Question 1

In activity-based costing,costs are traced to individual activities and then allocated to cost objects.

Accepted Answer

A) True 
 B)False  True

Question 2

Traditional costing:
Total overhead costs/Total DLH = $4,500,000/(150,000 + 250,000)labor hours = $11.25 per DLH

Accepted Answer

The answer of Traditional costing:
Total overhead costs/Total DLH = $4,500,000/(150,000...

Question 3

Mirkle Corporation uses the following activity rates from its activity-based costing to assign overhead costs to products:   Data for one of the company's products follow:   The company produced 4,000 units of product during the period.Direct materials cost $7.30 per unit and direct labor cost $5.45 per unit.How much total cost would be assigned to the 4,000 units of Product P59G using the activity-based costing system?

Accepted Answer

A) $61,014.40 
B) $39,214.40 
C) $10,014.40 
D) $51,000.00 
E) $31,814.40 
A) $61,014.40 
B) $39,214.40 
C) $10,014.40 
D) $51,000.00 
E) $31,814.40 A

Question 4

A _________________ is a factor that causes the cost of an activity to go up and down.

Accepted Answer

The answer of A _________________ is a factor that causes...

Question 5

Naples Corporation has provided the following data from its activity-based costing accounting system:   Distribution of resource consumption across activity cost pools:   The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs that are not assigned to products.How much indirect factory wages and factory equipment depreciation cost would be assigned to the Customer Orders activity cost pool?

Accepted Answer

A) $247,000 
B) $390,000 
C) $214,500 
D) $780,000 
E) $208,000 
A) $247,000 
B) $390,000 
C) $214,500 
D) $780,000 
E) $208,000

Question 6

With activity-based costing,complex products are assigned a larger portion of overhead.

Accepted Answer

A) True 
 B)False

Question 7

Under traditional cost allocation methods,low-volume complex products are often ________________ and high-volume simpler products are likely to be ________________.
Answers must appear in this order.

Accepted Answer

undercoste

Question 8

An activity __________________ is a temporary account accumulating the costs a company incurs to support an identified set of activities.

Accepted Answer

The answer of An activity __________________ is a temporary account...

Question 9

Activity-based costing generally requires less effort to implement and maintain than a traditional cost system.

Accepted Answer

A) True 
 B)False

Question 10

The following is taken from Clausen Company's internal records of its factory with two operating departments.The cost driver for indirect labor is direct labor hours,and the cost driver for the remaining items is number of hours of machine use.Compute the total amount of indirect labor allocated to Dept.1 using activity-based costing.

Accepted Answer

A) $5,505. 
B) $54,371. 
C) $16,864. 
D) $10,471. 
E) $8,073. 
A) $5,505. 
B) $54,371. 
C) $16,864. 
D) $10,471. 
E) $8,073.

Question 11

Unit costs can be significantly different when using activity-based costing compared to traditional cost allocation methods.

Accepted Answer

A) True 
 B)False

Question 12

Rockaway Company produces two types of product,flat and round,on the same production line.For the current period,the company reports the following data.   Rockaway's controller wishes to apply activity-based costing (ABC)to allocate the $60,000 of overhead costs incurred by the two product lines to see whether cost per unit would change markedly from that reported above.She has collected the following information.   She has also collected the following information about the cost drivers for each category (cost pool)and the amount of each driver used by the two product lines.   Assign these three overhead cost pools to each of the two products using ABC.Show each overhead cost allocation by product and the total overhead allocated to each product.Determine average cost per unit for each of the two products using ABC.(Round your answer to 2 decimal places. )Which overhead cost allocation method would you recommend to the controller?

Accepted Answer

@#IMG-DLM& @#IMG-DLM& @#IMG-DLM& The average cost of flat increases an

Question 13

Mirkle Corporation uses the following activity rates from its activity-based costing to assign overhead costs to products:   Data for one of the company's products follow:   The company produced 4,000 units of product during the period.Direct materials cost $7.30 per unit and direct labor cost $5.45 per unit.What is the cost per unit of Product P59G using the activity-based costing system?

Accepted Answer

A) $167.53 
B) $12.75 
C) $2.50 
D) $15.25 
E) $9.80 
A) $167.53 
B) $12.75 
C) $2.50 
D) $15.25 
E) $9.80

Question 14

Quantum Corporation has provided the following data from its activity-based costing system:   The company makes 340 units of product J71B a year,requiring a total of 980 machine-hours,36 orders,and 22 inspection-hours per year.The product's direct materials cost is $27.50 per unit and its direct labor cost is $18.10 per unit.According to the activity-based costing system,the total overhead cost for producing the 340 units of the J71B product is:

Accepted Answer

A) $15,504.00 
B) $30,972.72 
C) $37,126.72 
D) $21,622.72 
E) $17,957.92 
A) $15,504.00 
B) $30,972.72 
C) $37,126.72 
D) $21,622.72 
E) $17,957.92

Question 15

Winterland, Inc., produces two types of skis, downhill skis and cross country skis. Product and production information about the two items is shown below:
 
 Required:
 
 1. If Winterland uses the traditional two-stage method of allocating overhead costs based on direct labor hours, what is the amount of indirect costs per set of skis for each of the two types of skis?
 2. If Winterland uses activity based costing, what is the total amount of indirect costs per set of skis for each of the two types of skis? Assume that depreciation is allocated based on machine hours, setup costs based on the number of setups, and miscellaneous costs based on the number of direct labor hours.

Accepted Answer

1. Traditional costing:
 
 Tot

Question 16

The following is taken from Jeffers Company's internal records of its factory with two operating departments.The cost driver for indirect labor is direct labor costs,and the cost driver for the remaining items is number of hours of machine use.Compute the total amount of overhead allocated to Dept.2 using activity-based costing.

Accepted Answer

A) $16,392. 
B) $19,877. 
C) $28,830. 
D) $22,243. 
E) $73,600. 
A) $16,392. 
B) $19,877. 
C) $28,830. 
D) $22,243. 
E) $73,600.

Question 17

The following is taken from Clausen Company's internal records of its factory with two operating departments.The cost driver for indirect labor is direct labor hours,and the cost driver for the remaining items is number of hours of machine use.Compute the total amount of rent and utilities allocated to Dept.2 using activity-based costing.

Accepted Answer

A) $6,000. 
B) $13,134. 
C) $8,566. 
D) $14,092. 
E) $14,152. 
A) $6,000. 
B) $13,134. 
C) $8,566. 
D) $14,092. 
E) $14,152.

Question 18

When using a plantwide overhead rate method to assign overhead costs,the cost object is always the unit of product.

Accepted Answer

A) True 
 B)False

Question 19

Activity-based costing can be especially effective in situations where many different types of products are manufactured in the same department or departments.

Accepted Answer

A) True 
 B)False

Question 20

Rockaway Company produces two types of product,flat and round,on the same production line.For the current period,the company reports the following data.   Rockaway's controller wishes to apply activity-based costing (ABC)to allocate the $60,000 of overhead costs incurred by the two product lines to see whether cost per unit would change markedly from that reported above.She has collected the following information.   She has also collected the following information about the cost drivers for each category (cost pool)and the amount of each driver used by the two product lines.   Assign these three overhead cost pools to flat using ABC and determine average cost per unit for the product.(Round your answer to 2 decimal places. )

Accepted Answer

The answer of Rockaway Company produces two types of product,flat...

In activity-based costing,costs are traced to individual activities and then allocated to cost objects.

Traditional costing: Total overhead costs/Total DLH = $4,500,000/(150,000 + 250,000)labor hours = $11.25 per DLH

A _________________ is a factor that causes the cost of an activity to go up and down.

With activity-based costing,complex products are assigned a larger portion of overhead.

Under traditional cost allocation methods,low-volume complex products are often and high-volume simpler products are likely to be . Answers must appear in this order.

An activity __________________ is a temporary account accumulating the costs a company incurs to support an identified set of activities.

Activity-based costing generally requires less effort to implement and maintain than a traditional cost system.

Unit costs can be significantly different when using activity-based costing compared to traditional cost allocation methods.

When using a plantwide overhead rate method to assign overhead costs,the cost object is always the unit of product.

Activity-based costing can be especially effective in situations where many different types of products are manufactured in the same department or departments.

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets, Natural Resources, and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Cost Accounting

Process Cost Accounting

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Capital Budgeting and Managerial Decisions

Appendix B: Time Value of Money

Filters

Exam 27: Appendix C: Activity-Based Costing

In activity-based costing,costs are traced to individual activities and then allocated to cost objects.

Traditional costing: Total overhead costs/Total DLH = $4,500,000/(150,000 + 250,000)labor hours = $11.25 per DLH

A _________________ is a factor that causes the cost of an activity to go up and down.

With activity-based costing,complex products are assigned a larger portion of overhead.

Under traditional cost allocation methods,low-volume complex products are often ________________ and high-volume simpler products are likely to be ________________. Answers must appear in this order.

An activity __________________ is a temporary account accumulating the costs a company incurs to support an identified set of activities.

Activity-based costing generally requires less effort to implement and maintain than a traditional cost system.

Unit costs can be significantly different when using activity-based costing compared to traditional cost allocation methods.

When using a plantwide overhead rate method to assign overhead costs,the cost object is always the unit of product.

Activity-based costing can be especially effective in situations where many different types of products are manufactured in the same department or departments.

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets, Natural Resources, and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Cost Accounting

Process Cost Accounting

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Capital Budgeting and Managerial Decisions

Appendix B: Time Value of Money

Filters

Under traditional cost allocation methods,low-volume complex products are often and high-volume simpler products are likely to be . Answers must appear in this order.