Exam 27: Appendix C: Activity-Based Costing

A plantwide overhead rate method is adequate when a company produces only one product or has multiple products that use about the same amount of indirect resources.

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 overhead cost would be assigned to Product P59G using the activity-based costing system?

A system of assigning costs to departments and products on the basis of a variety of activities instead of only one allocation base is called:

Activity cost pools are not a necessary part of the allocation of overhead costs using activity-based costing.

Activity based costing can improve costing activity for:

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 Product Processing activity cost pool?

Kozlov Corporation has provided the following data from its activity-based costing system: The company makes 430 units of product A21W a year,requiring a total of 690 machine-hours,40 orders,and 10 inspection-hours per year.The product's direct materials cost is $35.72 per unit and its direct labor cost is $29.46 per unit.According to the activity-based costing system,the average cost of product A21W is closest to:

Quantum Corporation has provided the following data from its activity-based costing system: The company makes 430 units of product R32E a year,requiring a total of 1,120 machine-hours,40 orders,and 30 inspection-hours per year.The product's direct materials cost is $49.81 per unit and its direct labor cost is $12.34 per unit.The product sells for $129.90 per unit.According to the activity-based costing system,the product margin for product R32E is:

In activity-based costing,all overhead is lumped together and a predetermined overhead rate per unit of an allocation base is computed and used to assign overhead to jobs and processes.

Which of the following is not a limitation of activity-based costing?

Founder Consulting Corporation has its headquarters in Memphis and operates from three branch offices in Nashville,Atlanta,and Louisville.Two of the company's activity cost pools are Administrative Service and Development Service.These costs are allocated to the three branch offices using an activity-based costing system.Information for next year follows: Estimated branch data for next year is as follows: How much of the headquarters cost allocation should Atlanta expect to receive next year?

An activity-based cost allocation system:

After all activity costs are accumulated in an activity cost pool account,overhead rates are computed and costs are allocated to cost objects based on:

Borden Corporation uses an activity-based costing system with three activity cost pools.The company has provided the following data concerning its costs and its activity based costing system: Distribution of resource consumption: How much cost,in total,would be allocated in the first-stage allocation to the Setting Up activity cost pool?

Zephyr Corporation has provided the following data from its activity-based costing system: Data concerning one of the company's products,Product LM41,appear below: According to the activity-based costing system,the product margin for product LM41 is:

A factor that causes the cost of an activity to go up or down is a(n):

In activity-based costing,low-volume complex products are usually undercosted and high volume simpler products are overcosted,because the method fails to reflect the different uses of indirect resources.

Activity rates from Hilliard Corporation's activity-based costing system are listed below.The company uses the activity rates to assign overhead costs to products: Last year,Product XL91 involved 2 customer orders,434 assembly hours,and 20 batches.How much overhead cost would be assigned to Product XL91 using the activity-based costing system?

If a firm uses activity-based costing to allocate costs,it does all but which of the following?

Activity-based costing attempts to better allocate costs to the proper users of overhead by focusing on activities.