Question : 61. A responsibility accounting report that compares actual costs and : 1256744

 

 

61. A responsibility accounting report that compares actual costs and expenses for a department with the budgeted amounts is called a(n):A.  Performance reportB.  Service reportC.  Income statementD.  Balance sheetE.  Cost report

 

 

 

 

 

 

62. A responsibility accounting system:A.  Is designed to measure the performance of managers in terms of uncontrollable costs.B.  Assigns responsibility for costs to the top managerial level.C.  Is designed to hold a manager responsible for costs over which the manager has no influence.D.  Can be applied at any level of an organization.E.  Is well suited to work in an environment without clear lines of responsibility and authority.

 

 

 

63. Under which of the following conditions is a market-based transfer price likely to be used?A.  There is no excess capacity.B.  No market price exists.C.  Excess capacity exists.D.  Excess capacity exists and the market price covers fixed costs.E.  There is only an internal market for the item in question.

 

 

 

64. A single cost incurred in producing or purchasing two or more essentially different products is a(n):A.  Product costB.  Incremental costC.  Differential costD.  Joint costE.  Fixed cost

 

 

 

 

 

 

 

 

 

65. Allocations of joint product costs can be based on the relative market values of the products:A.  And never on the relative physical quantities of the products.B.  Plus an adjustment for future excess margins.C.  And not on any other basis.D.  At the time the products are separated.E.  Only if the products contain both direct and indirect costs.

 

 

 

66. Allocating joint costs to products can be based on their relative:A.  Market valuesB.  Direct costsC.  Gross marginsD.  Total costsE.  Variable costs

 

 

67. General Chemical produced 10,000 gallons of Greon and 20,000 gallons of Baron. Joint costs incurred in producing the two products totaled $7,500. At the split-off point, Greon has a market value of $6 per gallon and Baron $2 per gallon. What portion of the joint costs should be allocated to Greon if the basis is market value at point of separation?A.  $2,500B.  $3,000C.  $4,500D.  $5,625E.  $1,500

 

 

 

68. Data pertaining to a company’s joint manufacturing process for the current period follows: 

 

Product

 

Product

 

 

A

 

B

 

Quantities produced

200 lbs.

 

100 lbs.

 

Processing  cost after

 

 

 

 

products are separated

$1,100

 

$400

 

Market value at point

 

 

 

 

of separation

$8/lb.

 

$16/lb.

 

What cost amount should be allocated to Product A for this period’s $660 of joint costs on the basis of market value at the point of separation?A.  $330.00B.  $440.00C.  $220.00D.  $194.12E.  $484.00

 

 

 

69. A sawmill bought a shipment of logs for $40,000. When cut, the logs produced 1 million board feet of lumber in the following grades: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.How much cost should be allocated to Type 1 and Type 2, respectively?  

 

Type 1

Type 2

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

 

 

 

 

70. A sawmill paid $70,000 for logs that produced 200,000 board feet of lumber in three different grades and amounts as follows: 

Grade

 

Production

 

Market Price

 

Structural

 

25,000 board feet

 

$1,350/1,000 bd. ft.

 

No. 1 Common

 

75,000 board feet

 

$  750/1,000 bd. ft.

 

No. 2 Common

 

100,000 board feet

 

$  300/1,000 bd. ft.

 

How much of the $70,000 joint cost should be allocated to No. 2 Common? A.  $0B.  $17,500C.  $23,333D.  $35,000E.  $70,000