Category: Uncategorized

Decide which of the  properties of a commutative group (closure, identity, inverse, associative, commutative) hold for the given system:   

Excellent Manufacturers Inc.  has a current production level of 20,000 units per month. Unit costs at this level are:   Direct materials                                      $0.26 Direct labor                                               0.40 Variable overhead                                    0.16 Fixed overhead                                         0.21 Marketing – fixed                                      0.25 Marketing/distribution – variable            0.42   Current monthly sales are 18,000 units. Jax Company has contacted Excellent about purchasing 1,550 units at $2.00 each. Current sales would NOT be affected by the one-time-only special order, and variable marketing/distribution costs would NOT be incurred on the special order. What is Ratzlaff Company’s change in operating profits if the special order is accepted?

Which of the following is not true with regards to relevant costs and relevant revenues?

When production is less than sales, operating income will be the same regardless of whether variable cost or absorption costing is used.

Product-cost cross-subsidization  means that:

As product diversity and indirect costs increase, it is usually best to switch away from a broad averaging system to an activity-based cost system.

Extreme Manufacturing Company provides the following ABC costing information:           Activities                                          Total Costs                Activity-cost drivers         Account inquiry                               $750,000                           15,000 hours         Account billing                                 $250,000                       5,000,000 lines         Account verification accounts       $173,250                     70,000 accounts         Correspondence letters                    $42,000                            7,000 letters                Total costs                              $1,215,250                                              The above activities are used by Departments A and B as follows:                                                                            Department A                       Department B         Account inquiry hours                              2,000 hours                           3,500 hours         Account billing lines                               900,000 lines                        750,000 lines         Account verification accounts            9,000 accounts                     7,000 accounts         Correspondence letters                          1,200  letters                         1,600 letters   How much of the total costs will be assigned to Department B?

Franklin Inc. manufactures pipes and applies manufacturing overhead costs to production at a budgeted indirect-cost rate of $18 per direct labor-hour. The following data are obtained from the accounting records for June 2018:                  Direct materials                                                         $170,000                Direct labor (4,600 hours @ $10/hour)                       46,000                Indirect labor                                                                  17,000                Plant facility rent                                                            34,000                Depreciation on plant machinery and equipment      24,500                Sales commissions                                                         33,000                Administrative expenses                                               28,000   For June 2018, manufacturing overhead is ________.

X-Industries manufactures 3-D printers. For each unit, $3,400 of direct material is used and there is $2,600 of direct manufacturing labor at $16 per hour. Manufacturing overhead is applied at $20 per direct manufacturing labor hour. Calculate the profit earned on 46 units if each unit sells for $9,500.

Extracts from cost information of Hebar Corp.:     Simple L3 Pack Complex L7 Pack Total   Setup cost allocated using direct labor-hours $19,250 $5,750 $25,000 Setup cost allocated using setup-hours $13,400 $11,600 $25,000   Assuming that setup-hours is considered a more effective cost drive for allocating setup costs than direct labor-hours. Which of the following statements is true of Hebar’s setup costs under traditional costing?