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ACCT 434 Week 3 Cost Behavior Decision .pdf

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ACCT 434 Week 3 Cost Behavior Decision
Making Quality
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Question :
(TCO 3) Dougherty Company employs 20 individuals. Eight employees are paid
$12 per hour and the rest are salaried employees paid $3,000 a month. How would
total costs of personnel be classified?
Question :
(TCO 3) For January, the cost components of a picture frame include $0.35 for the
glass, $0.65 for the wooden frame, and $0.80 for assembly. The assembly desk
and tools cost $400. A total of 1,000 frames is expected to be produced in the
coming year. What cost function best represents these costs?
Question :
(TCO 3) Which cost estimation method uses a formal mathematical method to
develop cost functions based on past data?
Question :
(TCO 3) Penny's TV and Appliance Store is a small company that has hired you to
perform some management advisory services. The following information pertains
to 20X8 operations: Sales (2,000 televisions) $900,000; Cost of goods sold
$400,000; Store manager's salary per year $70,000; Operating costs per year
$157,000; Advertising and promotion per year $15,000; Commissions (4% of
sales) $36,000. What are the estimated total costs if Penny's expects to sell 3,000
units next year?
Question :

(TCO 4) The formal process of choosing among alternatives is known as a(n)
Question :
(TCO 4) When using the five-step decision process, which one of the following
steps should be done last?
Question :
(TCO 4) Sunk costs
Question :
(TCO 4) Northwoods Incorporated manufactures rustic furniture. The cost
accounting system estimates manufacturing costs to be $90 per table, consisting
of 80% variable costs and 20% fixed costs. The company has surplus capacity
available. It is Northwoods' policy to add a 50% markup to full costs. A large hotel
chain is currently expanding and has decided to decorate all new hotels using the
rustic style. Northwoods is invited to submit a bid to the hotel chain. What is the
lowest price per unit Northwoods should bid on this long-term order?
Question :
(TCO 5) Throughput contribution equals revenues minus
Question :
(TCO 5) A machine has been identified as a bottleneck and the source of the
constraint for a manufacturing company that has multiple products and multiple
machines. One way the company can overcome the bottleneck is

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