Exam 3: Cost Assignment

Which of the following is a key consideration in selecting an allocation base?

Which of the following characteristics is a consequence of the implementation of a plant-wide allocation rate?

The calculation of unit costs is important for

Examples of support departments include all of the following EXCEPT

Gray Enterprises has two support departments (S1 and S2) and two producing departments (A and B). The distribution of services by the support departments is as follows: $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$$\text { Services Provided to }$ S 1 - 8\% 74\% 18\% S2 21\% - 47\% 32\% Total department costs for the support and producing departments are as follows: 1 £58,000 2 124,000 712,000 568,000

When actual overhead cost exceeds overhead applied to production,

Figure 3-4 Quint Manufacturing uses an activity-based costing system. The company produces Model 1 and Model 2. Information relating to the two products is as follows: Units produced Model 1 Model 2 Machine hours 24,000 30,000 Direct labour hours 7,500 8,500 Material handling (number of moves) 8,000 12,000 Setups 4,000 6,000 5,000 7,000 The following costs are reported: Material handling £40,000 Labour-related overhead 120,000 Setups 60,000 -Refer to Figure 3-4. Labour-related overhead costs assigned to Model 1 are

Figure 3-4 Quint Manufacturing uses an activity-based costing system. The company produces Model 1 and Model 2. Information relating to the two products is as follows: Units produced Model 1 Model 2 Machine hours 24,000 30,000 Direct labour hours 7,500 8,500 Material handling (number of moves) 8,000 12,000 Setups 4,000 6,000 5,000 7,000 The following costs are reported: Material handling £40,000 Labour-related overhead 120,000 Setups 60,000 -Refer to Figure 3-4. Setup costs assigned to Model 2 are

Figure 3-7 Granite, Inc., has identified the following overhead costs and cost drivers for next year: Overhead Item Expected Cost Cost Driver Expected Quantity Setup costs £100,000 Number of setups 500 Ordering costs 40,000 Number of orders 3,200 Maintenance 200,000 Machine hours 4,000 Power 20,000 Kilowatt hours 80,000 The following are two of the jobs completed during the year: Job 500 Job 501 Direct materials £1,500 £2,000 Direct labour £1,400 £2,400 Units completed 100 160 Direct labour hours 100 160 Number of setups 2 8 Number of orders 8 10 Machine hours 40 50 Kilowatt hours 60 100 The company's normal activity is 4,000 direct labour hours. -Refer to Figure 3-7. If Granite's direct labour hours are used to assign overhead, the unit cost for Job 500 would be

Oaks Company has two support departments, Maintenance Department (MD) and Personnel Department (PD), and two producing departments, P1 and P2. The Maintenance Department costs of £30,000 are allocated on the basis of standard service used. The Personnel Department costs of £4,500 are allocated on the basis of number of employees. The direct costs of Departments P1 and P2 are £9,000 and £15,000, respectively. Data on standard service hours and number of employees are as follows: MD PD P1 P2 Standard service hours used 100 50 300 150 Number of employees 10 20 90 90 Direct labour hours 50 50 250 250 Using the sequential method, if the support department with the highest percentage of interdepartmental service is allocated first, the cost of the support departments allocated to Department P1 is

Refer to Figure 3-3. What is the amount of overhead cost to be assigned to Product X using machine hours as the activity driver in an activity-based costing system?

____ is (are) a method of allocating service department costs that gives partial recognition to interdepartmental services by using a methodology that allocates service department costs sequentially both to the remaining service departments and the producing departments.