We have 10 Quiz pzl answer all

11. When interpreting a CVP graph, which of the following is NOT correct?

a. The breakeven point is where the total revenue line meets the fixed cost line.

b. The anticipated profit or loss at any given level of sales is measured by the vertical distance between the total revenue line and the total expense line.

c. The total revenue line starts at the origin.

d. When sales are below the breakeven intersection, the company incurs a loss.

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12. The Work in Process inventory account of a manufacturing company shows a balance of $2,400 at the end of an accounting period. The job cost sheets of two uncompleted jobs show charges of $400 and $470for direct materials and charges of $200 and $250 for direct labour. From this information, what predetermined overhead rate, as a percentage of direct labour costs, does the company appear to be using?

a. 240%.

b. 80%.

c. 300%.

d. 125%.

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13. The Watts Company uses predetermined overhead rates to apply manufacturing overhead to jobs. The predetermined overhead rate is based on labour cost in Department A and on machine hours in Department B. At the beginning of the year, the company made the following estimates:

	Department A	Department B
Direct labour cost	$60,000	$40,000
Manufacturing overhead	$66,000	$90,000
Direct labour hours	6,000	8,000
Machine hours	2,000	6,000

What predetermined overhead rates would be used in Departments A and B, respectively?

a. 50% and $5.00.

b. 200% and $5.00.

c. 110% and $15.00.

d. 50% and $8.00.

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14. Simplex Company has the following estimated costs for next year:

Direct materials	$15,000
Direct labour	55,000
Sales commissions	75,000
Salary of production supervisor	65,000
Indirect materials	41,080
Advertising expenses	11,000
Rent on factory equipment	16,000

Simplex estimates that 10,000 direct labour and 16,000 machine hours will be worked during the year. If overhead is applied on the basis of machine hours, what will be the overhead rate per hour?

a. $6.94.

b. $8.56.

c. $3.50.

d. $7.63.

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15. Which of the following statements refers to management accounting information?

a. It primarily measures and records business transactions

b. The reports are generally delayed and historical

c. There are no regulations governing the reports

d. The reports are audited so they can be used in confidence by potential investors

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16. Which one of the following is a variable cost for an insurance company?

a. rent

b. sales commissions

c. property taxes

d. amortization of office equipment

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17. Costs incurred at which of the following activity levels should NOT be allocated to products for decision-making purposes?

a. Organization-sustaining activities.

b. Batch-level activities.

c. Product-level activities.

d. Unit-level activities.

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18. Arranging for a shipment of a number of different products to a customer is an example of an activity at which of the following levels?

a. Customer-level activity.

b. Unit-level activity.

c. Batch-level activity.

d. Organization-sustaining activity.

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19. Which of the following is NOT a limitation of activity-based costing?

a. In practice, most managers insist on fully allocating all costs to products, customers, and other costing objects in an activity-based costing system. This results in overstated costs.

b. Maintaining an activity-based costing system is more costly than maintaining a traditional direct labour-based costing system.

c. More accurate product costs may result in increasing the selling prices of some products.

d. Changing from a traditional direct labour-based costing system to an activity-based costing system changes product margins and other key performance indicators used by managers. Such changes are often resisted by managers.

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20. Paul Company has two products: A and B. The company uses activity-based costing. The estimated total cost and expected activity for each of the company's three activity cost pools are as follows:

Activity Cost Pool	Est. Cost	Product A	Product B	Total
Activity 1	$22,000	400	100	500
Activity 2	40,861	380	200	580
Activity 3	14,600	500	250	750

The activity rate under the activity-based costing system for Activity 2 is closest to which of the following?

a. $70.45.

b. $58.40.

c. $19.47.

d. $28.87.

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