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Problem 1: Which one of the following levers of control in budget ensures sufficient cash flow for financial viability?
a) Diagnostic control system
b) Belief system
c) Interactive control system
d) Boundary system
Problem 2: Which one of the following method of allocating joint costs used when all products sold at split-off?
a) Net realizable value (NRV) method
b) Physical output
c) Constant gross margin (GM) NRV method
d) Sales value at split-off method
Problem 3: Which one of the following budgeting approach, the budgets identify fixed and variable cost functions at the resource center level?
a) Rolling budgets
b) Zero based budgets
c) GPK and RCA
d) Activity based budgets
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Evaluate the Predetermined Overhead Rate
Determine the company's bid if activity-based costing is used and the bid is based upon full manufacturing cost plus 30 percent.
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A new plant accountant suggested that the company may be able to assign support costs to products more accurately by using an activity based costing system that relies on a separate rate for each manufacturing activity that causes support costs.
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