developer

  11) Boyd Tool Company is a tool manufacturer. Production capacity is 3,000 units per month; however, they are considering alternative ways to increase capacity to 3,500 units. One of the alternatives involves purchasing new equipment. In this alternative, there are two choices: machine A will provide increased capacity of 4,000 units per month, with unit costs of $14 at capacity; and, machine B will increase capacity to 3,600 units per month with unit costs of $15 at capacity. Both machines are adequate since Boyd's does not intend to go beyond the 3,500 units per month level for the foreseeable […]

  12.3   Apply two of three pricing methods: target pricing to set target costs and cost-plus pricing.   1) Including unit fixed costs for pricing is often used because of its simplicity.   2) Target pricing includes: (1) developing a needed product, (2) choosing a target price, (3) deriving a target cost per unit, and (4) performing value engineering.   3) When prices are set in a competitive marketplace, product costs are the most important influence on pricing decisions.   4) Companies that produce high quality products do not have to pay attention to the actions of their competitors.   […]

  8) Which of the following is the most widely used method of allocating support department costs? A) linear equation method B) step-down method C) hybrid method D) reciprocal method E) direct allocation method Use the information below to answer the following question(s).   Joe's Tire Company has two support departments, Personnel and Maintenance. The Maintenance Department costs of $80,000 are allocated on the basis of standard service hours used. The Personnel Department costs of $20,000 are allocated based on the number of employees. Costs of Departments A and B are $40,000 and $60,000, respectively.   Data on standard service […]

  14.3   Analyze how the selection of the single or dual cost allocation rate affects the calculation of the efficiency variance.   1) The user department is responsible for any unfavourable cost variances during the budgeting period if budgeted prices and quantities are used for cost allocation.   2) User departments will be able to determine their allocated costs for each category in advance if budgeted usage is the allocation base. 3) A budgeted rate helps to motivate the manager of a support department.   4) A support department adds value directly to a product or service, which is observable […]

  17) Which of the following factors would be considered irrelevant when evaluating equipment replacement decisions? A) the book value of the old machine B) manufacturing costs C) overhead costs D) product production costs E) useful life of new equipment   18) Ignoring tax consequences, how should the gain or loss on disposal of an old machine be treated in an equipment replacement decision? A) used to defray installation costs of the new machine B) deducted from the accumulated amortization C) deducted from the cost of the new machine D) added to the accumulated amortization (or deducted from the cost) […]