Questions
22321 Cost Management Systems - Spring 2025 Practice quiz: Topics 3, 4 and 5
Multiple dropdown selections
Imagine a small company that bakes cupcakes. The cupcakes are made to be standardised size (about 60 grams each), however they are sold in orders of various quantities The company organised into three departments. For each department select the most appropriate cost driver to allocate that department's indirect costs: Department Description Cost driver? Mixing Wet and dry ingredients are combined and mixed together [ Select ] Number of cakes Number of employees Number of customer orders Baking Cakes are baked in ovens [ Select ] Number of direct labour hours Number of machine hours Number of employees Sales Cakes are sold to customers [ Select ] Number of cakes Number of customer orders Number of machine hours
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Step-by-Step Analysis
Question restatement: A small cupcake company has three departments (Mixing, Baking, Sales) and must assign the most appropriate cost driver for allocating that department's indirect costs. The department descriptions and likely cost drivers are provided, and the expected selections are listed as the correct answers: Mixing → Number of cakes, Baking → Number of machine hours, Sales → Number of customer orders.
Option analysis for Mixing (choose a cost driver):
- Number of cakes: This is a logical driver because the mixing stage is tied to the total quantity of batter needed; more cakes require more mixing time and ingredients, so costs should scale with the number of cakes produced.
- Number of machine hours: While mixing may involve equipment, cost drivers for mixing are typically tied to the volume of output rather than the time equipment runs, and using m......Login to view full explanationLog in for full answers
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Imagine a small company that bakes cupcakes. The cupcakes are made to be standardised size (about 60 grams each), however they are sold in orders of various quantities The company organised into three departments. For each department select the most appropriate cost driver to allocate that department's indirect costs: Department Description Cost driver? Mixing Wet and dry ingredients are combined and mixed together [ Select ] Number of customer orders Number of employees Number of cakes Baking Cakes are baked in ovens [ Select ] Number of employees Number of direct labour hours Number of machine hours Sales Cakes are sold to customers [ Select ] Number of machine hours Number of cakes Number of customer orders
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Imagine a small company that bakes cupcakes. The cupcakes are made to be standardised size (about 60 grams each), however they are sold in orders of various quantities The company organised into three departments. For each department select the most appropriate cost driver to allocate that department's indirect costs: Department Description Cost driver? Mixing Wet and dry ingredients are combined and mixed together [ Select ] Number of employees Number of customer orders Number of cakes Baking Cakes are baked in ovens [ Select ] Number of employees Number of machine hours Number of direct labour hours Sales Cakes are sold to customers [ Select ] Number of cakes Number of machine hours Number of customer orders
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