ROQUE Electronics manufactures a variety of electronic gadgets for use in the home. Which of the following would be the best measure of activity to use for allocating the costs of inspecting the finished products at ROQUE? a. Machine-hours b. Direct labor-hours c. Inspection time d. Number of inspections

ROQUE Electronics manufactures a variety of electronic gadgets for use in the home. Which of the following would be the best measure of activity to use for allocating the costs of inspecting the finished products at ROQUE? a. Machine-hours b. Direct labor-hours c. Inspection time d. Number of inspections

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter1: Introduction To Managerial Accounting

Section: Chapter Questions

Problem 1E: Indicate whether each of the following costs of an automobile manufacturer would be classified as...

See similar textbooks

Similar questions

Pocket Umbrella, Inc. is considering producing a new type of umbrella. This new pocket-sized umbrella would fit into a coat pocket or purse. Classify the following costs of this new product as direct materials, direct labor, manufacturing overhead, or selling and administrative. Cost of advertising the product Fabric used to make the umbrellas Maintenance of cutting machines used to cut the umbrella fabric so it will fit the umbrella frame Wages of workers who assemble the product Presidents salary The salary of the supervisor of the people who assemble the product Wages of the product tester who stands in a shower to make sure the umbrellas do not leak Cost of market research survey Salary of the companys sales managers Depreciation of administrative office building
Reducir, Inc., produces two different types of hydraulic cylinders. Reducir produces a major subassembly for the cylinders in the Cutting and Welding Department. Other parts and the subassembly are then assembled in the Assembly Department. The activities, expected costs, and drivers associated with these two manufacturing processes are given below. Note: In the assembly process, the materials-handling activity is a function of product characteristics rather than batch activity. Other overhead activities, their costs, and drivers are listed below. Other production information concerning the two hydraulic cylinders is also provided: Required: 1. Using a plantwide rate based on machine hours, calculate the total overhead cost assigned to each product and the unit overhead cost. 2. Using activity rates, calculate the total overhead cost assigned to each product and the unit overhead cost. Comment on the accuracy of the plantwide rate. 3. Calculate the global consumption ratios. 4. Calculate the consumption ratios for welding and materials handling (Assembly) and show that two drivers, welding hours and number of parts, can be used to achieve the same ABC product costs calculated in Requirement 2. Explain the value of this simplification. 5. Calculate the consumption ratios for inspection and engineering, and show that the drivers for these two activities also duplicate the ABC product costs calculated in Requirement 2.
Larsen, Inc., produces two types of electronic parts and has provided the following data: There are four activities: machining, setting up, testing, and purchasing. Required: 1. Calculate the activity consumption ratios for each product. 2. Calculate the consumption ratios for the plantwide rate (direct labor hours). When compared with the activity ratios, what can you say about the relative accuracy of a plantwide rate? Which product is undercosted? 3. What if the machine hours were used for the plantwide rate? Would this remove the cost distortion of a plantwide rate?
Hepworth Communications produces cell phones. One of the four major electronic components is produced internally. The other three components are purchased from external suppliers. The electronic components and other parts are assembled (by the Assembly Department) and then tested (by the Testing Department). Any units that fail the test are sent to the Rework Department where the unit is taken apart and the failed component is replaced. Data from the Testing Department reveal that the internally produced component (made by the Component Department) is the most frequent cause of product failure. One out of every 50 phones fails because of a faulty internally produced component. Barry Norton is the manager of the Component Department. In a recent performance evaluation, the plant manager told Barry that he needed to be more sensitive to the needs of the departments customers. This charge puzzled Barry somewhatafter all, the component is not sold to anyone but is used in producing the plants cell phones. Required: 1. Who are Barrys customers? 2. Explain the plant managers charge to Barry to be more sensitive to his customers. Explain also how this increased sensitivity could improve the companys time-based competitive ability. 3. What role would cost management play in helping Barry be more sensitive to his customers?
The following describes the job responsibilities of two employees of Barney Manufacturing. Joan Dennison, Cost Accounting Manager. Joan is responsible for measuring and collecting costs associated with the manufacture of the garden hose product line. She is also responsible for preparing periodic reports that compare the actual costs with planned costs. These reports are provided to the production line managers and the plant manager. Joan helps to explain and interpret the reports. Steven Swasey, Production Manager. Steven is responsible for the manufacture of the high-quality garden hose. He supervises the line workers, helps to develop the production schedule, and is responsible for seeing that production quotas are met. He is also held accountable for controlling manufacturing costs. Required: CONCEPTUAL CONNECTION Identify Joan and Steven as line or staff and explain your reasons.
Indicate whether the following costs of Procter Gamble (PG), a maker of consumer products, would be classified as direct materials cost, direct labor cost, or factory overhead cost: a. Depreciation on assembly line equipment in the Mehoopany, Pennsylvania, paper products plant b. Licensing payments for use of Disney characters on children products c. Maintenance supplies d. Packaging materials e. Paper used in bath tissue f. Plant manager salary for the Iowa City, Iowa, plant g. Resins for body wash products h. Salary of process engineers i. Scents and fragrances used in making soaps and detergents j. Wages of production line employees at the Pineville, Louisiana, soap and detergent plant
Which of the following costs would be included as part of the factory overhead costs of a computer manufacturer? A.The cost of memory chips B.Depreciation of testing equipment C.Wages of computer assemblers D. The cost of disk drives
In practice, items such as wood screws and glue used in the production of school desks and chairs would most likely be classified as: a. period costs. b. direct labor. c. factory overhead. d. direct materials.
Guerra Electronics manufactures a variety of electronic gadgets for use in the home. Which of the following would probably be the most accurate measure of activity to use for allocating the costs of inspecting the finished products at Guerra? Multiple Choice Machine-hours Direct labor-hours Inspection time Number of inspections
For each of the following activities, select the most appropriate cost driver. Each cost driver may be used only once. Activity Cost Driver 1. Pay vendors Answer 2. Evaluate vendors Answer 3. Inspect raw materials Answer 4. Plan for purchases of raw materials Answer 5. Packaging Answer 6. Supervision Answer 7. Employee training Answer 8. Clean tables Answer 9. Machine maintenance Answer 10. Move in-process product from one work station to the next Answer
The following activities occur at Greenwich Corporation, a company that manufactures a variety of products.a. Receive raw materials from suppliers.b. Manage parts inventories.c. Do rough milling work on products.d. Interview and process new employees in the personnel department.e. Design new products.f. Perform periodic preventive maintenance on general-use equipment.g. Use the general factory building.h. Issue purchase orders for a job.Required:Classify each of the activities above as either a unit-level, batch-level, product-level, or organization-sustaining activity.
Listed below are activities incurred by Rocky Point Manufacturing Company. The company manufactures a variety of products for sale to large department stores. Required: Match each of the following resources and activities with the most likely activity level. Activity Level: Unit(U), Batch(B), Product/Process(P), Facility(F) Resource and Description Activity Level a. Product design activities b. Specialized machinery setups c. Scheduling, training and support services for all employees d. Random inspection of each batch of production e. High grade plastic used for production runs f. Cost of ordering and maintaining components used in electronic games manufacture