Question 1

A favorable market-size variance results with a decrease in market size.

Accepted Answer

A) True 
 B)False  False

Question 2

A customer cost hierarchy may include distribution-channel costs.

Accepted Answer

A) True 
 B)False  True

Question 3

Which item is NOT a category in the customer cost hierarchy?

Accepted Answer

A) customer output unit-level costs 
B) customer batch-level costs 
C) distribution-channel costs 
D) corporate-sustaining costs 
E) product-sustaining cost 
A) customer output unit-level costs 
B) customer batch-level costs 
C) distribution-channel costs 
D) corporate-sustaining costs 
E) product-sustaining cost E

Question 4

Metal Cabinet Company manufactures two and four drawer filing cabinets.The actual units sold (5,000)equalled the expected units to be sold for both products.The four drawer cabinets constitute 66 percent of the budgeted sales mix.The budgeted selling price is $30 for four drawer cabinets and $15 for two drawer cabinets.What is the sales-quantity variance?

Accepted Answer

A) $0 
B) $25,500 
C) $49,500 
D) $99,000 
E) $101,500 
A) $0 
B) $25,500 
C) $49,500 
D) $99,000 
E) $101,500

Question 5

Use the information below to answer the following question(s).Special Tea Products (STP)has an exclusive contract with Tea Distributors.Two brands of Teas are imported, Strong and Mild, and sold to retail outlets.The monthly budget for the contract is based on a combination of last year's performance, a forecast of general industry sales, and the company's expected share of the Canadian market for imported Tea.The following information is provided for the month of May:
   Budgeted fixed costs are $1,750.Actual fixed costs are $2,000.
-What is the STP total sales-quantity variance for revenues?

Accepted Answer

A) $0 
B) $150.00 unfavourable 
C) $150.00 favourable 
D) $300.00 unfavourable 
E) $450.00 favourable 
A) $0 
B) $150.00 unfavourable 
C) $150.00 favourable 
D) $300.00 unfavourable 
E) $450.00 favourable

Question 6

Various Product Company is a manufacturer of numerous products which are similar and are processed on the same assembly line.The production manager has decided that she will require all product managers and assembly line managers to be responsible for their own operations.The accounting information system is a large complex system that can provide specialized reporting when needed.It also has room for new, permanent applications.Required:
Discuss how the production manager can expand the reporting responsibilities of these managers.

Accepted Answer

The reporting system can be expanded by

Question 7

The Omega Corporation manufactures two types of vacuum cleaners: the ZENITH for commercial building use and the House-Helper for residences.Budgeted and actual operating data for the year are as follows:
     Required:
Compute the sales-mix variance and the sales-quantity variance by type of vacuum cleaner, and in total.(in terms of the contribution margin)

Accepted Answer

Budgeted sales-mix percentage:

Question 8

Answer the following questions using the information below:
The Sasita Corporation manufactures two types of vacuum cleaners, the Zenith for commercial building use and the House-Helper for residences.Budgeted and actual operating data for the year 2019 were as follows:
     Prior to the beginning of the year, a consulting firm estimated the total volume for vacuum cleaners of the Zenith and House-Helper category to be 250,000 units, but actual industry volume was 256,000 units.
-What is the market-size variance?

Accepted Answer

A) $1,152,000 F 
B) $108,000 F 
C) $360,000 U 
D) $1,260,000 F 
E) $96,000 F 
A) $1,152,000 F 
B) $108,000 F 
C) $360,000 U 
D) $1,260,000 F 
E) $96,000 F

Question 9

Harry's Electronics manufactures electronic parts.Data for two of the company's customers is as follows:
   Customer-specific costs
   Required:
Prepare a comparative income statement in gross margin format with one column for each customer.Present customer-specific costs as period expenses.

Accepted Answer

@#IMG-DLM& Customer-

Question 10

Give examples of bundled products for each of the following industries:
a.Resort hotel
b.Bank
c.Restaurant
d.Computer store
e.Gasoline service station/convenience store
f.Software manufacturer

Accepted Answer

a.Hotel room plus meals, free drinks, us

Question 11

An activity-based costing system may focus on customers rather than products.

Accepted Answer

A) True 
 B)False

Question 12

Analyzing whether to add or drop a customer is an application of relevant costing analysis.

Accepted Answer

A) True 
 B)False

Question 13

Columbia Coffee Inc.sells two types of coffee, Regular and Decaf.The monthly budget for Canadian coffee sales is based on a combination of last year's performance, a forecast of industry sales, and the company's expected share of the Canadian market.The following information is provided for March:
     Budgeted fixed costs are $58,000.Actual fixed costs are $62,000.Required:
Calculate the static-budget, flexible-budget and sales-volume variances for the contribution margin, for the company for March.

Accepted Answer

Static-budget varian

Question 14

Revenue shedding refers to the strategy of providing price discounts on a long-term basis to specific customers.

Accepted Answer

A) True 
 B)False

Question 15

If the market-size variance is $650 F, the sales-mix variance is $500 F, the flexible budget variance is $9,250 F, and the static budget variance is $8,000 U, which of the following is TRUE?

Accepted Answer

A) The market-share variance is $18,400 U. 
B) The sales-volume variance is $17,250 F. 
C) The sales-quantity variance is $18,400 U. 
D) The sales-volume variance is $17,750 U. 
E) The market-share variance is $17,250 U. 
A) The market-share variance is $18,400 U. 
B) The sales-volume variance is $17,250 F. 
C) The sales-quantity variance is $18,400 U. 
D) The sales-volume variance is $17,750 U. 
E) The market-share variance is $17,250 U.

Question 16

Singh Manufacturing Ltd.manufactures electrical parts.Data for two of the company's customers is as follows:
   Customer-specific costs
   Required:
a.Prepare a comparative income statement in gross margin format with one column for each customer; present customer-specific costs as period expenses.
b.Which customer is relatively more profitable? Support your answer with comparative percentage analysis.

Accepted Answer

a. @#IMG-DLM& Customer-specific costs
 @#IMG-DLM& b.Gross ma

Question 17

Which of the following statements is TRUE?

Accepted Answer

A) The two main classes of revenue allocation methods are the step-up method and the incremental method. 
B) The stand-alone revenue allocation method ranks the individual products in a bundle and then uses this ranking to allocate the bundled revenues to these individual products. 
C) A bundled product is a package of two or more products or services, sold for multiple prices. 
D) The issues discussed with revenue tracing and sales returns apply to cost tracing. 
E) The two main classes of revenue allocation methods are the stand-alone method and the incremental method. 
A) The two main classes of revenue allocation methods are the step-up method and the incremental method. 
B) The stand-alone revenue allocation method ranks the individual products in a bundle and then uses this ranking to allocate the bundled revenues to these individual products. 
C) A bundled product is a package of two or more products or services, sold for multiple prices. 
D) The issues discussed with revenue tracing and sales returns apply to cost tracing. 
E) The two main classes of revenue allocation methods are the stand-alone method and the incremental method.

Question 18

Costs incurred to process orders would MOST likely be classified as a

Accepted Answer

A) customer output unit-level cost. 
B) customer batch-level cost. 
C) customer-sustaining cost. 
D) corporate-sustaining cost. 
E) distribution-channel cost. 
A) customer output unit-level cost. 
B) customer batch-level cost. 
C) customer-sustaining cost. 
D) corporate-sustaining cost. 
E) distribution-channel cost.

Question 19

To more accurately assess customer profitability, corporate-sustaining costs should be allocated.

Accepted Answer

A) True 
 B)False

Question 20

Use the information below to answer the following question(s).Special Tea Products (STP)has an exclusive contract with Tea Distributors.Two brands of Teas are imported, Strong and Mild, and sold to retail outlets.The monthly budget for the contract is based on a combination of last year's performance, a forecast of general industry sales, and the company's expected share of the Canadian market for imported Tea.The following information is provided for the month of May:
   Budgeted fixed costs are $1,750.Actual fixed costs are $2,000.
-What is the STP sales-volume variance (contribution margin)for Strong tea?

Accepted Answer

A) $600 favourable 
B) $600 unfavourable 
C) $900 favourable 
D) $900 unfavourable 
E) $300 unfavourable 
A) $600 favourable 
B) $600 unfavourable 
C) $900 favourable 
D) $900 unfavourable 
E) $300 unfavourable

A favorable market-size variance results with a decrease in market size.

A customer cost hierarchy may include distribution-channel costs.

Which item is NOT a category in the customer cost hierarchy?

Harry's Electronics manufactures electronic parts.Data for two of the company's customers is as follows: Customer-specific costs Required: Prepare a comparative income statement in gross margin format with one column for each customer.Present customer-specific costs as period expenses.

Give examples of bundled products for each of the following industries: a.Resort hotel b.Bank c.Restaurant d.Computer store e.Gasoline service station/convenience store f.Software manufacturer

An activity-based costing system may focus on customers rather than products.

Analyzing whether to add or drop a customer is an application of relevant costing analysis.

Revenue shedding refers to the strategy of providing price discounts on a long-term basis to specific customers.

If the market-size variance is $650 F, the sales-mix variance is $500 F, the flexible budget variance is $9,250 F, and the static budget variance is $8,000 U, which of the following is TRUE?

Which of the following statements is TRUE?

Costs incurred to process orders would MOST likely be classified as a

To more accurately assess customer profitability, corporate-sustaining costs should be allocated.

The Accountants Vital Role in Decision Making

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Activity-Based Costing and Management

Master Budget and Responsibility Accounting

Flexible Budgets, Variances, and Management Control: I

Flexible Budgets, Variances, and Management Control: II

Income Effects of Denominator Level on Inventory Valuation

Analysis of Cost Behaviour

Decision Making and Relevant Information

Pricing Decisions, Product Profitability Decisions, and Cost Management

Strategy, Balanced Scorecard, and Profitability Analysis

Period Cost Allocation

Cost Allocation: Joint Products and Byproducts

Process Costing

Spoilage, Rework, and Scrap

Inventory Cost Management Strategies

Capital Budgeting: Methods of Investment Analysis

Transfer Pricing and Multinational Management Control Systems

Multinational Performance Measurement and Compensation

Filters

Exam 16: Revenue and Customer Profitability Analysis

A favorable market-size variance results with a decrease in market size.

A customer cost hierarchy may include distribution-channel costs.

Which item is NOT a category in the customer cost hierarchy?

Harry's Electronics manufactures electronic parts.Data for two of the company's customers is as follows: Customer-specific costs Required: Prepare a comparative income statement in gross margin format with one column for each customer.Present customer-specific costs as period expenses.

Give examples of bundled products for each of the following industries: a.Resort hotel b.Bank c.Restaurant d.Computer store e.Gasoline service station/convenience store f.Software manufacturer

An activity-based costing system may focus on customers rather than products.

Analyzing whether to add or drop a customer is an application of relevant costing analysis.

Revenue shedding refers to the strategy of providing price discounts on a long-term basis to specific customers.

If the market-size variance is $650 F, the sales-mix variance is $500 F, the flexible budget variance is $9,250 F, and the static budget variance is $8,000 U, which of the following is TRUE?

Which of the following statements is TRUE?

Costs incurred to process orders would MOST likely be classified as a

To more accurately assess customer profitability, corporate-sustaining costs should be allocated.

The Accountants Vital Role in Decision Making

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Activity-Based Costing and Management

Master Budget and Responsibility Accounting

Flexible Budgets, Variances, and Management Control: I

Flexible Budgets, Variances, and Management Control: II

Income Effects of Denominator Level on Inventory Valuation

Analysis of Cost Behaviour

Decision Making and Relevant Information

Pricing Decisions, Product Profitability Decisions, and Cost Management

Strategy, Balanced Scorecard, and Profitability Analysis

Period Cost Allocation

Cost Allocation: Joint Products and Byproducts

Process Costing

Spoilage, Rework, and Scrap

Inventory Cost Management Strategies

Capital Budgeting: Methods of Investment Analysis

Transfer Pricing and Multinational Management Control Systems

Multinational Performance Measurement and Compensation

Filters