhead of $140,000. Hartman produces throw rugs (700 inspections) and area rugs (1,300 inspections). How much of the inspecting cost pool should be assigned to throw rugs? 11. The benefits of budgeting include: A. formalized planning. B. providing a basis for performance evaluation. C. opening lines of communication and coordination within an entity. D. All of the above. E. None of these. 12. The bottom-up budget development approach the budget: A. is imposed on lower-level personnel who rarely are involved in budget construction. B. centers on lower-level employee participation. C. process begins with the issuance of general guidelines by top management. D. Both B and C. E. None of these. 13. Which of the following is not an element of a master budget? A. Sales budget. B. Direct labor budget. C. Factory overhead budget. D. Cash budget. E. None of these. 14. The budgeting process would normally begin with the preparation of a: A. cash budget. B. capital expenditure budget. C. sales budget. D. production budget. E. None of these. 15. A continuous budget typically: A. drops completed months and adds future months as time passes. B. is known as pro forma budgeting. C. is a top-down approach with management constantly issuing budget edicts. D. eliminates the need for periodic bank reconciliations. E. None of these. 16. T manufactures chairs, and each requires 4 feet of lumber. 1,500 and 1,700 chairs will be built in April and May, respectively. T keeps lumber on hand at 40% of the next month's production needs. How many feet should T buy in April? A. 5,980 B. 6,300 C. 6,320 D. 8,720 E. None of these. 17. A company began operations on January 1 with cash of $75,000. January sales were $150,000. No collections occurred. Cost of goods sold is $40,000, and there are no ending inventories or payables. How much cash was on hand at the end of January? A. $35,000 B. $110,000. C. $185,000. D. $225,000. E. None of these. 18. Operations began May 1. Sales are budgeted to increase as $15,000, $17,000, and $20,000 for the first three months. Ending inventory is 75% of the next month's projected sales. Ending inventory for June is: A. $15,000. B. $11,250. C. $7,500 if the gross profit rate is 50%. D. $5,625 if the gross profit rate is 50%. E. None of these. (Essay) 19. Assume that March’s budgeted sales are 10,000 units. Beginning finished goods inventory contained 1,000 units, and 1,500 units are desired to be on hand at month end. Conversely, beginning direct materials inventory consisted of 1,500 units, but only 1,000 units are desired to be on hand at month end. Each finished unit requires 2 units of raw materials and 1 hour of direct labor. Raw materials cost $6 per unit, direct labor costs $9 per hour, factory overhead is applied at $7 per hour, and the company has no work in process. How much will raw material purchases amount to for March? (Essay) 20. Winchell Company has provided projected information as follows: Net sales of $10,000, fixed manufacturing costs of $1,000, and variable manufacturing costs of 45% of net sales. Assuming no change in inventory, what will the projected cost of goods sold be? 21. What term identifies an accounting system in which the operations of the business are broken down into cost centers and the control function of a manager or supervisor is emphasized? A. Responsibility accounting. B. Operations-research accounting. C. Budgetary accounting. D. Control accounting. E. None of these. 22. A segment of an organization is referred to as a cost center if it has: A. responsibility for developing markets for and selling of the output. B. authority to make decisions affecting the major determinants of profit. C. authority to make decisions about the amount of investment capital. D. authority to make decisions over the operations including choice of suppliers. E. None of these. 23. When used for performance evaluation, periodic internal reports based on a responsibility accounting system should not: A. be related to the organization chart. B. include allocated common fixed costs. C. include variances between actual and budgeted controllable costs. D. distinguish between controllable and noncontrollable costs. E. None of these. 24. For the month of April, budgeted sales were $100,000 and budgeted cost of goods sold was $80,000. Actual sales were $80,000 and actual cost of goods sold amounted to $90,000. In preparing its monthly performance report: A. an unfavorable cost variance of $20,000. B. a favorable cost variance of $20,000. C. a favorable cost variance of $10,000. D. an unfavorable cost variance of $10,000. E. None of these. 25. The primary difference between a master budget and a flexible budget is that a: A. flexible budget considers only variable costs. B. flexible budget is only applicable to service businesses. C. master budget is for an entire facility rather than a single department. D. master budget is based on one level of production. E. None of these. 27. A product consists of 2 ounces of oil ($2 per ounce) and 1 ounce of powder ($8 per ounce). Each man hour ($24 per hour) produces 12 units of product. Variable overhead is at $4 per labor hour. Fixed overhead is applied at $8 per labor hour. A. The standard cost of a unit of product is $13. B. The standard cost of a unit of product is $15. C. The standard cost of a unit of product is $24. D. The standard cost of a unit of product is $36. E. None of these. 24. What type of direct material variances for usage and price will arise if the actual number of pounds of materials used exceeds standard pounds allowed but actual cost was less than standard cost? A. Unfavorable usage, but favorable price B. Favorable usage, and favorable price C. Unfavorable usage, and unfavorable price D. Cannot be determined from the information given. E. None of these. 29. Total production of 1,000 units of finished goods required 3,000 actual parts at $2.25 per part. The standard is 2.9 parts per unit of finished goods, at a standard price of $2.30 per part. Which of the following statements is true? A. The materials price variance is $150 favorable. B. The materials price variance is $145 unfavorable. C. The materials quantity variance is $225 favorable. D. The materials quantity variance is $225 unfavorable. E. None of these. (Essay) 30. Vanzant produced 1,000 units of output. The production process normally requires 2 hours of labor per unit of output. The standard labor rate is $10 per hour but Vanzant paid $11 per hour. Actual hours needed to complete the production process were 1,900. How much was the labor efficiency variance? (Essay) 31. Vanzant produced 1,000 units of output. The production process normally requires 2 hours of labor per unit of output. The standard labor rate is $10 per hour but Vanzant paid $11 per hour. Actual hours needed to complete the production process were 1,900. How much was the labor rate variance?

Explanation / Answer

Answer to the first question - No 7:

D. Customer-level activities

Explanation:

It does not depend on the volume of production rather depends on number of customers required to be handled.

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