Question

15) Treasurers, Incy a man pers, Inc, a manufacturer of gift articles, uses a single plantwide rate to allocate indirect costs with machine hours as the allocation base. Estimated overhead costs for the year are $9,000,000 Botimated machine hours are 30,000. During the year, the actual machine hours used were 44.000. Calculate the predetermined overhead allocation rate. B) $120 $205 D) $153 A) $300 36) An activity-based costing system is developed in four steps: a. Compute the predetermined overhead allocation rate for each activity. b. Identify activities and estimate their total indirect costs. c. Identify the allocation base for each activity and estimate the total quantity of each allocation base. d. Allocate indirect costs to the cost object. Which of the following is the correct order for performing these steps? A) b, a, cd B) d a, b, C ) a, b, cd D) b, c ad 37) The production line of a manufacturing company is most likely to be considered to be an A) investment center profit center B) revenue center D) cost center 38) Provisions Company, a manufacturer of office supplies, provides the following financial information: Operating income Net sales Total assets at Jan. 1 Total assets at Dec. 31 Pen Division $80,000 $400,000 $600,000 $610,000 Pencil Division $30,000 $150,000 $350,000 $300,000 Calculate the return on investment for the Pen Division. (Round your answer to two decimal places.) A) 13.33% B) 9.23% 13.11% D) 13.22% 39) A profit center responsibility report A) includes traceable fixed expenses B) should not include costs for which the profit center manager is not accountable does not include revenues since that information only appears on the revenue center responsibility report D) is the same as a performance report 40) Which of the following is irrelevant when deciding to upgrade a company's heating and air conditioning system? A) the energy efficiency of the old equipment versus the energy efficiency of the new equipment B) the safety of the new equipment compared to the old equipment the productivity of the old equipment compared to that of the new equipment D) the purchase price of the old equipment

Answer 1

35. A. $ 300

Predetermined overhead rate = $ 9,000,000 / 30,000 machine hours = $ 300 per machine hour.

36. D. b,c,a,d

37. D. Cost center.

38. D. 13.22 %

Return on Investment = Operating Income / Average Operating Assets = $ 80,000 / $ 605,000 = 13.22 %

39. B. Should not include costs for which the profit center manager is not accountable.

40. D. The purchase price of the old equipment.