1. (TCO 1) Which of the following is a sign that an ABC system may be useful? (Points : 5) Operations staff agrees with accountants about the costs of manufacturing and marketing products and services. There are small amounts of indirect costs. Products make diverse demands on resources because of differences in volume, process steps, batch size, or complexity. Products a company is less suited to produce and sell show small profits. 2. (TCO 1) Merriamn Company provides the following ABC costing information: Activities Total Costs Activity-cost drivers Account inquiry hours $400,000 10,000 hours Account billing lines $280,000 4,000,000 lines Account verification accounts $150,000 40,000 accounts Correspondence letters $ 50,000 4,000 letters Total costs $880,000 The above activities are used by Department A and B as follows: Department A Department B Account inquiry hours 2,000 hours 4,000 hours Account billing lines 400,000 lines 200,000 lines Account verification accounts 10,000 accounts 8,000 accounts Correspondence letters 1,000 letters 1,600 letters How much of the inquiry cost will be assigned to Department A? (Points : 5) $80,000 $400,000 $160,000 None of the above 3. (TCO 2) Budgeting provides all of the following EXCEPT (Points : 5) a means to communicate the organization's short-term goals to its members. support for the management functions of planning and coordination. a means to anticipate problems. an ethical framework for decision making. 4. (TCO 2) Dalyrymple Company produces a special spray nozzle. The budgeted indirect total cost of inserting the spray nozzle is $80,000. The budgeted number of nozzles to be inserted is 40,000. What is the budgeted indirect cost allocation rate for this activity? (Points : 5) $.50 $1.00 $1.50 $2.00 5. (TCO 3) Which cost estimation method analyzes accounts in the subsidiary ledger as variable, fixed, or mixed using qualitative methods? (Points : 5) Quantitative analysis Industrial engineering Account analysis Conference 6. (TCO 4) Relevant costs in a make-or-buy decision of a part include (Points : 5) setup overhead for the manufacture of the product using the outsourced part. currently used manufacturing capacity that has alternative uses. annual plant insurance that will remain the same. corporate office costs that will be allocated differently. 7. (TCO 5) Producing more nonbottleneck output (Points : 5) creates more inventory and increases throughput contribution. creates less pressure for the bottleneck workstations. allows for the maximization of overall contribution. creates more inventory, but does not increase throughput contribution 8. (TCO 5) Jensen Company has relevant costs of $80 per unit to manufacture Part A. A current supplier offers to make Part A for $70 per unit. If capacity is constrained, the opportunity cost of buying Part A from the supplier is (Points : 5) 0. $10,000. $70,000. indeterminable. 9. (TCO 3) The cost function y = 100 + 10X (Points : 5) has a slope coefficient of 100 is a nonlinear. has an intercept of 100. represents a fixed cost. 10. (TCO 4) Opportunity costs (Points : 5) result in a cash outlay. only are considered when selecting among alternatives. are recorded in the accounting records. should be maximized for the best decision