1. (TCO 4) Assumptions underlying cost-volume-profit analysis include all of the following, except: (Points : 5) all costs can be divided into fixed and variable elements. total costs are directly proportional to volume over the relevant range. selling prices are to be unchanged. volume is the only relevant factor affecting cost.

Question 2. 2. (TCO 6) Which of the following is true about activity-based costing? (Points : 5)

It should not be used with process or job costing. It can be used only with process costing. It can be used only with job costing. It can be used with either process or job costing.

Question 3. 3. (TCO 2) In a traditional job order cost system, the use of direct labor on jobs increases: (Points : 5)

stores. work in process. factory overhead. finished goods.

Question 4. 4. (TCO5) Cost drivers are NOT: (Points : 5)

All of the above are not cost drivers. Accounting measurements are used to evaluate whether or not performance is proceeding according to plan. A mechanical basis, such as machine hours, computer time, size of equipment, or square footage of factory, is used to assign to activities. Costs linked to two or more other costs.

Question 5. 5. (TCO 8) Wood Co. has considerable excess manufacturing capacity. A special job order's cost sheet includes the following applied manufacturing overhead costs: Fixed costs: 25,000 Variable costs: 36,000 The fixed costs include a normal $4,500 allocation for in-house design costs, although no in-house design will be done. Instead, the job will require the use of external designers costing $9,250. What is the total amount to be included in the calculation to determine the minimum acceptable price for the job? (Points : 5)

$40,500 $45,250 $61,000 $65,750

Question 6. 6. (TCO 1) Who are the users of managerial accounting information? How does their use of accounting information differ from the users of financial accounting information? (Points : 25)

Question 7. 7. (TCO 2) Wolf Co. estimates that its employees will work 500,000 direct labor hours during the coming year. Total overhead costs are estimated to be $9,600,000 and direct labor costs are estimated to be $12,500,000. Direct Labor hours are actually 450,000. If Wolf Co. allocates overhead based on direct labor HOURS, what is the predetermined overhead rate? (Points : 25)