Deck 15: Cost Allocation, Customer-Profitability Analysis, and Sales-Variance Analysis

Question 1

For each cost pool listed select an appropriate allocation base from the list below. An allocation base may be used only once. Assume a manufacturing company.
Cost pools:

-Vice President of Finance's office expenses

A) Number of employees per department
B) Employee wages and salaries per department
C) Production facility square footage
D) Hours of operation of each production department
E) Machine hours by department
F) Operations costs of each department
G) Hours of computer use per month per department
H) Indirect labor-hours per department

Answer 1

Operations costs of each department

Question 2

For each cost pool listed select an appropriate allocation base from the list below. An allocation base may be used only once. Assume a manufacturing company.
Cost pools:

-Computer operations used in conjunction with manufacturing

A) Number of employees per department
B) Employee wages and salaries per department
C) Production facility square footage
D) Hours of operation of each production department
E) Machine hours by department
F) Operations costs of each department
G) Hours of computer use per month per department
H) Indirect labor-hours per department

Answer 2

Hours of computer use per month per department

Question 3

For each cost pool listed select an appropriate allocation base from the list below. An allocation base may be used only once. Assume a manufacturing company.
Cost pools:

-Personnel Department

A) Number of employees per department
B) Employee wages and salaries per department
C) Production facility square footage
D) Hours of operation of each production department
E) Machine hours by department
F) Operations costs of each department
G) Hours of computer use per month per department
H) Indirect labor-hours per department

Answer 3

Number of employees per department

Question 4

For each cost pool listed select an appropriate allocation base from the list below. An allocation base may be used only once. Assume a manufacturing company.
Cost pools:

-Manufacturing machinery cost

A) Number of employees per department
B) Employee wages and salaries per department
C) Production facility square footage
D) Hours of operation of each production department
E) Machine hours by department
F) Operations costs of each department
G) Hours of computer use per month per department
H) Indirect labor-hours per department

Question 5

For each cost pool listed select an appropriate allocation base from the list below. An allocation base may be used only once. Assume a manufacturing company.
Cost pools:

-Energy costs

A) Number of employees per department
B) Employee wages and salaries per department
C) Production facility square footage
D) Hours of operation of each production department
E) Machine hours by department
F) Operations costs of each department
G) Hours of computer use per month per department
H) Indirect labor-hours per department

Question 6

Answer the following questions using the information below:
Shaghai Tea Products has an exclusive contract with Dubai Distributors. Calamine and Shanghai are two brands of teas that are imported and sold to retail outlets. The following information is provided for the month of March:
Budgeted and actual fixed corporate-sustaining costs are $1,750 and $2,000, respectively.

-What is the actual contribution margin for the month?

A) $8,800
B) $7,500
C) $8,500
D) $6,900

Question 7

Answer the following questions using the information below:
Shaghai Tea Products has an exclusive contract with Dubai Distributors. Calamine and Shanghai are two brands of teas that are imported and sold to retail outlets. The following information is provided for the month of March:
Budgeted and actual fixed corporate-sustaining costs are $1,750 and $2,000, respectively.

-What is the contribution margin for the flexible budget?

A) $8,800
B) $8,500
C) $7,500
D) $6,900

Question 8

Answer the following questions using the information below:
Malaika's Flowering Plants provides the following information for the month of May:


-What is the budgeted contribution margin per composite unit for the actual mix?

A) $14.36
B) $14.80
C) $13.80
D) $14.00

Question 9

Answer the following questions using the information below:
Wassim Flowering Plants provides the following information for the month of May:


-What is the budgeted contribution margin per composite unit for the actual mix?

A) $8.60
B) $9.60
C) $8.00
D) $9.00

Question 10

Answer the following questions using the information below:
The XTRA Appliance Manufacturing Corporation manufactures two vacuum cleaners, the Standard and the Super. The following information was gathered about the two products:


-What is the budgeted sales-mix percentage for the Standard and the Super vacuum cleaners, respectively?

A) 0.30 and 0.70
B) 0.20 and 0.80
C) 0.70 and 0.30
D) 0.80 and 0.20

Question 11

Answer the following questions using the information below:
The Nile Clean Corporation manufactures two types of vacuum cleaners, the Victor for commercial building use and the House-Mate for residences. Budgeted and actual operating data for the year 2014 were as follows:


-What is the contribution margin for the flexible budget?

A) $5,400,000
B) $1,200,000
C) $4,200,000
D) $5,200,000