Managerial Accounting - Chapter 6 Practice

32 Questions  I  By Rmerklen3

  
Changes are done, please start the quiz.


Question Excerpt

Removing question excerpt is a premium feature

Upgrade and get a lot more done!
1.  §The allocation process may make fixed costs appear to be variable costs §This happens when fixed costs are unitized §Unitized fixed costs are stated on a per unit basis §When managers increase sales they also increase their allocated general and administrative costs §This could lead to decisions which could hurt the profitability of the company
A.
B.
2.  §Allocations of fixed costs can be made that they appear fixed to managers §This is achieved by lump-sum allocations of fixed costs §A lump-sum allocation is not affected by changes in the activity level of the organizational unit §Lump-sum allocations generally should remain the same from year to year
A.
B.
3.  Cost Allocation Process - The first step of Cost Allocation is to determine the cost objective.  Which of the below are associated with that step?
A.
B.
C.
D.
E.
F.
G.
4.  Cost Allocation Process - The second step of Cost Allocation is to form cost pools.  Which of the below are associated with that step?
A.
B.
C.
D.
E.
F.
G.
5.  When fixed costs are stated on a per unit basis:
A.
B.
C.
D.
6.  Allocating Service Department Costs - Organizational units of manufacturing firms classified as either: Service departments provide indirect support
A.
B.
7.  Allocation of actual amounts allows service department to pass on cost of inefficiencies and waste to production departments
A.
B.
8.  Relating Cost Pools to Products Using Cost Drivers §The company will estimate the total cost assigned to each cost pool §The company will then decide on an appropriate driver, such as number of inspections for inspection costs §The company will then estimate the activity in the driver §The overhead allocation rate is: (Estimated total cost of the cost pool)/(Estimated activity in the driver)
A.
B.
9.  In the cost allocation process, an allocation base:
A.
B.
C.
D.
10.  Which of the following is not a volume-related cost driver?
A.
B.
C.
D.
11.  Fixed Indirect Costs – Other Approaches Which is Ability to bear costs?
A.
B.
C.
12.  The direct method of allocating costs:
A.
B.
C.
D.
13.  In the cost allocation process, the cost objective is the:
A.
B.
C.
D.
14.  Cost Allocation Process - The third step of Cost Allocation is to select an allocation base that relates the cost pool to the cost objectives.  Which of the below are associated with that step?
A.
B.
C.
D.
E.
F.
G.
15.  Fixed Indirect Costs – Other Approaches Which is Equity approach to allocation?
A.
B.
C.
16.  §Some companies assign overhead to products using only one or two overhead cost pools §Although simple, this may lead to distortion of cost allocation §Some products will be overcosted §Some products will be undercosted §This problem is solved by setting up separate cost pools for overhead
A.
B.
17.  Cost Allocation -  One purpose of Cost Allocation is to encourage evaluation of services.  Which options are associated with that purpose?
A.
B.
C.
D.
E.
F.
G.
H.
18.  §Management should allocate based on actual rather than budgeted costs
A.
B.
19.  Pros and Cons of ABC §Benefits §Less likely to undercost complex low volume products and overcost simple high volume products §Drivers used in ABC are not always volume related §ABC may lead to improvements in cost control §Costs are not buried in one or two pools
A.
B.
20.  Fixed Indirect Costs – Other Approaches Which is Relative benefits approach to allocation?
A.
B.
C.
21.  In almost all situations, determining the true allocation is impossible               Managers support the allocation which makes them look best               Managers reject allocations which cast an unfavorable light on their performance
A.
B.
22.  Which ISN'T a purpose of Cost Allocation?
A.
B.
C.
D.
E.
23.  Cost Allocation -  One purpose of Cost Allocation is to provide "full cost" information.  Which options are associated with that purpose?
A.
B.
C.
D.
E.
F.
G.
H.
24.  Allocating Service Department Costs - Organizational units of manufacturing firms classified as either: Cost pools are formed by service departments and are allocated to production departments.
A.
B.
25.  Cost Allocation -  One purpose of Cost Allocation is to provide information for decisions.  Which options are associated with that purpose?
A.
B.
C.
D.
E.
F.
G.
H.
26.  Cost Allocation -  One purpose of Cost Allocation is to reduce frivolous use of common resources.  Which options are associated with that purpose?
A.
B.
C.
D.
E.
F.
G.
H.
27.  Order of the Activity-Based Costing approach:
A. 1
A.
B. 2
B.
C. 3
C.
D. 4
D.
28.  Pros and Cons of ABC §Limitations §More costly to develop and maintain than a traditional costing system §Allocations are made from each cost pool to each product §Used to develop full cost of products §Includes fixed costs §Lacks incremental information necessary for decision making
A.
B.
29.  Problems with Cost Allocation - Potential problems are brought about by:
A.
B.
C.
D.
E.
30.  All of the following are reasons indirect costs are allocated to products, services and departments, except:
A.
B.
C.
D.
31.  Allocating Service Department Costs - Organizational units of manufacturing firms classified as either: Production departments provide indirect support
A.
B.
32.  Cost allocation is achieved by a three step process:
A. 1
A.
B. 2
B.
C. 3
C.
Back to top


to post comments.

Removing ad is a premium feature

Upgrade and get a lot more done!
Take Another Quiz