Review Assessment: Online Assignment One S2 2012
The service department cost allocation method that completely ignores reciprocal services between service departments is called the: Answer
In order to have a high-quality finished product:
the product's design specifications must meet customers' expectations AND the product must meet the standards of its design.
The ‘direct method' ignores the fact that:
some service departments provide services to other service departments
Refer to the following data.
Direct material used
Depreciation on factory equipment
Overtime premiums paid
The product costs are:
The Casual Furniture Company manufactures outdoor furniture, and incurred the following costs during the month of January. Timber
Factory cleaner's wages
Administrative staff salaries
Depreciation—sales office equipment
Utilities, insurance—sales office
The manufacturing overhead is:
Correct Answer: $15 000
Cost of Goods Manufactured = Beginning Work in Process + Total Manufacturing Costs – Ending Work in Process. Answer
When recording inventory in the financial statements, the accounting standards prescribe that the companies use the lower of cost or net realisable value. Answer
The Lots More Store has a Janitorial Department and a Personnel Department that provide services to three Sales Departments. The Janitorial Department cost is allocated based on space and the Personnel Department cost is allocated based on employees. The following information is available.
Space (sq m)
No. of Employees
Using the step-down method, calculate the amount of Janitorial Department cost allocated to Sales Department #2, if the Personnel Department is allocated first. Answer
Quality of conformance refers to:
the degree to which the product meets its design specifications. 10.
Which of the following is not an objective of management accounting? Answer
Providing information for profit and loss statements
Appraisal costs refer to costs incurred:
Correct Answer: in determining whether defects exist.
Leisure Life manufactures a variety of sporting equipment. The firm's predetermined overhead application rate was 150 per cent of direct labour cost. Job 101 included direct materials of $15 000 and direct labour of $6 000. The manufacturing overhead applied to Job 101 during the year was: Answer
Which of the following is not a cost of quality?
Productive inefficiency cost
If production increases, variable cost will: Correct Answer: remain constant on a per unit basis.
The service department cost allocation method that fully accounts for the mutual provision of services between service departments is called the: Answer
Which of the following statements is correct?
Cost accounting is a subset of management accounting.
Richardson & Sons purchased direct material worth $15 000 during the most recent period. At the end of the period the direct...
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