Question 1

If the company uses activity-based costing (ABC),what is the cost of each unit of Job A-28?

Accepted Answer

A) $320.00 
B) $30.40 
C) $187.40 
D) $350.40 
A) $320.00 
B) $30.40 
C) $187.40 
D) $350.40

Question 2

In general,low-volume products (and services)have a lower degree of complexity associated with them.

Accepted Answer

A) True 
 B)False

Question 3

It is possible to apply activity-based costing (ABC)to segments of an organization without applying it to the entire organization.

Accepted Answer

A) True 
 B)False

Question 4

A major client has requested bookkeeping service.However,Martin is already billing 100% of her capacity (i.e.,2,000 hours per year)and would need to shift 100 hours from her tax services to meet this client's request.What is the minimum fee per hour that Martin could charge this client for bookkeeping services and be no worse off than last year?

Accepted Answer

A) $48.75 
B) $60.00 
C) $81.25 
D) $90.00 
A) $48.75 
B) $60.00 
C) $81.25 
D) $90.00

Question 5

What is the total cost allocated to the bookkeeping services using activity-based costing?

Accepted Answer

A) $24,000 
B) $33,000 
C) $35,000 
D) $44,000 
A) $24,000 
B) $33,000 
C) $35,000 
D) $44,000

Question 6

Which of the following statements is true?

Accepted Answer

A) One of the lessons learned from activity-based costing (AB
C) is that all costs are really a function of volume. 
B) The primary purpose of the plant wide and department allocation methods is allocating direct costs to specific products. 
C) A problem with activity-based costing (AB
C) is that it requires more recordkeeping than other methods. 
D) Direct cost allocations are required for the plant wide and department allocation methods. 
A) One of the lessons learned from activity-based costing (AB
C) is that all costs are really a function of volume. 
B) The primary purpose of the plant wide and department allocation methods is allocating direct costs to specific products. 
C) A problem with activity-based costing (AB
C) is that it requires more recordkeeping than other methods. 
D) Direct cost allocations are required for the plant wide and department allocation methods.

Question 7

The single-stage cost allocation system uses a plant wide rate because the cost pool is the entire plant.

Accepted Answer

A) True 
 B)False

Question 8

Under a traditional costing system that allocates overhead on the basis of direct labor hours,the materials handling costs allocated to one unit of wall mirrors would be

Accepted Answer

A) $1,000 
B) $500 
C) $2,000 
D) $5,000 
A) $1,000 
B) $500 
C) $2,000 
D) $5,000

Question 9

Under a traditional costing system that allocates overhead on the basis of direct labor hours,the materials handling costs allocated to one unit of specialty windows would be

Accepted Answer

A) $1,500 
B) $500 
C) $2,000 
D) $5,000 
A) $1,500 
B) $500 
C) $2,000 
D) $5,000

Question 10

What is the typical effect on the numbers of cost pools and cost assignment bases when an activity-based costing (ABC)system replaces a traditional costing system? (CPA adapted)

Accepted Answer

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

Question 11

Management estimates that it costs $400 to analyze and close a commercial loan.What is the overhead rate if Muskego allocates the remaining indirect costs using direct labor hours?

Accepted Answer

A) $14.00 per hour 
B) $16.67 per hour 
C) $1,000 per loan 
D) $500 per loan 
A) $14.00 per hour 
B) $16.67 per hour 
C) $1,000 per loan 
D) $500 per loan

Question 12

Explain how activity-based costing provides a more detailed measure of costs than do plantwide or department allocation methods.

Accepted Answer

Activity-based costing first allocates c

Question 13

The basic difference between the department cost allocation method and activity-based costing (ABC)is the number of stages involved in allocating costs to products.

Accepted Answer

A) True 
 B)False

Question 14

What is the total overhead per unit allocated to Product R 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

Question 15

The plant wide cost allocation method should be used by companies that manufacture products that are similar and use the same resources.

Accepted Answer

A) True 
 B)False

Question 16

Management estimates that it costs $500 to analyze and close a commercial loan.This amount has been included in the $250,000 of indirect costs.How much of the $250,000 indirect costs should be allocated to the Commercial Department?

Accepted Answer

A) $40,000 
B) $50,000 
C) $90,000 
D) $120,000 
A) $40,000 
B) $50,000 
C) $90,000 
D) $120,000

Question 17

Multiple (departmental)manufacturing overhead rates are considered preferable to a single (plant wide)overhead rate when (CMA adapted)

Accepted Answer

A) manufacturing is limited to a single product flowing through identical departments in a fixed sequence. 
B) various products are manufactured that do not pass through the same departments or use the same manufacturing techniques. 
C) individual cost drivers cannot accurately be determined with respect to cause-and-effect relationships. 
D) the single or plant wide rate is related to several identified cost drivers. 
A) manufacturing is limited to a single product flowing through identical departments in a fixed sequence. 
B) various products are manufactured that do not pass through the same departments or use the same manufacturing techniques. 
C) individual cost drivers cannot accurately be determined with respect to cause-and-effect relationships. 
D) the single or plant wide rate is related to several identified cost drivers.

Question 18

The electricity used for production machinery would be classified as a

Accepted Answer

A) volume-related activity. 
B) batch-related activity. 
C) product-related activity. 
D) facility-related activity. 
A) volume-related activity. 
B) batch-related activity. 
C) product-related activity. 
D) facility-related activity.

Question 19

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

Accepted Answer

A) $80.48 
B) $79.50 
C) $74.00 
D) $75.17 
A) $80.48 
B) $79.50 
C) $74.00 
D) $75.17

Question 20

Which one of the following accounts is not used in an activity-based costing (ABC)system?

Accepted Answer

A) Materials Inventory 
B) Work-in-Process Inventory 
C) Finished Goods Inventory 
D) Overhead Applied 
E) Allocations Incurred 
A) Materials Inventory 
B) Work-in-Process Inventory 
C) Finished Goods Inventory 
D) Overhead Applied 
E) Allocations Incurred

If the company uses activity-based costing (ABC),what is the cost of each unit of Job A-28?

In general,low-volume products (and services)have a lower degree of complexity associated with them.

It is possible to apply activity-based costing (ABC)to segments of an organization without applying it to the entire organization.

What is the total cost allocated to the bookkeeping services using activity-based costing?

Which of the following statements is true?

The single-stage cost allocation system uses a plant wide rate because the cost pool is the entire plant.

Under a traditional costing system that allocates overhead on the basis of direct labor hours,the materials handling costs allocated to one unit of wall mirrors would be

Under a traditional costing system that allocates overhead on the basis of direct labor hours,the materials handling costs allocated to one unit of specialty windows would be

What is the typical effect on the numbers of cost pools and cost assignment bases when an activity-based costing (ABC)system replaces a traditional costing system? (CPA adapted)

Management estimates that it costs $400 to analyze and close a commercial loan.What is the overhead rate if Muskego allocates the remaining indirect costs using direct labor hours?

Explain how activity-based costing provides a more detailed measure of costs than do plantwide or department allocation methods.

The basic difference between the department cost allocation method and activity-based costing (ABC)is the number of stages involved in allocating costs to products.

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

The plant wide cost allocation method should be used by companies that manufacture products that are similar and use the same resources.

Management estimates that it costs $500 to analyze and close a commercial loan.This amount has been included in the $250,000 of indirect costs.How much of the $250,000 indirect costs should be allocated to the Commercial Department?

Multiple (departmental)manufacturing overhead rates are considered preferable to a single (plant wide)overhead rate when (CMA adapted)

The electricity used for production machinery would be classified as a

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

Which one of the following accounts is not used in an activity-based costing (ABC)system?

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

If the company uses activity-based costing (ABC),what is the cost of each unit of Job A-28?

In general,low-volume products (and services)have a lower degree of complexity associated with them.

It is possible to apply activity-based costing (ABC)to segments of an organization without applying it to the entire organization.

What is the total cost allocated to the bookkeeping services using activity-based costing?

Which of the following statements is true?

The single-stage cost allocation system uses a plant wide rate because the cost pool is the entire plant.

Under a traditional costing system that allocates overhead on the basis of direct labor hours,the materials handling costs allocated to one unit of wall mirrors would be

Under a traditional costing system that allocates overhead on the basis of direct labor hours,the materials handling costs allocated to one unit of specialty windows would be

What is the typical effect on the numbers of cost pools and cost assignment bases when an activity-based costing (ABC)system replaces a traditional costing system? (CPA adapted)

Management estimates that it costs $400 to analyze and close a commercial loan.What is the overhead rate if Muskego allocates the remaining indirect costs using direct labor hours?

Explain how activity-based costing provides a more detailed measure of costs than do plantwide or department allocation methods.

The basic difference between the department cost allocation method and activity-based costing (ABC)is the number of stages involved in allocating costs to products.

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

The plant wide cost allocation method should be used by companies that manufacture products that are similar and use the same resources.

Management estimates that it costs $500 to analyze and close a commercial loan.This amount has been included in the $250,000 of indirect costs.How much of the $250,000 indirect costs should be allocated to the Commercial Department?

Multiple (departmental)manufacturing overhead rates are considered preferable to a single (plant wide)overhead rate when (CMA adapted)

The electricity used for production machinery would be classified as a

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

Which one of the following accounts is not used in an activity-based costing (ABC)system?

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