CRM 101 FINAL EXAM QUESTIONS

37. Managerial accounting a. is concerned with costing products. b. is governed by generally accepted accounting principles. c. pertains to the entity as a whole and is highly aggregated. d. places emphasis on special-purpose information. 38. Managerial accounting information is generally prepared for a. stockholders. b. managers. c. regulatory agencies. d. investors. 39. Managerial accounting information a. pertains to the entity as a whole and is highly aggregated. b. must be prepared according to generally accepted accounting principles. c. pertains to subunits of the entity and may be very detailed. d. is prepared only once a year. 40. The major reporting standard for management accounting is a. the Standards of Ethical Conduct for Practitioners of Management Accounting and Financial Management. b. the Sarbanes-Oxley Act of 2002. c. relevance to decisions. d. generally accepted accounting principles. 41. Managerial accounting is also called a. inside reporting. b. cost accounting. c. management accounting. d. strategic management. 42. Which of the following is not an internal user? a. Corporate officers b. Staff employees c. Stockholders d. Department manager 43. Which of the following is not part of managerial accounting? a. Determining whether planned goals are being met b. Reporting financial information to the shareholders c. Calculating product costs d. Controlling costs 44. Which of the following uses managerial accounting? a. Manufacturing and service entities, but not merchandising b. Profit-oriented businesses only c. Service, manufacturing, and merchandising entities d. Only manufacturing entities 41. Overhead applied to Mini A using activity-based costing is a. $1,275,000. b. $1,536,000. c. $1,760,000. d. $1,920,000. 42. Overhead applied to Maxi B using activity-based costing is a. $1,280,000. b. $1,640,000. c. $1,664,000. d. $2,125,000. 43. Veronica Co. produces 3 products, Products Rain, Snow, and Wind. Product Rain requires 15 machine setups, Product Snow requires 20 setups, and Product Wind requires 35 setups. Veronica has identified an activity cost pool with allocated overhead of $420,000 for which the cost driver is machine setups. How much overhead is assigned to each product? Rain Snow Wind a. $140,000 $140,000 $140,000 b. $28,000 $21,000 $12,000 c. $90,000 $120,000 $210,000 d. $12,000 $21,000 $28,000 44. GoFish Inc. has an overhead rate for machine setups of $200 per machine setup, for a total of $56,000 of overhead. The company produces two products, Product Salamander and Product Gold, which require 120 and 160 setups each, respectively. The overhead assigned to each product is Salamander Gold a. $28,000 $28,000 b. $32,000 $24,000 c. $26,000 $30,000 d. $24,000 $32,000 45. Hammock Company manufactures two models of its hammock, the Superior and the Deluxe. The Superior model requires 10,000 direct labour hours and the Deluxe requires 40,000 direct labour hours. The company produces 4,000 units of the Superior model and 1,000 units of the Deluxe model each year. The company produces the Superior model in batch sizes of 200, while it produces the Deluxe model in batch sizes of 100. The company expects to incur $120,000 of total setup costs this year. How much of the setup costs are allocated to the Superior model using ABC costing? a. $80,000 b. $60,000 c. $24,000 d. $100,000 46. Jaime Inc. manufactures 2 products, sweaters and jackets. The company has estimated its overhead in the order-processing department to be $180,000. The company produces 50,000 sweaters and 80,000 jackets each year. Sweater production requires 25,000 machine hours, jacket production requires 50,000 machine hours. The company places raw materials orders 10 times per month, 2 times for raw materials for sweaters and the remainder for raw materials for jackets. How much of the order processing overhead should be allocated to jackets? a. $90,000 b. $120,000 c. $110,770 d. $144,000 47. Canterra Co. incurs $160,000 of overhead costs each year in its three main departments, setup ($10,000), machining ($110,000), and packing ($40,000). The setup department performs 40 setups per year, the machining department works 5,000 hours per year, and the packing department packs 500 orders per year. Information about Canterra’s 2 products is as follows: Product One Product Two Number of setups 20 20 Machining hours 1,000 4,000 Orders packed 150 350 If machining hours are used as a base, how much overhead is assigned to Product One each year? a. $32,000 b. $80,000 c. $55,000 d. $48,000 48. Canterra Co. incurs $540,000 of overhead costs each year in its three main departments, setup ($40,000), machining ($400,000), and packing ($100,000). The setup department performs 50 setups per year, the machining department works 8,000 hours per year, and the packing department packs 200 orders per year. Information about Canterra’s 2 products is as follows: Product One Product Two Number of setups 10 40 Machining hours 3,000 5,000 Orders packed 110 90 Using ABC, how much overhead is assigned to Product One each year? a. $540,000 b. $327,000 c. $270,000 d. $213,000 49. Canterra Co. incurs $160,000 of overhead costs each year in its three main departments, setup ($10,000), machining ($110,000), and packing ($40,000). The setup department performs 40 setups per year, the machining department works 5,000 hours per year, and the packing department packs 500 orders per year. Information about Canterra’s 2 products is as follows: Product One Product Two Number of setups 20 20 Machining hours 1,000 4,000 Orders packed 150 350 Number of product Manufactured 600 400 Using ABC, how much overhead is assigned to Product Two each year? a. $80,000 b. $64,000 c. $121,000 d. $128,000 50. A company incurs $1,200,000 of overhead each year in three departments, Processing, Packaging, and Testing. The company performs 800 processing transactions, 200,000 packaging transactions, and 2,000 tests per year in producing 400,000 drums of Oil and 600,000 drums of Sludge. The following data are available: Department Expected use of Driver Cost Processing 800 $500,000 Packaging 200,000 500,000 Testing 2,000 200,000 Production information for Oil is as follows: Department Expected use of Driver Processing 300 Packaging 120,000 Testing 1,600 Calculate the amount of overhead assigned to Oil. a. $600,000 b. $647,500 c. $552,500 d. $460,000