.

Motorcade
Company has three service departments (S1, S2, and S3) and two production
departments (P1 and P2). The following data relate to Motorcade’s
allocation of service department costs:

Budgeted Costs

Nbr of Employees

S1

$3,000,000

75

S2

2,320,000

50

S3

1,000,000

25

P1

150

P2

225

Service
department costs are allocated by the direct method. The number of
employees is used as the allocation base for all service department
costs.
Calculate
the total service department cost allocated to each production department
P1.

Calculate
the total service department cost allocated to production department P1

Your
Answer:Question 1 options:

Answer

Question
2 (1 point)

El
Dorado Company has two production plants. Recently, the company conducted
an ABM study to determine the cost of activities involved in processing
orders for parts at each of the plants. How might an operations manager use
this information to manage the cost of processing orders?
Question 2 options:

Set
up an ABC costing system

Identify
benchmarks

Compare
the cost to process an order at each plant and the nature of the orders
to determine if costs are out of control. If out of control, investigate

Close
down the plant with the highest cost to increase profits

Question
3 (1 point)

Infinity
Designs, an interior design company, has experienced a drop in business
due to an increase in interest rates and a corresponding slowdown in
remodeling projects. To stimulate business, the company is considering
exhibiting at the Home and Garden Expo. The exhibit will cost the company
$12,000 for space. At the show, Infinity Designs will present a slide
show on a PC, pass out brochures that are printed previously, (the
company printed more than needed), and show its portfolio of previous

jobs.

The
company estimates that revenue will increase by $36,000 over the next
year as a result of the exhibit. For the previous year, profit was as
follows:

Revenue

$201,000

Less:

Design
supplies (variable cost)

$16,000

Salary
of Samantha Spade (owner)

80,000

Salary
of Kim Bridesdale (full time employee)

55,000

Rent

18,000

Utilities

6,000

Depreciation
of office equipment

3,600

Printing
of advertising materials

700

Advertising
in Middleton Journal

2,500

Travel
expenses other than depreciation of autos (variable cost)

$2,200

Depreciation
of company cars

9,000

Required:

Calculate
the impact of the exhibit on company profit.

Your Answer:
Question 3 options:

Answer

Question
4 (1 point)

Each
year, Sunshine Motos surveys 7,500 former and prospective customers
regarding satisfaction and brand awareness. For the current year, the
company is considering outsourcing the survey to Global Associates, who
have offered to conduct the survey and summarize results for $30,300.Craig
Sunshine, the president of Sunshine Motors, believes that Global will do a
higher-quality job than his company has been doing, but is unwilling to
spend more than $10,000 above the current costs. The head of
bookkeeping for Sunshine has prepared the following summary of costs
related to the survey in the prior year.
Mailing
$17,000

Printing
(done by Lester Print Shop) $4,500
Salary
of Pat Fisher, part-time employee who stuffed envelopes and summarized data
when surveys were returned
(100 hours X $15) $1,500
Share
of depreciation of computer and software used to track survey responses and
summarized results. $1,100
Share
of electricity/phone/etc. based on square feet of space occupied by Pat
Fisher vs. entire company. $500
REQUIRED:
What is the incremental cost of going outside versus conducting the survey
as in the past?

Your Answer:
Question 4 options:

Answer

Question
5 (1 point)

Howell
Corporation produces an executive jet for which it currently manufactures a
fuel valve; the cost of the valve is indicated below:

Cost per Unit

Variable
costs

Direct
material

$900

Direct
labor

600

Variable
overhead

300

Fixed
costs

Depreciation
of equipment

500

Depreciation
of building

250

Supervisory
salaries

300

The
company has an offer from Duvall Valves to produce the part for $2,000 per
unit and supply 1,000 valves (the number needed in the coming year). If the
company accepts this offer and shuts down production of valves, production
workers and supervisors will be reassigned to other areas. The equipment cannot
be used elsewhere in the company, and it has no market value. However, the
space occupied by the production of the valve can be used by another
production group that is currently leasing space for $55,000 per year.
What
is the incremental savings of buying the valves?
Your Answer:
Question 5 options:

Answer

Question
6 (1 point)

Landmark
Coal operates a mine. During July, the company obtained 500 tons of ore,
which yielded 250 pounds of gold and 62,500 pounds of copper. The joint
cost related to the operation was $500,000. Gold sells for $325 per ounce
and copper sells for $0.87 per pound. Allocate the joint costs using
relative weight. With these costs, what is the profit or loss associated
with Copper?
Your Answer:
Question 6 options:

Answer

Question
7 (1 point)

Landmark
Coal operates a mine. During July, the company obtained 500 tons of
ore, which yielded 250 pounds of gold and 63,700 pounds of
copper. The joint cost related to the operation was $500,000. Gold
sells for $325 per ounce and copper sells for $0.93 per pound.
Allocate the joint costs using the relative sales values. With these
costs, what is the profit or loss associated with Copper?

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Your Answer:
Question 7 options:

Answer

Question
8 (1 point)

Common
costs
Question
8 options:

A)
are fixed costs that are not directly traceable to an individual product
line

B)
normally not avoidable

both
A and B are true statements

Neither
A nor B is a true statement

.Motorcade
Company has three service departments (S1, S2, and S3) and two production
departments (P1 and P2). The following data relate to Motorcade’s
allocation of service department costs: Budgeted CostsNbr of Employees S1$3,000,00075 S22,320,00050 S31,000,00025 P1 150 P2 225 Service
department costs are allocated by the direct method. The number of
employees is used as the allocation base for all service department
costs.Calculate
the total service department cost allocated to each production department
P1. Calculate
the total service department cost allocated to production department P1
Your
Answer:Question 1 options:AnswerQuestion
2 (1 point) El
Dorado Company has two production plants. Recently, the company conducted
an ABM study to determine the cost of activities involved in processing
orders for parts at each of the plants. How might an operations manager use
this information to manage the cost of processing orders?Question 2 options:Set
up an ABC costing systemIdentify
benchmarksCompare
the cost to process an order at each plant and the nature of the orders
to determine if costs are out of control. If out of control, investigateClose
down the plant with the highest cost to increase profitsQuestion
3 (1 point) Infinity
Designs, an interior design company, has experienced a drop in business
due to an increase in interest rates and a corresponding slowdown in
remodeling projects. To stimulate business, the company is considering
exhibiting at the Home and Garden Expo. The exhibit will cost the company
$12,000 for space. At the show, Infinity Designs will present a slide
show on a PC, pass out brochures that are printed previously, (the
company printed more than needed), and show its portfolio of previous jobs. The
company estimates that revenue will increase by $36,000 over the next
year as a result of the exhibit. For the previous year, profit was as
follows: Revenue $201,000 Less: Design
supplies (variable cost)$16,000 Salary
of Samantha Spade (owner)80,000 Salary
of Kim Bridesdale (full time employee)55,000 Rent18,000 Utilities6,000 Depreciation
of office equipment3,600 Printing
of advertising materials700 Advertising
in Middleton Journal2,500 Travel
expenses other than depreciation of autos (variable cost)$2,200 Depreciation
of company cars9,000 Required:Calculate
the impact of the exhibit on company profit. Your Answer:Question 3 options:AnswerQuestion
4 (1 point) Each
year, Sunshine Motos surveys 7,500 former and prospective customers
regarding satisfaction and brand awareness. For the current year, the
company is considering outsourcing the survey to Global Associates, who
have offered to conduct the survey and summarize results for $30,300.Craig
Sunshine, the president of Sunshine Motors, believes that Global will do a
higher-quality job than his company has been doing, but is unwilling to
spend more than $10,000 above the current costs. The head of
bookkeeping for Sunshine has prepared the following summary of costs
related to the survey in the prior year.Mailing
$17,000
Printing
(done by Lester Print Shop) $4,500Salary
of Pat Fisher, part-time employee who stuffed envelopes and summarized data
when surveys were returned
(100 hours X $15) $1,500Share
of depreciation of computer and software used to track survey responses and
summarized results. $1,100Share
of electricity/phone/etc. based on square feet of space occupied by Pat
Fisher vs. entire company. $500REQUIRED:
What is the incremental cost of going outside versus conducting the survey
as in the past? Your Answer:Question 4 options:AnswerQuestion
5 (1 point) Howell
Corporation produces an executive jet for which it currently manufactures a
fuel valve; the cost of the valve is indicated below: Cost per UnitVariable
costs Direct
material$900Direct
labor600Variable
overhead300 Fixed
costs Depreciation
of equipment500Depreciation
of building250Supervisory
salaries300 The
company has an offer from Duvall Valves to produce the part for $2,000 per
unit and supply 1,000 valves (the number needed in the coming year). If the
company accepts this offer and shuts down production of valves, production
workers and supervisors will be reassigned to other areas. The equipment cannot
be used elsewhere in the company, and it has no market value. However, the
space occupied by the production of the valve can be used by another
production group that is currently leasing space for $55,000 per year.What
is the incremental savings of buying the valves?Your Answer:Question 5 options:AnswerQuestion
6 (1 point) Landmark
Coal operates a mine. During July, the company obtained 500 tons of ore,
which yielded 250 pounds of gold and 62,500 pounds of copper. The joint
cost related to the operation was $500,000. Gold sells for $325 per ounce
and copper sells for $0.87 per pound. Allocate the joint costs using
relative weight. With these costs, what is the profit or loss associated
with Copper?Your Answer:Question 6 options:AnswerQuestion
7 (1 point) Landmark
Coal operates a mine. During July, the company obtained 500 tons of
ore, which yielded 250 pounds of gold and 63,700 pounds of
copper. The joint cost related to the operation was $500,000. Gold
sells for $325 per ounce and copper sells for $0.93 per pound.
Allocate the joint costs using the relative sales values. With these
costs, what is the profit or loss associated with Copper? .png” alt=”https://ci5.googleusercontent.com/proxy/5v4u8IVQnC37R5Oks5ZXjfQJq2QBDXC8tITrCofImzVhmLV_voSfwEwAk3Vh7slO0_DZ2BfAH0UWkXqO3nXgHyVQGo6CNGbsLn-fKbJr=s0-d-e1-ft#http://edugen.wileyplus.com/edugen/art2/common/pixel.gif”>.png” alt=”https://ci5.googleusercontent.com/proxy/5v4u8IVQnC37R5Oks5ZXjfQJq2QBDXC8tITrCofImzVhmLV_voSfwEwAk3Vh7slO0_DZ2BfAH0UWkXqO3nXgHyVQGo6CNGbsLn-fKbJr=s0-d-e1-ft#http://edugen.wileyplus.com/edugen/art2/common/pixel.gif”>Your Answer:Question 7 options:AnswerQuestion
8 (1 point) Common
costsQuestion
8 options:A)
are fixed costs that are not directly traceable to an individual product
lineB)
normally not avoidableboth
A and B are true statementsNeither
A nor B is a true statement