Question 1 (1 point) .umuc.edu/d2l/img/0/QuestionCollection.Main.infQuestionUnsaved.gif?v=10.3.0.791-144″ alt=”Question 1 unsaved” title=”Question 1 unsaved”>
Motorcade Company has three service departments (S1, S2, and S3) and
two production departments (P1 and P2). The following data relate to
Motorcade’s allocation of service department costs:
Budgeted Costs
Nbr of Employees
S1
$3,160,000
75
S2
2,120,000
50
S3
1,000,000
25
P1
150
P2
225
Service department costs are allocated by the direct method. The
number of employees is used as the allocation base for all service
department costs.
Calculate the total service department cost allocated to each production department P1.
Calculate the total service department cost allocated to production department P1Your Answer:Question 1 options:Answer
Question 2 (1 point) .umuc.edu/d2l/img/0/QuestionCollection.Main.infQuestionUnsaved.gif?v=10.3.0.791-144″ alt=”Question 2 unsaved” title=”Question 2 unsaved”>El
Dorado Company has two production plants. Recently, the company
conducted an ABM study to determine the cost of activities involved in
processing orders for parts at each of the plants. How might an
operations manager use this information to manage the cost of processing
orders?Question 2 options:Set up an ABC costing systemIdentify benchmarksCompare
the cost to process an order at each plant and the nature of the orders
to determine if costs are out of control. If out of control,
investigateClose down the plant with the highest cost to increase profits
Question 3 (1 point) .umuc.edu/d2l/img/0/QuestionCollection.Main.infQuestionUnsaved.gif?v=10.3.0.791-144″ alt=”Question 3 unsaved” title=”Question 3 unsaved”>
Infinity
Designs, an interior design company, has experienced a drop in business
due to an increase in interest rates and a corresponding slowdown in
remodeling projects. To stimulate business, the company is considering
exhibiting at the Home and Garden Expo. The exhibit will cost the
company $12,000 for space. At the show, Infinity Designs will present a
slide show on a PC, pass out brochures that are printed previously, (the
company printed more than needed), and show its portfolio of previous
jobs.
The
company estimates that revenue will increase by $36,000 over the next
year as a result of the exhibit. For the previous year, profit was as
follows:
Revenue
$201,000
Less:
Design supplies (variable cost)
$15,500
Salary of Samantha Spade (owner)
80,000
Salary of Kim Bridesdale (full time employee)
55,000
Rent
18,000
Utilities
6,000
Depreciation of office equipment
3,600
Printing of advertising materials
700
Advertising in Middleton Journal
2,500
Travel expenses other than depreciation of autos (variable cost)
$2,400
Depreciation of company cars
9,000
Required:
Calculate the impact of the exhibit on company profit.
Your Answer:Question 3 options:Answer
Question 4 (1 point) .umuc.edu/d2l/img/0/QuestionCollection.Main.infQuestionUnsaved.gif?v=10.3.0.791-144″ alt=”Question 4 unsaved” title=”Question 4 unsaved”>Each
year, Sunshine Motos surveys 7,500 former and prospective customers
regarding satisfaction and brand awareness. For the current year, the
company is considering outsourcing the survey to Global Associates, who
have offered to conduct the survey and summarize results for
$30,000.Craig Sunshine, the president of Sunshine Motors, believes that
Global will do a higher-quality job than his company has been doing, but
is unwilling to spend more than $10,000 above the current costs. The
head of bookkeeping for Sunshine has prepared the following summary of
costs related to the survey in the prior year.
Mailing $16,600
Printing (done by Lester Print Shop) $4,500
Salary of Pat Fisher, part-time employee who stuffed envelopes and summarized data when surveys were returned (100 hours X $15) $1,500
Share of depreciation of computer and software used to track survey responses and summarized results. $1,100
Share of electricity/phone/etc. based on square feet of space occupied by Pat Fisher vs. entire company. $500
REQUIRED: What is the incremental cost of going outside versus conducting the survey as in the past?
Your Answer:Question 4 options:Answer
Question 5 (1 point) .umuc.edu/d2l/img/0/QuestionCollection.Main.infQuestionUnsaved.gif?v=10.3.0.791-144″ alt=”Question 5 unsaved” title=”Question 5 unsaved”>Howell
Corporation produces an executive jet for which it currently
manufactures a fuel valve; the cost of the valve is indicated below:
Cost per Unit
Variable costs
Direct material
$920
Direct labor
600
Variable overhead
300
Fixed costs
Depreciation of equipment
500
Depreciation of building
250
Supervisory salaries
300
The company has an offer from Duvall Valves to produce the part for
$2,000 per unit and supply 1,000 valves (the number needed in the coming
year). If the company accepts this offer and shuts down production of
valves, production workers and supervisors will be reassigned to other
areas. The equipment cannot be used elsewhere in the company, and it has
no market value. However, the space occupied by the production of the
valve can be used by another production group that is currently leasing
space for $55,000 per year.
What is the incremental savings of buying the valves? (The answer
should be stated in a per-unit format and is a positive number)Your Answer:Question 5 options:Answer
Question 6 (1 point) .umuc.edu/d2l/img/0/QuestionCollection.Main.infQuestionUnsaved.gif?v=10.3.0.791-144″ alt=”Question 6 unsaved” title=”Question 6 unsaved”>Landmark
Coal operates a mine. During July, the company obtained 500 tons of
ore, which yielded 250 pounds of gold and 63,400 pounds of copper. The
joint cost related to the operation was $500,000. Gold sells for $325
per ounce and copper sells for $0.89 per pound. Allocate the joint
costs using relative weight. With these costs, what is the profit or
loss associated with Copper?Your Answer:Question 6 options:Answer
Question 7 (1 point) .umuc.edu/d2l/img/0/QuestionCollection.Main.infQuestionUnsaved.gif?v=10.3.0.791-144″ alt=”Question 7 unsaved” title=”Question 7 unsaved”>
Landmark Coal operates a mine. During July, the company
obtained 500 tons of ore, which yielded 250 pounds of gold and 62,800
pounds of copper. The joint cost related to the operation was $500,000.
Gold sells for $325 per ounce and copper sells for $0.93 per pound.
Allocate the joint costs using the relative sales values. With these
costs, what is the profit or loss associated with Copper?
.wileyplus.com/edugen/art2/common/pixel.gif” alt=””>
.wileyplus.com/edugen/art2/common/pixel.gif” alt=””>Your Answer:Question 7 options:Answer
Question 8 (1 point) .umuc.edu/d2l/img/0/QuestionCollection.Main.infQuestionUnsaved.gif?v=10.3.0.791-144″ alt=”Question 8 unsaved” title=”Question 8 unsaved”>Common costsQuestion 8 options:A) are fixed costs that are not directly traceable to an individual product lineB) normally not avoidableboth A and B are true statementsNeither A nor B is a true statementMotorcade Company has three service departments (S1, S2, and S3) and
two production departments (P1 and P2). The following data relate to
Motorcade’s allocation of service department costs:Budgeted CostsNbr of EmployeesS1$3,160,00075S22,120,00050S31,000,00025P1150P2225Service department costs are allocated by the direct method. The
number of employees is used as the allocation base for all service
department costs.Calculate the total service department cost allocated to each production department P1.Calculate the total service department cost allocated to production department P1El
Dorado Company has two production plants. Recently, the company
conducted an ABM study to determine the cost of activities involved in
processing orders for parts at each of the plants. How might an
operations manager use this information to manage the cost of processing
orders?Set up an ABC costing systemIdentify benchmarksCompare
the cost to process an order at each plant and the nature of the orders
to determine if costs are out of control. If out of control,
investigateClose down the plant with the highest cost to increase profitsEach
year, Sunshine Motos surveys 7,500 former and prospective customers
regarding satisfaction and brand awareness. For the current year, the
company is considering outsourcing the survey to Global Associates, who
have offered to conduct the survey and summarize results for
$30,000.Craig Sunshine, the president of Sunshine Motors, believes that
Global will do a higher-quality job than his company has been doing, but
is unwilling to spend more than $10,000 above the current costs. The
head of bookkeeping for Sunshine has prepared the following summary of
costs related to the survey in the prior year.Mailing $16,600 Printing (done by Lester Print Shop) $4,500Salary of Pat Fisher, part-time employee who stuffed envelopes and summarized data when surveys were returned (100 hours X $15) $1,500Share of depreciation of computer and software used to track survey responses and summarized results. $1,100Share of electricity/phone/etc. based on square feet of space occupied by Pat Fisher vs. entire company. $500REQUIRED: What is the incremental cost of going outside versus conducting the survey as in the past?Howell
Corporation produces an executive jet for which it currently
manufactures a fuel valve; the cost of the valve is indicated below:Cost per UnitVariable costsDirect material$920Direct labor600Variable overhead300Fixed costsDepreciation of equipment500Depreciation of building250Supervisory salaries300The company has an offer from Duvall Valves to produce the part for
$2,000 per unit and supply 1,000 valves (the number needed in the coming
year). If the company accepts this offer and shuts down production of
valves, production workers and supervisors will be reassigned to other
areas. The equipment cannot be used elsewhere in the company, and it has
no market value. However, the space occupied by the production of the
valve can be used by another production group that is currently leasing
space for $55,000 per year.What is the incremental savings of buying the valves? (The answer
should be stated in a per-unit format and is a positive number)Landmark
Coal operates a mine. During July, the company obtained 500 tons of
ore, which yielded 250 pounds of gold and 63,400 pounds of copper. The
joint cost related to the operation was $500,000. Gold sells for $325
per ounce and copper sells for $0.89 per pound. Allocate the joint
costs using relative weight. With these costs, what is the profit or
loss associated with Copper?Landmark Coal operates a mine. During July, the company
obtained 500 tons of ore, which yielded 250 pounds of gold and 62,800
pounds of copper. The joint cost related to the operation was $500,000.
Gold sells for $325 per ounce and copper sells for $0.93 per pound.
Allocate the joint costs using the relative sales values. With these
costs, what is the profit or loss associated with Copper?.wileyplus.com/edugen/art2/common/pixel.gif” alt=””>Common costsA) are fixed costs that are not directly traceable to an individual product lineB) normally not avoidableboth A and B are true statementsNeither A nor B is a true statement
