Question tco 6 which of the following is not a reason

This preview shows page 12 - 16 out of 17 pages.

7. Question : (TCO 6) Which of the following is not a reason that companies allocate costs? Student Answer: To calculate the full cost of products for financial reporting purposes To discourage managers from using external suppliers To reduce the frivolous use of company resources To provide information needed by managers to make appropriate decisions
Instructor Explanation: Chapter 6, Page 198 Points Received: 4 of 4 Comments: 8. Question : (TCO 6) Which of the following statements about cost pools is not true?
Instructor Explanation: Chapter 6, Page 202 Points Received: 4 of 4 Comments:
9. Question : (TCO 6) The building maintenance department for Jones Manufacturing Company budgets annual costs of $4,200,000 based on the expected operating level for the coming year. The costs are allocated to two production departments. The following data relate to the potential allocation bases: Production Dept. 1 Production Dept. 2 Square footage 15,000 45,000 Direct labor hours 25,000 50,000 If Jones assigns costs to departments based on square footage, how much total costs will be allocated to Production Department 1? Instructor Explanation: Chapter 6, Pages 213-214
Points Received: 4 of 4 Comments:
10. Question : (TCO 7) A company is currently making a necessary component in house (the company is producing the component for its own use). The company has received an offer to buy the component from an outside supplier. A machine is being rented to make the component. If the company were to buy the component, the machine would no longer be rented. The rent on the machine, in relation to the decision to make or buy the component, is:
Instructor Explanation: Chapter 7, Pages 252-254 Points Received: 4 of 4 Comments: 11. Question : (TCO 7) Ricket Company has 1,500 obsolete calculators that are carried in inventory at a cost of $13,200. If these calculators are upgraded at a cost of $9,500, they could be sold for $22,500. Alternatively, the calculators could be sold "as is" for $9,000. What is the net advantage or disadvantage of reworking the calculators? Student Answer: $13,000 advantage $4,000 advantage $9,200 disadvantage $200 disadvantage
Instructor Explanation: Chapter 7, Pages 251-252
($22,500 - $9,000) - ($9,500 - $0) = $4,000 Points Received: 4 of 4 Comments:

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture