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Tonya Johnson

Week 3 Quiz

1.) True

2.) True

3.) True

4.) Yes Yes

5.) Organization Unit

6.)

7.)

8.)

9.)

10.)

11.) the sales forcast or sale budget

12.) all of these

13.) raw materials needed to meet the production schedule + desired ending
inventory of raw materials – beginning inventory of raw materials

14.) it is not necessary to prepare any other budgets before preparing the cash
budget.

15.) 306,000

16.) 31,500

17.) $ 13,335

18.)

19.)

20.)

Week 3 : Week 3 - W3: Assignment 3 Quiz


Time Remaining:

1. If a manufacturing company is using activity-based costing for internal purposes only, then organization-
sustaining overhead costs should not be allocated to any of the products. (Points : 2)

True

False
2. Batch-level activities are performed each time a batch of goods is handled or processed. (Points : 2)

True

False
3. Activity-based costing involves a two-stage allocation in which overhead costs are first assigned to
departments and then to jobs on the basis of direct labor hours. (Points : 2)

True

False
4. An activity-based costing system that is designed for internal decision-making generally will not conform
to generally accepted accounting principles. Which of the following is NOT a reason for this happening?
(Points : 2)

Some manufacturing costs (i.e., the costs of idle capacity and organization-sustaining costs) will
not be assigned to products.

Some nonmanufacturing costs are assigned to products.

Allocation bases other than direct labor-hours, direct labor cost, and machine-hours are used.

First-stage allocations may be based on subjective interview data.


5. Would factory, security, and assembly activities be best classified at an appliance manufacturing plant as
unit-level, batch-level, product-level, or organization-sustaining?

(Points : 2)

6. Leaper Corporation uses an activity-based costing system with the following three activity cost pools:

The Other activity cost pool is used to accumulate costs of idle capacity and organization-sustaining costs.
The company has provided the following data concerning its costs:
The distribution of resource consumption across activity cost pools is given below:

The activity rate for the Order Processing activity cost pool is closest to: (Points : 2)

$1,485 per order

$1,540 per order

$1,465 per order

$1,320 per order


7. Mayeux Corporation uses an activity-based costing system with three activity cost pools. The company
has provided the following data concerning its costs and its activity-based costing system:

Distribution of resource consumption:

How much cost, in total, would be allocated in the first-stage allocation to the Setting Up activity cost pool?
(Points : 2)

$360,000

$336,000

$288,000

$348,000
8. Perl Corporation uses an activity-based costing system with three activity cost pools. The company has
provided the following data concerning its costs:
The distribution of resource consumption across the three activity cost pools is given below:

How much cost, in total, would be allocated in the first-stage allocation to the Order Processing activity cost
pool? (Points : 2)

$336,000

$319,000

$330,000

$396,000
9. Dobles Corporation has provided the following data from its activity-based costing system:

The company makes 420 units of product D28K a year, requiring a total of 460 machine-hours, 80 orders,
and 10 inspection-hours per year. The product's direct materials cost is $48.96 per unit and its direct labor
cost is $25.36 per unit. According to the activity-based costing system, the average cost of product D28K is
closest to: (Points : 2)

$95.34 per unit

$93.60 per unit

$74.32 per unit

$89.93 per unit


10. Data concerning three of the activity cost pools of Salcido LLC, a legal firm, have been provided below:

The activity rate for the "meeting with clients" activity cost pool is closest to: (Points : 2)

$95 per meeting hour


$61 per meeting hour

$163 per meeting hour

$1,182,239 per meeting hour


11. Which of the following budgets are prepared before the sales budget?

(Points : 2)

12. A basic idea underlying __________________ is that a manager should be held responsible only for
those items that the manager can actually control to a significant extent. (Points : 2)

participative budgeting

planning and control

responsibility accounting

the master budget


13. On October 1, the Gala Manufacturing Company has 300 units of Product XYZ on hand. The company
plans to sell 1,200 units of Product XYZ during October, and plans to have 500 units on hand October 31.
How many units of Product XYZ must be produced during October? (Points : 2)

1,400

1,500

1,000

2,000
14. The manufacturing overhead budget at Foshay Corporation is based on budgeted direct labor-hours.
The direct labor budget indicates that 5,800 direct labor-hours will be required in May. The variable
overhead rate is $9.10 per direct labor-hour. The company's budgeted fixed manufacturing overhead is
$104,400 per month, which includes depreciation of $8,120. All other fixed manufacturing overhead costs
represent current cash flows. The company recomputes its predetermined overhead rate every month. The
predetermined overhead rate for May should be: (Points : 2)

$9.10

$27.10

$18.00

$25.70
15. All of Gaylord Company's sales are on account. Thirty-five percent of the credit sales are collected in the
month of sale, 45% in the month following sale, and the rest are collected in the second month following
sale. Bad debts are negligible and should be ignored. The following are budgeted sales data for the
company:

What is the amount of cash that should be collected in March? (Points : 2)


$39,000

$37,000

$27,500

$51,000
16. Betz Company's sales budget shows the following projections for next year:

Inventory at the beginning of the year was 18,000 units. The finished goods inventory at the end of each
quarter is to equal 30% of the next quarter's budgeted unit sales. How many units should be produced
during the first quarter? (Points : 2)

24,000

48,000

66,000

72,000
17. Alexis Fabrication, Inc. manufactures and sells box trailers for semi trucks. Each trailer requires two (2)
axles. For next quarter, Alexis has scheduled 720 trailers for production and 750 for sale. Alexis is also
moving to just-in-time purchasing next quarter and plans on reducing its inventory of trailer axles by 100.
How many axles should Alexis budget for purchase for next quarter? (Points : 2)

1,240 axles

1,300 axles

1,340 axles

1,400 axles
18. Traverse Company manufactures and sells women's skirts. Each skirt (unit) requires 2.5 yards of cloth.
Selected data from Traverse's master budget for next quarter are shown below:

Each unit requires 1.5 hours of direct labor, and the average hourly cost of Traverse's direct labor is $10.
What is the cost of Traverse Company's direct labor in September? (Points : 2)

$135,000

$180,000

$157,500

$120,000
19. Haylock Inc. bases its manufacturing overhead budget on budgeted direct labor-hours. The direct labor
budget indicates that 5,600 direct labor-hours will be required in August. The variable overhead rate is
$5.40 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $69,440 per month,
which includes depreciation of $15,680. All other fixed manufacturing overhead costs represent current cash
flows. The August cash disbursements for manufacturing overhead on the manufacturing overhead budget
should be: (Points : 2)

$99,680

$84,000

$53,760

$30,240
20. Sedita Inc. is working on its cash budget for July. The budgeted beginning cash balance is $46,000.
Budgeted cash receipts total $175,000 and budgeted cash disbursements total $174,000. The desired
ending cash balance is $50,000. The excess (deficiency) of cash available over disbursements for July will
be: (Points : 2)

$47,000

$221,000

$45,000

$1,000

Time Remaining:

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