Question :
63.Refer to the information above. All of the following costs : 1259677
63.Refer to the information above. All of the following costs are traceable to a specific factory except:
A. Depreciation on the company’s fleet of tractor trailer trucks.
B. Direct materials.
C. Salaries of production supervisors.
D. Wages of production set-up laborers.
64.Refer to the information above. The monthly salaries of the employees of the store’s Accounting Department should be classified as a:
A. Common fixed cost.
B. Traceable fixed cost.
C. Committed fixed cost.
D. Controllable fixed cost.
65.Refer to the information above. Depreciation of the fixtures and equipment used exclusively in a particular sales department should be classified as a:
A. Common fixed cost.
B. Variable cost.
C. Controllable fixed cost.
D. Committed fixed cost.
66.Refer to the information above. All of the following costs are traceable to specific sales departments except:
A. Cost of goods sold.
B. Depreciation of equipment and fixtures used in the department.
C. Advertising a special sale in a particular department.
D. The salary of the store manager.
67.Refer to the information above. The cost of heating and air conditioning the store should be:
A. Allocated among the sales departments based upon their relative sales volume.
B. Allocated among the sales departments based upon their relative floor space.
C. Classified as a common fixed cost.
D. Omitted from the company’s income statements.
68.Refer to the information above. In deciding how the store will benefit most from increasing the sales of selected departments, the store manager should be most interested in the:
A. Total sales of each department.
B. Contribution margin ratios of each department.
C. Fixed costs traceable to each department.
D. Responsibility margins of each department.
69.Many companies view performance margin as a more useful tool than responsibility margin for evaluating segment managers. This is because:
A. Managers have no control over traceable fixed costs.
B. Performance margin is not affected by the size of the department.
C. Performance margin indicates the change in operating income that would result from closing the department.
D. Performance margin includes only those revenue and costs under the manager’s direct control.
70.If a company wanted to evaluate the manager’s ability to control costs, the company would probably look at the:
A. Performance margin.
B. Responsibility margin.
C. Contribution margin.
D. Segment margin.
71.In the short run, the greatest increase in profitability will result from increasing sales in those profit centers with the:
A. Highest performance margins.
B. Lowest traceable fixed costs.
C. Highest contribution margin ratios.
D. Highest responsibility margins.
72.The dollar amount used by one division which supplies a good or a service to another division within a company is called a:
A. Market price.
B. Transfer price.
C. Fair price.
D. Agreed-upon price.
73.The most common value used for transfer pricing is:
A. Total fixed costs.
B. Total fixed and variable costs.
C. Market value less fixed costs.
D. Market value.
74.Company MHF operates subsidiaries in two countries. One of the subsidiaries consumes the output of the other in the production of a good for sale to the public. The company could increase cash flows by:
A. Using a transfer price based on full cost.
B. Using a transfer price to transfer as much income as possible to the subsidiary located in the lower tax country.
C. Using a transfer price based on market value.
D. Using a transfer price to transfer as much income as possible to the subsidiary located in the higher tax country.
75.Division managers at Colonial Company are paid a bonus based on the responsibility margin of their respective responsibility centers. Division A sells goods to Division B and to outside customers. The manager of Division B would most likely prefer that transfer prices be based on:
A. The market value of the goods purchased from Division A.
B. The market value of the goods purchased from Division A plus a fixed percentage.
C. The cost of the goods purchased from Division A.
D. The cost of the goods purchased from Division A plus a fixed percentage.
76.Division X supplies partially completed units of product to division Y. The divisions’ negotiated price is $30 per unit. Assuming Division X completed and transferred 3,000 units to division Y, the total transfer price on this transaction is:
A. $30,000.
B. $60,000.
C. $90,000.
D. $3,000.
77.Division X supplies partially completed units of product to division Y. The divisions’ negotiated price is $30 plus 20% per unit. Assuming Division X completed and transferred 5,000 units to division Y, the total transfer price on this transaction is:
A. $180,000.
B. $120,000.
C. $150,000.
D. $5,000.
