ACCT 434 Week 4 Midterm Exam (Devry) ACCT 434 Week 3 Cost Behavior Decision Making Quality (Devry) ACCT 434 Week 2 Master Budget Flexible Budgets (Devry) ACCT 434 Week 1-7 All Discussion Questions (Devry) ACCT 434 Week 1 Quiz Activity Based Costing (Devry) ACCT 434 Entire Course Advanced Cost Management (Devry) ACCT 434 Week 6 Customer Profitability Capital Budgeting (Devry) ACCT 434 Week 7 Quality Control Inventory Management (Devry) ACCT-434 Week 5 Pricing Decisions Management Control Systems (Devry)

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1.
Question :
(TCO1) ABC systems create
2.
Question :
(TCO 1) Merriamn Company provides the following ABC costing
information:
Activities
Total Costs

2. Activity-cost drivers
Account inquiry hours
$400,000
10,000 hours
Account billing lines
$280,000
4,000,000 lines
Account verification accounts
$150,000
40,000 accounts
Correspondence letters
$ 50,000
4,000 letters
Total costs
$880,000
The above activities are used by Department A and B as follows:
Department A
Department B
Account inquiry hours
2,000 hours
4,000 hours
Account billing lines
400,000 lines
200,000 lines
Account verification accounts
10,000 accounts
8,000 accounts
Correspondence letters
1,000 letters
1,600 letters
How much of the account billing cost will be assigned to Department B?
3.
Question :

3. (TCO 2) A master budget
4.
Question :
(TCO 2) Dalyrymple Company produces a special spray nozzle. The
budgeted indirect total cost of inserting the spray nozzle is $80,000. The
budgeted number of nozzles to be inserted is 40,000. What is the
budgeted indirect cost allocation rate for this activity?
5.
Question :
(TCO 3) Which cost estimation method analyzes accounts in the
subsidiary ledger as variable, fixed, or mixed using qualitative methods?
6.
Question :
(TCO 4) In evaluating different alternatives, it is useful to concentrate
on
7.
Question :
(TCO 5) The theory of constraints is used for cost analysis when
8.
Question :
(TCO 5) Schmidt Corporation produces a part that is used in the
manufacture of one of its products. The costs associated with the
production of 10,000 units of this part are as follows:
Direct materials
$45,000
Direct labor
65,000
Variable factory overhead
30,000
Fixed factory overhead
70,000
Total costs
$210,000

4. Of the fixed factory overhead costs, $30,000 is avoidable.
Phil Company has offered to sell 10,000 units of the same part to
Schmidt Corporation for $18 per unit. Assuming there is no other use for
the facilities, Schmidt should
9.
Question :
(TCO 3) The cost function + 10X
10.
Question :
(TCO 4) Sunk costs
1.
Question :
(TCO 1) For each of the following drivers identify an appropriate
activity.
a. # of machines
b. # of setups
c. # of inspections
d. # of orders
e. # of runs
f. # of bins or aisles
g. # of engineers
2.
Question :
(TCO 2) Favata Company has the following information:
Month Budgeted Sales
June $60,000
July 51,000
August 40,000
September 70,000
October 72,000
In addition, the cost of goods sold rate is 70% and the desired inventory
level is 30% of next month's cost of sales.
Prepare a purchases budget for July through September.

5. 3.
Question :
(TCO 3) Patrick Ross, the president of Ross's Wild Game Company, has
asked for information about the cost behavior of manufacturing
overhead costs. Specifically, he wants to know how much overhead cost
is fixed and how much is variable. The following data are the only
records available:
Month Machine-hours Overhead Costs
February 1,700 $20,500
March 2,800 22,250
April 1,000 19,950
May 2,500 21,500
June 3,500 23,950
Using the high-low method, determine the overhead cost equation. Use
machine-hours as your cost driver.
4.
Question :
(TCO 5) Kirkland Company manufactures a part for use in its production
of hats. When 10,000 items are produced, the costs per unit are:
Direct materials $0.60
Direct manufacturing labor 3.00
Variable manufacturing overhead 1.20
Fixed manufacturing overhead 1.60
Total $6.40
Mike Company has offered to sell to Kirkland Company 10,000 units of
the part for $6.00 per unit. The plant facilities could be used to
manufacture another item at a savings of $9,000 if Kirkland accepts the
offer. In addition, $1.00 per unit of fixed manufacturing overhead on
the original item would be eliminated.
a. What is the relevant per unit cost for the original part?
b. Which alternative is best for Kirkland Company? By how much?

6. 3.
Question :
(TCO 3) Patrick Ross, the president of Ross's Wild Game Company, has
asked for information about the cost behavior of manufacturing
overhead costs. Specifically, he wants to know how much overhead cost
is fixed and how much is variable. The following data are the only
records available:
Month Machine-hours Overhead Costs
February 1,700 $20,500
March 2,800 22,250
April 1,000 19,950
May 2,500 21,500
June 3,500 23,950
Using the high-low method, determine the overhead cost equation. Use
machine-hours as your cost driver.
4.
Question :
(TCO 5) Kirkland Company manufactures a part for use in its production
of hats. When 10,000 items are produced, the costs per unit are:
Direct materials $0.60
Direct manufacturing labor 3.00
Variable manufacturing overhead 1.20
Fixed manufacturing overhead 1.60
Total $6.40
Mike Company has offered to sell to Kirkland Company 10,000 units of
the part for $6.00 per unit. The plant facilities could be used to
manufacture another item at a savings of $9,000 if Kirkland accepts the
offer. In addition, $1.00 per unit of fixed manufacturing overhead on
the original item would be eliminated.
a. What is the relevant per unit cost for the original part?
b. Which alternative is best for Kirkland Company? By how much?