#1

Actual usage for the year by Department A was 40,000 kilometers and by Department B was 180,000 kilometers.

If a singlerate cost allocation method is used, what amount of transportation facility costs will be budgeted for Department A?

A. $5,600 B. $8,400 C. $7,200 D. $9,000 E. $30,800

#2

Subwaste Company, is interested in using the reciprocal allocation method. The following data from operations were collected for analysis:

Budgeted manufacturing overhead

costs:

Information Systems	I(Support Dept)	$150,000
Accounting	A(Support Dept)	$80,000
Department A	Dept. A(Production Dept)	$325,000
Department B	Dept. B(Production Dept)	$175,000

Services

furnished:

By Information Sytems (budgeted servicehours):
to Accounting	1,500
to Department A	3,500
to Department B	2,000
By Accounting (Number of employees serviced):
Information Systmens	5
Department A	15
Department B	10

Which of the following linear equations represents the complete reciprocated cost of the Accounting Department?

A. P = $80,000 B. P = (500/6,000) M C. P = $150,000 + (500/6,000) M D. P = $80,000 + (1,500/7,000) M E. P = $80,000 + (500/6,000) M

#3

Crackle Company produces speakers, and has the following information available concerning its inventory items:

Relevant ordering costs per purchase order	$40
Relevant carrying costs per year:
Required annual return on investment	8%
Required other costs per year	$1.60

Annual demand is 6,480 units per year. The purchase price per package is $30.

What is the economic order quantity for Crackle Company?

A. 75,000 units B. 1,000 units C. 1,464 units D. 360 units E. 5,000 units

The Freight-To-You Corporation has a central transportation facility. The transportation facility has only two users, Department A and Department B. The following data apply to the coming budget year: Budgeted costs of operating the transporation facility for 200,000 to 300,000 kilometers: Fixed costs per year Variable costs Budgeted long-run usage per year. Department A Department B Budgeted amounts are used to calculate the allocation rates. $27,500 3 cents (-03) per kilometer 60,000 kilometers 190,000 kilometers