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What is the purpose of cost allocation – All of the above

The one primary difference between variable and absorption costing is that under – variable costing, companies charge the fixed manufacturing overhead as an expense in the current period. 

Fixed costs are $3.000.000 and the unit contribution margin is $150. What is the break-even point? – 20.000

The reciprocal method  – …fully recognizes the mutual services provided among all support department 

A support department is also called a – service department

Some companies allocate all corporate costs to divisions,… – because these costs are incurred to support division activities

A main product is… – the one product having a high total sales value emerging from a joint production process

In a company, an operating department… – Receives support from the service department

Joint costs… – are costs of a production process that yields multiple products simultaneously

The reciprocal method… – fully recognizes the mutual services provided among all support departments. These allocations can be performed by using repeated iterations of allocations or by formulating and solving linear equations expressing the relationships among the departments.

Which of the following is not a budgeted indirect cost… – Midyear adjustments

What is the purpose of cost allocation? – All of the above

Different production systems take different cost systems. – True

When we talk about physical measures in joint cost allocation methods, we refer to… – Allocate using tangible attributes of the products

The first step in the seven-step approach to job costing is to – identify the job that is the chosen cost object.

Which of the following is true when making cost allocation decisions? – Fairness is more of an objective rather than a valid criterion

When considering the costs allocated to employee recruitment, development and training, these corporate costs can be described as: – Human resource management costs

Which one of the following is not a cost allocation method? – One way allocation method

Which of the following is not one of the purposes of cost allocation? – To charge costs the recipient has no control over 

Which of the following is correct about the direct method? – It allocates support department costs to operating departments only

Which goal of cost allocation is not true: – Managing allocation

What is NOT an influence over the budget indirect cost: – Profitability 

Which are purposes of cost allocation? – All of them above

Which of these is the formula for calculating gross margin? – Sales – total production or acquisition cost

Which costing method uses the actual rate for direct cost and the budgeted rate for indirect costs? – Normal Costing

Which one of this is the preferred criteria for cost allocation? – Cause and Effect

Range of volume where total fixed costs remain constant at a certain level and where the variable cost per unit remains constant at a certain level – Relevant Range

Which of the following statements is TRUE? – Normal costing uses both actual and budgeted rates

Which of the following is true regarding the direct method? – he direct method allocates support department costs to operating departments only, ignoring usage of a support department by other support departments.

The cause-and-effect criterion: – has a linkage between the amount of cost incurred and the reason for the cost

What is the name of the method that assigns service costs to other departments as well as operating departments in a logical subsequent process? – Step-Down method

The calculation to determine target cost is – sales price – desired profit.

The management account provides detailed information for —— users who make, plan, and control managerial decisions. – Internal

Which of the following would NOT cause overheads to be over- or under-absorbed? – The actual costs of direct labor were bigger than the budget

Which of the following does not accurately describe the application of job-order costing? – Manufacturing overhead costs incurred is used to determine total manufacturing costs.

Which of the following is not typically a fixed cost? – Wi-Fi access

Theoretical Capacity is: – the level of capacity based on producing at full efficiency all the time.

What is the biggest disadvantage of the step-down method? – It can only step down; charges for overhead can’t step back up again

What’s the difference between normal and actual costing? – Actual costing uses the actual rate for both direct and indirect costs, whereas normal costing uses the budgeted rate for indirect costs.

Which of the following is not a purpose of cost allocation? – aiding in variable costing for internal reporting

Which of the following statements is false with regards to using fairness as a cost-allocation guide? – It has a linkage between the amount of cost incurred and the reason for the cost 

A production department…? – directly adds value to the product or service

What is a primary criterion used in activity-based costing? – Cause-and-effect

What is NOT a Purpose of cost allocation? – To motivate shareholders

Why are joint costs allocated to individual products? – All of them are correct 

The step-down method or sequential allocation method…? – allocates support-department costs to other support departments and to operating departments in a sequential manner that partially recognizes the mutual services provided among all support departments

How can you allocate corporate costs to divisions? – All of the above

For which of the following industries would job-order costing most likely not be appropriate – Cereal production

Contribution margin results from – Subtracting total variable costs to sales

Which of the following statements is true? – All of the above

What are the four basic cost behavior patterns? – Fixed Costs, Variable Costs, Mixed Costs, Step Costs

Which of the following are not tools for management accounting? – Process Costing

Joint Costs are – costs of a production process that yields multiple products simultaneously.

The physical-measure method – allocates joint costs on the basis of a comparable physical measure such as weight or volume at the split off point. This method is considered less desirable due to the fact that physical measures usually have no relationship to the revenue-generating abilities of a product.