ACG 6315
1.For which of the following products would job order costing be least likely to be used?
Textbook printing
Newsprint paper Manufacturing
Mortgage loan processing
Residential building
2.Which of the following costs are treated as part of the cost of product?
Wages of plant security guards
Insurance on the plant building and equipment
All of the above are product costs
Depreciation on the kitchen sink in the plant cafeteria
3. If a cost is identical under each alternative under consideration within a given decision context, the cost is considered:
An outlay cost
A sunk cost
An opportunity cost
An irrelevant cost
4. Which of the following is an example of an activity cost driver?
None of the above
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Determine the unit break-even point, assuming fixed costs are $60,000 per period, variable costs are $16.00 per unit, and the sales price is $25.00 per unit.
12,000
5,000
6,667
15,000
13. Chinchilla, Inc. uses activity-based costing. The company produces X and Y. Information relating to the two products is as follows:
X
Y
Units produced
38,000
50,000
Machine-hours
15,000
17,000
Direct labor-hours
16,000
24,000
Materials handling (number of moves)
8,000
12,000
Setups
10,000
14,000
The following costs are reported: Materials handling
$320,000
Labor-related overhead
560,000
Setups
480,000
Labor-related overhead costs assigned to product X are:
$464,000
$224,000
$576,000
$384,000
14. A decision to work closely with a limited number of suppliers for the purpose of ensuring that the proper materials are available at the optimal time is an example of:
A batch level cost driver
An activity cost driver
An organizational cost driver
A structural cost driver
15. A unit contribution margin measures:
The difference between price and variable cost per unit
The difference between unit sales and total costs per unit
The percentage difference between sales and cost of goods sold
The difference between sales and cost of goods sold on a unit basis
16. The following information pertains to Pellino’s 2014 operations:
Selling price per unit
1- The total unit cost = Total Variable Cost + Production Fixed Expenses + Advertising Expense + Selling and Administrative Expense = 3.23 + 1.20 + 0.30 + 0.19 = 4.92.
In order to calculate the breakeven point, we use the following equation and budget data:
Although the financial goal is to create profit, we need to calculate the breakeven point to get started.
5. Determine the necessary sales in unit and dollars to break-even or attain desired profit using the break-even formula.
Since material cost is one of the key cost drivers for the production of the units, it is best to take
Glaser Health Products manufactures medical items for the health care industry. Production involves machining, assembly and painting. Finished units are then packed and shipped. The financial controller is interested to introduce an activity-based costing (ABC) system to allocate (or distribute) indirect costs to products. Indirect costs, as distinct from direct costs, cannot be unambiguously linked to specific products. The controller would like to calculate product costs based on ABC for planning and control, not inventory valuation.
Based on the Excel Problem of chapter one, if the total capacity for this business is 725 will you stay in it? If you want to stay in it what price you need to obtain a break even point of 725?
* Least expensive of the three strategies due to the lack of excess inventory and employee overtime
Unit Break-even Volume = Total Fixed Costs/Contribution per unit = $525,000 - $6.40 = 82,031.25units
4. Evergreen Fertilizer Company produces fertilizer. The company’s fixed monthly cost is $25,000, and its variable cost per pound of fertilizer is $0.15. Evergreen sells the fertilizer for $0.40 per pound. Determine the monthly break-even volume for the
To calculate the total costs involved for each of the three options, I have considered only those factors that are not common in all. I have calculated only the excess of cost that might be required to deploy an option.
1. Bridget Company uses activity-based costing. The company has two products: A and B. The annual
Abby Conroy was tasked with calculating an effective quote for Breeland Ltd., she chose the activity based accounting costing system since it more accurately captures the related costs. A special order was placed by Breeland Ltd. with Ace Fertilizer Company. The did not plan to order more of this product in the future. Based on Ace’s policy, the special order included disposal costs for any used materials in the event no other orders existed for the unused materials at the time the Breeland contract was signed. Abby correctly calculated the total direct material and labor costs and accurately arrived at the indirect costs using the ABC method and used cost activity pools that make sense for the company and
Breakeven = fixed cost/margin = total dollar fixed costs/ unit selling price –unit variable costs
Assuming Top That uses the first-in, first-out (FIFO) method to account for inventories, the assignment of costs to units completed and transferred to the Sewing Department during February is