All Questions
Filter by:
Question 1
Free
Multiple Choice

The method that allocates costs in each cost pool using the same rate per unit is known as the ________ .

Choose correct answer/s
A

incremental cost-allocation method

B

reciprocal cost-allocation method

C

single-rate cost allocation method

D

dual-rate cost-allocation method

Check answer
Question 2
Free
Multiple Choice

The dual-rate cost-allocation method classifies costs in each cost pool into a ________ .

Choose correct answer/s
A

budgeted-cost pool and an actual-cost pool

B

variable-cost pool and a fixed-cost pool

C

direct-cost pool and an indirect-cost pool

D

direct-cost pool and a reciprocal-cost pool

Check answer
Question 3
Free
Multiple Choice

Which of the following departments would not be considered a service or support department?

Choose correct answer/s
A

assembly

B

information systems

C

shipping

D

plant maintenance

Check answer
Question 4
Free
Multiple Choice

When using the dual-rate method, the fixed cost allocation is based on ________ .

Choose correct answer/s
A

actual rate

B

budgeted usage

C

incremental cost allocation

D

prime cost allocation

Check answer
Question 5
Free
Multiple Choice

Consider the following information attributed to the material management department
Budgeted usage of materials-handling labor-hours 3500
Budgeted cost pools:
Fixed costs $154,000
Variable costs $126,000 (3500 hours x $36 per hour)
The company uses the single-rate method to allocate support costs to the Machining and Assembly Departments. Assuming that the actual hours tracked in the Machining and Assembly department are 500 for the month, what would be the allocation rate and how much cost would be allocated to the Machining and Assembly Department for the operations of the month? (Round final answers to the nearest dollar.)

Choose correct answer/s
A

$80 an hour for a total of $40,000

B

$36 an hour for a total of $40,000

C

$36 an hour for a total of $18,000

D

$560 an hour for a total of $80

Check answer
Question 6
Multiple Choice

Which of the following is a disadvantage of single-rate method?

Choose correct answer/s
A
It is very costly to implement.
B
It may lead operating department managers to make sub-optimal decisions that are in their own best interest.
C
It does not signal to department managers how variable costs and fixed costs behave differently.
D
It requires managers to distinguish variable costs from fixed costs, which is often a challenging task.
To unlock the question
Question 7
Multiple Choice

Which of the following is an advantage of a dual-rate method?

Choose correct answer/s
A
It is the most widely used method in practice.
B
It is less costly to implement.
C
It avoids the expensive analysis for categorizing costs as either fixed or variable.
D
It allocates fixed cost as per the budgeted usage that helps in short and long-run planning.
To unlock the question
Question 8
Multiple Choice

Which of the following is a disadvantage of a dual-rate method?

Choose correct answer/s
A
It allocates fixed costs on the basis of budgeted long-run usage, which may tempt some managers to underestimate their planned usage.
B
It may lead operating department managers to make sub-optimal decisions that are in their own best interest.
C
It allocates fixed and variable-cost pool using the same cost-allocation base, which will mislead managers in making decisions.
D
It does not guide department managers to make decisions that benefit both the organization as a whole and each department.
To unlock the question
Question 9
Multiple Choice

Which of the following is an advantage of using practical capacity to allocate costs?

Choose correct answer/s
A
is that it allows a downward supply spiral to develop
B
is that it focuses management's attention on managing unused capacity
C
is that budgets are much easier to develop
D
is that it results in departments bearing a lower percentage of fixed costs
To unlock the question
Question 10
Multiple Choice

Which of the following would be considered the biggest advantage of using practical capacity to allocate costs?

Choose correct answer/s
A
focuses the user's division with the costs of overused capacity
B
never causes over or under-allocated overhead
C
burdens the user divisions with the costs of unused capacity
D
focuses management's attention on unused capacity
To unlock the question
Question 11
Multiple Choice

The Charmatz Corporation has a central copying facility. The copying facility has only two users, the Marketing Department and the Operations Department. The following data apply to the coming budget year:
image
Budgeted amounts are used to calculate the allocation rates.
Actual usage for the year by the Marketing Department was 80,000 copies and by the Operations Department was 320,000 copies. If a single-rate cost-allocation method is used, what amount of copying facility costs will be budgeted for the Marketing Department? (Round any intermediary calculations to the nearest cent.)

Choose correct answer/s
A
$18,200
B
$6000
C
$12,200
D
$21,250
To unlock the question
Question 12
Multiple Choice

The Charmatz Corporation has a central copying facility. The copying facility has only two users, the Marketing Department and the Operations Department. The following data apply to the coming budget year:
image
Budgeted amounts are used to calculate the allocation rates.
Actual usage for the year by the Marketing Department was 70,000 copies and by the Operations Department was 330,000 copies. If a single-rate cost-allocation method is used, what amount of copying facility costs will be allocated to the Marketing Department? Assume actual usage is used to allocate copying costs. (Do not round interim calculations and round the final calculation to the nearest dollar.)

Choose correct answer/s
A
$20,250
B
$18,000
C
$12,600
D
$2100
To unlock the question
Question 13
Multiple Choice

The Charmatz Corporation has a central copying facility. The copying facility has only two users, the Marketing Department and the Operations Department. The following data apply to the coming budget year:
image
Budgeted amounts are used to calculate the allocation rates.
Actual usage for the year by the Marketing Department was 120,000 copies and by the Operations Department was 380,000 copies. If a dual-rate cost-allocation method is used, what amount of copying facility costs will be budgeted for the Operations Department?

Choose correct answer/s
A
$65,100
B
$68,600
C
$64,140
D
$67,640
To unlock the question
Question 14
Multiple Choice

The Charmatz Corporation has a central copying facility. The copying facility has only two users, the Marketing Department and the Operations Department. The following data apply to the coming budget year:
image
Budgeted amounts are used to calculate the allocation rates.
Actual usage for the year by the Marketing Department was 120,000 copies and by the Operations Department was 360,000 copies. If a dual-rate cost-allocation method is used, what amount of copying facility costs will be allocated to the Operations Department? Assume budgeted usage is used to allocate fixed copying costs and actual usage is used to allocate variable copying costs.

Choose correct answer/s
A
$69,000
B
$117,000
C
$70,980
D
$69,480
To unlock the question
Question 15
Multiple Choice

The Speedjet Aircraft Corporation has a central materials laboratory. The laboratory has only two users, the Large Plane Department and the Small Plane Department. The following data apply to the coming budget year:
image
Budgeted amounts are used to calculate the allocation rates.
Actual usage for the year by the Large Plane Department was 70,000 technician hours and by the Small Plane Department was 90,000 technician hours. If a single-rate cost-allocation method is used, what is the allocation rate per hour used? (Round the final answer to the nearest dollar.)

Choose correct answer/s
A
$120.50
B
$101.60
C
$158.75
D
$77.12
To unlock the question
Question 16
Multiple Choice

The Speedjet Aircraft Corporation has a central materials laboratory. The laboratory has only two users, the Large Plane Department and the Small Plane Department. The following data apply to the coming budget year:
image
Budgeted amounts are used to calculate the allocation rates.
Actual usage for the year by the Large Plane Department was 70,000 technician hours and by the Small Plane Department was 90,000 technician hours. If a dual-rate cost-allocation method is used, what amount of materials laboratory costs will be budgeted for the Large Plane Department?

Choose correct answer/s
A
$9,846,000
B
$9,012,500
C
$7,658,000
D
$11,587,500
To unlock the question
Question 17
Multiple Choice

The Speedjet Aircraft Corporation has a central materials laboratory. The laboratory has only two users, the Large Plane Department and the Small Plane Department. The following data apply to the coming budget year:
image
Budgeted amounts are used to calculate the allocation rates.
Actual usage for the year by the Large Plane Department was 60,000 technician hours and by the Small Plane Department was 80,000 technician hours. If a single-rate cost-allocation method is used, what amount of materials laboratory costs will be allocated to the Large Plane Department? Assume actual usage is used to allocate laboratory costs.

Choose correct answer/s
A
$10,228,571.4
B
$8,960,000
C
$7,671,429
D
$6,720,000
To unlock the question
Question 18
Multiple Choice

The Speedjet Aircraft Corporation has a central materials laboratory. The laboratory has only two users, the Large Plane Department and the Small Plane Department. The following data apply to the coming budget year:
image
Budgeted amounts are used to calculate the allocation rates.
Actual usage for the year by the Large Plane Department was 80,000 technician hours and by the Small Plane Department was 120,000 technician hours. If a dual-rate cost-allocation method is used, what amount of materials laboratory costs will be allocated to the Large Plane Department? Assume budgeted usage is used to allocate fixed materials laboratory costs and actual usage is used to allocate variable materials laboratory costs.

Choose correct answer/s
A
$10,300,000
B
$10,100,000
C
$9,600,000
D
$10,800,000
To unlock the question
Question 19
Multiple Choice

The Speedjet Aircraft Corporation has a central materials laboratory. The laboratory has only two users, the Large Plane Department and the Small Plane Department. The following data apply to the coming budget year:
image
Budgeted amounts are used to calculate the allocation rates.
Actual usage for the year by the Large Plane Department was 70,000 technician hours and by the Small Plane Department was 80,000 technician hours. If a dual-rate cost-allocation method is used, what amount of materials laboratory costs will be budgeted for the Small Plane Department?

Choose correct answer/s
A
$14,153,333
B
$10,293,333
C
$9,200,000
D
$12,650,000
To unlock the question
Question 20
Multiple Choice

The Speedjet Aircraft Corporation has a central materials laboratory. The laboratory has only two users, the Large Plane Department and the Small Plane Department. The following data apply to the coming budget year:
image
Budgeted amounts are used to calculate the allocation rates.
Actual usage for the year by the Large Plane Department was 80,000 technician hours and by the Small Plane Department was 120,000 technician hours. If a dual-rate cost-allocation method is used, what amount of materials laboratory costs will be allocated to the Small Plane Department? Assume budgeted usage is used to allocate fixed materials laboratory costs and actual usage is used to allocate variable materials laboratory costs.

Choose correct answer/s
A
$13,920,000
B
$11,670,000
C
$10,370,000
D
$8,120,000
To unlock the question