For Neo
(TCO 1) If products are alike, then for costing purposes: (Points: 5)
a simple costing system will yield accurate cost numbers
an activity-based costing system should be used
multiple indirect-cost rates should be used
varying demands will be placed on resources


2. (TCO 1) Bristol Company produces a special spray nozzle. The budgeted indirect total cost of inserting the spray nozzle is $200,000. The budgeted number of nozzles to be inserted is 80,000. What is the budgeted indirect cost allocation rate for this activity? (Points: 5)
$3.00
$2.50
$2.00
$3.50


3. (TCO 2) Variable overhead costs include: (Points: 5)
machine maintenance
depreciation on plant equipment
plant-leasing costs
the plant manager's salary


4. (TCO 2) Information pertaining to Brenton Corporation's sales revenue is presented in the following table:
February March April
Cash Sales $160,000 $150,000 $120,000
Credit Sales 300,000 400,000 280,000
Total Sales $460,000 $550,000 $400,000
Management estimates that 5% of credit sales are not collectible. Of the credit sales that are collectible, 75% are collected in the month of sale and the remainder in the month following the sale. Cost of purchases of inventory each month are 80% of the next month's projected total sales. All purchases of inventory are on account; 50% are paid in the month of purchase, and the remainder is paid in the month following the purchase.
Brenton's budgeted total cash payments in March for inventory purchases are
(Points: 5)
$385,000.
$505,000.
$306,250.
$280,000.


5. (TCO 2) Financing decisions PRIMARILY deal with: (Points: 5)
the use of scarce resources
how to obtain funds to acquire resources
acquiring equipment and buildings
preparing financial statements for stockholders


6. (TCO 3) The cost function y = 1,000 + 5X: (Points: 5)
represents a fixed cost
is not a straight line
has an intercept of 1,000
has a slope coefficient of 1,000


7. (TCO 3) Which cost estimation method may use time-and-motion studies to analyze the relationship between inputs and outputs in physical terms? (Points: 5)
the quantitative analysis method
the account analysis method
the conference method
the industrial engineering method


8. (TCO 4) A computer system installed last year is an example of a(n): (Points: 5)
avoidable cost
differential cost
relevant cost
sunk cost


9. (TCO 5) Throughput contribution equals revenues minus: (Points: 5)
operating costs
direct material costs of goods sold
direct material costs and minus operating costs
direct material and direct labor costs


10. (TCO 5) Keeping the bottleneck operation busy and subordinating all nonbottleneck operations to the bottleneck operation involves: (Points: 5)
keeping the bottleneck resource busy at least 90% of the time
maximizing the contribution margin of the nonbottleneck operation
having the workers at the nonbottleneck operation or machine improving their productivity
None of these answers is correct


11. (TCO 6) Which of the following methods of allocating costs use market-based data? (Points: 5)
Sales value at splitoff method.
Estimated net realizable value method.
The constant gross-margin percentage method.
All of the above use market-based methods.


12. (TCO 6) Which of the following is a disadvantage of the physical-measure method of allocating joint costs? (Points: 5)
The measurement basis for each product may be different.
The need for a common denominator.
The physical measure may not reflect the product's ability to generate revenues.
All of the above are disadvantages.


13. (TCO 7) Life-cycle budgeting is particularly important when: (Points: 5)
the development period for R&D is short and inexpensive
there are significant nonproduction costs
most costs are locked in during production
a low percentage of costs are incurred before any revenues are received


14. (TCO 7) Pritchard Company manufactures a product that has a variable cost of $30 per unit. Fixed costs total $2,000,000, allocated on the basis of the number of units produced. Selling price is computer by adding a 12% markup to full cost. How much should the selling price be per unit for 300,000 units? (Points: 5)
$49
$43.75
$42.
$41.07.