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Exam 11: Reporting for Control

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Question 91

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(Appendix 11A) What will be the total appraisal cost appearing on the quality cost report?

A) $70,000.
B) $97,000.
C) $110,000.
D) $119,000.

E) A) and B)
F) A) and C)

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Question 92

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(Appendix 11A) Which of the following would be classified as an internal failure cost on a quality cost report?

A) Rework labour and overhead.
B) Technical support provided to suppliers.
C) Quality improvement projects.
D) Systems development.

E) A) and B)
F) All of the above

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Question 93

Multiple Choice

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For the past year,what was the turnover?

(Appendix 11A) Assume that the company uses the step-down method of allocating Service Department costs to Operating Departments,and Building and Grounds costs are allocated first.How much Personnel Department cost would be allocated to Operating Department A?

Service departments,such as accounting,finance,general administration,legal,and personnel,are usually considered to be cost centres.In addition,manufacturing facilities are often considered to be cost centres.

(Appendix 11A) Total costs in the Personnel Department are $900,000 per year.Under the step-down method,the costs of the Personnel Department are allocated before the costs of the Engineering Department are allocated.What would be the amount of this cost allocated to the Engineering Department under the step-down method,rounded to the nearest dollar?

There is a growing trend toward greater centralization for effective control as more businesses go global.

(Appendix 11A) Total costs in the Personnel Department are $900,000 per year.Under the step-down method,the costs of the Personnel Department are allocated before the costs of the Engineering Department are allocated.What would be the amount of Personnel Department cost that would be allocated to Producing Department 2 under the step method,rounded to the nearest dollar?

The salary paid to a store manager is a traceable fixed expense of the store.

(Appendix 11A) What will be the total internal failure cost appearing on the quality cost report?

(Appendix 11A) Which of the following statements about reciprocal service department costs is correct?

What is Company A's residual income?

(Appendix 11A) What will be the total internal failure cost appearing on the quality cost report?

What was the return on investment?

(Appendix 11A) What will be the total prevention cost appearing on the quality cost report?

(Appendix 11A) What will be the total appraisal cost appearing on the quality cost report?

A company had the following results last year: sales,$700,000;return on investment,28%;and margin,8%.What were the average operating assets last year?

The IT Corporation produces and markets two types of electronic calculators: Model 11 and Model 12.The following data were gathered on activities last month: Required: a.Prepare a segmented income statement in the contribution format for last month,showing both "Amount" and "Percent" columns for the company as a whole and for each model. b.Why might it be very difficult to calculate separate break-even sales for each model? c.Refer to the original data and,if necessary,the results of the segmented income statement prepared in part (a)above.Calculate the total break-even sales (in both units AND dollars)for last month,assuming that none of the fixed production costs and fixed selling expenses is traceable.Allocate the total break-even sales between the two models. d.Again,refer to the original data and,if necessary,the results of the segmented income statement prepared in part (a)above.Calculate the total break-even sales (in both units AND dollars)for last month,assuming that the "allocated" amounts of the company's administrative expenses are actually traceable.Allocate the total break-even sales between the two models. e.How reasonable are the total break-even sales numbers calculated in parts (c)and (d)given the actual results for last month?

Sales and average operating assets for Company P and Company Q are given below: What is the margin that each company (Company P and Company Q,respectively) will have to earn in order to generate a return on investment of 20%?

For the past year,what was the return on investment?