Ch9 6) Two investment centers at Marshman Corporation have the following current
ID: 2473272 • Letter: C
Question
Ch9
6) Two investment centers at Marshman Corporation have the following current-year income and asset data:
The return on investment (ROI) for Investment Center B is:
371.4%
26.9%
24.1%
39.2%
21.7%
7) Which of the following statements is correct concerning the elements of cycle time?
Move time is the time spent moving (1) raw materials from storage to production and (2) goods in process from one factory location to another factory location.
Inspection time is the time spent producing the product.
Process time is considered non-value-added time.
Wait time is considered value-added time.
Cycle efficiency is the ratio of non-value-added time to total cycle time.
8) Regardless of the system used in departmental cost analysis:
Direct costs are allocated, indirect costs are not.
Indirect costs are allocated, direct costs are not.
Both direct and indirect costs are allocated.
Neither direct nor indirect costs are allocated.
Total departmental costs will always be the same.
9) The following is a partially completed departmental expense allocation spreadsheet for Brickland. It reports the total amounts of direct and indirect expenses for its four departments. Purchasing department expenses are allocated to the operating departments on the basis of purchase orders. Maintenance department expenses are allocated based on square footage. Compute the amount of Maintenance department expense to be allocated to Fabrication.
$6,400.
$9,900.
$8,100.
$9,000.
$25,600.
References
10) Wren Pork Company uses the relative market value method of allocating joint costs in its production of pork products. Relevant information for the current period follows:
The total joint cost for the current period was $43,000. How much of this cost should Wren Pork allocate to Loin chops?
$0.
$5,909.
$8,600.
$10,750.
$43,000.
InvestmentCenter A Investment
Center B Investment center income $415,000 $525,000 Investment center average invested assets $2,400,000 $1,950,000
Explanation / Answer
6. Return on Investment = Investment center income/Investment center average invested assets
= 525,000/1,950,000
= 26.9%
7. Move time is the time spent moving goods in process from one factory location to another factory location.
8. Regardless of the system used in departmental cost analysis: - Total departmental costs will always be the same
9. Maintenance Department expenses to be allocated to Fabrication Department on basis of sq. ft =
18,000 * 3,300/(3,300+2,700)
=$9,900
10. Total Joint cost = $43,000
Product
Pounds
Price/lb.
Pounds * Price
Loin chops
3,000
$5.00
15,000
Ground
10,000
2.00
20,000
Ribs
4,000
4.75
19,000
Bacon
6,000
3.50
21,000
Total
75,000
Cost Wren Pork should allocate to Loin chops = 43,000*15,000/75,000
=$8,600
Product
Pounds
Price/lb.
Pounds * Price
Loin chops
3,000
$5.00
15,000
Ground
10,000
2.00
20,000
Ribs
4,000
4.75
19,000
Bacon
6,000
3.50
21,000
Total
75,000