Question

1.

Which of the following is not a stakeholder in a business?

		employees
		suppliers
		customers
		competitors

2.

Which of the following does NOT describe managerial accounting?

		not generally released to the public
		various formats are used
		used for the SEC filings
		used primarily for internal making

3.

Jones company makes two products A & B. Here is some financial information about those products.

                         A    B     Combined total cost of cost drivers

Direct labor    $45,000 $35,000

Direct materials              $40,000 $30,000

Cost drivers

               Set ups 6    4 $10,000

             Inspections    4    6 $5,000

                 Test Runs 12     8 $25,000

                 Units produced    1000 1000

Using ABC Costing for overhead, what is the total cost for product A?

		$107000
		$108000
		$33000
		$106,500

Answer 1

Q.1	Correct Option A i.e.Competitors
Q.2	Correct Option C i.e. used for the SEC filings
Q.3	Correct Option B i.e. $108,000
	Note 1: Overhead allocation sheet
					Product A
	Activity	Total OH Cost	Total Cost Driver	OH Rate	Driver Incurred	OH Cost assigned
	Set up	10,000	10	1000.00	6	6,000
	INSPECTION	5,000	10	500.00	4	2,000
	TEST RUN	25,000	20	1250.00	12	15,000
	Total	40,000				23,000
	Add: direct labor					45000
	Add Direct material					40000
	Total cost for product A					108,000