Question :
61. Which of the following a likely advantage in activity-based costing : 1295584
61. Which of the following is a likely advantage in activity-based costing (ABC)? A. A decrease in the need to maintain accurate cost driver information.B. A decrease in the need to maintain accurate overhead cost information.C. An increase in the ability to trace indirect costs to specific activities.D. As increase in the cost of accumulating, tracking, and assigning costs to products and services.
62. Which of the following is true regarding activity-based costing (ABC)? A. The benefits of using ABC always outweigh its limitations.B. The lower the proportion of overhead costs as compared to direct materials and direct labor costs, the more likely a company will benefit by using ABC.C. Companies with a high-proportion of non-unit-level costs should rarely use ABC.D. High measurement costs associated with ABC may deter some companies from its use.
63. In a ____ costing system, product costs are accumulated directly in cost of goods sold. A. jobB. processC. backflushD. operations
64. Which of the following statements is false regarding “backflush” costing? A. It is rarely used by a company that uses a just-in-time (JIT) manufacturing system.B. It records all manufacturing costs directly into cost of goods sold.C. Small amounts of ending inventory are backflushed into the appropriate inventory account.D. It is considered to be a simple system that does not yield as much information as the other costing systems.
65. Barrow manufacturing produces made-to-order backyard pools. During the year, Barrow accepted a customer order that required direct materials costing $2,500. If Barrow uses backflush costing, which account should be increased when the materials are purchased? A. Finished goodsB. Cost of goods soldC. Direct materialsD. Work-in process
66. All of the following statements about service departments costs are true except: A. Service departments costs include the costs of providing services to other departments within an organization.B. Service department costs are only allocated to producing departments.C. Service department costs should be allocated using an allocation base or cost driver related to the costs incurred.D. Service department costs do not include the costs of providing services to external customers.
67. Companies allocate service department costs to other departments for all of the following reasons except: A. to improve decisions concerning how to use scarce resources.B. to hold departments that consume the resources accountable for the services they consume.C. to provide more accurate product cost information.D. to determine what the salary of service department employees should be.
68. Which of the following would be classified as a service department? A. The bottling department of a soft drink manufacturer.B. The painting department of an automobile manufacturer.C. The accounting department of a manufacturing company.D. The claims processing department of an insurance company.
69. The Danville Manufacturing Company has two service departments and two producing departments. The following data are available for 2006.
Service Dept. 1
Service Dept. 2
Producing 1
Producing 2
Department Costs
$12,000
$8,000
$60,000
$70,000
Number of Transactions
6,000
4,000
6,000
14,000
Square Feet Occupied
2,000
1,000
4,000
6,000
The costs of service departments 1 and 2 are allocated on the basis of number of transactions and square feet occupied, respectively. Refer to the Danville Manufacturing information above. Assuming that Danville Manufacturing Company allocates service department 1 costs first, the amount of service department 1 costs allocated to service department 2 under the step-down method would be: A. $0B. $1,600C. $2,000D. $2,400
70. The Danville Manufacturing Company has two service departments and two producing departments. The following data are available for 2006.
Service Dept. 1
Service Dept. 2
Producing 1
Producing 2
Department Costs
$12,000
$8,000
$60,000
$70,000
Number of Transactions
6,000
4,000
6,000
14,000
Square Feet Occupied
2,000
1,000
4,000
6,000
The costs of service departments 1 and 2 are allocated on the basis of number of transactions and square feet occupied, respectively. Refer to the Danville Manufacturing information above. Assuming that Danville Manufacturing Company allocates service department 1 costs first, the amount of service department 2 costs allocated to producing 1 under the step-down method would be: A. $3,200B. $4,000C. $3,000D. $2,400
71. The Danville Manufacturing Company has two service departments and two producing departments. The following data are available for 2006.
Service Dept. 1
Service Dept. 2
Producing 1
Producing 2
Department Costs
$12,000
$8,000
$60,000
$70,000
Number of Transactions
6,000
4,000
6,000
14,000
Square Feet Occupied
2,000
1,000
4,000
6,000
The costs of service departments 1 and 2 are allocated on the basis of number of transactions and square feet occupied, respectively. Refer to the Danville Manufacturing information above. Assuming that Danville Manufacturing Company uses the direct method of allocating service costs, the amount of service department 1 costs allocated to producing 1 would be: (If necessary, round your answer to the nearest whole number.) A. $5,143B. $3,000C. $4,800D. $3,600
72. The Danville Manufacturing Company has two service departments and two producing departments. The following data are available for 2006.
Service Dept. 1
Service Dept. 2
Producing 1
Producing 2
Department Costs
$12,000
$8,000
$60,000
$70,000
Number of Transactions
6,000
4,000
6,000
14,000
Square Feet Occupied
2,000
1,000
4,000
6,000
The costs of service departments 1 and 2 are allocated on the basis of number of transactions and square feet occupied, respectively. Refer to the Danville Manufacturing information above. Assuming that Danville Manufacturing Company uses the direct method of allocating service costs, the amount of service department 2 costs allocated to producing 2 would be: A. $4,000B. $4,364C. $4,800D. $5,600
