ACCT 434 Week 4 Midterm Exam

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1.Question : (TCO1) ABC systems create

2.Question : (TCO 1) Merriamn Company provides the following ABC costing information:
Activities
Total Costs
Activity-cost drivers
Account inquiry hours
$400,000
10,000 hours
Account billing lines
$280,000
4,000,000 lines
Account verification accounts
$150,000
40,000 accounts
Correspondence letters
$ 50,000
4,000 letters
Total costs
$880,000
The above activities are used by Department A and B as follows:
Department A
Department B
Account inquiry hours
2,000 hours
4,000 hours
Account billing lines
400,000 lines
200,000 lines
Account verification accounts
10,000 accounts
8,000 accounts
Correspondence letters
1,000 letters
1,600 letters
How much of the account billing cost will be assigned to Department B
3. Question : (TCO 2) A master budget

4.Question : (TCO 2) Dalyrymple Company produces a special spray nozzle. The budgeted indirect total cost of inserting the spray nozzle is $80,000. The budgeted number of nozzles to be inserted is 40,000. What is the budgeted indirect cost allocation rate for this activity
5.Question : (TCO 3) Which cost estimation method analyzes accounts in the subsidiary ledger as variable, fixed, or mixed using qualitative methods
6.Question : (TCO 4) In evaluating different alternatives, it is useful to concentrate on

7.Question : (TCO 5) The theory of constraints is used for cost analysis when

8.Question : (TCO 5) Schmidt Corporation produces a part that is used in the manufacture of one of its products. The costs associated with the production of 10,000 units of this part are as follows:
Direct materials
$45,000
Direct labor
65,000
Variable factory overhead
30,000
Fixed factory overhead
70,000
Total costs
$210,000
Of the fixed factory overhead costs, $30,000 is avoidable.
Phil Company has offered to sell…