In a machine-intensive production environment, the most accurate cost driver of
ID: 342181 • Letter: I
Question
In a machine-intensive production environment, the most accurate cost driver of manufacturing overhead costs is usually ________.
Select one:
A. machine hours
B. direct labor costs
C. direct labor hours
D. direct materials used
2.
The Assembly Department of Interface, Inc., manufacturer of computers, had 4500 units of beginning inventory in September, and 8000 units were transferred to it from the Production Department. The Assembly Department completed 4000 units during the month and transferred them to the Packaging Department. The weighted-average method is used. Calculate the total number of units to account for by the Assembly Department.
Select one:
A. 8000 units
B. 12,500 units
C. 4500 units
D. 3500 units
3.
Unit product cost calculations using absorption costing do NOT include ________.
Select one:
A. fixed manufacturing overhead
B. variable manufacturing overhead
C. direct materials
D. variable selling and administrative costs
4.
Managerial accounting includes the planning function. Which of the following items would be part of the planning function of a business's managerial accounting?
Select one:
A. monitoring operations to keep the company on track
B. comparing actual to expected results
C. monitoring and evaluating the results of operations
D. choosing goals and deciding how to achieve them
Explanation / Answer
1. Machine Hours
In a machine-intensive production environment, the most accurate cost driver of manufacturing overhead costs is usually Machine Hours
2. 3500 Units
Total number of units to account for by the Assembly Department
= Unit transfered from production department - Beginning inventory
= 8000 Units - 4500 Units
= 3500 Units
3. (d) Variable Selling and Administrative costs
Unit product cost calculations using absorption costing do NOT include Variable Selling and Administrative costs
4. Choosing goals and deciding how to achieve them
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