The content of this quiz comes from the following text book; Cost AccountingA Managerial EmphasisFourteenth Edition Chapters7, 8, 10, 11; 14-16 are covered. ***This quiz is extremely important. If you...

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Name:
Section:
ACT 5704 – WEB and WEB 2
Cost Accounting
Summer Term, 2013
Quiz Two: Chapters 7, 8, 10, 11; 14 – 16
100 Points
Instructions: Type your name above in the space provided. Answer the following multiple-
choice questions by typing the best answer in the space provided below. Do not submit the
complete Quiz – only submit this answer sheet. Each question is worth 6 2/3 points. You may
use your textbook but you are not allowed to discuss the Quiz with anyone. Good luck!
1. A
2. D
3. B
4. C
5. A&D (both answers are same)
6. B
7. B
8. A
9. C
10. D
11. C
12. B
13. C
14. B
15. D
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Use the following to answer questions 1 and 2:
Spacer Company has two service departments and two operating departments. Budgeted costs
and budgeted activity in the various departments for last year are shown below:
Custodial Cutting Assembly
Services Cafeteria Department Department
Departmental costs .......... $50,400 $28,000 $120,000 $200,000
Square feet occupied ....... 500 1,000 4,000 5,000
Number of employees ..... 10 15 75 100
Machine-hours ................ 10,000 15,000
Service department costs are allocated to operating departments with the costs of Custodial
Services allocated on the basis of square feet of space occupied and the costs of the Cafeteria on
the basis of number of employees. The departmental costs for the cutting and assembly
departments are overhead costs. Predetermined overhead rates in the Cutting and Assembly
departments are based on machine-hours.
1. Assume that the company uses the direct method of allocation. The predetermined
overhead rate in the Assembly Department would be closest to:
A) $16.27
B) $15.00
C) $15.87
D) $16.00
2. Assume that the company uses the step method of allocation with Custodial Services
allocated first. The amount of Custodial Services cost allocated to the Assembly
Department would be:
A) $0
B) $28,000
C) $24,000
D) $25,200
3.Product X-47 is one of the joint products in a joint manufacturing process. Management is
studying whether to sell X-47 at the split-off point or to process X-47 further into Xylene.
The following data have been gathered:
Selling price of X-47
I. Variable cost of processing X-47 into Xylene.
II. The avoidable fixed costs of processing X-47 into Xylene.
III. The selling price of Xylene.
IV. The joint cost of the process from which X-47 is produced.
...