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13) Jeremy's Football Manufacturing Company reported: Actual fixed overhead$500,000 Fixed manufacturing overhead spending variance$30,000 favorable Fixed manufacturing production-volume variance$20,000 unfavorable To isolate these variances at the end of the accounting period, Jeremy would debit Fixed Manufacturing Overhead Allocated for: A) $480,000 B) $490,000 C) $500,000 D) $510,000 14) Kristin's Basketball Manufacturing Company reported: Actual fixed overhead$800,000 Fixed manufacturing overhead spending variance$60,000 favorable Fixed manufacturing production-volume variance$40,000 favorable To isolate these variances at the end of the accounting period, Kristin would debit: A) Fixed Manufacturing Overhead Allocated for $900,000 B) Fixed Manufacturing Overhead Spending Variance for $60,000 C) Fixed Manufacturing Production-Volume […]

9) Critics of absorption costing suggest to evaluate management on their ability to: A) exceed production quotas B) increase operating income C) decrease inventory costs D) All of these answers are correct. 10) Differences between absorption costing and variable costing are much smaller when a: A) large part of the manufacturing process is subcontracted out B) just-in-time inventory strategy is implemented C) significant portion of manufacturing costs are fixed D) Both A and B are correct. 11) All of the following are examples of drawbacks of using absorption costing EXCEPT: A) management has the ability to manipulate operating income via […]

Answer the following questions using the information below: Nichols, Inc., manufactures remote controls. Currently the company uses a plant-wide rate for allocating manufacturing overhead. The plant manager believes it is time to refine the method of cost allocation and has the accounting department identify the primary production activities and their cost drivers:   ActivitiesCost driverAllocation Rate Material handlingNumber of parts$2 per part AssemblyLabor hours$20 per hour InspectionTime at inspection station$3 per minute The current traditional cost method allocates overhead based on direct manufacturing labor hours using a rate of $200 per labor hour. 24) What are the indirect manufacturing costs […]

  51) If Ferry Company has a safety stock of 160 units and the average daily demand is 20 units, how many days can be covered if the shipment from the supplier is delayed by 12 days? A) 12.0 days B) 10.0 days C) 8.0 days D) 6.7 days E) 13.33 days 52) If Jackson Collectibles, Inc. has a safety stock of 35 units and the average weekly demand is 14 units, how many days can be covered if the shipment from the supplier is delayed? A) 2.5 days B) 17.5 days C) 21 days D) 35 days E) 7.0 […]

  65) For supply item ABC, Andrews Company has been ordering 125 units based on the recommendation of the salesperson who calls on the company monthly. A new purchasing agent has been hired by the company who wants to start using the economic-order-quantity method and its supporting decision elements. She has gathered the following information:   Annual demand in units 250 Days used per year 250 Lead time, in days 10 Ordering costs $100 Annual unit carrying costs $20   Required: Determine the EOQ, average inventory, orders per year, average daily demand, reorder point, annual ordering costs, and annual carrying […]