DEVRY ACCT 434 Week 4 Midterm Exam Check this A+ tutorial guideline at http://www.acct434assignment.com/acct434-devry/acct-434-week-4-midtermexam 1.Question : (TCO1) ABC systems create 2.Question : (TCO 1) Merriamn Company provides the following ABC costing information: Activities Total Costs Activity-cost drivers Account inquiry hours \$400,000 10,000 hours Account billing lines \$280,000 4,000,000 lines Account verification accounts \$150,000 40,000 accounts Correspondence letters \$ 50,000 4,000 letters Total costs \$880,000 The above activities are used by Department A and B as follows: Department A Department B Account inquiry hours 2,000 hours 4,000 hours Account billing lines 400,000 lines

200,000 lines Account verification accounts 10,000 accounts 8,000 accounts Correspondence letters 1,000 letters 1,600 letters How much of the account billing cost will be assigned to Department B? 3. Question : (TCO 2) A master budget 4.Question : (TCO 2) Dalyrymple Company produces a special spray nozzle. The budgeted indirect total cost of inserting the spray nozzle is \$80,000. The budgeted number of nozzles to be inserted is 40,000. What is the budgeted indirect cost allocation rate for this activity? 5.Question : (TCO 3) Which cost estimation method analyzes accounts in the subsidiary ledger as variable, fixed, or mixed using qualitative methods? 6.Question : (TCO 4) In evaluating different alternatives, it is useful to concentrate on 7.Question : (TCO 5) The theory of constraints is used for cost analysis when 8.Question : (TCO 5) Schmidt Corporation produces a part that is used in the manufacture of one of its products. The costs associated with the production of 10,000 units of this part are as follows: Direct materials \$45,000 Direct labor 65,000 Variable factory overhead 30,000 Fixed factory overhead 70,000 Total costs \$210,000 Of the fixed factory overhead costs, \$30,000 is avoidable. Phil Company has offered to sell 10,000 units of the same part to Schmidt Corporation for \$18 per unit. Assuming there is no other use for the facilities, Schmidt should 9. Question : (TCO 3) The cost function + 10X 10.Question : (TCO 4) Sunk costs 1.Question : (TCO 1) For each of the following drivers identify an appropriate activity. a. # of machines