From requirement a, produce widgets first.
20,000 units 1.5 DLH per unit = 30,000 DLH to produce widgets
Use remaining 10,000 DLH available to produce gadgets.
10,000 DLH/1.2 DLH per unit = 8,333 units of gadgets
(20,000 units 90)
Setups: 100,000/500 = 200 per setup
Ordering costs: 40,000/3,200 = 12.50 per order
Maintenance: 200,000/4,000 = 50 per machine hour
Power: 20,000/80,000 = 0.25 per kilowatt hour
Work in progress, May 1 (10% complete)
Started in May
Work in progress, May 31 (20% complete)
Materials and conversion are incurred uniformly throughout the progress.
23. Refer to Figure 5-3. Units started and completed
9. The following budget estimates have been prepared by Flowers Company:
The company likes to maintain a minimum cash balance of 50,000.
Any excess cash is
Decrease in operating costs
Increase in on-time deliveries
The system will cost 400,000 and will last ten years. The system would have a salvage value of
30,000 at the end of ten years. The company's cost of capital is 8 per cent.
e. no change in profits.
1,000 [240 - (270 - 120,000/2,000)] = 30,000 increase
41. Refer to Figure 9-7. Assuming Meco Company is operating at capacity and accepting the order
would require an offsetting redu
Allocate Building Department first, therefore, 50/140
REF: Appendix 3.1
36. Oaks Company has two support departments, Maintenance Department (MD) and Personnel
Department (PD), and two producing departments, P1 and P
Other variable overhead
Variable product costs per unit:
Variable product costs per un
d. mixed cost.
7. Which of the following statements is TRUE about fixed and variable costs?
a. Both costs are constant when considered on a per-unit basis.
b. Both costs are constant when considered on a total basis.
c. Fixed costs
c. Price skimming
d. Target costing
16. _ is where a higher price is charged at the beginning of a product's life cycle.
a. Penetration pricing
b. Predatory pricing
c. Price skimming
d. Target costing
43. Bronco Company sells a product for 10. Budgeted sales for the first quarter of the current year are
The company wants to maintain an inventory of finished unit
39. Assuming all other things are the same, variable cost per unit must have _ if there was an
increase in the break-even point.
a. remained the same
b. increased first, then decreased
d. depends on the circumstances
Chapter 17 - Standard costing and variance analysis 1
1. To determine the unit standard cost for a particular input, a company must decide how much
a. input should be used per unit of output and how much should be paid for the quantity of
none of the above
36. Goal congruence means
a. there is alignment of organizational and managerial goals.
b. the organization is aligned to
120,000 + 2,600 = 122,600
54. Fixed overhead was budgeted at 500,000 and 25,000 direct labour hours were budgeted. If the
fixed overhead volume variance was 12,000 favourable and the fixed overhead spendin
Chapter 18 - Standard costing and variance analysis 2: Further aspects
Froelech Company has developed capacity standards. Information is as follows:
Standard cost of the activity capacity acquired
Standard cost of the activity
d. none of the above.
(6,000 pounds 2.60) + 900 = 16,500
16,500/6,000 pounds = 2.75 per pound
27. During December, 6,000 pounds of raw materials were purchased at a cost of 16 per pound. If
there was an unf
39. Refer to Figure 17-2. Rax's labour rate variance would be
a. 4,300 favourable.
b. 4,300 unfavourable.
c. 2,500 favourable.
d. 2,500 unfavourable.
(2,500 hours 19) - (2,500 hours 18) = 2,500 U
Budgeted fixed overhead for the period is 280,000, and expected capacity for the period is 28,000
direct labour hours.
Calculate the standard fixed overhead rate.
Complete the standard cost card for the product.
a. 10 per DLH
21. The following information is provided:
Assume the division's current ROI is 10 per cent and the firm's minimum required ra
11. Refer to Figure 18-4. What is the materials yield variance?
a. 4,000 (F)
b. 8,000 (F)
c. 8,000 (U)
d. 9,000 (U)
STANDARD YIELD = (4000/5000) 50,000 = 40,000
(40,000 - 36,000) (8,000/4,000) =
The following information was extracted from the accounting records of Noelle Company:
STANDARD COST CARD
8 pounds 1.20 per pound
3 hours 20 per hour
3 hours 6 per hour
Decentralization is the delegation of decision-making authority to successively lower management
levels in an organization. The lower in the organization that authority is delegated, the greater is
the decentralization. Centralization exists when top mana
The following results for the year pertain to the Maddox Division of Ryan Ltd.:
The weighted average cost of capital is 12 per cent. The firm's minimum required rate of return is
14 per cent.
Brad Company developed the following budgeted life-cycle income statement for two proposed
products. Each product's life cycle is expected to be two years.
Cost of goods sold
c. 0.56 hours per unit.
d. 0.50 hours per unit.
1,000 hours/1,800 units = 0.56 hours per unit
38. Refer to Figure 21-5. Sammie's theoretical cycle time for this year would be
a. 2.00 hours per unit.
4. Riemay, SA., has done a cost analysis for its production of sports cards. The following activities
and cost drivers have been developed:
50 + 35 per labour hour
25,000 + 0.01
b. provides an indirect cash inflow by reducing taxes.
c. multiplied by the tax rate equals the depreciation tax shield (i.e. the tax benefit from
d. all of the above
20. A follow-up analysis of an investment de
600,000 (1 - .40) = 360,000
6. If an asset is sold for more than its tax written down value,
a. a gain results and additional taxes are incurred.
b. a gain and tax savings result.
c. a loss results and addi
1) An important aspect of leadership is influencing a group to achieve its goals.
2) Despite the best efforts of researchers, it proved impossible to identify one set of traits
that would always differentiate leaders from nonleaders.
1) Controlling is the process of monitoring, comparing, and correcting work performance.
2) Having a control system reduces the scope of employee empowerment and autonomy.
3) Managers engage in controlling activities to protect the organization
1) The definition of motivation has three key elements: energy, direction, and persistence.
2) According to Maslow's hierarchy of needs theory, lower-order needs are predominantly
satisfied internally while higher-order needs are satisfied exte
Chapter 14 Managers and Communication
1) If a manager clearly and articulately verbalizes instructions to a subordinate,
communication is said to have taken place.
2) Communication does not only serve to inform; it can also act to control behavior.
Chapter 10 Basic Organizational Design
1) Organizational structure is defined as the formal arrangement of jobs within an
2) Organizational structure is the degree to which standardized procedures are in place in an