Exam 5: Activity-Based-Costing

Which of the following is a batch-level activity?

Which of the following is a non-value-added activity?

A company incurs $1,200,000 of overhead each year in three departments, Processing, Packaging, and Testing.The company performs 800 processing transactions, 200,000 packaging transactions, and 2,000 tests per year in producing 400,000 drums of Oil and 600,000 drums of Sludge.The following data are available: Calculate the amount of overhead assigned to Oil.

Canterra Co.incurs $540,000 of overhead costs each year in its three main departments, setup ($40,000), machining ($400,000), and packing ($100,000).The setup department performs 50 setups per year, the machining department works 8,000 hours per year, and the packing department packs 200 orders per year.Information about Canterra's 2 products is as follows: Using ABC, how much overhead is assigned to Product One each year?

Which of the following is typical of traditional costing systems?

Veronica Co.produces 3 products, Products Rain, Snow, and Wind.Product Rain requires 15 machine setups, Product Snow requires 20 setups, and Product Wind requires 35 setups.Veronica has identified an activity cost pool with allocated overhead of $420,000 for which the cost driver is machine setups.How much overhead is assigned to each product?

Which of the following is an example of unit-level activity in a major automotive parts distribution company?

ABC is particularly useful when overhead costs are an insignificant portion of total costs.

ABC is generally more costly to implement than traditional costing.

Which of the following is an example of batch-level activity in a company marketing cell phones?

Non-value-added activities increase the cost of a product but not its market value.

Canterra Co.incurs $160,000 of overhead costs each year in its three main departments, setup ($10,000), machining ($110,000), and packing ($40,000).The setup department performs 40 setups per year, the machining department works 5,000 hours per year, and the packing department packs 500 orders per year.Information about Canterra's 2 products is as follows: If machining hours are used as a base, how much overhead is assigned to Product One each year?

What sometimes makes implementation of activity-based costing difficult in service industries is

Activity-based costing has been found to be useful in each of the following service industries except

Activity-based management focuses on reducing costs and improving processes.

Engineering design is a value-added activity.

ABC eliminates all arbitrary cost allocations.

All of the following statements are correct except that

GoFish Inc.has an overhead rate for machine setups of $200 per machine setup, for a total of $56,000 of overhead.The company produces two products, Product Salamander and Product Gold, which require 120 and 160 setups each, respectively.The overhead assigned to each product is

Which of the following is an example of a facility-level activity in an airport?