Question :
31.Which of the following statements false?
A. Both direct and indirect costs : 1257129
31.Which of the following statements is false?
A. Both direct and indirect costs can be assigned to a cost object.
B. Cost drivers are often selected based on the availability of information.
C. Volume measures are good drivers for fixed overhead costs.
D. Fixed costs that do not have a definitive cost driver are allocated using an allocation base that distributes a rational share of the cost to each product.
32.Selection of a cost driver depends on:
A. The availability of information for both the cost and the potential cost driver.
B. A cause-and-effect relationship between the cost driver and the cost.
C. Judgment of management.
D. All of these answers are correct.
33.For a manufacturer, measures of volume may include:
A. Number of units produced.
B. Number of square feet occupied.
C. Amount of direct materials used in production.
D. Both number of units produced and amount of direct materials used in production are correct.
34.The Flintstone Construction Company delivers dirt and stone from local quarries to its construction sites. A new truck that was purchased for a cost of $120,000 at the beginning of the year was expected to deliver 200,000 tons over its useful life. The following is a breakdown of the tons delivered during the year to each construction site: How much truck depreciation should be allocated to Site A? (Do not round your intermediate calculations.)
A. $21,818
B. $30,000
C. $2,000
D. None of these answers is correct.
35.State University’s College of Business is divided into three departments, accounting, marketing, and management. Relevant information for each department is provided below: The Dean of the College of Business is trying to assign funds from the operating budget to the three departments. Assuming that the chair of each department is trying to attain the highest funding possible for his/her department, which of the following most accurately describes the allocation base that each chair will favor?
A. The chair of management will want to use the number of students while the chair of marketing will prefer the number of faculty.
B. The chair of accounting and the chair of management will want to use the number of faculty.
C. The chair of the marketing department will want to use number of students, while the chair of the accounting department will want to use number of classes per semester.
D. The chair of the accounting department will want to use number of students while the chair of the management department will want to use number of faculty.
36.During 2013, the Kemp Construction Company built 23 custom homes that ranged in size from 2,500 square feet to 8,000 square feet. One home was completed each month during January, February, and March. Three homes were completed during April and May. Two homes were completed during each of the months from June through December. Based upon this information, the most appropriate allocation base (i.e., cost driver) for the assignment of indirect overhead costs to each house would be the:
A. Number of homes built during the month.
B. Number of months in the year.
C. Number of homes built during the year.
D. Size of the home.
37.Bank’s Department Store has three departments: Men’s, Women’s and Children’s. The store incurred $50,000 of store rental costs in 2013. The departments identified the following cost drivers for 2013: Using the most appropriate cost driver, how much rental cost (rounded to the nearest dollar) should be allocated to the Women’s Department? (Do not round your intermediate calculations.)
A. $33,333
B. $29,412
C. $25,081
D. $34,884
38.Humphries Construction Company builds warehouses that range in size from 12,000 to 100,000 square feet. Which of the following would not be a rational base for allocating overhead costs to the warehouses?
A. Labor hours
B. Direct material costs
C. Number of warehouses completed
D. Square footage of the warehouses
39.Jessup Company expects to incur overhead costs of $20,000 per month and direct production costs of $125 per unit. The estimated production activity for the upcoming year is 1,000 units. If the company desires to earn a gross profit of $50 per unit, the sales price per unit would be which of the following amounts?
A. $175
B. $195
C. $415
D. $290
40.Haskins Company employs material handling employees who move materials between production divisions at a labor cost of $360,000 a year. It is estimated that these employees move 600,000 pounds of material per year. If 60,000 pounds are moved in March, how much of the material handling cost should be assigned to products made in March? (Do not round your intermediate calculations.)
A. $36,000
B. $24,000
C. $50,000
D. $38,000
