Quiz 10

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Question 1 (1 point)

Motorcade Company has three service departments (S1, S2, and S3) and two production departments (P1 and P2). The following data relate to Motorcade's allocation of service department costs:
	Budgeted Costs	Nbr of Employees
S1	$3,240,000	75
S2	2,560,000	50
S3	1,000,000	25
P1		150
P2		225
Service department costs are allocated by the direct method. The number of employees is used as the allocation base for all service department costs

Calculate the total service department cost allocated to production department P1

Your Answer:

Answer

Question 2 (1 point)

El Dorado Company has two production plants. Recently, the company conducted an ABM study to determine the cost of activities involved in processing orders for parts at each of the plants. How might an operations manager use this information to manage the cost of processing orders?

Question 2 options:

	Set up an ABC costing system
	Identify benchmarks
	Compare the cost to process an order at each plant and the nature of the orders to determine if costs are out of control. If out of control, investigate
	Close down the plant with the highest cost to increase profits

Question 3 (1 point)

Infinity Designs, an interior design company, has experienced a drop in business due to an increase in interest rates and a corresponding slowdown in remodeling projects. To stimulate business, the company is considering exhibiting at the Home and Garden Expo. The exhibit will cost the company $12,000 for space. At the show, Infinity Designs will present a slide show on a PC, pass out brochures that are printed previously, (the company printed more than needed), and show its portfolio of previous
jobs.
The company estimates that revenue will increase by $36,000 over the next year as a result of the exhibit. For the previous year, profit was as follows:

		Revenue		$201,000
		Less:
		Design supplies (variable cost)	$16,000
		Salary of Samantha Spade (owner)	80,000
		Salary of Kim Bridesdale (full time employee)	55,000
		Rent	18,000
		Utilities	6,000
		Depreciation of office equipment	3,600
		Printing of advertising materials	700
		Advertising in Middleton Journal	2,500
		Travel expenses other than depreciation of autos (variable cost)	$2,200
		Depreciation of company cars	9,000
Required:
Calculate the impact of the exhibit on company profit.

Question 3 options:

Answer

Question 4 (1 point)

Each year, Sunshine Motos surveys 7,500 former and prospective customers regarding satisfaction and brand awareness. For the current year, the company is considering outsourcing the survey to Global Associates, who have offered to conduct the survey and summarize results for $30,000.Craig Sunshine, the president of Sunshine Motors, believes that Global will do a higher-quality job than his company has been doing, but is unwilling to spend more than $10,000 above the current costs. The head of bookkeeping for Sunshine has prepared the following summary of costs related to the survey in the prior year.

Mailing $16,200

Printing (done by Lester Print Shop) $4,500

Salary of Pat Fisher, part-time employee who stuffed envelopes and summarized data when surveys were returned (100 hours X $15) $1,500

Share of depreciation of computer and software used to track survey responses and summarized results. $1,100

Share of electricity/phone/etc. based on square feet of space occupied by Pat Fisher vs. entire company. $500

REQUIRED: What is the incremental cost of going outside versus conducting the survey as in the past?

Answer

Question 5 (1 point)

Howell Corporation produces an executive jet for which it currently manufactures a fuel valve; the cost of the valve is indicated below:

	Cost per Unit
Variable costs
Direct material	$960
Direct labor	600
Variable overhead	300
Fixed costs
Depreciation of equipment	500
Depreciation of building	225
Supervisory salaries	300

The company has an offer from Duvall Valves to produce the part for $2,000 per unit and supply 1,000 valves (the number needed in the coming year). If the company accepts this offer and shuts down production of valves, production workers and supervisors will be reassigned to other areas. The equipment cannot be used elsewhere in the company, and it has no market value. However, the space occupied by the production of the valve can be used by another production group that is currently leasing space for $55,000 per year.

What is the incremental savings of buying the valves? (The answer should be stated in a per-unit format and is a positive number)

Your Answer:

Question 5 options:

Answer

Question 6 (1 point)

Landmark Coal operates a mine. During July, the company obtained 500 tons of ore, which yielded 250 pounds of gold and 63,400 pounds of copper. The joint cost related to the operation was $500,000. Gold sells for $325 per ounce and copper sells for $0.85 per pound. Allocate the joint costs using relative weight. With these costs, what is the profit or loss associated with Copper?

Your Answer:

Question 6 options:

Question 7 (1 point)

Landmark Coal operates a mine. During July, the company obtained 500 tons of ore, which yielded 250 pounds of gold and 63,100 pounds of copper. The joint cost related to the operation was $500,000. Gold sells for $325 per ounce and copper sells for $0.87 per pound. Allocate the joint costs using the relative sales values. With these costs, what is the profit or loss associated with Copper?

Question 7 options:

Answer

Question 8 (1 point)

Common costs

Question 8 options:

	A) are fixed costs that are not directly traceable to an individual product line
	B) normally not avoidable
	both A and B are true statements
	Neither A nor B is a true statement

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Quiz 10 Question 1 (1 point) Motorcade Company has three service departments (S1, S2, and S3) and two production 1 departments (P1 and P2). The following data relate to Motorcade's allocation of service department costs: Budgeted Costs Nbr of Employees S1 $3,240,000 75 S2 2,560,000 50 S3 1,000,000 25 P1 150 P2 225 Service department costs are allocated by the direct method. The number of employees is used as the allocation base for all service department costs Calculate the total service department cost allocated to production department P1 Your Answer: Answer Question 2 (1 point) El Dorado Company has two production plants. Recently, the company conducted an ABM study to determine the cost of activities involved in processing orders for parts at each of the plants. How might an operations manager use this information to manage the cost of processing orders? Question 2 options: Set up an ABC costing system Identify benchmarks Compare the cost to process an order at each plant and the nature of the orders to determine if costs are out of control. If out of control, investigate Close down the plant with the highest cost to increase profits Question 3 (1 point) Infinity Designs, an interior design company, has experienced a 3 drop in business due to an increase in interest rates and a corresponding slowdown in remodeling projects. To stimulate business, the company is considering exhibiting at the Home and Garden Expo. The exhibit will cost the company $12,000 for space. At the show, Infinity Designs will present a slide show on a PC, pass out brochures that are printed previously, (the company printed more than needed), and show its portfolio of previous jobs. The company estimates that revenue will increase by $36,000 over the next year as a result of the exhibit. For the previous year, profit was as follows: Revenue Less: Design supplies (variable cost) Salary of Samantha Spade (owner) Salary of Kim Bridesdale (full time employee) Rent Utilities Depreciation of office equipment Printing of advertising materials Advertising in Middleton Journal Travel expenses other than depreciation of autos (variable cost) Depreciation of company cars Required: $201,000 $16,000 80,000 55,000 18,000 6,000 3,600 700 2,500 $2,200 9,000 Calculate the impact of the exhibit on company profit. Question 3 options: Answer Question 4 (1 point) Each year, Sunshine Motos surveys 7,500 former and prospective customers regarding satisfaction and brand awareness. For the current year, the company is considering outsourcing the survey to Global Associates, who have offered to conduct the survey and summarize results for $30,000.Craig Sunshine, the president of Sunshine Motors, believes that Global will do a higher-quality job than his company has been doing, but is unwilling to spend more than $10,000 above the current costs. The head of bookkeeping for Sunshine has prepared the following summary of costs related to the survey in the prior year. Mailing $16,200 Printing (done by Lester Print Shop) $4,500 Salary of Pat Fisher, part-time employee who stuffed envelopes and summarized data when surveys were returned (100 hours X $15) $1,500 Share of depreciation of computer and software used to track survey responses and summarized results. $1,100 Share of electricity/phone/etc. based on square feet of space occupied by Pat Fisher vs. entire company. $500 REQUIRED: What is the incremental cost of going outside versus conducting the survey as in the past? Answer Question 5 (1 point) Howell Corporation produces an executive jet for which it currently manufactures a fuel valve; the cost of the valve is indicated below: Cost per Unit Variable costs Direct material $960 Direct labor 600 Variable overhead 300 Fixed costs Depreciation of equipment 500 Depreciation of building 225 Supervisory salaries 300 The company has an offer from Duvall Valves to produce the part for $2,000 per unit and supply 1,000 valves (the number needed in the coming year). If the company accepts this offer and shuts down production of valves, production workers and supervisors will be reassigned to other areas. The equipment cannot be used elsewhere in the company, and it has no market value. However, the space occupied by the production of the valve can be used by another production group that is currently leasing space for $55,000 per year. What is the incremental savings of buying the valves? (The answer should be stated in a per-unit format and is a positive number) Your Answer: Question 5 options: Answer Question 6 (1 point) Landmark Coal operates a mine. During July, the company obtained 500 tons of ore, which yielded 250 pounds of gold and 63,400 pounds of copper. The joint cost related to the operation was $500,000. Gold sells for $325 per ounce and copper sells for $0.85 per pound. Allocate the joint costs using relative weight. With these costs, what is the profit or loss associated with Copper? Your Answer: Question 6 options: Question 7 (1 point) Landmark Coal operates a mine. During July, the company obtained 500 tons of ore, which yielded 250 pounds of gold and 63,100 pounds of copper. The joint cost related to the operation was $500,000. Gold sells for $325 per ounce and copper sells for $0.87 per pound. Allocate the joint costs using the relative sales values. With these costs, what is the profit or loss associated with Copper? Question 7 options: Answer Question 8 (1 point) Common costs Question 8 options: A) are fixed costs that are not directly traceable to an individual product line B) normally not avoidable both A and B are true statements Neither A nor B is a true statement Quiz -73371013144373 317673 2097602 1 143646 0 false Note: It is recommended that you save your response as you complete each question. Question 1 (1 point) 1 Motorcade Company has three service departments (S1, S2, and S3) and two production departments (P1 and P2). The following data relate to Motorcade's allocation of service department costs: Budgeted Costs Nbr of Employees S1 $3,120,000 75 S2 2,560,000 50 S3 1,000,000 25 P1 150 P2 225 Service department costs are allocated by the direct method. The number of employees is used as the allocation base for all service department costs Calculate the total service department cost allocated to production department P1 Your Answer: Question 1 options: Answer Save Question 2 (1 point) 2 El Dorado Company has two production plants. Recently, the company conducted an ABM study to determine the cost of activities involved in processing orders for parts at each of the plants. How might an operations manager use this information to manage the cost of processing orders? Question 2 options: Set up an ABC costing system Identify benchmarks Compare the cost to process an order at each plant and the nature of the orders to determine if costs are out of control. If out of control, investigate Close down the plant with the highest cost to increase profits Save Question 3 (1 point) 3 Infinity Designs, an interior design company, has experienced a drop in business due to an increase in interest rates and a corresponding slowdown in remodeling projects. To stimulate business, the company is considering exhibiting at the Home and Garden Expo. The exhibit will cost the company $12,000 for space. At the show, Infinity Designs will present a slide show on a PC, pass out brochures that are printed previously, (the company printed more than needed), and show its portfolio of previous jobs. The company estimates that revenue will increase by $36,000 over the next year as a result of the exhibit. For the previous year, profit was as follows: Revenue Less: Design supplies (variable cost) Salary of Samantha Spade (owner) Salary of Kim Bridesdale (full time employee) Rent Utilities Depreciation of office equipment Printing of advertising materials Advertising in Middleton Journal Travel expenses other than depreciation of autos (variable cost) Depreciation of company cars $201,000 $15,500 80,000 55,000 18,000 6,000 3,600 700 2,500 $2,400 9,000 Required: Calculate the impact of the exhibit on company profit. Your Answer: Question 3 options: Answer Save Question 4 (1 point) 4 Each year, Sunshine Motos surveys 7,500 former and prospective customers regarding satisfaction and brand awareness. For the current year, the company is considering outsourcing the survey to Global Associates, who have offered to conduct the survey and summarize results for $30,600.Craig Sunshine, the president of Sunshine Motors, believes that Global will do a higher-quality job than his company has been doing, but is unwilling to spend more than $10,000 above the current costs. The head of bookkeeping for Sunshine has prepared the following summary of costs related to the survey in the prior year. Mailing $16,400 Printing (done by Lester Print Shop) $4,500 Salary of Pat Fisher, part-time employee who stuffed envelopes and summarized data when surveys were returned (100 hours X $15) $1,500 Share of depreciation of computer and software used to track survey responses and summarized results. $1,100 Share of electricity/phone/etc. based on square feet of space occupied by Pat Fisher vs. entire company. $500 REQUIRED: What is the incremental cost of going outside versus conducting the survey as in the past? Your Answer: Question 4 options: Answer Save Question 5 (1 point) 5 Howell Corporation produces an executive jet for which it currently manufactures a fuel valve; the cost of the valve is indicated below: Cost per Unit Variable costs Direct material $960 Direct labor 600 Variable overhead 300 Fixed costs Depreciation of equipment 500 Depreciation of building 200 Supervisory salaries 300 The company has an offer from Duvall Valves to produce the part for $2,000 per unit and supply 1,000 valves (the number needed in the coming year). If the company accepts this offer and shuts down production of valves, production workers and supervisors will be reassigned to other areas. The equipment cannot be used elsewhere in the company, and it has no market value. However, the space occupied by the production of the valve can be used by another production group that is currently leasing space for $55,000 per year. What is the incremental savings of buying the valves? (The answer should be stated in a perunit format and is a positive number) Your Answer: Question 5 options: Answer Save Question 6 (1 point) 6 Landmark Coal operates a mine. During July, the company obtained 500 tons of ore, which yielded 250 pounds of gold and 62,800 pounds of copper. The joint cost related to the operation was $500,000. Gold sells for $325 per ounce and copper sells for $0.87 per pound. Allocate the joint costs using relative weight. With these costs, what is the profit or loss associated with Copper? Your Answer: Question 6 options: Answer Save Question 7 (1 point) 7 Landmark Coal operates a mine. During July, the company obtained 500 tons of ore, which yielded 250 pounds of gold and 62,500 pounds of copper. The joint cost related to the operation was $500,000. Gold sells for $325 per ounce and copper sells for $0.91 per pound. Allocate the joint costs using the relative sales values. With these costs, what is the profit or loss associated with Copper? Your Answer: Question 7 options: Answer Save Question 8 (1 point) 8 Common costs Question 8 options: A) are fixed costs that are not directly traceable to an individual product line B) normally not avoidable both A and B are true statements Neither A nor B is a true statement Quiz -73371013144373 317673 2097602 1 143646 0 false Note: It is recommended that you save your response as you complete each question. Question 1 (1 point) 1 Motorcade Company has three service departments (S1, S2, and S3) and two production departments (P1 and P2). The following data relate to Motorcade's allocation of service department costs: Budgeted Costs Nbr of Employees S1 $3,120,000 75 S2 2,560,000 50 S3 1,000,000 25 P1 150 P2 225 Service department costs are allocated by the direct method. The number of employees is used as the allocation base for all service department costs Calculate the total service department cost allocated to production department P1 Your Answer: Question 1 options: Answer Save Question 2 (1 point) 2 El Dorado Company has two production plants. Recently, the company conducted an ABM study to determine the cost of activities involved in processing orders for parts at each of the plants. How might an operations manager use this information to manage the cost of processing orders? Question 2 options: Set up an ABC costing system Identify benchmarks Compare the cost to process an order at each plant and the nature of the orders to determine if costs are out of control. If out of control, investigate Close down the plant with the highest cost to increase profits Save Question 3 (1 point) 3 Infinity Designs, an interior design company, has experienced a drop in business due to an increase in interest rates and a corresponding slowdown in remodeling projects. To stimulate business, the company is considering exhibiting at the Home and Garden Expo. The exhibit will cost the company $12,000 for space. At the show, Infinity Designs will present a slide show on a PC, pass out brochures that are printed previously, (the company printed more than needed), and show its portfolio of previous jobs. The company estimates that revenue will increase by $36,000 over the next year as a result of the exhibit. For the previous year, profit was as follows: Revenue Less: Design supplies (variable cost) Salary of Samantha Spade (owner) Salary of Kim Bridesdale (full time employee) Rent Utilities Depreciation of office equipment Printing of advertising materials Advertising in Middleton Journal Travel expenses other than depreciation of autos (variable cost) Depreciation of company cars $201,000 $15,500 80,000 55,000 18,000 6,000 3,600 700 2,500 $2,400 9,000 Required: Calculate the impact of the exhibit on company profit. Your Answer: Question 3 options: Answer Save Question 4 (1 point) 4 Each year, Sunshine Motos surveys 7,500 former and prospective customers regarding satisfaction and brand awareness. For the current year, the company is considering outsourcing the survey to Global Associates, who have offered to conduct the survey and summarize results for $30,600.Craig Sunshine, the president of Sunshine Motors, believes that Global will do a higher-quality job than his company has been doing, but is unwilling to spend more than $10,000 above the current costs. The head of bookkeeping for Sunshine has prepared the following summary of costs related to the survey in the prior year. Mailing $16,400 Printing (done by Lester Print Shop) $4,500 Salary of Pat Fisher, part-time employee who stuffed envelopes and summarized data when surveys were returned (100 hours X $15) $1,500 Share of depreciation of computer and software used to track survey responses and summarized results. $1,100 Share of electricity/phone/etc. based on square feet of space occupied by Pat Fisher vs. entire company. $500 REQUIRED: What is the incremental cost of going outside versus conducting the survey as in the past? Your Answer: Question 4 options: Answer Save Question 5 (1 point) 5 Howell Corporation produces an executive jet for which it currently manufactures a fuel valve; the cost of the valve is indicated below: Cost per Unit Variable costs Direct material $960 Direct labor 600 Variable overhead 300 Fixed costs Depreciation of equipment 500 Depreciation of building 200 Supervisory salaries 300 The company has an offer from Duvall Valves to produce the part for $2,000 per unit and supply 1,000 valves (the number needed in the coming year). If the company accepts this offer and shuts down production of valves, production workers and supervisors will be reassigned to other areas. The equipment cannot be used elsewhere in the company, and it has no market value. However, the space occupied by the production of the valve can be used by another production group that is currently leasing space for $55,000 per year. What is the incremental savings of buying the valves? (The answer should be stated in a perunit format and is a positive number) Your Answer: Question 5 options: Answer Save Question 6 (1 point) 6 Landmark Coal operates a mine. During July, the company obtained 500 tons of ore, which yielded 250 pounds of gold and 62,800 pounds of copper. The joint cost related to the operation was $500,000. Gold sells for $325 per ounce and copper sells for $0.87 per pound. Allocate the joint costs using relative weight. With these costs, what is the profit or loss associated with Copper? Your Answer: Question 6 options: Answer Save Question 7 (1 point) 7 Landmark Coal operates a mine. During July, the company obtained 500 tons of ore, which yielded 250 pounds of gold and 62,500 pounds of copper. The joint cost related to the operation was $500,000. Gold sells for $325 per ounce and copper sells for $0.91 per pound. Allocate the joint costs using the relative sales values. With these costs, what is the profit or loss associated with Copper? Your Answer: Question 7 options: Answer Save Question 8 (1 point) 8 Common costs Question 8 options: A) are fixed costs that are not directly traceable to an individual product line B) normally not avoidable both A and B are true statements Neither A nor B is a true statement