8) If the number of employees is considered the cost driver, what amount of personnel costs will be allocated to Department A?
A) $35,000
B) $10,667
C) $140,000
D) $43,700
9) If the number of new hires is considered the cost driver, what amount of personnel costs will be allocated to Department A?
A) $35,000
B) $10,667
C) $143,750
D) $43,700
10) Which cost estimation method is being used by Auric Company?
A) the simple regression method
B) the conference method
C) the account analysis method
D) the marginal costing method
Answer the following questions using the information below:
At the Verill Company, the cost of the library and information center has always been charged to the various departments based upon number of employees. Recently, opinions gathered from the department managers indicate that the number of engineers within a department might be a better predictor of library and information center costs.
Total library and information center costs are $200,000.
DepartmentABC
Number of employees135530135
Number of engineers08020
11) Which cost estimation method is being used by Verill Company?
A) the regression analysis method
B) the marginal costing method
C) the conference method
D) the operating costing method
12) If the number of employees is considered the cost driver, what amount of library and information center costs will be allocated to Department A?
A) $30,000
B) $33,750
C) $0
D) $66,667
13) If the number of engineers is considered the cost driver, what amount of library and information center costs will be allocated to Department A?
A) $30,000
B) $33,750
C) $0
D) $66,667
Isondo’s TV and Appliance Store is a small company that has hired you to perform some management advisory services. The following information pertains to 2015 operations.
Sales (1,200 televisions)$ 1,200,000
Cost of goods sold540,000
Store manager’s salary per year108,000
Operating costs per year216,000
Advertising and promotion per year24,000
Commissions (3% of sales)36,000
14) What was the variable cost per unit sold for 2015?
A) $30
B) $480
C) $770
D) $450
15) What were total fixed costs for 2015?
A) $924,000
B) $576,000
C) $348,000
D) $224,000
16) What are the estimated total costs if the company expects to sell 3,500 units next year?
A) $2,028,000
B) $3,619,000
C) $3,271,000
D) $1,429,000
17) Which cost estimation method is being used by Isondo’s TV and Appliance Store?
A) the operating costing method
B) the marginal costing method
C) the account analysis method
D) the cost-volume-profit analysis method
Answer the following questions using the information below:
Genend’s Good Value Appliance Store is a small company that has hired you to perform some management advisory services. The following information pertains to 2015 operations.
Sales (6,000 microwave ovens)$ 1,740,000
Cost of goods sold960,000
Store manager’s salary per year100,000
Operating costs per year250,000
Advertising and promotion per year30,000
Commissions (3% of sales)52,200
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