Question

two styles of credit reports: Individual and Corporate. The difference between overeign Credit Checks produces two styles of credit reports ference between the two is the amount of background information and data collection required. The Corporate report uses mo because additional checking and data are required. There ompleted follow: Total support service costs to be allocated are $3,200,000. Corporate report uses more skilled personnel ata are required. The relevant figures for the year Allocation base Data purchased Research hours Interview hours Number of reports Individual Corporate $10,000 S80.000 24.000 30.000 1.000 10.000 16.000 3.000 Which cost-allocation based would the manager of the Corporate Report Department prefer the least? A. Data purchased B. Interview hours C. Research hours D. None of the above 2. The purpose of the flexible budget is to: A. eliminate cyclical fluctuations in production reports by ignoring variable costs. B. reduce the total time in preparing the annual budget. C. compare actual and budgeted results at virtually any level of production. D. allow management some latitude in meeting goals. 3. The starting point in preparing a comprehensive budget for a manufacturing company limited by its ability to produce and not by its ability to sell is A. a projection of fixed asset acquisitions. B. an estimate of productive capacity. C. a sales forecast. D. an estimate of cash receipts and disbursements.

Answer 1

1. As the difference between the two is the background information and the data collection, they are the preferred allocation base.

The answer is B.

2. Under the flexible budget, the variable cost per unit and the total fixed costs remains the same with the master budget and the actual number of units are used.

The answer is C.

3. Ad the company is limited by its ability to produce, the productive capacity is taken to consideration.

The answer is B.