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| 1 | |
Hybrid costing: |
| | A) | is the same as process costing |
| | B) | is the same as job costing |
| | C) | has the features of two or more costing systems |
| | D) | is the same as activity-based costing |
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| 2 | |
Avalon Accounting Partners employs 15 professional tax accountants. Each professional tax accountant is allotted the following number of hours per year:
| Hours | Budgeted billable time to clients | 1 800 | Budgeted recreational leave time | 160 | Budgeted professional development | 40 | Budgeted unbillable time due to lack of demand | 0 | Budgeted sick leave | 80 |
Consumer demand for the company’s services is at 100% of the time available. Each professional tax accountant receives a salary of $75 000 per year and fringe benefits of $15 000 per year. Avalon Accounting Partners has estimated the following overhead costs for their Tax Advisory Department for coming year: Costs | Actual | Budgeted | Wages and salaries — other employees | $152 000 | $141 250 | Phone, fax and data communications | 32 000 | 25 000 | Electricity | 4 625 | 5 000 | Stationery and supplies | 9 500 | 10 000 | Rent | 38 000 | 40 000 | Corporate resources | 62 000 | 60 000 | Total | $298 125 | $281 250 |
Avalon Accounting Partners has identified the overhead cost driver as the professional labour dollars. If management believes that the clients should be charged for the employees’ benefits that Avalon has to pay, the hourly rate of pay for professional labour is: |
| | A) | $41.67 |
| | B) | $43.27 |
| | C) | $45.92 |
| | D) | $50.00 |
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| 3 | |
Avalon Accounting Partners employs 15 professional tax accountants. Each professional tax accountant is allotted the following number of hours per year:
| Hours | Budgeted billable time to clients | 1 800 | Budgeted recreational leave time | 160 | Budgeted professional development | 40 | Budgeted unbillable time due to lack of demand | 0 | Budgeted sick leave | 80 |
Consumer demand for the company’s services is at 100% of the time available. Each professional tax accountant receives a salary of $75 000 per year and fringe benefits of $15 000 per year. Avalon Accounting Partners has estimated the following overhead costs for their Tax Advisory Department for coming year: Costs | Actual | Budgeted | Wages and salaries—other employees | $152 000 | $150 500 | Phone, fax and data communications | 32 000 | 25 000 | Electricity | 8 000 | 10 000 | Stationery and supplies | 9 000 | 12 000 | Rent | 68 000 | 60 000 | Corporate resources | 82 000 | 80 000 | Total | $351 000 | $337 500 |
Avalon Accounting Partners has identified the overhead cost driver to be the professional labour dollars. The predetermined overhead rate per unit of cost driver is: |
| | A) | $0.26 per professional labour dollar |
| | B) | $0.25 per professional labour dollar |
| | C) | $0.30 per professional labour dollar |
| | D) | $0.312 per professional labour dollar |
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| 4 | |
Avalon Accounting Partners employs 15 professional tax accountants. Each professional tax accountant is allotted the following number of hours per year:
| Hours | Budgeted billable time to clients | 1 800 | Budgeted recreational leave time | 160 | Budgeted professional development | 40 | Budgeted unbillable time due to lack of demand | 0 | Budgeted sick leave | 80 |
Consumer demand for the company’s services is at 100% of the time available. Each professional tax accountant receives a salary of $75 000 per year and fringe benefits of $15 000 per year. Avalon Accounting Partners has estimated the following overhead costs for their Tax Advisory Department for coming year: Costs | Actual | Budgeted | Wages and salaries—other employees | $152 000 | $150 500 | Phone, fax and data communications | 32 000 | 25 000 | Electricity | 8 000 | 10 000 | Stationery and supplies | 9 000 | 12 000 | Rent | 68 000 | 60 000 | Corporate resources | 82 000 | 80 000 | Total | $351 000 | $337 500 |
Avalon Accounting Partners has identified the overhead cost driver to be the professional labour dollars. Jenny Greene has a simple tax return prepared by Avalon Accounting Partners. Her tax return took two hours of professional labour to prepare. The cost of providing this service to Jenny Greene is: |
| | A) | $62.50 |
| | B) | $100 |
| | C) | $125 |
| | D) | $126 |
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| 5 | |
Avalon Accounting Partners employs 15 professional tax accountants. Each professional tax accountant is allotted the following number of hours per year:
| Hours | Budgeted billable time to clients | 1 800 | Budgeted recreational leave time | 160 | Budgeted professional development | 40 | Budgeted unbillable time due to lack of demand | 0 | Budgeted sick leave | 80 |
Consumer demand for the company’s services is at 100% of the time available. Each professional tax accountant receives a salary of $75 000 per year and fringe benefits of $15 000 per year. Avalon Accounting Partners has estimated the following overhead costs for their Tax Advisory Department for coming year: Costs | Actual | Budgeted | Wages and salaries—other employees | $152 000 | $150 500 | Phone, fax and data communications | 32 000 | 25 000 | Electricity | 8 000 | 10 000 | Stationery and supplies | 9 000 | 12 000 | Rent | 68 000 | 60 000 | Corporate resources | 82 000 | 80 000 | Total | $351 000 | $337 500 |
Avalon Accounting Partners has identified the overhead cost driver to be the professional labour dollars. Jenny Greene has a simple tax return prepared by Avalon Accounting Partners. Her tax return took two hours of professional labour to prepare. Avalon budgets for a profit margin of 50% on total costs. The price that Jenny Greene would pay for her tax return to be prepared by Avalon Accounting Partners is: |
| | A) | $100 |
| | B) | $150 |
| | C) | $187.50 |
| | D) | $189 |
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| 6 | |
Reasons for costing services include the following: |
| | A) | as a basis for setting fees, assessing the profitability of each service and controlling costs |
| | B) | as a basis for setting fees, assessing the profitability of each service and determining which services to promote, refine or withdraw from |
| | C) | as a basis for setting fees, assessing the profitability of each service, determining which services to promote, refine or withdraw from and controlling costs |
| | D) | assessing the profitability of each service and determining which services to promote, refine or withdraw from |
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| 7 | |
Under AASB 102 Inventories, net realisable value of inventories for a retailer or wholesaler is defined as: |
| | A) | the estimated selling price of the merchandise |
| | B) | the purchase price of the merchandise |
| | C) | the purchase price of the merchandise plus any duties and other taxes relating to the purchase price |
| | D) | the estimated selling price of the merchandise less estimated cost of completion and the estimated costs necessary to make the sale |
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| 8 | |
The salaries of staff that are responsible for identifying new services or service production processes for an international airline are an example of a: |
| | A) | customer support cost |
| | B) | research and development cost |
| | C) | marketing cost |
| | D) | design cost |
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| 9 | |
The salaries of staff that deal with customer complaints are an example of a: |
| | A) | customer support cost |
| | B) | research and development cost |
| | C) | marketing cost |
| | D) | production/delivery cost |
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| 10 | |
Which of the following cost classifications are relevant to service entities? |
| | A) | Variable/fixed. |
| | B) | Direct/indirect. |
| | C) | Controllable/uncontrollable. |
| | D) | Choices 1, 2 and 3. |
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