FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 12: Cost Accumulation, Tracing, and Allocation

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 101

Multiple Choice

Review LaterAdd Note

Review Later

The Western and Pacific Railroad has two divisions, the Western Division and the Pacific Division. The company recently invested $8,000,000 to maintain its railroad track. Pertinent data for the two divisions are as follows: $\begin{array}{lr}\text { Total Miles Traveled: }\\\\\text { Western Division } & 800,000 \mathrm{miles} \\\text { Pacific Division } & 1,200,000 \mathrm{miles}\end{array}$ The amount of track improvement cost that should be allocated to the Western Division is:

A) $4,000,000.
B) $3,200,000.
C) $800,000.
D) $5,333,333.

E) A) and B)
F) All of the above

Correct Answer

verified

Show Answer

Question 102

True/False

Review LaterAdd Note

Review Later

A predetermined overhead rate is calculated using estimated or predicted cost and volume data.

A) True
B) False

Correct Answer

verified

Show Answer

Question 103

Multiple Choice

Review LaterAdd Note

Blankenship Company operates a factory with two departments, X and Y. The utilities to heat and light the manufacturing facility would most likely be allocated to departments X and Y on the basis of:

The goal in allocating a cost to cost objects is to achieve a rational allocation.

The accuracy of managerial accounting information usually is more important than timeliness.

Assume that a factory seeks to allocate rent to several departments that occupy the factory. The factory is occupied by all of the departments. Which of the following is the most logical cost driver for allocating the factory rent?

Southeast Manufacturing Company has identified the following cost objects: Cost Object 1: The cost of operating the finishing department Cost Object 2: The cost of a particular product made in June Cost Object 3: The cost of operating the factory With respect to these cost objects, the cost of the salary of the supervisor of the finishing department is directly traceable to cost objects:

Sheddon Industries produces two products. The products' identified costs are as follows: $\begin{array} { l c c } & \text {Product A } & \text { Product B} \\\text { Direct materials } & \$ 23,000 & \$ 19,000 \\\text { Direct labor } & \$ 11,000 & 27,000\end{array}$ The company's overhead costs of $57,000 are allocated based on direct labor cost. Assume 7,000 units of product A and 8,000 units of Product B are produced. What is the cost per unit for product B? (Do not round intermediate calculations.)

State University's College of Business is divided into three departments, accounting, marketing, and management. Relevant information for each department is provided below: $\begin{array} { l c c c } \text { Cost Driver } & \text { Accounting } & \text { Marketing } & \text { Management } \\\text { Number of gtudenta } & 700 & 400 & 200 \\\text { Number of clageg } & 32 & 18 & 14 \\\text { per semester } & & & \\\text { Number of faculty } & \text { 10 } & 12 & 5\end{array}$ The Dean of the College of Business is trying to assign funds from the operating budget to the three departments. Assuming that the chair of each department is trying to attain the highest funding possible for his/her department, which of the following most accurately describes the allocation base that each chair will favor?

Nature's Soap manufactures Bar soap and Liquid soap. Of the following costs, which would be an indirect cost to the Liquid Department?

The process of dividing a total cost into parts and assigning it to cost objects is known as:

Which formula best represents the first step used to allocate an indirect cost to a cost object?

Allocation of costs to various cost objects may:

The process of dividing a total cost into parts and assigning it to cost objects is known as:

Preston Company has three divisions. The company should consider a cost to be a direct cost of a division if:

Costs that can be traced to a cost object in a cost-effective way are called direct costs.

Alleghany Community College operates four departments. The square footage used by each department is shown below. $\begin{array}{lc}\text { Department } & \text { Square Footage }\\\text { Accounting } & 7,000 \\\text { Marketing } & 8,000 \\\text { Technology } & 10,000 \\\text { Sciences } & \underline{7,000}\\\text {Total}&\underline{32,000}\end{array}$ Alleghany's annual building rental cost is $260,000.What amount of rent expense should be allocated to the Sciences Department? (Do not round intermediate calculations.)

Indirect costs are often pooled, and not allocated individually because:

Which of the following statements is false?

Humphries Construction Company builds warehouses that range in size from 12,000 to 100,000 square feet. Which of the following would not be a rational base for allocating overhead costs to the warehouses?