Question :
71. A sawmill bought a shipment of logs for $40,000. When : 1225599
71. A sawmill bought a shipment of logs for $40,000. When cut, the logs produced a million board feet of lumber in the following grades. Compute the cost to be allocated to Type 1 and Type 2 lumber, respectively, if the value basis is used.
Type 1 – 400,000 bd. ft. priced to sell at $0.12 per bd. ft.
Type 2 – 400,000 bd. ft. priced to sell at $0.06 per bd. ft.
Type 3 – 200,000 bd. ft. priced to sell at $0.04 per bd. ft.
A. $16,000; $16,000.
B. $13,333; $4,444.
C. $40,000; $24,000.
D. $24,000; $12,000.
E. $24,000; $8,000.
72. A sawmill paid $70,000 for logs that produced 200,000 board feet of lumber in 3 different grades and amounts as follows:
Compute the portion of the $70,000 joint cost to be allocated to No. 2 Common.
A. $0.
B. $17,500.
C. $23,333.
D. $35,000.
E. $70,000.
73. A dairy allocates the cost of unprocessed milk to the production of milk, cream, butter and cheese. For the current period, unprocessed milk was purchased for $240,000, and the following quantities of product and sales revenues were produced.
How much of the $240,000 cost should be allocated to milk?
A. $0.
B. $86,400.
C. $90,000.
D. $133,333.
E. $240,000.
74. Breon Beef Company uses the relative market value method of allocating joint costs in its production of beef products. Relevant information for the current period follows:
The total joint cost for the current period was $43,000. How much of this cost should Breon Beef allocate to sirloin?
A. $0.
B. $5,909.
C. $8,600.
D. $10,750.
E. $43,000.
75. Calculating return on total assets for an investment center is defined by the following formula for an investment center:
A. Contribution margin/Ending assets.
B. Gross profit/Ending assets.
C. Net income/Ending assets.
D. Net income/Average invested assets.
E. Contribution margin/Average invested assets.
76. Investment center managers are usually evaluated using performance measures
A. that combine income and assets.
B. that combine income and capital.
C. based on assets only.
D. based on income only.
E. that combine assets and capital.
77. A retail store has three departments, 1, 2, and 3, and does general advertising that benefits all departments. Advertising expense totaled $50,000 for the year, and departmental sales were as follows. Allocate advertising expense to Department 2 based on departmental sales.
A. $11,000.
B. $14,000.
C. $16,667.
D. $22,500.
E. $50,000.
78. Dresden, Inc. has four departments. Information about these departments follows is listed below. If allocated maintenance cost is based on floor space occupied by each, compute the amount of maintenance cost allocated to the Cutting Department.
A. $2,769.
B. $3,000.
C. $3,724.
D. $6,000.
E. $18,000.
79. Baker Corporation has two operating departments, Machining and Assembly, and an office. The three categories of office expenses are allocated to the two departments using different allocation bases. The following information is available for the current period:
The amount of the total office expenses that should be allocated to Assembly for the current period is:
A. $35,750.
B. $45,000.
C. $54,250.
D. $90,000.
E. $600,000.
80. In a firm that manufactures clothing, the department that is responsible for actually assembling the garments could best be described as a:
A. Service department.
B. Operating or production department.
C. Cost center.
D. Department in which all of the costs incurred are direct expenses.
E. Department in which all of the costs incurred are indirect expenses.
