ACCT 3203 Exam 2

Lake Corporation manufactures two products, AA and BB, from a joint process. A production run costs $20,000 and results in 500 units of AA and 2,000 units of BB. Both products must be processed past the split-off point, incurring separable costs of $5 per unit for AA and $10 per unit for BB. The market price is $25 for AA and $20 for BB. Allocate the joint production cost to AA using the physical units method.(Round your answer to the nearest dollar.)

4,000

Hasselhoff, Inc., is a multinational company with divisions around the world. Division A in the United States purchases a part from Division G in Canada. There is no outside market for the part. The part is sold for $12 and normally receives a 20% markup. What is the transfer price using the resale price method? a. $10.00 b. $9.60 c. $12.00 d. $14.40

a. $10.00

Southland Company usually sells 30% of its merchandise during a month for cash with the remaining sales on account. The company's acounts receivable payment history is as follows: Collected in the month of sale 30% Collected in the month after sale 50% Collected in the second month after sale 15% Total budgeted sales for the second quarter are as follows: April $120,000 May $100,000 June $180,000 What is the total expected cash for the month of June? a. $139,400 b. $119,400 c. $173,400 d. $54,000

a. $139,400

Oaks Company has two support departments, Maintenance (MD) and Personnel (PD), and two producing departments, P1 and P2. Data on these departments follows: MD PD P1 P2 Budgeted OH $30,000 $4,500 $9,000 $15,000 Service hours used 100 50 300 150 Number of employees 10 20 95 95 Direct labor hours 50 50 250 250 MD costs are allocated based on service hours used; PD costs are allocated based on number of employees. Using the reciprocal method, what is the total in P1 after allocation? (Round any dollar amounts to the nearest dollar.) a. $30,807 b. $34,678 c. $21,807 d. $34,500

a. $30,807

Frekko Company provided the following information: Standard costs per unit: Variable overhead 4 mach. hrs @$6/mach hr Fixed overhead 4 mach. hrs. @$10/mach hr Actual units produced 20,000 units Normal capacity in units 21,000 units Actual machine hours 79,000 machine hours Actual variable overhead cost $540,000 Actual fixed overhead cost $810,000 Using the three-variance method, what is the spending variance? a. $36,000 U b. $30,000 U c. $36,000 F d. $30,000 F

a. $36,000 U

Eden Company manufactures Brights and Dulls from a joint process. A production run costs $50,000 and results in 250 units of Brights and 1,000 units of Dulls. Both products must be processed past the split-off point, incurring separable costs for Brights of $60 per unit and $40 per unit for Dulls. The market price is $250 for Brights and $200 for Dulls. What is the gross profit for Brights assuming the net realizable value method is used? a. $36,054 b. $11,446 c. $47,500 d. $62,500

a. $36,054

Wylie & Company developed the following data for the month of June. June 1 cash balance $ 2,300 Cash sales in June $ 67,000 Credit sales for June are $20,000; for May $10,000; and for April $16,000. 60% of credit sales are collected in the month of sale, 20% in the following month, and 10% in the second month following the sale. Purchases for May were $34,000 and for June are $40,000. Half of purchases are paid in the month of purchase and the remainder in the following month. June salaries are $28,400, utilities are $1,090, and depreciation on the building is $1,000. June cash payments for purchases equaled: a. $37,000. b. $77,000. c. $34,000. d. $74,000.

a. $37,000

Southland Company usually sells 30% of its merchandise during a month for cash with the remaining sales on account. The company's acounts receivable payment history is as follows: Collected in the month of sale 30% Collected in the month after sale 50% Collected in the second month after sale 15% Total budgeted sales for the second quarter are as follows: April $120,000 May $100,000 June $180,000 What are the expected cash sales for June? a. $54,000 b. $82,600 c. $180,000 d. $27,000

a. $54,000

Crawford Company's standard fixed overhead cost is $6 per direct labor hour based on budgeted fixed costs of $600,000. The standard allows one direct labor hour per unit. During the year, Crawford produced 110,000 units of product, incurred $630,000 of fixed overhead costs, and recorded 212,000 actual hours of direct labor. What is the fixed overhead volume variance? a. $60,000 F b. $24,000 F c. $36,000 U d. $60,000 U

a. $60,000 F

Young Company has a tax rate of 40%. Information for the company is as follows: Amount After-Tax Cost Mortgage bonds $1,000,000 0.048 Unsecured bonds 3,000,000 0.050 Common stock 6,000,000 0.150 What is the weighted cost of capital? a. 0.1098 b. 0.2480 c. 0.0827 d. 0.0366

a. 0.1098

______________ is (are) a type of fringe benefit received over and above salary. a. Perquisites b. Cash compensation c. Bonus based on net income d. EVA

a. Perquisites

What is the strategic plan? a. a plan from which an organization can determine short and long term objectives b. a forecast of future sales c. the final step in the budgeting process d. a type of budget that contains the operating budget and the financial budget

a. a plan from which an organization can determine short and long term objectives

Dvision A produces a component and wants to sell it to Division B. The transfer price is a. revenue to Division A and cost to Division B. b. revenue to Division B and cost to Division A. c. revenue to Division A and no effect on Division B. d. a cost to Division B and no effect on Division A.

a. revenue to Division A and cost to Division B

The overhead budget: a. shows the expected costs of production except for direct materials and direct labor. b. shows the expected costs of production. c. shows only the expected variable overhead. d. shows only the expected fixed overhead.

a. shows the expected costs of production except for direct materials and direct labor.

The _______ is the standard plus the allowable deviation. a. upper control limit b. standard price c. standard quantity d. total budget variance

a. upper control limit

Which of the following factors would cause an unfavorable materials quantity variance? a. using poorly maintained machinery. b. using higher quality materials. c. using more highly skilled workers. d. receiving discounts for purchasing larger than normal quantities.

a. using poorly maintained machinery

Regis Corp. uses two materials, X and Y, in making its product. The standards are: Material Standard Mix Standard Unit Price Standard Cost X 3,500 units $1.00 per unit $3,500 Y 1,500 units $3.00 per unit $4,500 Yield 4,000 units Actual production information for April was: Material Actual Mix X 30,000 units Y 20,000 units Yield 36,000 units What is the materials mix variance? a. $5,000 F b. $10,000 U c. $10,000 F d. $15,000 F

b. $10,000 U

Florida Company makes and sells t-shirts. Expected sales in February equal 500 units; expected sales in March equal 1,500 units. Each shirt costs $7 and sells for $9. The company requires 30% of the next month's sales in ending inventory. On February 1, 700 shirts were in inventory. Calculate the sales budgeted for March. a. $3,000 b. $13,500 c. $10,500 d. $24,000

b. $13,500

The following information pertains to Utter Company: Support Departments Producing Departments Personnel Maintenance Fabrication Assembly Budgeted OH $40,000 $72,000 $140,000 $160,000 Direct labor hours 2,000 2,500 8,000 10,000 Machine hours -- -- 12,000 8,000 Number of employees 4 5 15 25 Personnel costs are allocated based on number of employees; maintenance costs are allocated based on machine hours. Predetermined overhead rates for the producing departments are based on direct labor hours. If the direct method is used to allocated support department costs, the overhead rate for Assembly would be a. $19.82 b. $21.38 c. $26.73 d. $16.00

b. $21.38

Correll Company has two divisions, A and B. Information for each is as follows: Division A Division B Operating income $40,000 $260,000 Asset base $100,000 $1,200,000 Target rate of return 15% 18% Margin 10% 20% What is the residual income for A? a. $40,000 b. $25,000 c. $15,000 d. $28,000

b. $25,000

Southland Company usually sells 30% of its merchandise during a month for cash with the remaining sales on account. The company's acounts receivable payment history is as follows: Collected in the month of sale 30% Collected in the month after sale 50% Collected in the second month after sale 15% Total budgeted sales for the second quarter are as follows: April $120,000 May $100,000 June $180,000 Of the credit sales made in April, how much will be received in cash in April? a. $87,500 b. $25,200 c. $120,000 d. $30,000

b. $25,200

The following information pertains to Utter Company: Support Departments Producing Departments Personnel Maintenance Fabrication Assembly Budgeted OH $140,000 $72,000 $140,000 $160,000 Direct labor hours 2,000 2,500 8,000 10,000 Machine hours -- -- 12,000 8,000 Number of employees 4 5 15 25 Personnel costs are allocated based on number of employees; maintenance costs are allocated based on machine hours. Predetermined overhead rates for the producing departments are based on direct labor hours. If the sequential method is used to allocated support department costs, with personnel allocated first, the overhead rate for Fabrication would be what? (Round the allocation ratios to 4 significant digits.) a. $28.80 b. $29.90 c. $28.73 d. $24.78

b. $29.90

Eden Company manufactures Brights and Dulls from a joint process. A production run costs $50,000 and results in 250 units of Brights and 1,000 units of Dulls. Both products must be processed past the split-off point, incurring separable costs for Brights of $60 per unit and $40 per unit for Dulls. The market price is $250 for Brights and $200 for Dulls. What is the joint cost allocated to Dulls assuming the constant gross profit method is used? a. $15,000 b. $40,000 c. $50,000 d. $10,000

b. $40,000

Shorter Company expects the following for the month of July: Cash balance, July 1 $ 1,300 Cash sales, July $40,000 Materials purchases, July $10,000 Materials purchases, June $12,000 Payments for direct labor $13,000 Tax payments in July $ 2,100 Depreciation on equipment $ 2,000 Other cash expenditures $ 8,900 There are no credit sales. Shorter purchases all direct materials on account and pays 70% of a month's purchases that month; the remainder is paid the following month. What is the expected cash balance on July 31? a. $4,700 b. $6,700 c. $7,300 d. $5,400

b. $6,700

Deli Products produces two products, X and Y, in a single process. During the year, 4,000 units of X and 6,000 units of Y were produced from a joint process costing $25,000. Separable processing costs beyond the split-off point were $10,000 for X and $4,000 for Y. X sells for $10 per unit, Y sells for $9 per unit. What is the allocation of joint costs to Product X using the net realizable value method? a. $25,000 b. $9,375 c. $10,000 d. $10,638

b. $9,375

Beta Division had the following information: Asset base for Beta $400,000 Income for Beta $50,000 Weighted average cost of capital 12% Target ROI 15% Margin for Beta 20% What is the return on investment of Beta Division? a. 20.0% b. 12.5% c. 62.5% d. 800.0%

b. 12.5%

Beta Division had the following information: Asset base for Beta $400,000 Income for Beta $50,000 Weighted average cost of capital 12% Target ROI 15% Margin for Beta 20% If the asset base is decreased by $100,000, with no other changes, the return on investment of Beta will be a. 100.0% b. 16.7% c. 600.0% d. 62.5%

b. 16.7%

Glover Company provided the following information on expected sales in units: January 1,000 February 900 March 1,200 April 1,300 Glover's policy is to have 30% of next month's sales in ending inventory. On January 1, there were 300 units in inventory. Each unit produced requires 2 pounds of material A and 5 units of material D. Material A costs $4 per pound and material D costs $6 per unit. Glover requires 20% of the next month's production needs in inventory for each type of direct material. On January 1, there were 215 pounds of material A and 412 units of material D in inventory. How many units of material D does Glover expect to purchase in January? a. 5,190 b. 5,428 c. 792 d. 953

b. 5,428

_______ demand maximum efficiency and can be achieved only if everything operates perfectly. a. Currently attainable standards b. Ideal standards c. Budget standards d. Personnel standards

b. Ideal standards

The master budget is divided into two major budgets. What are they? a. Cost of Goods Sold Budget and Direct Materials Budget b. Operating Budget and Financial Budget c. Overhead Budget and Direct Labor Budget d. Sales Budget and Ending Finished Goods Inventory Budget

b. Operating Budget and Financial Budget

Which is NOT an acceptable method of disposing of variances? a. closing them to cost of goods sold b. closing them to raw materials, WIP, and finished goods c. closing them to WIP, Finished goods, and cost of goods sold. d. all are acceptable methods

b. closing hem to raw materials, WIP, and finished goods

Multiple measures of performance are beneficial if they a. are all financial measures. b. include nonfinancial operating measures. c. focus only on short-run factors. d. all of these statements are true.

b. include non financial operating measures

The _______________ is the transfer price that would leave the selling division no worse off if the good is sold to an internal division. a. negotiated transfer price. b. minimum transfer price. c. maximum transfer price. d. cost-plus price.

b. minimum transfer price

The "floor" in transfer pricing is a. the transfer price that would leave the buying division no worse off if an input is purchased from an internal division. b. the transfer price that would leave the selling division no worse off if the good is sold to an internal division. c. the transfer price that would give the selling division its normal profit. d. the transfer price that would give the buying division a price break compared to purchasing from an outside company.

b. the transfer price that would leave the selling division no worse off if the good is sold to an internal division

A company expects that 50% of accounts receivable will be paid in the month of sale, 20% will be paid the month after sale, and 10% will be paid in the second month after the sale. The company has the following sales on account: January $15,000 February $25,000 March $17,000 What are expected cash receipts on accounts receivable for March? a. $8,500 b. $13,500 c. $15,000 d. $15,500

c. $15,000

If a support department's costs were budgeted to be $150,000 and actual costs incurred by the support department were $200,000, the total amount of the support department's costs that should be allocated to other departments is a. $350,000 b. $200,000 c. $150,000 d. $50,000

c. $150,000

Barker Company had the following standards for one unit of product: Materials 4 pounds @ $1.50 per pound Direct labor 0.5 hour @ $20.00 per hour The actual usage was as follows: Direct materials $38,152 for 25,100 pounds Direct labor $61,835 for 2,980 hours 6,200 units were produced during the period. What is the labor efficiency variance? a. $2,400 Favorable b. $2,400 Unfavorable c. $2,235 Favorable d. $2,235 Unfavorable

c. $2,400 Favorable

For the coming year, Alpha Company's travel dept. budgeted fixed cost of $143,360 and variable cost of $34 per trip. Budgeted yearly trips, monthly peak trips, and actual total trips are as follows: Budgeted Yearly Trips Budgeted Monthly Peak Trips Actual Trips West Sales Territory 110 5 100 Midwest Sales Territory 170 12 150 Southern Sales Territory 150 15 160 Eastern Sales Territory 130 8 140 Using both a fixed and variable rate with fixed costs allocated on the basis of monthly peak trips, what will the West Sales Territory be charged for the year? (Round to the nearest dollar.) a. $31,498 b. $29,492 c. $21,320 d. $30,638

c. $21,320

You have just gotten a summer job that will pay you (net of taxes) $900 per month. There are 11 weeks of summer (you will be paid for all of them). Then school starts, you will quit your job. Fortunately, you have a scholarship for tuition and fees. Your parents are happy to have you at home and will pay any cell phone and transportation costs. You have gathered the following data for summer and the first semester of school: Books $700 Supplies $250 There are 16 weeks in the semester, and you'll need $50 per week for entertainment. You need to cover summer expenses of $30 a week. Right now, you have $100 in your checking account. Preparing a cash budget for the summer and the first semester of college will help you decide if you can afford a trip to Florida during Christmas break. (Hint: Do the entire time period, do not break it down by week or by month. Assume 4.4 weeks in a month.) What is the estimated ending balance of your checking account at the end of the semester? a. $320 b. $600 c. $270 d. $440

c. $270

DeAngelo Company provided the following data: Beginning Cash balance $12,300 Cash sales in August $80,000 Credit sales for June $40,000 Credit sales for July $40,000 Credit sales for August $30,000 70% of credit sales are collected in the month of sale, 15% in the following month, and 10% in the second month following the sale. Anticipated cash receipts from accounts receivable in August are: a. $47,500. b. $41,680. c. $31,000. d. $121,000

c. $31,000

Reynolds Company has normal monthly production of 10,000 units, each unit takes one direct labor hour at standard. Additional information is provided: Overhead rates per DLH: Fixed $ 6.00 Variable 10.00 $16.00 Actual units produced 9,000 Actual total factory overhead (includes $70,000 fixed overhead) $156,000 Actual direct labor hours 9,000 What is the variable overhead spending variance? a. $86,000 U b. $0 c. $4,000 F d. $10,000 F

c. $4,000 F

Hasslehoff, Inc., is a multinational company with divisions around the world. Division A in the United States purchases a part from Division G in Canada. The part can be purchased externally for $7 each. Transportation costs amount to $1 and the commission of $0.50 will not need to be paid. What is the transfer price using the comparable uncontrolled price method? a. $8.50 b. $8.00 c. $7.50 d. $7.00

c. $7.50

Regis Corp. uses two materials, X and Y, in making its product. The standards are: Material Standard Mix Standard Unit Price Standard Cost X 3,500 units $1.00 per unit $3,500 Y 1,500 units $3.00 per unit $4,500 Yield 4,000 units Actual production information for April was: Material Actual Mix X 30,000 units Y 20,000 units Yield 36,000 units What is the materials yield variance? a. $15,000 F b. $10,000 U c. $8,000 U d. $18,000 U

c. $8,000 U

Beta Division had the following information: Asset base for Beta $400,000 Income for Beta $50,000 Weighted average cost of capital 12% Target ROI 15% Margin for Beta 20% What is the turnover for Beta Division? a. 0.200 b. 0.125 c. 0.625 d. 8.000

c. 0.625

Glover Company provided the following information on expected sales in units: January 1,000 February 900 March 1,200 April 1,300 Glover's policy is to have 30% of next month's sales in ending inventory. On January 1, there were 300 units in inventory. Each unit produced requires 2 pounds of material A and 5 units of material D. Material A costs $4 per pound and material D costs $6 per unit. Glover requires 20% of the next month's production needs in inventory for each type of direct material. On January 1, there were 215 pounds of material A and 412 units of material D in inventory. How many units does Glover expect to produce in January? a. 1,270 b. 1,000 c. 970 d. 730

c. 970

If the allocation is for performance evaluation, the allocation of variable support department costs would be calculated as a. Actual rate x Actual usage. b. Actual rate x Budgeted usage. c. Budgeted rate x Actual usage. d. Budgeted rate x Budgeted usage.

c. Budgeted rate x Actual rate

____________________ is after-tax operating profit minus the total annual cost of capital. a. ROI b. Residual income c. EVA d. Net Income

c. EVA

Which of the following is correct regarding the materials yield variance? a. If relatively less of the more expensive input is used, the materials yield variance is unfavorable. b. If relatively more of the more expensive input is used, the materials yield variance is favorable. c. The materials usage variance is composed of the materials mix variance and the materials yield variance. d. The standard yield is equal to the total inputs used divided by the output created.

c. The materials usage variance is composed of the materials mix variance and the materials yield variance

_______________ is (are) the transfer price that would leave the buying division no worse off if the good is sold to an internal division. a. The negotiated transfer price b. The minimum transfer price c. The maximum transfer price d. Both a and c are correct.

c. The maximum transfer price

As a general rule, an investigation of a variance should be undertaken only if the a. anticipated benefits are greater than zero. b. variance is negative. c. anticipated benefits are greater than the expected costs. d. variance is positive.

c. anticipated benefits are greater than the expected costs

A mix variance is a. created whenever the actual mix of inputs differs from the standard mix. b. the difference in the standard cost of the actual mix of inputs used and the standard cost of the mix of the inputs that should have been used. c. both a and b are correct d. none of these are correct.

c. both a and b are correct

On the cash budget, cash available includes the following: a. cash on hand. b. expected cash receipts. c. both cash on hand and expected cash receipts. d. none of these answers is correct.

c. both cash on hand and expected cash receipts

A ___________ is a secondary product recovered in the course of manufacturing a primary product during a joint process. a. main product b. unprofitable product c. by-product d. tertiary product

c. by-product

A Treadwell Corp. manager created the production budget for the next three months. The desired ending inventory for the quarter is _____ the desired ending inventory for the last month. a. greater than b. less than c. equal to d. can not be determined with the information provided

c. equal to

Examples of support departments include all of the following EXCEPT a. maintenance. b. personnel. c. machining. d. data processing.

c. machining

Price standards are the responsibility of a. accounting b. personnel c. purchasing d. none of these

c. purchasing

If variable manufacturing overhead is applied based on direct labor hours and there is an unfavorable direct labor efficiency variance a. the direct materials usage variance will be unfavorable. b. the direct labor rate variance will be favorable. c. the variable manufacturing overhead efficiency variance will be unfavorable. d. the variable manufacturing overhead spending variance will be unfavorable.

c. the variable manufacturing overhead efficiency variance will be unfavorable

A common cost occurs a. when only one product or service is benefited. b. when different resources are used to produce one output. c. when the same resource is used in the output of two or more outputs. d. when a resource is used by two or more companies.

c. when the same resource is used in the output of two or more outputs

Comparsion of an international division's ROI can potentially be misleading because of a. the absence of activity-based management. b. differing production technologies. c. the lack of good information. d. differing environmental factors.

d. differing environmental factors

Shorter Company expects the following for the month of July: Cash balance, July 1 $ 1,300 Cash sales, July $40,000 Materials purchases, July $10,000 Materials purchases, June $12,000 Payments for direct labor $13,000 Tax payments in July $ 2,100 Depreciation on equipment $ 2,000 Other cash expenditures $ 8,900 There are no credit sales. Shorter purchases all direct materials on account and pays 70% of a month's purchases that month; the remainder is paid the following month. Expected cash payments on accounts payable in July equal what amount? a. $10,000 b. $22,000 c. $15,400 d. $10,600

d. $10,600

Eden Company manufactures Brights and Dulls from a joint process. A production run costs $50,000 and results in 250 units of Brights and 1,000 units of Dulls. Both products must be processed past the split-off point, incurring separable costs for Brights of $60 per unit and $40 per unit for Dulls. The market price is $250 for Brights and $200 for Dulls. What is the amount of joint costs allocated to Brights using the net realizable value method? a. $50,000 b. $11,906 c. 0 d. $11,446

d. $11,446

Beta Division had the following information: Asset base for Beta $400,000 Income for Beta $50,000 Weighted average cost of capital 12% Target ROI 15% Margin for Beta 20% What is EVA for Beta Division? a. $60,000 b. $48,000 c. $7,500 d. $2,000

d. $2,000

Barker Company had the following standards for one unit of product: Materials 4 pounds @ $1.50 per pound Direct labor 0.5 hour @ $20.00 per hour The actual usage was as follows: Direct materials $38,152 for 25,100 pounds Direct labor $61,835 for 2,980 hours 6,200 units were produced during the period. What is the labor rate variance? a. $2,400 Favorable b. $2,400 Unfavorable c. $2,235 Favorable d. $2,235 Unfavorable

d. $2,235

Crawford Company's standard fixed overhead cost is $6 per direct labor hour based on budgeted fixed costs of $600,000. The standard allows one direct labor hour per unit. During the year, Crawford produced 110,000 units of product, incurred $630,000 of fixed overhead costs, and recorded 212,000 actual hours of direct labor. What is the fixed overhead spending variance? a. $60,000 F b. $24,000 F c. $36,000 U d. $30,000 U

d. $30,000 U

Eden Company manufactures Brights and Dulls from a joint process. A production run costs $50,000 and results in 250 units of Brights and 1,000 units of Dulls. Both products must be processed past the split-off point, incurring separable costs for Brights of $60 per unit and $40 per unit for Dulls. The market price is $250 for Brights and $200 for Dulls. What is the gross profit for Brights assuming the physical units method is used? a. $62,500 b. $12,500 c. $47,500 d. $37,500

d. $37,500

Frekko Company provided the following information: Standard costs per unit: Variable overhead 4 mach. hrs @$6/mach hr Fixed overhead 4 mach. hrs. @$10/mach hr Actual units produced 20,000 units Normal capacity in units 21,000 units Actual machine hours 79,000 machine hours Actual variable overhead cost $540,000 Actual fixed overhead cost $810,000 Using the two-variance method, what is the volume variance? a. $6,000 F b. $40,000 F c. $6,000 U d. $40,000 U

d. $40,000 U

Barker Company had the following standards for one unit of product: Materials 4 pounds @ $1.50 per pound Direct labor 0.5 hour @ $20.00 per hour The actual usage was as follows: Direct materials $38,152 for 25,100 pounds Direct labor $61,835 for 2,980 hours 6,200 units were produced during the period. What is the materials usage variance? a. $502 Favorable b. $502 Unfavorable c. $450 Favorable d. $450 Unfavorable

d. $450 Unfavorable

Hasselhoff, Inc., is a multinational company with divisions around the world. Division A in the United States purchases a part from Division G in Canada. There is no outside market for the part because it is used in the manufacture of another product. The manufacturing cost for the part is $5. Transportation is $1; commissions are $0.50 but do not need to be paid. What is the transfer price using the cost-plus method? a. $5.50 b. $6.50 c. $5.00 d. $6.00

d. $6.00

Dover Company has budgeted production of 50,000 units for January, 60,000 units for February, and 75,000 units for March. Each unit requires 0.25 hours of labor. The average cost of labor is $15 per hour. What is the budget for direct labor for the first quarter? a. $574,250 b. $734,540 c. $594,360 d. $693,750

d. $693,750

What are the potential problems with participative budgeting? a .setting standards that are too high b. building slack into the budget ('padding') c. pseudoparticipation d. All of these are problems with participative budgeting. e. None of these are problems with participative budgeting.

d. All of these are problems with participative budgeting

If the allocation is for product costing, the allocation of variable support department costs would be calculated as a. Actual rate x Actual usage. b. Actual rate x Budgeted usage. c. Budgeted rate x Actual usage. d. Budgeted rate x Budgeted usage.

d. Budgeted rate x Budgeted usage

The accounts receivable aging schedule is an important part of the: a. Accounts payable budget. b. Cost of goods sold budget. c. Budgeted income statement. d. Cash budget.

d. Cash budget

Examples of producing departments include all of the following EXCEPT a. mixing b. molding c. packaging d. accounting

d. accounting

The major objective(s) of allocation is (are) a. to motivate managers. b. to compute product line profitability. c. to value inventory. d. all of these.

d. all of these

Which of the following industries would most likely have joint costs in production? a. flour milling b. dairy products c. commercial fishing d. all of these

d. all of these

Goal congruence can be defined as a. an incentive plan arranged so the managers' goals are allied with the shareholders' goals. b. managers operating the business in the best interest of the shareholders. c. tying management rewards to shareholder results. d. all of these are correct.

d. all of these are correct

If a company produces fewer units than expected, there will be a. a favorable budget variance. b. an unfavorable spending variance. c. a favorable volume variance. d. an unfavorable volume variance.

d. an unfavorable volume variance

The emphasis on short-run results at the expense of the long run is a. efficient behavior. b. effective behavior. c. optimal behavior. d. myopic behavior.

d. myopic behavior

Which of the following departments would NOT be a cost center? a. advertising department b. city police department c. building and grounds department d. sales department

d. sales department

Which of the following would be the most appropriate base for allocating the costs of the housekeeping department? a. machine hours b. direct labor hours c. number of employees d. square feet

d. square feet