ACCT 434 Week 3 Quiz, Cost Behavior Decision Making Quality

ACCT 434 Week 3 Quiz, Cost Behavior Decision Making Quality

1. (TCO 3) Dougherty Company employs 20 individuals. Eight employees are paid $12 per hour and the rest are salaried employees paid $3,000 a month. How would total costs of personnel be classified?

2. (TCO 3) For January, the cost components of a picture frame include $0.35 for the glass, $0.65 for the wooden frame, and $0.80 for assembly. The assembly desk and tools cost $400. A total of 1,000 frames is expected to be produced in the coming year. What cost function best represents these costs?

3. (TCO 3) Which cost estimation method uses a formal mathematical method to develop cost functions based on past data?

4. (TCO 3) Penny’s TV and Appliance Store is a small company that has hired you to perform some management advisory services. The following information pertains to 20X8 operations: Sales (2,000 televisions) $900,000; Cost of goods sold $400,000; Store manager’s salary per year $70,000; Operating costs per year $157,000; Advertising and promotion per year $15,000; Commissions (4% of sales) $36,000. What are the estimated total costs if Penny’s expects to sell 3,000 units next year?

5. (TCO 4) The formal process of choosing among alternatives is known as a(n)

6. (TCO 4) When using the five-step decision process, which one of the following steps should be done last?

7. (TCO 4) Sunk costs

8. (TCO 4) Northwoods Incorporated manufactures rustic furniture. The cost accounting system estimates manufacturing costs to be $90 per table, consisting of 80% variable costs and 20% fixed costs. The company has surplus capacity available. It is Northwoods’ policy to add a 50% markup to full costs. A large hotel chain is currently expanding and has decided to decorate all new hotels using the rustic style. Northwoods is invited to submit a bid to the hotel chain. What is the lowest price per unit Northwoods should bid on this long-term order?

9. (TCO 5) Throughput contribution equals revenues minus

10. (TCO 5) A machine has been identified as a bottleneck and the source of the constraint for a manufacturing company that has multiple products and multiple machines. One way the company can overcome the bottleneck is

ACCT 434 Week 3 Quiz 2

1. Related to Problem #1, use the high-low method to determine the estimating cost function with machine-hours as the cost driver

2. Related to Problem #1, use the high-low method to determine the estimating cost function with kilowatt-hours as the cost driver.

3. Related to Problem #1, for July, the company ran the machines for 3,000 hours and used 4,000,000 kilowatt-hours of power. The overhead costs totaled $114,000. Which cost driver was the best predictor for July?

4. Related to Problem #2, what amount of the MNO production costs is avoidable?

5. Related to Problem #2, should the company outsource MNO? Why or why not?

6. Related to Problem #2, what other items should the company consider before outsourcing any of the parts it manufactures?