Assignment

Question 1. Which terms would make the following sentence true? Manufacturing companies that benefit the most from activity-based costing are those where overhead costs are a _________ percentage of total product cost and where there is ___________ diversity among the various products that they produce.
low, little
low, considerable
high, little
high, considerable

Question 2. Batch-level activities are performed each time a batch of goods is handled or processed.
True
False

Question 3. Would factory security and assembly activities be best classified at an appliance manufacturing plant as unit-level, batch-level, product-level, or organization-sustaining?

Question 4. Providing the power required to run production equipment is an example of a:
Unit-level activity.
Batch-level activity.
Product-level activity.
Organization-sustaining activity.

Question 5. In traditional costing systems, all manufacturing costs are assigned to products-even manufacturing costs that are not caused by the products.
True
False

Question 6. Houseal Corporation has provided the following data from its activity-based costing system:

Data concerning one of the company's products, Product W58B, appear below:

According to the activity-based costing system, the product margin for product W58B is:
$3,668.60
$5,975.60
$5,515.40
$19,418.40

Question 7. Millner Corporation has provided the following data from its activity-based costing accounting system:

The activity rate for the "designing products" activity cost pool is closest to:
$101 per product design hour
$1,372,448 per product design hour
$176 per product design hour
$57 per product design hour

Question 8. The usual starting point for a master budget is:
the direct materials purchase budget.
the budgeted income statement.
the sales forecast or sales budget.
the production budget.

Question 9. Which of the following benefits could an organization reasonably expect from an effective budget program?
Better control of the organization's costs.
Better coordination of an organization's activities.
Better communication of the organization's objectives.
All of these.

Question 10. A basic idea underlying __________________ is that a manager should be held responsible only for those items that the manager can actually control to a significant extent.
participative budgeting
planning and control
responsibility accounting
the master budget

Question 11. The manufacturing overhead budget at Foshay Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 5,800 direct labor-hours will be required in May. The variable overhead rate is $9.10 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $104,400 per month, which includes depreciation of $8,120. All other fixed manufacturing overhead costs represent current cash flows. The company recomputes its predetermined overhead rate every month. The predetermined overhead rate for May should be:
$9.10
$27.10
$18.00
$25.70

Question 12. All of Gaylord Company's sales are on account. Thirty-five percent of the credit sales are collected in the month of sale, 45% in the month following sale, and the rest are collected in the second month following sale. Bad debts are negligible and should be ignored. The following are budgeted sales data for the company:

What is the amount of cash that should be collected in March?
$39,000
$37,000
$27,500
$51,000

Question 13. On January 1, Barnes Company has 8,000 units of Product A on hand. During the year, the company plans to sell 30,000 units of Product A, and plans to have 6,500 units on hand at year end. How many units of Product A must be produced during the year?
28,500
31,500
30,000
36,500

Question 14. Haylock Inc. bases its manufacturing overhead budget on budgeted direct labor-hours. The direct labor budget indicates that 5,600 direct labor-hours will be required in August. The variable overhead rate is $5.40 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $69,440 per month, which includes depreciation of $15,680. All other fixed manufacturing overhead costs represent current cash flows. The August cash disbursements for manufacturing overhead on the manufacturing overhead budget should be:
$99,680
$84,000
$53,760
$30,240

Question 15. Sedita Inc. is working on its cash budget for July. The budgeted beginning cash balance is $46,000. Budgeted cash receipts total $175,000 and budgeted cash disbursements total $174,000. The desired ending cash balance is $50,000. The excess (deficiency) of cash available over disbursements for July will be:
$47,000
$221,000
$45,000
$1,000.