Question :
126.The following a partially completed lower section of a departmental : 1258701
126.The following is a partially completed lower section of a departmental expense allocation spreadsheet for Brickland. It reports the total amounts of direct and indirect expenses for the four departments. Purchasing department expenses are allocated to the operating departments on the basis of purchase orders. Maintenance department expenses are allocated based on square footage. Compute the amount of Maintenance department expense to be allocated to Fabrication.
PurchasingMaintenanceFabricationAssembly
Operating costs$32,000$18,000$96,000$62,000
No. of purchase orders 16 4
Sq. ft. of space 3,3002,700
A. $6,400.
B. $9,900.
C. $8,100.
D. $9,000.
E. $25,600.
127.Which of the following represents the correct formula for calculating cycle time for a manufacturer?
A. Process time + inspection time – move time – wait time.
B. Process time – inspection time + move time + wait time.
C. Process time + inspection time + move time + wait time.
D. Process time – inspection time – move time – wait time.
E. Process time + inspection time + move time – wait time.
128.Which of the following statements is correct concerning the elements of cycle time?
A. Move time is the time spent moving (1) raw materials from storage to production and (2) goods in process from one factory location to another factory location.
B. Inspection time is the time spent producing the product.
C. Process time is considered non-value-added time.
D. Wait time is considered value-added time.
E. Cycle efficiency is the ratio of non-value-added time to total cycle time.
129.Using the information below, compute the manufacturing cycle time:
Inspections time.5 hours
Move time.6 hours
Wait time.9 hours
Warehouse storage time72.0 hours
A. 7.5 hours.
B. 6.5 hours.
C. 8.0 hours.
D. 80.0 hours.
E. 7.1 hours.
130.Using the information below, compute the cycle efficiency:
Process time6.0 hours
Inspections time.5 hours
Move time.6 hours
Wait time.9 hours
Warehouse storage time72.0 hours
A. 93.8%.
B. 81.3%.
C. 100.0%.
D. 75.0%.
E. 88.8%.
131.When the selling division in an internal transfer has unsatisfied demand from outside customers for the product that is being transferred, then the lowest acceptable transfer price as far as the selling division is concerned is:
A. variable cost of producing a unit of product.
B. the full absorption cost of producing a unit of product.
C. the market price charged to outside customers, less costs saved by transferring internally.
D. the amount that the purchasing division would have to pay an outside seller to acquire a similar product for its use.
E. all the costs of producing a unit of product.
132.Division M makes a part that it sells to customers outside of the company. Data concerning this part appear below:
Selling price to outside customers$75
Variable cost per unit$50
Total fixed costs$400,000
Capacity in units25,000
Division O of the same company would like to use the part manufactured by Division M in one of its products. Division O currently purchases a similar part made by an outside company for $70 per unit and would substitute the part made by Division M. Division O requires 5,000 units of the part each period. Division M can sell every unit it produces on the outside market. What should be the lowest acceptable transfer price from the perspective of Division O?
A. $75
B. $66
C. $16
D. $50
E. $25
133.Part AR3 costs the Southwestern Division of Luxon Corporation $26 to make-direct materials are $10, direct labor is $4, variable manufacturing overhead is $9, and fixed manufacturing overhead is $3. Southwestern Division sells Part AR3 to other companies for $30. The Northeastern Division of Luxon Corporation can use Part AR3 in one of its products. The Southwestern Division has enough idle capacity to produce all of the units of Part AR3 that the Northeastern Division would require. What is the lowest transfer price at which the Southwestern Division should be willing to sell Part AR3 to the Northeastern Division?
A. $30
B. $26
C. $23
D. $27
E. $21
134.Part 7B costs the Midwest Division of Frackle Corporation $30 to make, of which $21 is variable. Midwest Division sells Part 7B to other companies for $47. The Northern Division of Frackle Corporation can use Part 7B in one of its products. The Midwest Division has enough idle capacity to produce all of the units of Part 7B that the Northern Division would require. What is the lowest transfer price at which the Midwest Division should be willing to sell Part 7B to the Northern Division?
A. $30
B. $21
C. $47
D. $17
E. $20
135.Division P of Launch Corporation has the capacity for making 75,000 wheel sets per year and regularly sells 60,000 each year on the outside market. The regular sales price is $100 per wheel set, and the variable production cost per unit is $65. Division Q of Launch Corporation currently buys 30,000 wheel sets (of the kind made by Division P) yearly from an outside supplier at a price of $90 per wheel set. If Division Q were to buy the 30,000 wheel sets it needs annually from Division P at $87 per wheel set, the change in annual net operating income for the company as a whole, compared to what it is currently, would be:
A. $600,000
B. $225,000
C. $750,000
D. $135,000
E. $700,000
