devry acct349 quiz week 1 2 and 3

1. Question : (TCO 10) Which of the following statements is true about overhead cost variance analysis using activity-based costing?

Overhead cost variances are calculated for output-unit level costs only.

Overhead cost variances are calculated for variable manufacturing overhead costs only.

A 4-variance analysis can be conducted.

Activity-based costing uses input measures for all activities, resulting in the inability to do flexible budgets needed for variance analysis.

Question 2. Question : (TCO 10) Sebastian Company, which manufactures electrical switches, uses a standard cost system and carries all inventories at standard. The standard manufacturing overhead costs per switch are based on direct labor hours and are shown below:

Variable overhead (5 hours at $12 per direct manufacturing labor hour) $ 60

Fixed overhead (5 hours at $15 per direct manufacturing labor hour,

based on capacity of 200,000 direct manufacturing labor hours per month) 75

Total overhead per switch $ 135

The following information is available for the month of December:

• 46,000 switches were produced, although 40,000 switches were scheduled to be produced.

• 225,000 direct manufacturing labor hours were worked at a total cost of $5,625,000.

• Variable manufacturing overhead costs were $2,750,000.

• Fixed manufacturing overhead costs were $3,050,000.

The total variable manufacturing overhead variance was

$10,000 F

$10,000 U

$110,000 U

$110,000 F

Question 3. Question : (TCO 10) Sebastian Company, which manufactures electrical switches, uses a standard cost system and carries all inventories at standard. The standard manufacturing overhead costs per switch are based on direct labor hours and are shown below:

Variable overhead (5 hours at $12 per direct manufacturing labor hour) $ 60

Fixed overhead (5 hours at $15 per direct manufacturing labor hour,

based on capacity of 200,000 direct manufacturing labor hours per month) 75

Total overhead per switch $ 135

The following information is available for the month of December:

• 46,000 switches were produced, although 40,000 switches were scheduled to be produced.

• 225,000 direct manufacturing labor hours were worked at a total cost of $5,625,000.

• Variable manufacturing overhead costs were $2,750,000.

• Fixed manufacturing overhead costs were $3,050,000.

The fixed manufacturing overhead spending variance for December was

$450,000 F

$400,000 F

$50,000 U

$775,000 F

Question 4. Question : (TCO 10) The following information is for Pappillon Corporation’s variable manufacturing overhead costs last month: favorable flexible-budget variance of $3,000, unfavorable efficiency variance of $2,500. The spending variance is

$500 favorable.

$5,500 unfavorable.

$5,500 favorable.

None of the above

Question 5. Question : (TCO 10) Budgeted overhead costs rates can be expressed as an amount per unit of output or per unit of input.

True

False

Question 1. Question : (TCO 6) Homogeneity is used to

develop cost pools in which the costs have the same or similar cost-allocation base.

develop cost pools of similar amounts for allocation purposes.

develop cost pools based on similarity of origination costs to be allocated.

develop costs pools only for activity-based costing.

Question 2. Question : (TCO 6) Information about price discounting can be useful in analyzing revenues of customers if

sales people are properly trained in sales forecasting.

records in the information system are kept of reductions in selling price below list price.

a strictly enforced company policy is in place regarding volume-based price discounts.

sales people are on an incentive plan that is based on revenues.

Question 3. Question : (TCO 5) Natural Nutrients Bakery of Southfield produces three flavors of cat morsels that have budgeted and actual sales data for a bag of a dozen of its cat morsels as follows for December 20XX.

Budgeted Data Actual Data

Tuna ChikBits ChezNips Tuna ChikBits ChezNips

Bags 7,200 4,800 4,000 10,800 3,600 7,200

CM per bag $2.50 $4.00 $5.00 $2.00 $3.00 $7.50

Cont. Margin $18,000 $19,200 $20,000 $21,600 $10,800 $54,000

Total Contribution Margin $57,200 $86,400

According to company forecasts, it was budgeting to earn a 25% market share in total units (bags) of specialty prepared cat treats sold in December 20XX in Southfield. Reliable industry sources indicate that the total number of bags of cat treats sold for December 20XX in Southfield was 72,000.

The sales-quantity variance for December 20XX for Natural Nutrients Bakery is

$3,600 F.

$20,200 F.

$20,020 F.

$29,200 F.

Points Received: 6 of 6

Comments:

Question 4. Question : (TCO 6) Natural Nutrients Bakery of Southfield produces three flavors of cat morsels that have budgeted and actual sales data for a bag of a dozen of its cat morsels as follows for December 20XX.

Budgeted Data Actual Data

Tuna ChikBits ChezNips Tuna ChikBits ChezNips

Bags 7,200 4,800 4,000 10,800 3,600 7,200

CM per bag $2.50 $4.00 $5.00 $2.00 $3.00 $7.50

Cont. Margin $18,000 $19,200 $20,000 $21,600 $10,800 $54,000

Total Contribution Margin $57,200 $86,400

According to company forecasts, it was budgeting to earn a 25% market share in total units (bags) of specialty prepared cat treats sold in December 20XX in Southfield. Reliable industry sources indicate that the total number of bags of cat treats sold for December 200X in Southfield was 72,000.

The market-share variance for December 20XX for Natural Nutrients Bakery is

$20,020 F.

$12,870 F.

$11,600 F.

$11,440 F.

Question 5. Question : (TCO 6) Fulbrite Fashions sells a line of women’s dresses. Fulbrite’s performance report for November is shown below. The company uses a flexible budget to analyze its performance and to measure the effect on operating income of the various factors affecting the difference between budgeted and actual operating income.

Actual Budget

Dresses sold 5,000 6,000

Sales $235,000 $300,000

Variable costs (145,000) (180,000)

Contribution margin $ 90,000 $120,000

Fixed costs (84,000) (80,000)

Operating income $ 6,000 $ 40,000

The effect of the sales quantity variance on Fulbrite’s contribution margin for November is

$30,000 unfavorable.

$18,000 unfavorable.

$20,000 unfavorable.

$15,000 unfavorable.

Question 1. Question : (TCO 1) A mixed cost function has a constant component of $20,000. If the total cost is $60,000 and the independent variable has the value 200, what is the slope coefficient?

Student Answer: $200

$400

$600

$40,000

Points Received: 6 of 6

Comments:

Question 2. Question : (TCO 1) Companies that take advantage of quantity discounts in purchasing their materials have

decreasing cost functions.

linear cost functions.

nonlinear cost functions.

stationary cost functions.

Comments:

Question 3. Question : (TCO 3) The best opportunity for cost reduction is

: during the manufacturing phase of the value chain.

during the product/process design phase of the value chain.

during the marketing phase of the value chain.

during the distribution phase of the value chain.

Question 4. Question : (TCO 3) Each month, Haddock Company has $275,000 total manufacturing costs (20% fixed) and $125,000 distribution and marketing costs (36% fixed). Haddock’s monthly sales are $500,000. The markup percentage on variable costs to arrive at the existing (target) selling price is

20%.

40%.

80%.

66.666%.

$200,000/$300,000 = 66 2/3%

Question 5. Question : (TCO 3) Which of these do antitrust laws on pricing not cover?

: Collusive pricing

Dumping

Peak-load pricing

Predatory pricing