Question : 61) What the Machining Department’s allocation of both service departments respectively : 1196099

 

61)

What is the Machining Department’s allocation of both service departments respectively if their complete reciprocated cost were $375,000 for Plant Maintenance and $100,000 for Data Processing? 61)

______ A)

$281,250 and $12,500 B)

$337,500 and $200,000 C)

$337,500 and $12,500 D)

$131,250 and $84,375 E)

$112,275 and $74,468

62)

What is the Capping Department’s total cost if both service departments are allocated using the complete reciprocated cost method and their costs for the year were $375,000 for Plant Maintenance and $100,000 for Data Processing? 62)

______ A)

$196,898 B)

$321,898 C)

$412,766 D)

$191,053 E)

$184,132

63)

Which method allows for partial recognition of the services rendered by support departments to other support departments? 63)

______ A)

the direct allocation method B)

the step-down method C)

the reciprocal allocation method D)

the step-down allocation method E)

the interdepartmental method

64)

Which of the following is False concerning the complete reciprocated costs figure? 64)

______ A)

It is always equal to the actual cost amount. B)

It is always less than the actual cost amount. C)

It is always less than the artificial costs figure. D)

It is always larger than the actual cost amount. E)

It is always greater than the artificial costs figure.

65)

Which of the following is a valid conclusion, in comparing the three allocation methods? 65)

______ A)

Many managers find the reciprocal method difficult to understand. B)

The step-down method is viewed as too complex by most organizations. C)

Many managers find the step-down method too simple. D)

The reciprocal method is conceptually inferior. E)

The direct method is viewed as too complex by most organizations.

66)

Which of the following terms describes a cost of operating a facility, operation, activity area, or like cost object that is shared by two or more users? 66)

______ A)

direct cost B)

sunk cost C)

common cost D)

fixed cost E)

varying cost

67)

Two entities, Cooper Company and Magic Company, share a common warehouse facility. Total costs for the facility are budgeted at $2,000,000. Accountants have estimated that if Cooper Company did not use the facility the cost incurred would be reduced by 30 percent. What amount of the budgeted cost should be allocated, respectively, to Cooper and Magic if the incremental allocation method is used? 67)

______ A)

$0; $1,604,000 B)

$396,000; $1,604,000 C)

$600,000; $1,400,000 D)

$0; $1,400,000 E)

$700,000; $1,300,000

68)

Cutler Hammer currently utilizes a manufacturing facility for $200,000 per year. The facility is used at 70 percent capacity. The shipping department has proposed a plan in which it would utilize the other 30 percent plant capacity for the company’s shipping plus handling the shipping of several nearby businesses. The company’s consulting firm estimated that the overall costs of maintaining the space would increase by 12 percent.

The shipping manager is interested in the amount that would be allocated under the stand-alone method. 68)

______ A)

$60,000 B)

$67,200 C)

$24,000 D)

$26,880 E)

$42,000

69)

Smith Company and Jones Company currently share an employee dining facility. Jones Company employs fewer people and believes that they should not be required to pay one-half of the $300,000 costs incurred for the facility. An independent consulting firm stipulated that Smith Company could receive the same services for $150,000 while Jones’s employees could receive comparable services for $100,000.

What will be Jones’s allocated cost if the stand-alone method is used? 69)

______ A)

$180,000 B)

$83,333 C)

$150,000 D)

$100,000 E)

$120,000

70)

Two entities, Burch Company and Carey Company, share a common warehouse facility. Total costs for the facility are budgeted at $1,000,000. Accountants have estimated that if Burch Company did not use the facility the cost incurred would be reduced by 30 percent.

What amount of the budgeted cost should be allocated, respectively, to Burch and Carey if the incremental allocation method is used? 70)

______ A)

$0; $802,000 B)

$198,000; $802,000 C)

$300,000; $700,000 D)

$0; $700,000 E)

$350,000; $650,000