Question 1

What is the total overhead per unit allocated to Product S using activity-based costing (ABC)?

Accepted Answer

A) $2.60 
B) $2.27 
C) $2.00 
D) $1.83 
A) $2.60 
B) $2.27 
C) $2.00 
D) $1.83 B

Question 2

Martin wants her hourly fees for the tax services to be 160% of their activity-based costs.What is the fee per hour for tax services in the upcoming year?

Accepted Answer

A) $70.40 
B) $88.00 
C) $110.00 
D) $118.40 
A) $70.40 
B) $88.00 
C) $110.00 
D) $118.40 C

Question 3

Volume-based costing allocates indirect product costs based on the volume of output,using such allocation bases as direct labor hours,machine hours,or the amount of direct material used in the production process.Activity-based costing (ABC)has consistently shown that Volume-based costing ___________ the cost of high volume products and ______________ the cost of low volume products.

Accepted Answer

A) a 
B) b 
C) c 
D) d 
A) a 
B) b 
C) c 
D) d B

Question 4

If Smelly changes its allocation basis to machine hours,what is the total product cost per case for Product P?

Accepted Answer

A) $163.50 
B) $144.00 
C) $138.15 
D) $117.15 
A) $163.50 
B) $144.00 
C) $138.15 
D) $117.15

Question 5

If the company uses activity-based costing (ABC),what is the cost of each unit of Job 102?

Accepted Answer

A) $340 
B) $392 
C) $440 
D) $520 
A) $340 
B) $392 
C) $440 
D) $520

Question 6

Under an activity-based costing (ABC)system,the materials handling costs allocated to one unit of wall mirrors would be

Accepted Answer

A) $625.00 
B) $312.50 
C) $833.33 
D) $1,000.00 
A) $625.00 
B) $312.50 
C) $833.33 
D) $1,000.00

Question 7

Activity-based costing (ABC)is a costing technique that uses a two stage allocation process.Which of the following statements best describes these two stages?

Accepted Answer

A) The costs are assigned to activities,and then to the products based upon their use of the activities. 
B) The costs are assigned to departments,and then to the products based upon their use of activity resources. 
C) Service department costs are allocated to the production departments,and then to the products based upon their use of the activities. 
D) Indirect costs are assigned to activities,and then to the products based upon the direct cost resources used by the activities. 
A) The costs are assigned to activities,and then to the products based upon their use of the activities. 
B) The costs are assigned to departments,and then to the products based upon their use of activity resources. 
C) Service department costs are allocated to the production departments,and then to the products based upon their use of the activities. 
D) Indirect costs are assigned to activities,and then to the products based upon the direct cost resources used by the activities.

Question 8

Department D has recently purchased and installed new computerized equipment for Product X.This equipment will increase the overhead costs by $2,700 and decrease labor costs (due to time savings)in Department D by $3.00 per case.Machine hours will not change.If Smelly uses a plantwide rate based on direct labor hours,what is the revised product cost per case for Product X?

Accepted Answer

A) $82.50 
B) $74.00 
C) $79.50 
D) $69.50 
A) $82.50 
B) $74.00 
C) $79.50 
D) $69.50

Question 9

If Muskego uses a bankwide rate based on the number of loans processed,what would be the total costs for the Commercial Department?

Accepted Answer

A) $50,000 
B) $150,000 
C) $200,000 
D) $250,000 
A) $50,000 
B) $150,000 
C) $200,000 
D) $250,000

Question 10

If Muskego uses a bankwide rate based on direct labor hours,what would be the indirect costs allocated to the Consumer Department?

Accepted Answer

A) $100,000 
B) $150,000 
C) $250,000 
D) $350,000 
A) $100,000 
B) $150,000 
C) $250,000 
D) $350,000

Question 11

Activity-based costing (ABC)is a two-stage cost allocation system that (1)allocates costs to activities and (2)then to products based on their use of the activities.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following would be a reasonable basis for assigning the materials handling costs to the units produced in an activity-based costing (ABC)system?

Accepted Answer

A) Number of production runs per year 
B) Number of components per completed unit 
C) Amount of time required to produce one unit 
D) Amount of overhead applied to each completed unit 
A) Number of production runs per year 
B) Number of components per completed unit 
C) Amount of time required to produce one unit 
D) Amount of overhead applied to each completed unit

Question 13

The death spiral concept refers to the process of continually decreasing selling prices to meet foreign competition.

Accepted Answer

A) True 
 B)False

Question 14

The number of products produced is an example of a facility-related cost driver in the cost hierarchy.

Accepted Answer

A) True 
 B)False

Question 15

Before using activity-based costing (ABC),managers must apply the cost-benefit principle to the additional recordkeeping costs associated with ABC.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following measures is used by traditional costing systems as an allocation base for allocating overhead costs to the units produced?

Accepted Answer

A) Volume-related activities 
B) Batch-related activities 
C) Product-related activities 
D) Facility-related activities 
A) Volume-related activities 
B) Batch-related activities 
C) Product-related activities 
D) Facility-related activities

Question 17

Department D has recently purchased and installed new computerized equipment for Product X.This equipment will increase the overhead costs by $2,700 and decrease labor costs (due to time savings)in Department D by $3.00 per case.Machine hours will not change.If Smelly uses departmental rates,what are the product costs per case for Product X assuming Departments C and D use direct labor hours and machine hours as their respective allocation bases?

Accepted Answer

A) $80.00 
B) $74.00 
C) $69.50 
D) $79.50 
A) $80.00 
B) $74.00 
C) $69.50 
D) $79.50

Question 18

The company prices its products at 140% of cost.If the company uses activity-based costing (ABC),the price of each unit of Job 103 would be

Accepted Answer

A) $98 
B) $100 
C) $116 
D) $140 
A) $98 
B) $100 
C) $116 
D) $140

Question 19

If the company uses traditional costing and allocates overhead using direct labor cost,what is the cost of each unit of Job 102?

Accepted Answer

A) $340 
B) $392 
C) $440 
D) $520 
A) $340 
B) $392 
C) $440 
D) $520

Question 20

The company prices its products at 150% of cost.If the company uses activity-based costing (ABC),the price of each unit of Job B-32 would be

Accepted Answer

A) $96.53 
B) $144.80 
C) $130.00 
D) $226.53 
A) $96.53 
B) $144.80 
C) $130.00 
D) $226.53

What is the total overhead per unit allocated to Product S using activity-based costing (ABC)?

Martin wants her hourly fees for the tax services to be 160% of their activity-based costs.What is the fee per hour for tax services in the upcoming year?

If Smelly changes its allocation basis to machine hours,what is the total product cost per case for Product P?

If the company uses activity-based costing (ABC),what is the cost of each unit of Job 102?

Under an activity-based costing (ABC)system,the materials handling costs allocated to one unit of wall mirrors would be

Activity-based costing (ABC)is a costing technique that uses a two stage allocation process.Which of the following statements best describes these two stages?

If Muskego uses a bankwide rate based on the number of loans processed,what would be the total costs for the Commercial Department?

If Muskego uses a bankwide rate based on direct labor hours,what would be the indirect costs allocated to the Consumer Department?

Activity-based costing (ABC)is a two-stage cost allocation system that (1)allocates costs to activities and (2)then to products based on their use of the activities.

Which of the following would be a reasonable basis for assigning the materials handling costs to the units produced in an activity-based costing (ABC)system?

The death spiral concept refers to the process of continually decreasing selling prices to meet foreign competition.

The number of products produced is an example of a facility-related cost driver in the cost hierarchy.

Before using activity-based costing (ABC),managers must apply the cost-benefit principle to the additional recordkeeping costs associated with ABC.

Which of the following measures is used by traditional costing systems as an allocation base for allocating overhead costs to the units produced?

The company prices its products at 140% of cost.If the company uses activity-based costing (ABC),the price of each unit of Job 103 would be

If the company uses traditional costing and allocates overhead using direct labor cost,what is the cost of each unit of Job 102?

The company prices its products at 150% of cost.If the company uses activity-based costing (ABC),the price of each unit of Job B-32 would be

Cost Accounting: Information for Decision Making

Fundamentals of Cost-Volume-Profit Analysis

Fundamentals of Cost Analysis for Decision Making

Cost Estimation

Fundamentals of Product and Service Costing

Job Costing

Process Costing

Service Department and Joint Cost Allocation

Fundamentals of Management Control Systems

Planning and Budgeting

Business Unit Performance Measurement

Transfer Pricing

Fundamentals of Variance Analysis

Additional Topics in Variance Analysis

Nonfinancial and Multiple Measures of Performance

Filters

Exam 9: Activity-Based Costing

What is the total overhead per unit allocated to Product S using activity-based costing (ABC)?

Martin wants her hourly fees for the tax services to be 160% of their activity-based costs.What is the fee per hour for tax services in the upcoming year?

If Smelly changes its allocation basis to machine hours,what is the total product cost per case for Product P?

If the company uses activity-based costing (ABC),what is the cost of each unit of Job 102?

Under an activity-based costing (ABC)system,the materials handling costs allocated to one unit of wall mirrors would be

Activity-based costing (ABC)is a costing technique that uses a two stage allocation process.Which of the following statements best describes these two stages?

If Muskego uses a bankwide rate based on the number of loans processed,what would be the total costs for the Commercial Department?

If Muskego uses a bankwide rate based on direct labor hours,what would be the indirect costs allocated to the Consumer Department?

Activity-based costing (ABC)is a two-stage cost allocation system that (1)allocates costs to activities and (2)then to products based on their use of the activities.

Which of the following would be a reasonable basis for assigning the materials handling costs to the units produced in an activity-based costing (ABC)system?

The death spiral concept refers to the process of continually decreasing selling prices to meet foreign competition.

The number of products produced is an example of a facility-related cost driver in the cost hierarchy.

Before using activity-based costing (ABC),managers must apply the cost-benefit principle to the additional recordkeeping costs associated with ABC.

Which of the following measures is used by traditional costing systems as an allocation base for allocating overhead costs to the units produced?

The company prices its products at 140% of cost.If the company uses activity-based costing (ABC),the price of each unit of Job 103 would be

If the company uses traditional costing and allocates overhead using direct labor cost,what is the cost of each unit of Job 102?

The company prices its products at 150% of cost.If the company uses activity-based costing (ABC),the price of each unit of Job B-32 would be

Cost Accounting: Information for Decision Making

Fundamentals of Cost-Volume-Profit Analysis

Fundamentals of Cost Analysis for Decision Making

Cost Estimation

Fundamentals of Product and Service Costing

Job Costing

Process Costing

Service Department and Joint Cost Allocation

Fundamentals of Management Control Systems

Planning and Budgeting

Business Unit Performance Measurement

Transfer Pricing

Fundamentals of Variance Analysis

Additional Topics in Variance Analysis

Nonfinancial and Multiple Measures of Performance

Filters