ACCT 314 Exam 2

Of the following organizations, activity-based costing (ABC) cannot be used by:

None of these are correct, as all these organizations can use ABC

Activity-based costing systems:

often reveal products that were under- or overcosted by traditional costing systems.

A favorable price variance for direct manufacturing labor might indicate that:

under-skilled employees are being hired

Quattro began operations in April of this year. It makes all sales on account, subject to thefollowing collection pattern: 30% are collected in the month of sale; 60% are collected in the firstmonth after sale; and 10% are collected in the second month after sale. If sales for April, May,and June were $60,000, $80,000, and $70,000, respectively, what were the firm's budgetedcollections for May?

$60,000

Real Madrid Corporation plans to sell 41,000 units of its single product in March. The companyhas 2,800 units in its March 1 finished-goods inventory and anticipates having 2,400 completedunits in inventory on March 31. On the basis of this information, how many units does RealMadrid plan to produce during March?

40,600

An examination of Shorter Corporation's inventory accounts revealed the following information:Raw materials, June 1: 46,000 unitsRaw materials, June 30: 51,000 unitsPurchases of raw materials during June: 185,000 unitsShorter's finished product requires four units of raw materials. On the basis of this information,how many finished products were manufactured during June?

45,000

Coleman, Inc. anticipates sales of 50,000 units, 48,000 units, and 51,000 units in July, August, and September, respectively. Company policy is to maintain an ending finished-goods inventory equal to 40% of the following month's sales. On the basis of this information, how many units would the company plan to produce in August?

49,200

Jackson manufactures products X and Y, applying overhead on the basis of labor hours. X, a low-volume product, requires a variety of complex manufacturing procedures. Y, on the other hand, is both a high-volume product and relatively simplistic in nature. What would an activity-based costing system likely disclose about products X and Y as a result of Jackson's current accounting procedures?

X: undercosted Y: Overcosted