ACCT202 - Teng Final Exam Fall 2017 Use the following to answer question 30. Man

Question

ACCT202 - Teng Final Exam Fall 2017 Use the following to answer question 30. Management of the Catering Company would like the Food Division to transfer 10,000 cans of its final product to the Restaurant Division for S30·The Food Division sells the product to customers for $70 per unit. The Food Division's variable cost per unit is $35 and its fixed cost per unit is $10. 30. If the Food Division has 10,000 units available capacity, what is the minimum transfer price the Food Division should accept? A) S30 B) $35 C) $45 D) $70 31. Budgeting in not-for-profit organizations A) is not important because they are not profit-oriented. B) usually starts with budgeting expenditures, rather than receipts. C) is necessary only if some product is produced and sold. D) consists entirely of budgeted contributions. The overhead volume variance relates only to A) variable overhead costs. B) fixed overhead costs. C) both variable and fixed overhead costs. D) all manufacturing costs. 32. 33. An appropriate activity index for a college or university for budgeting faculty positions would be the A) faculty hours worked B) number of administrators. C) credit hours taught by a department. D) number of days in the school term 34. In using variance reports, management looks for A) total assets invested. B) significant variances. C) competitors' costs in comparison to the company's costs. D) more efficient ways of valuing inventories.

Explanation / Answer

30 . minimum transfer price for units produced in available capacity = variable cost = $35

so option (b) $35 is correct.

31. option (b) usually starts with budgeting expenditures rather than receipts is correct.

32. overhead volume variance relates only to fixed overhead cost .

so , option (b) fixed overhead cost is correct.

33. an appropriate activity index for a college or university for budgeting faculty position would be credit hours taught by a department .

so option (c) is correct.

34. in using variance report, management looks for significant variances.

so option (b) is correct.

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