QUESTION 1 Consider the following information attributed to the material management department Budgeted usage of materials handling labor hours 3500 Budgeted cost pools Fixed costs $154,000 Variable costs $126,000 (3500 hours x $36 per hour) The company uses the single rate method to allocate support costs to the Machining and Assembly Departments Assuming that the actual hours tracked in the Machining and Assembly department are 500 for the month, what would be the allocation rate and how much cost would be allocated to the Machining and Assembly Department for the operations of the month (Round final answers to the nearest dollar ) a $80 an hour for a total of $40,000 b $36 an hour for a total of $40,000 c $36 an hour for a total of $18,000 d $560 an hour for a total of $80 Which of the following is an advantage of a dual rate method a It is the most widely used method in practice b It is less costly to implement c It avoids the expensive analysis for categorizing costs as either fixed or variable d It allocates fixed cost as per the budgeted usage that helps in short and long run planning QUESTION 3 The Charmatz Corporation has a central copying facility The copying facility has only two users, the Marketing Department and the Operations Department The following data apply to the coming budget year Budgeted costs of operating the copying facility for 300,000 to 500,000 copies Fixed costs per year $61,000 Variable costs 6 cents (0 06) per copy Budgeted long run usage in copies per year Marketing Department 100,000 copies Operations Department 400,000 copies Budgeted amounts are used to calculate the allocation rates Actual usage for the year by the Marketing Department was 80,000 copies and by the Operations Department was 320,000 copies If a single rate cost allocation method is used, what amount of copying facility costs will be budgeted for the Marketing Department (Round any intermediary calculations to the nearest cent ) a $18,200 b $6000 c $12,200 d $21,250 QUESTION 4 The Charmatz Corporation has a central copying facility The copying facility has only two users, the Marketing Department and the Operations Department The following data apply to the coming budget year Budgeted costs of operating the copying facility for 300,000 to 500,000 copies Fixed costs per year $69,000 Variable costs 3 cents (0 03) per copy Budgeted long run usage in copies per year Marketing Department 100,000 copies Operations Department 360,000 copies Budgeted amounts are used to calculate the allocation rates Actual usage for the year by the Marketing Department was 70,000 copies and by the Operations Department was 330,000 copies If a single rate cost allocation method is used, what amount of copying facility costs will be allocated to the Marketing Department Assume actual usage is used to allocate copying costs (Do not round interim calculations and round the final calculation to the nearest dollar ) a $20,250 b $18,000 c $12,600 d $2100 QUESTION 5 The Speedjet Aircraft Corporation has a central materials laboratory The laboratory has only two users, the Large Plane Department and the Small Plane Department The following data apply to the coming budget year Budgeted costs of operating the materials laboratory for 100,000 to 200,000 technician hours per year Fixed costs per year $7,400,000 Variable costs $75 per technician hour Budgeted long run usage in hours per year Large Plane Department 80,000 technician hours Small Plane Department 120,000 technician hours Budgeted amounts are used to calculate the allocation rates Actual usage for the year by the Large Plane Department was 60,000 technician hours and by the Small Plane Department was 80,000 technician hours If a single rate cost allocation method is used, what amount of materials laboratory costs will be allocated to the Large Plane Department Assume actual usage is used to allocate laboratory costs a $10,228,571 4 b $8,960,000 c $7,671,429 d $6,720,000

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QUESTION 1 Consider the following information attributed to the material management department Budgeted usage of materials-handling labor-hours 3500 Budgeted cost pools: Fixed costs $154,000 Variable

QUESTION 1

Consider the following information attributed to the material management department

Budgeted usage of materials-handling labor-hours 3500

Budgeted cost pools:

Fixed costs $154,000

Variable costs $126,000 (3500 hours x $36 per hour)

The company uses the single-rate method to allocate support costs to the Machining and Assembly Departments. Assuming that the actual hours tracked in the Machining and Assembly department are 500 for the month, what would be the allocation rate and how much cost would be allocated to the Machining and Assembly Department for the operations of the month? (Round final answers to the nearest dollar.)

a.
$80 an hour for a total of $40,000

b.
$36 an hour for a total of $40,000

c.
$36 an hour for a total of $18,000

d.
$560 an hour for a total of $80

Which of the following is an advantage of a dual-rate method?

	a.	It is the most widely used method in practice
	b.	It is less costly to implement.
	c.	It avoids the expensive analysis for categorizing costs as either fixed or variable.
	d.	It allocates fixed cost as per the budgeted usage that helps in short and long-run planning.

QUESTION 3

The Charmatz Corporation has a central copying facility. The copying facility has only two users, the Marketing Department and the Operations Department. The following data apply to the coming budget year:

Budgeted costs of operating the copying facility

for 300,000 to 500,000 copies:

Fixed costs per year $61,000

Variable costs 6 cents (0.06) per copy

Budgeted long-run usage in copies per year:

Marketing Department 100,000 copies

Operations Department 400,000 copies

Budgeted amounts are used to calculate the allocation rates.

Actual usage for the year by the Marketing Department was 80,000 copies and by the Operations Department was 320,000 copies. If a single-rate cost-allocation method is used, what amount of copying facility costs will be budgeted for the Marketing Department? (Round any intermediary calculations to the nearest cent.)

a.
$18,200

b.
$6000

c.
$12,200

d.
$21,250

QUESTION 4

The Charmatz Corporation has a central copying facility. The copying facility has only two users, the Marketing Department and the Operations Department. The following data apply to the coming budget year:

Budgeted costs of operating the copying facility

for 300,000 to 500,000 copies:

Fixed costs per year $69,000

Variable costs 3 cents (0.03) per copy

Budgeted long-run usage in copies per year:

Marketing Department 100,000 copies

Operations Department 360,000 copies

Budgeted amounts are used to calculate the allocation rates.

Actual usage for the year by the Marketing Department was 70,000 copies and by the Operations Department was 330,000 copies. If a single-rate cost-allocation method is used, what amount of copying facility costs will be allocated to the Marketing Department? Assume actual usage is used to allocate copying costs. (Do not round interim calculations and round the final calculation to the nearest dollar.)

a.
$20,250

b.
$18,000

c.
$12,600

d.
$2100

QUESTION 5

The Speedjet Aircraft Corporation has a central materials laboratory. The laboratory has only two users, the Large Plane Department and the Small Plane Department. The following data apply to the coming budget year:

Budgeted costs of operating the materials laboratory

for 100,000 to 200,000 technician hours per year:

Fixed costs per year $7,400,000

Variable costs $75 per technician hour

Budgeted long-run usage in hours per year:

Large Plane Department 80,000 technician hours

Small Plane Department 120,000 technician hours

Budgeted amounts are used to calculate the allocation rates.

Actual usage for the year by the Large Plane Department was 60,000 technician hours and by the Small Plane Department was 80,000 technician hours. If a single-rate cost-allocation method is used, what amount of materials laboratory costs will be allocated to the Large Plane Department? Assume actual usage is used to allocate laboratory costs.

a.
$10,228,571.4

b.
$8,960,000

c.
$7,671,429

d.
$6,720,000