ACC\u00a0434\u00a0Final\u00a0Exams\t1.\u00a0(TCO\u00a01)\u00a0a\u00a0significant\u00a0limitation\u00a0of\u00a0activity-based\u00a0costing\u00a0is\u00a0the\u00a0(Points:\u00a05)\t\u00a0\t2.\u00a0(TCO\u00a01)\u00a0Ireland\u00a0Company\u00a0produces\u00a0a\u00a0special\u00a0spray\u00a0nozzle.\u00a0\u00a0The\u00a0budgeted\u00a0indirect\u00a0total\u00a0cost\u00a0of\u00a0inserting\u00a0the\u00a0spray\u00a0nozzle\u00a0is\u00a0$180,000.\u00a0\u00a0The\u00a0budgeted\u00a0number\u00a0of\u00a0nozzles\u00a0to\u00a0be\u00a0inserted\u00a0is\u00a080,000.\u00a0\u00a0What\u00a0is\u00a0the\u00a0budgeted\u00a0indirect\u00a0cost\u00a0allocation\u00a0rate\u00a0for\u00a0this\u00a0activity?\u00a0(Points:\u00a05)\t3.\u00a0(TCO\u00a02)\u00a0Overhead\u00a0costs\u00a0have\u00a0been\u00a0increasing\u00a0due\u00a0to\u00a0all\u00a0of\u00a0the\u00a0following\u00a0except\u00a0(Points:\u00a05)\t4.\u00a0(TCO\u00a02)\u00a0Information\u00a0pertaining\u00a0to\u00a0Brenton\u00a0Corporation’s\u00a0sales\u00a0revenue\u00a0is\u00a0presented\u00a0in\u00a0the\u00a0following\u00a0table:\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd\u00a0February \ufffd \ufffd\u00a0\u00a0\u00a0\u00a0March \ufffd \ufffd \ufffdApril\t \ufffd \ufffd\u00a0Cash\u00a0Sales \ufffd \ufffd \ufffd \ufffd$160,000 \ufffd \ufffd\u00a0\u00a0$150,000 \ufffd\u00a0\u00a0\u00a0\u00a0$120,000\t \ufffd \ufffd\u00a0Credit\u00a0Sales \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0\u00a0300,000 \ufffd \ufffd\u00a0\u00a0\u00a0\u00a0400,000 \ufffd \ufffd\u00a0280,000\t \ufffd \ufffd\u00a0Total\u00a0Sales \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0\u00a0$460,000 \ufffd \ufffd\u00a0\u00a0$550,000 \ufffd \ufffd$400,000\tManagement\u00a0estimates\u00a0that\u00a05%\u00a0of\u00a0credit\u00a0sales\u00a0are\u00a0not\u00a0collectible.\u00a0\u00a0Of\u00a0the\u00a0credit\u00a0sales\u00a0that\u00a0are\u00a0collectible,\u00a075%\u00a0are\u00a0collected\u00a0in\u00a0the\u00a0month\u00a0of\u00a0sale\u00a0and\u00a0the\u00a0remainder\u00a0in\u00a0the\u00a0month\u00a0following\u00a0the\u00a0sale.\u00a0\u00a0Cost\u00a0of\u00a0purchases\u00a0of\u00a0inventory\u00a0each\u00a0month\u00a0is\u00a080%\u00a0of\u00a0the\u00a0next\u00a0month’s\u00a0projected\u00a0total\u00a0sales.\u00a0\u00a0All\u00a0purchases\u00a0of\u00a0inventory\u00a0are\u00a0on\u00a0\t\u00a0\t5.\u00a0(TCO\u00a02)\u00a0Budgeting\u00a0provides\u00a0all\u00a0of\u00a0the\u00a0following\u00a0EXCEPT\t\u00a0\t6.\u00a0(TCO\u00a03)\u00a0the\u00a0cost\u00a0components\u00a0of\u00a0an\u00a0air\u00a0conditioner\u00a0include\u00a0$35\u00a0for\u00a0the\u00a0compressor,\u00a0$15\u00a0for\u00a0the\u00a0sheet-molded\u00a0compound\u00a0frame,\u00a0and\u00a0$100\u00a0per\u00a0unit\u00a0for\u00a0assembly.\u00a0\u00a0The\u00a0factory\u00a0machines-and-tools\u00a0cost\u00a0is\u00a0$80,000.\u00a0\u00a0The\u00a0company\u00a0expects\u00a0to\u00a0produce\u00a01,500\u00a0air\u00a0conditioners\u00a0in\u00a0the\u00a0coming\u00a0year.\u00a0\u00a0What\u00a0cost\u00a0function\u00a0best\u00a0represents\u00a0these\u00a0costs?\t7.\u00a0(TCO\u00a03)\u00a0which\u00a0cost\u00a0estimation\u00a0method\u00a0uses\u00a0a\u00a0formal\u00a0mathematical\u00a0method\u00a0to\u00a0develop\u00a0cost\u00a0functions\u00a0based\u00a0on\u00a0past\u00a0data?\t\u00a0\t\u00a0\t8.\u00a0(TCO\u00a04)\u00a0Sunk\u00a0costs\t\u00a0\t9.\u00a0(TCO\u00a05)\u00a0in\u00a0the\u00a0theory\u00a0of\u00a0constraints,\u00a0the\u00a0only\u00a0direct\u00a0costs\u00a0are\t\u00a0\t10.\u00a0(TCO\u00a05)\u00a0Producing\u00a0more\u00a0non\u00a0bottleneck\u00a0output\t\u00a0\t11.\u00a0(TCO\u00a06)\u00a0which\u00a0of\u00a0the\u00a0following\u00a0methods\u00a0of\u00a0allocating\u00a0costs\u00a0use\u00a0market-based\u00a0data?\t\u00a0\t12.\u00a0(TCO\u00a06)\u00a0the\u00a0benefits-received\u00a0criteria\u00a0for\u00a0allocating\u00a0joint\u00a0costs\u00a0indicates\u00a0market-based\u00a0measures\u00a0are\u00a0preferred\u00a0because\t\u00a0\t13.\u00a0(TCO\u00a07)\u00a0Life-cycle\u00a0budgeting\u00a0is\u00a0particularly\u00a0important\u00a0when\t14.\u00a0(TCO\u00a07)\u00a0Pritchard\u00a0Company\u00a0manufactures\u00a0a\u00a0product\u00a0that\u00a0has\u00a0a\u00a0variable\u00a0cost\u00a0of\u00a0$30\u00a0per\u00a0unit.\u00a0\u00a0Fixed\u00a0costs\u00a0total\u00a0$2,000,000,\u00a0allocated\u00a0on\u00a0the\u00a0basis\u00a0of\u00a0the\u00a0number\u00a0of\u00a0units\u00a0produced.\u00a0\u00a0Selling\u00a0price\u00a0is\u00a0computer\u00a0by\u00a0adding\u00a0a\u00a012%\u00a0markup\u00a0to\u00a0full\u00a0cost.\u00a0\u00a0How\u00a0much\u00a0should\u00a0the\u00a0selling\u00a0price\u00a0be\u00a0per\u00a0unit\u00a0for\u00a0300,000\u00a0units?\t15.\u00a0(TCO\u00a08)\u00a0the\u00a0costs\u00a0used\u00a0in\u00a0cost-based\u00a0transfer\u00a0prices\t\u00a0\t16.\u00a0(TCO\u00a08)\u00a0Division\u00a0A\u00a0sells\u00a0soybean\u00a0paste\u00a0internally\u00a0to\u00a0Division\u00a0B,\u00a0which\u00a0in\u00a0turn,\u00a0produces\u00a0soybean\u00a0burgers\u00a0that\u00a0sell\u00a0for\u00a0$5\u00a0per\u00a0pound.\u00a0\u00a0Division\u00a0A\u00a0incurs\u00a0costs\u00a0of\u00a0$0.80\u00a0per\u00a0pound\u00a0while\u00a0Division\u00a0B\u00a0incurs\u00a0additional\u00a0costs\u00a0of\u00a0$3\u00a0per\u00a0pound.\tWhat\u00a0is\u00a0Division\u00a0A’s\u00a0operating\u00a0income\u00a0per\u00a0pound,\u00a0assuming\u00a0the\u00a0transfer\u00a0price\u00a0of\u00a0the\u00a0soybean\u00a0paste\u00a0is\u00a0set\u00a0at\u00a0$1.25\u00a0per\u00a0pound?\t17.\u00a0(TCO\u00a08)\u00a0Transferring\u00a0products\u00a0or\u00a0services\u00a0at\u00a0market\u00a0prices\u00a0generally\u00a0leads\u00a0to\u00a0optimal\u00a0decisions\u00a0when\t18.\u00a0(TCO\u00a09)\u00a0to\u00a0guide\u00a0cost\u00a0allocation\u00a0decisions,\u00a0the\u00a0benefits-received\u00a0criterion\t\u00a0\t19.\u00a0(TCO\u00a09)\u00a0The\u00a0Hassan\u00a0Corporation\u00a0has\u00a0an\u00a0electric\u00a0mixer\u00a0division\u00a0and\u00a0an\u00a0electric\u00a0lamp\u00a0division.\u00a0\u00a0Of\u00a0a\u00a0$50,000,000\u00a0bond\u00a0issuance,\u00a0the\u00a0electric\u00a0mixer\u00a0division\u00a0used\u00a0$24,000,000\u00a0and\u00a0the\u00a0electric\u00a0lamp\u00a0division\u00a0used\u00a0$26,000,000\u00a0for\u00a0expansion.\u00a0\u00a0Interest\u00a0costs\u00a0on\u00a0the\u00a0bond\u00a0totaled\u00a0$1,500,000\u00a0for\u00a0the\u00a0year.\u00a0\u00a0What\u00a0amount\u00a0of\u00a0interest\u00a0costs\u00a0should\u00a0be\u00a0allocated\u00a0to\u00a0the\u00a0electric\u00a0mixer\u00a0division?\t\u00a0\t20.\u00a0(TCO\u00a010)\u00a0A\u00a0“what-if”\u00a0technique\u00a0that\u00a0examines\u00a0how\u00a0a\u00a0result\u00a0will\u00a0change\u00a0if\u00a0the\u00a0original\u00a0predicted\u00a0data\u00a0are\u00a0not\u00a0achieved\u00a0or\u00a0if\u00a0an\u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y\u00a0is\u00a0estimated\u00a0to\u00a0be\u00a0100,000\u00a0units.\u00a0\u00a0The\u00a0annual\u00a0cost\u00a0of\u00a0carrying\u00a0one\u00a0unit\u00a0in\u00a0inventory\u00a0is\u00a0$1.60,\u00a0and\u00a0the\u00a0cost\u00a0to\u00a0initiate\u00a0a\u00a0production\u00a0run\u00a0is\u00a0$100.\u00a0\u00a0There\u00a0are\u00a0no\u00a0flag\u00a0displays\u00a0on\u00a0hand\u00a0but\u00a0Liberty\u00a0had\u00a0scheduled\u00a070\u00a0equal\u00a0production\u00a0runs\u00a0of\u00a0the\u00a0display\u00a0sets\u00a0for\u00a0the\u00a0coming\u00a0year,\u00a0the\u00a0first\u00a0of\u00a0which\u00a0is\u00a0to\u00a0be\u00a0run\u00a0immediately.\u00a0\u00a0Liberty\u00a0Celebrations\u00a0has\u00a0250\u00a0business\u00a0days\u00a0per\u00a0year.\u00a0\u00a0Assume\u00a0that\u00a0sales\u00a0occur\u00a0uniformly\u00a0throughout\u00a0the\u00a0year\u00a0and\u00a0that\u00a0production\u00a0is\u00a0instantaneous.\tThe\u00a0estimated\u00a0total\u00a0setup\u00a0cost\u00a0for\u00a0the\u00a0flag\u00a0displays\u00a0for\u00a0the\u00a0coming\u00a0year\u00a0is\t1.\u00a0If\u00a0Liberty\u00a0Celebrations\u00a0does\u00a0not\u00a0maintain\u00a0a\u00a0safety\u00a0stock,\u00a0the\u00a0estimated\u00a0total\u00a0carrying\u00a0cost\u00a0for\u00a0the\u00a0flag\u00a0displays\u00a0for\u00a0the\u00a0coming\u00a0year\u00a0is\t100000\/60\u00a0=\u00a01667\u00a0units\u00a0per\u00a0run\tRussell.Company.has.the.following.projected.account.balances.for.June.30,.20X5:\u00a0Accounts\u00a0payable\u00a0$40,000\u00a0Sales\u00a0$800,000\u00a0Accounts\u00a0receivable\u00a0$100,000\u00a0Capital\u00a0stock\u00a0$400,000\u00a0Depreciation,\u00a0factory\u00a0$24,000\u00a0Retained\u00a0earnings\u00a0?\u00a0Inventories\u00a0(5\/31\u00a0&\u00a06\/30)\u00a0$180,000\u00a0Cash\u00a0$56,000\u00a0Direct\u00a0materials\u00a0used\u00a0$200,000\u00a0Equipment,\u00a0net\u00a0$240,000\u00a0Office\u00a0salaries\u00a0$80,000\u00a0Buildings,\u00a0net\u00a0$400,000\u00a0Insurance,\u00a0factory\u00a0$4,000\u00a0Utilities,\u00a0factory\u00a0$16,000\u00a0Plant\u00a0wages\u00a0$140,000\u00a0Selling\u00a0expenses\u00a0$60,000\u00a0Bonds\u00a0payable\u00a0$160,000\u00a0Maintenance,\u00a0factory\u00a0$28,000\u00a0Required\t\u00a0\ta)\u00a0Prepare.a.budgeted.income.statement.for.June.20X5.\t\u00a0\tb)\u00a0Prepare.a.budgeted.balance.sheet.as.of.June.30,.20X5.\u00a0(Points:\u00a025)\t2.\u00a0(TCO\u00a05)\u00a0Steven’s\u00a0Medical\u00a0Equipment\u00a0Company\u00a0manufactures\u00a0hospital\u00a0beds.\u00a0Its\u00a0most\u00a0popular\u00a0model,\u00a0Deluxe,\u00a0sells\u00a0for\u00a0$5,000.\u00a0It\u00a0has\u00a0variable\u00a0costs\u00a0totaling\u00a0$2,800\u00a0and\u00a0fixed\u00a0costs\u00a0of\u00a0$1,000\u00a0per\u00a0unit,\u00a0based\u00a0on\u00a0an\u00a0average\u00a0production\u00a0run\u00a0of\u00a05,000\u00a0units.\u00a0It\u00a0normally\u00a0has\u00a0four\u00a0production\u00a0runs\u00a0a\u00a0year,\u00a0with\u00a0$600,000\u00a0in\u00a0setup\u00a0costs\u00a0each\u00a0time.\u00a0Plant\u00a0capacity\u00a0can\u00a0handle\u00a0up\u00a0to\u00a0six\u00a0runs\u00a0a\u00a0year\u00a0for\u00a0a\u00a0total\u00a0of\u00a030,000\u00a0beds.\u00a0A\u00a0competitor\u00a0is\u00a0introducing\u00a0a\u00a0new\u00a0hospital\u00a0bed\u00a0similar\u00a0to\u00a0Deluxe\u00a0that\u00a0will\u2026\u2026..?\u00a0(Points:\u00a025)\t2.\u00a0(TCO\u00a05)\u00a0Robert’s\u00a0Medical\u00a0Equipment\u00a0Company\u00a0manufactures\u00a0hospital\u00a0beds.\u00a0Its\u00a0most\u00a0popular\u00a0model,\u00a0Deluxe,\u00a0sells\u00a0for\u00a0$5,000.\u00a0It\u00a0has\u00a0variable\u00a0costs\u00a0totaling\u00a0$2,800\u00a0and\u00a0fixed\u00a0costs\u00a0of\u00a0$1,000\u00a0per\u00a0unit,\u00a0based\u00a0on\u00a0an\u00a0average\u00a0production\u00a0run\u00a0of\u00a05,000\u00a0units.\u00a0It\u00a0normally\u00a0has\u00a0four\u00a0production\u00a0runs\u00a0a\u00a0year,\u00a0with\u00a0$400,000\u00a0in\u00a0setup\u00a0costs\u00a0each\u00a0time.\u00a0Plant\u00a0capacity\u00a0can\u00a0handle\u00a0up\u00a0to\u00a0six\u00a0runs\u00a0a\u00a0year\u00a0for\u00a0a\u00a0total\u00a0of\u00a030,000\u00a0beds.\tA\u00a0competitor\u00a0is\u00a0introducing\u00a0a\u00a0new\u00a0hospital\u00a0bed\u00a0similar\u00a0to\u00a0Deluxe\u00a0that\u00a0will\u00a0sell\u00a0for\u00a0$4,000.\u00a0Management\u00a0believes\u00a0it\u00a0must\u00a0lower\u00a0the\u00a0price\u00a0to\u00a0compete.\u00a0Marketing\u00a0believes\u00a0that\u00a0the\u00a0new\u00a0price\u00a0will\u00a0increase\u00a0sales\u00a0by\u00a025%\u00a0a\u00a0year.\u00a0The\u00a0plant\u00a0manager\u00a0thinks\u00a0that\u00a0production\u00a0can\u00a0increase\u00a0by\u00a025%\u00a0with\u00a0the\u00a0same\u00a0level\u00a0of\u00a0fixed\u00a0costs.\u00a0The\u00a0company\u00a0currently\u00a0sells\u00a0all\u00a0the\u00a0Deluxe\u00a0beds\u00a0it\u00a0can\u00a0produce.\t\u00a0\tQuestion\u00a02:\u00a0\u00a0What\u00a0is\u00a0the\u00a0annual\u00a0operating\u00a0income\u00a0from\u00a0Deluxe\u00a0if\u00a0the\u00a0price\u00a0is\u00a0reduced\u00a0to\u00a0$4,000\u00a0and\u00a0sales\u00a0in\u00a0units\u00a0increase\u00a0by\u00a025%?\tSales\u00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250<\/p>\n","protected":false},"excerpt":{"rendered":"
ACC\u00a0434\u00a0Final\u00a0Exams 1.\u00a0(TCO\u00a01)\u00a0a\u00a0significant\u00a0limitation\u00a0of\u00a0activity-based\u00a0costing\u00a0is\u00a0the\u00a0(Points:\u00a05) \u00a0 2.\u00a0(TCO\u00a01)\u00a0Ireland\u00a0Company\u00a0produces\u00a0a\u00a0special\u00a0spray\u00a0nozzle.\u00a0\u00a0The\u00a0budgeted\u00a0indirect\u00a0total\u00a0cost\u00a0of\u00a0inserting\u00a0the\u00a0spray\u00a0nozzle\u00a0is\u00a0$180,000.\u00a0\u00a0The\u00a0budgeted\u00a0number\u00a0of\u00a0nozzles\u00a0to\u00a0be\u00a0inserted\u00a0is\u00a080,000.\u00a0\u00a0What\u00a0is\u00a0the\u00a0budgeted\u00a0indirect\u00a0cost\u00a0allocation\u00a0rate\u00a0for\u00a0this\u00a0activity?\u00a0(Points:\u00a05) 3.\u00a0(TCO\u00a02)\u00a0Overhead\u00a0costs\u00a0have\u00a0been\u00a0increasing\u00a0due\u00a0to\u00a0all\u00a0of\u00a0the\u00a0following\u00a0except\u00a0(Points:\u00a05) 4.\u00a0(TCO\u00a02)\u00a0Information\u00a0pertaining\u00a0to\u00a0Brenton\u00a0Corporation’s\u00a0sales\u00a0revenue\u00a0is\u00a0presented\u00a0in\u00a0the\u00a0following\u00a0table: \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd\u00a0February \ufffd \ufffd\u00a0\u00a0\u00a0\u00a0March \ufffd \ufffd \ufffdApril \ufffd \ufffd\u00a0Cash\u00a0Sales \ufffd \ufffd \ufffd \ufffd$160,000 \ufffd \ufffd\u00a0\u00a0$150,000 \ufffd\u00a0\u00a0\u00a0\u00a0$120,000 \ufffd \ufffd\u00a0Credit\u00a0Sales \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0\u00a0300,000 \ufffd \ufffd\u00a0\u00a0\u00a0\u00a0400,000 \ufffd \ufffd\u00a0280,000 \ufffd \ufffd\u00a0Total\u00a0Sales \ufffd Read More …<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-200922","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/200922","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/comments?post=200922"}],"version-history":[{"count":0,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/200922\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/media?parent=200922"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/categories?post=200922"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/tags?post=200922"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}