Acc310 Cost Accounting: Week 2 Quiz (10 MCQs) – Version 3

Reminder: There are other versions of this week’s quiz questions. Make sure you review and compare this tutorial to your questions. Acc310 Cost Accounting Week 2 Quiz (10 MCQs) – Version 3 1. The Shapely Company uses the high-low method to determine its cost equation. The following information was gathered for 2008: Machine Hours Direct Labor Costs Busiest month (June) 14,000 $200,000 Slowest month (December) 6,000 $120,000 If Shapely expects to use 10,000 machine hours next month, what are the estimated direct labor costs? (Points : 1) $160,000 $180,000 $175,000 $150,000 2. The Silver Company uses a predetermined overhead rate in applying overhead to production orders on a labor cost basis in Department A and on a machine hours basis in Department B. At the beginning of 2008, the company made the following estimates: Dept. A Dept. B Direct labor cost $60,000 $40,000 Factory overhead $90,000 $45,000 Direct labor hours 6,000 9,000 Machine hours 2,000 15,000 What predetermined overhead rate would be used in Department A and Department B respectively? (Points : 1) 150% and 300%. 150% and $3.00. $1.50 and 300%. $1.50 and $3.00. 3. Given the following information, compute the total number of units for the period. Direct labor hours 12,000 Direct labor cost $2.70 per hour Direct materials cost $75 per unit Total manufacturing cost $132,600 Fixed overhead cost $36,000 Variable overhead cost 50% of total labor cost (Points : 1) 360 432 640 840 4. The theory of constraints focuses on maximizing throughput contribution margin while minimizing all of the following except (Points : 1) fixed overhead costs. production bottlenecks. investment in buildings. investment in inventories. 5. Which of the following would be the least appropriate allocation base for allocating overhead in a highly automated (i.e., capital-intensive) manufacturing company? (Points : 1) electricity used machine hours direct labor hours material consumed 6. The Wiscow Manufacturing Company recorded overhead costs of $14,182 at an activity level of 4,200 machine hours and $8,748 at 2,300 machine hours. The records also indicated that overhead of $9,730 was incurred at 2,600 machine hours. What is the total estimated cost for 2,600 machine hours using the high-low method to estimate the cost equation? (Points : 1) $9,730 $9,606 $9,106 $8,788 7. A company is considering the use of a single-stage cost allocation process. Under what conditions would this choice be justified? (Points : 1) The company has many service departments but only one production department. The company produces a few products with similar characteristics in a few departments. The company has no service departments but many production departments. The company produces a wide selection of products in a single production department. 8. In a labor intensive company in which more overhead is used by the more highly skilled and paid employees, which activity base would be most appropriate for applying overhead to production? (Points : 1) Direct labor cost. Direct material cost. Direct labor hours. Machine hours. Sales value of the product produced. 9. Mount Company incurred a total cost of $8,600 to produce 400 units of pulp. Each unit of pulp required five (5) direct labor hours to complete. What is the total fixed cost if the variable cost was $1.50 per direct labor hour? (Points : 1) $1,700 $3,000 $5,600 $8,000 10. The Blade Division of Axe Company produces hardened steel blades. One-third of Blade's output is sold to the Forestry Products Division of Axe; the remainder is sold to outside customers. Blades' estimated operating profit for the year is: Forestry Outside Division Customers Sales $15,000 $40,000 Variable costs (10,000 ) (20,000 ) Fixed costs (3,000 ) (6,000 ) Operating profits. $2,000 $ 14,000 Unit sales 10,000 20,000 The Forestry Division has an opportunity to purchase 10,000 blades of the same quality from an outside supplier on a continuing basis. If the Blade Division is now operating at full capacity and can sell all its units to outside customers at the present selling price, what is the differential cost to Axe of requiring that the blades be made internally for the Forestry Division? (Points : 1) A. $2,500 B. $5,000 C. $7,500 D. $10,000