1.By converting dollars to be received in the future into current dollars, the present value methods take into consideration that money:
a has an international rate of exchange
b is the language of business
c is the measure of assets, liabilities, and stockholders' equity on financial statements
d has a time value
2. Which of the following are two methods of analyzing capital investment proposals that both ignore present value?
a Internal rate of return and average rate of return
b Net present value and average rate of return
c Internal rate of return and net present value
d Average rate of return and cash payback method
3.Which of the following is not a factory overhead allocation method?
a. single plantwide rate
b. multiple departmental rates
c. traditional costing
d. activity-based costing
4.Which of the following is a disadvantage of the single overhead rate approach to product costing?
a. difficult to implement
b. expensive to implement
c. not practical if multiple products consume overhead in different amounts
d. all of the above
5. The _________ approach to cost allocation uses multiple activity cost pools and cost drivers to apply overhead to a product cost.
a. single overhead rate
b. activity-based costing
c. multiple department rates
d. total quality management
6. Which approach to cost allocation is considered the most accurate?
a. single overhead rate
b. activity-based costing
c. multiple department rates
d. total quality management
Panamint Systems Corporation is estimating activity costs associated with producing disk drives, tapes drives, and wire drives. The indirect labor can be traced to four separate activity pools. The budgeted activity cost and activity base data by product are provided below.