Homework Answers
24.
Answer: D
This is a tool of systematic plan for future course of activities. Budget is advantageous because this is the way of resource allocation, judging performances, and improving communication through budget meeting.
25.
Answer: B
The product having higher contribution margin should be preferred. Therefore, Y should be preferred.
Total labor hours for Y = 8,000 units × 3 = 24,000
Hours left = 27,000 – 24,000 = 3,000
Units of production of X = 3,000 hours / Labor hours per unit = 3,000 / 2 = 1,500 units
Therefore, X = 1,500 units and Y = 8,000 units
26.
Answer: D
Only the significant variances should be presented to the management – these may be favorable or unfavorable. It is done for the attention of management in order to take correct measure for improvement. Suppose a material price variance of 45,000 favorable may be a management by exception; it happens because the standard price of material is too high and it needs a revision.
27.
Answer: D
This is a future cost and it differs between alternatives. This kind of cost could be avoided if such alternative is not chosen; examples are material cost or labor cost of producing garments.
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24. Which of the following is an advamtags of the budtin B) Budgeting provides a benchmark...
Maddox, a division of Stanley Enterprises, currently performs computer services for various departments of the firm....
Maddox, a division of Stanley Enterprises, currently performs computer services for various departments of the firm. One of the services has created a number of operating problems, and management is exploring whether to outsource the service to a consultant. Variable and fixed operating costs total $100,000 and $50,000, respectively. In addition, Stanley allocates $20,000 of corporate administrative overhead to Maddox. If Maddox were to use the outside consultant, fixed operating costs would be reduced by 70%. 24. The irrelevant costs...
8. Which of the following is not a benefit of budgeting? A. does uncover potential bottlenecks...
8. Which of the following is not a benefit of budgeting? A. does uncover potential bottlenecks before they occur B. does not coordinate the activities of the entire organization by integrating the plans and objectives of the various parts C. provides benchmarks for evaluating subsequent performance D. all of these E. none of these 9. The concept of budgeting means that: A. Budgetary variances should not be reviewed/analyzed by the top level of management B. Budgetary variances should be reviewed/analyzed...
PROBLEM 4 (20 pts) Determine which of the following alternatives, if any, is the best by...
PROBLEM 4 (20 pts) Determine which of the following alternatives, if any, is the best by using the following methods and assuming a 9% interest rate (and 9% minimum attractive rate of return). You may find that this problem is most easily solved by setting it up in Excel. (a) Present worth (b) Future worth (c) Annual cost (d) Rate of return Year WN-o -$16,000 +6,000 +6,000 +6,000 $19,000 +8,000 +8,000 +8,000 -$24,000 +10,000 +10,000 +10,000
Happy Valley Land and Snow Company provides the following ABC costing information: Activities Total Costs Activity...
Happy Valley Land and Snow Company provides the following ABC costing information: Activities Total Costs Activity cost drivers Labour hours $160,000 Gas 8,000 hours $18,000 6,000 gallons Invoices20,000 Total costs 198,000 The above activities used by their three departments are as follows 2,500 invoices Bush Dept. 1,200 hours 800 gallons Plowing Dept. 4,300 hours 3,700 gallons Lawn Dept. Labour hours 2,500 hours Gas Invoices How much of the total cost will be assigned to the Lawn Dept? 1,500 gallons 1,600...
Extreme Manufacturing Company provides the following ABC costing information: Activities Account inquiry Account billing Account verification...
Extreme Manufacturing Company provides the following ABC costing information: Activities Account inquiry Account billing Account verification accounts Correspondence letters Total costs Total Costs $320,000 $140,000 $118,750 $49,500 $628,250 Activity. - cost drivers 16,000 hours 4,000,000 lines 50,000 accounts 9,000 letters The above activities are used artments A and B as follows: Department A Account inquiry hours Department B 4,500 hours 3,000 hours O A. $124,000 OB. $131,300 OC. $158,500 O D. $138,750 Account billing lines Account verification accounts Correspondence letters...
Multiple Choice 50. Standards may be derived using a. historical data b. the assistance of industrial...
Multiple Choice
50. Standards may be derived using a. historical data b. the assistance of industrial engineers c. benchmarking d. all of the above LO 2 51. Variances are calculated for which of the following reasons a. budgeting b. bookkeeping c. monitoring d. b and c LO 3 52. The process of calculating variances and analysing the reasons they occurred is called a. Benchmarking b. Budget analysis c. Trend analysis d. Variance analysis LO 3 53. Variance analysis includes which...
Columbus Company provides the following ABC costing information: Activities Labor Gas Invoices Total costs Total Costs...
Columbus Company provides the following ABC costing information: Activities Labor Gas Invoices Total costs Total Costs $376,000 $6,000 $130,000 $512,000 Activity. - cost drivers 8,000 hours 3,000 gallons 6,500 invoices The above activities used by their three departments are: Labor Lawn Department 2,900 hours 1,800 gallons Bush Department 1,300 hours 900 gallons Plowing Department 3,800 hours 300 gallons Gas O A. $17.00 per hour O B. $47.00 per hour O C. $64.00 per hour O D. $29.26 per hour Invoices...
Extreme Manufacturing Company provides the following ABC costing information: Activities Account inquiry Account billing Account verification...
Extreme Manufacturing Company provides the following ABC costing information: Activities Account inquiry Account billing Account verification accounts Correspondence letters Total costs Total Costs $320,000 $200,000 $175,250 S24.000 $717.250 Activity-cost drivers 16,000 hours 4,000,000 lines 70,000 accounts 4,000 letters The above activities are used by Departments A and B as follows: Account inquiry hours Account billing lines Account verification accounts Correspondence letters Department A 2,700 hours 900,000 lines 8,000 accounts 1,400 letters Department B 4,200 hours 750,000 lines 6,000 accounts 1,800...
24) Four steps are necessary in preparing a production cost reports 1. Compute output in terms...
24) Four steps are necessary in preparing a production cost reports 1. Compute output in terms of equivalent units of production 2. Assign costs to units completed and units in process 3. Summarize the flow of physical units 4. Compute the cost per equivalent unit of production Place these steps in the correct order. A) 1,3,2,4 B) 3, 1, 4,2 C) 2, 1, 4,3 D) 4, 2, 1,3 Chapter 22 25) The budget process is a loop that consists of...
Extreme Manufacturing Company provides the following ABC costing information: Activities Account inquiry Account billing Account verification...
Extreme Manufacturing Company provides the following ABC costing information: Activities Account inquiry Account billing Account verification accounts Correspondence letters Total costs Total Costs $240,000 $210,000 $158,000 $67,500 $675,500 Activity – cost drivers 12,000 hours 7,000,000 lines 80,000 accounts 9,000 letters The above activities are used by Departments A and B as follows: Department A 2,500 hours Department B 4,000 hours Account inquiry hours O A. $15,800 O B. $158,000 O C. $79,000 OD. $11,850 Account billing lines Account verification accounts...
8. Which of the following is not a benefit of budgeting? A. does uncover potential bottlenecks before they occur B. does not coordinate the activities of the entire organization by integrating the plans and objectives of the various parts C. provides benchmarks for evaluating subsequent performance D. all of these E. none of these 9. The concept of budgeting means that: A. Budgetary variances should not be reviewed/analyzed by the top level of management B. Budgetary variances should be reviewed/analyzed...
PROBLEM 4 (20 pts) Determine which of the following alternatives, if any, is the best by using the following methods and assuming a 9% interest rate (and 9% minimum attractive rate of return). You may find that this problem is most easily solved by setting it up in Excel. (a) Present worth (b) Future worth (c) Annual cost (d) Rate of return Year WN-o -$16,000 +6,000 +6,000 +6,000 $19,000 +8,000 +8,000 +8,000 -$24,000 +10,000 +10,000 +10,000
Happy Valley Land and Snow Company provides the following ABC costing information: Activities Total Costs Activity cost drivers Labour hours $160,000 Gas 8,000 hours $18,000 6,000 gallons Invoices20,000 Total costs 198,000 The above activities used by their three departments are as follows 2,500 invoices Bush Dept. 1,200 hours 800 gallons Plowing Dept. 4,300 hours 3,700 gallons Lawn Dept. Labour hours 2,500 hours Gas Invoices How much of the total cost will be assigned to the Lawn Dept? 1,500 gallons 1,600...
Extreme Manufacturing Company provides the following ABC costing information: Activities Account inquiry Account billing Account verification accounts Correspondence letters Total costs Total Costs $320,000 $140,000 $118,750 $49,500 $628,250 Activity. - cost drivers 16,000 hours 4,000,000 lines 50,000 accounts 9,000 letters The above activities are used artments A and B as follows: Department A Account inquiry hours Department B 4,500 hours 3,000 hours O A. $124,000 OB. $131,300 OC. $158,500 O D. $138,750 Account billing lines Account verification accounts Correspondence letters...
Multiple Choice
50. Standards may be derived using a. historical data b. the assistance of industrial engineers c. benchmarking d. all of the above LO 2 51. Variances are calculated for which of the following reasons a. budgeting b. bookkeeping c. monitoring d. b and c LO 3 52. The process of calculating variances and analysing the reasons they occurred is called a. Benchmarking b. Budget analysis c. Trend analysis d. Variance analysis LO 3 53. Variance analysis includes which...
Columbus Company provides the following ABC costing information: Activities Labor Gas Invoices Total costs Total Costs $376,000 $6,000 $130,000 $512,000 Activity. - cost drivers 8,000 hours 3,000 gallons 6,500 invoices The above activities used by their three departments are: Labor Lawn Department 2,900 hours 1,800 gallons Bush Department 1,300 hours 900 gallons Plowing Department 3,800 hours 300 gallons Gas O A. $17.00 per hour O B. $47.00 per hour O C. $64.00 per hour O D. $29.26 per hour Invoices...
Extreme Manufacturing Company provides the following ABC costing information: Activities Account inquiry Account billing Account verification accounts Correspondence letters Total costs Total Costs $320,000 $200,000 $175,250 S24.000 $717.250 Activity-cost drivers 16,000 hours 4,000,000 lines 70,000 accounts 4,000 letters The above activities are used by Departments A and B as follows: Account inquiry hours Account billing lines Account verification accounts Correspondence letters Department A 2,700 hours 900,000 lines 8,000 accounts 1,400 letters Department B 4,200 hours 750,000 lines 6,000 accounts 1,800...
24) Four steps are necessary in preparing a production cost reports 1. Compute output in terms of equivalent units of production 2. Assign costs to units completed and units in process 3. Summarize the flow of physical units 4. Compute the cost per equivalent unit of production Place these steps in the correct order. A) 1,3,2,4 B) 3, 1, 4,2 C) 2, 1, 4,3 D) 4, 2, 1,3 Chapter 22 25) The budget process is a loop that consists of...
Extreme Manufacturing Company provides the following ABC costing information: Activities Account inquiry Account billing Account verification accounts Correspondence letters Total costs Total Costs $240,000 $210,000 $158,000 $67,500 $675,500 Activity – cost drivers 12,000 hours 7,000,000 lines 80,000 accounts 9,000 letters The above activities are used by Departments A and B as follows: Department A 2,500 hours Department B 4,000 hours Account inquiry hours O A. $15,800 O B. $158,000 O C. $79,000 OD. $11,850 Account billing lines Account verification accounts...
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