Westminster Manufacturing Company has two support activities and two line activities.The following data pertain to usage patterns for the support and line activities: $\begin{array}{lrrrr}&\text { Support Activities} &&\text { Line Activities }\\\hline &\text { Maintenance} &\text { human Resources} &\text { Activity A } &\text {Activity B }\\\hline \text { Costs } & \$ 40,000 & \$ 20,000 & \$ 100,000 & \$ 200,000 \\ \text { Square Footage Used } & 300 & 400 & 1,000 & 3,000 \\ \text { Number of Employees } & 10 & 20 & 100 & 150 \\ \text { Direct Labor Hours } & & & 2,000 & 4,000 \end{array}$ The costs of Maintenance are allocated based on square footage used.Human Resources costs are allocated based on number of employees.Activity A and B costs are overhead costs with predetermined overhead rates computed based on direct labor hours.If the company uses the step-down method of allocating support activities to line activities and allocates the cost of Maintenance first, what fraction of Human Resources costs will be allocated to Activity B?

A) 5/6 B) 1/4 C) 3/5 D) 1/3 E) None of the above. A) 5/6 B) 1/4 C) 3/5 D) 1/3 E) None of the above.

Westminster Manufacturing Company has two support activities and two line activities.The following data pertain to usage patterns for the support and line activities: $\begin{array}{lrrrr}&\text { Support Activities} &&\text { Line Activities }\\\hline &\text { Maintenance} &\text { human Resources} &\text { Activity A } &\text {Activity B }\\\hline \text { Costs } & \$ 40,000 & \$ 20,000 & \$ 100,000 & \$ 200,000 \\ \text { Square Footage Used } & 300 & 400 & 1,000 & 3,000 \\ \text { Number of Employees } & 10 & 20 & 100 & 150 \\ \text { Direct Labor Hours } & & & 2,000 & 4,000 \end{array}$ The costs of Maintenance are allocated based on square footage used.Human Resources costs are allocated based on number of employees.Activity A and B costs are overhead costs with predetermined overhead rates computed based on direct labor hours.If the company uses the step-down method of allocating support activities to line activities and allocates the cost of Maintenance first, what amount of total support activity costs will be allocated to Line Activities?

A) $60,000 B) $20,000 C) $40,000 D) $48,000 E) None of the above. A) $60,000 B) $20,000 C) $40,000 D) $48,000 E) None of the above.

Westminster Manufacturing Company has two support activities and two line activities.The following data pertain to usage patterns for the support and line activities: $\begin{array}{lrrrr}&\text { Support Activities} &&\text { Line Activities }\\\hline &\text { Maintenance} &\text { human Resources} &\text { Activity A } &\text {Activity B }\\\hline \text { Costs } & \$ 40,000 & \$ 20,000 & \$ 100,000 & \$ 200,000 \\ \text { Square Footage Used } & 300 & 400 & 1,000 & 3,000 \\ \text { Number of Employees } & 10 & 20 & 100 & 150 \\ \text { Direct Labor Hours } & & & 2,000 & 4,000 \end{array}$ The costs of Maintenance are allocated based on square footage used.Human Resources costs are allocated based on number of employees.Activity A and B costs are overhead costs with predetermined overhead rates computed based on direct labor hours.If the company uses the direct method of allocating support activities to line activities, what fraction of Maintenance will be allocated to Activity A?

A) 1/4 B) 1/4.7 C) 1.7/4.7 D) 3/7 E) None of the above. A) 1/4 B) 1/4.7 C) 1.7/4.7 D) 3/7 E) None of the above.

Exam 16: Refining Systems: Support Activity

It may be more appropriate for firms to employ long-term expected demand to allocate fixed capacity costs, and actual demand to allocate short-term variable costs.

(True/False)

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(37)

Question 21

Assume Porter's Consulting uses the number of purchase orders as the cost driver for allocating purchasing costs of $285,000.If Porter issues 1,000 purchase orders, including 300 used by line activity one, 400 used by line activity two, 50 for supplies used by purchasing itself, and 250 used by administration, how much of the cost will be allocated to line activity two using the direct method of allocation?

(Multiple Choice)

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Question 22

Westminster Manufacturing Company has two support activities and two line activities.The following data pertain to usage patterns for the support and line activities: Support Activities Line Activities Maintenance human Resources Activity A Activity B Costs \ 40,000 \ 20,000 \ 100,000 \ 200,000 Square Footage Used 300 400 1,000 3,000 Number of Employees 10 20 100 150 Direct Labor Hours 2,000 4,000 The costs of Maintenance are allocated based on square footage used.Human Resources costs are allocated based on number of employees.Activity A and B costs are overhead costs with predetermined overhead rates computed based on direct labor hours.If the company uses the step-down method of allocating support activities to line activities and allocates the cost of Maintenance first, what fraction of Human Resources costs will be allocated to Activity B?

(Multiple Choice)

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Question 23

Westminster Manufacturing Company has two support activities and two line activities.The following data pertain to usage patterns for the support and line activities: Support Activities Line Activities Maintenance human Resources Activity A Activity B Costs \ 40,000 \ 20,000 \ 100,000 \ 200,000 Square Footage Used 300 400 1,000 3,000 Number of Employees 10 20 100 150 Direct Labor Hours 2,000 4,000 The costs of Maintenance are allocated based on square footage used.Human Resources costs are allocated based on number of employees.Activity A and B costs are overhead costs with predetermined overhead rates computed based on direct labor hours.If the company uses the step-down method of allocating support activities to line activities and allocates the cost of Maintenance first, what amount of total support activity costs will be allocated to Line Activities?

(Multiple Choice)

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Question 24

In a consulting company specializing in designing multi-story office complexes, which of the following activities would not be classified as support activity?

(Multiple Choice)

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Question 25

Westminster Manufacturing Company has two support activities and two line activities.The following data pertain to usage patterns for the support and line activities: Support Activities Line Activities Maintenance human Resources Activity A Activity B Costs \ 40,000 \ 20,000 \ 100,000 \ 200,000 Square Footage Used 300 400 1,000 3,000 Number of Employees 10 20 100 150 Direct Labor Hours 2,000 4,000 The costs of Maintenance are allocated based on square footage used.Human Resources costs are allocated based on number of employees.Activity A and B costs are overhead costs with predetermined overhead rates computed based on direct labor hours.If the company uses the direct method of allocating support activities to line activities, what fraction of Maintenance will be allocated to Activity A?

(Multiple Choice)

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Question 26

Which of the following is not a method used to allocate support activity costs?

(Multiple Choice)

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Question 27

The step-down method of allocating support activity costs begins by rank-ordering support activity cost pools according to some criterion.

(True/False)

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Question 28

It may be more appropriate for firms to employ long-term expected demand to allocate fixed capacity costs, and actual demand to allocate short-term variable costs.

In a consulting company specializing in designing multi-story office complexes, which of the following activities would not be classified as support activity?

Which of the following is not a method used to allocate support activity costs?

The step-down method of allocating support activity costs begins by rank-ordering support activity cost pools according to some criterion.

Accounting: Information for Decision Making

Identifying and Estimating Costs and Benefits

Cost Flows and Cost Terminology

Techniques for Estimating Fixed and Variable Costs

Cost-Volume-Profit Analysis

Decision Making in the Short Term

Operating Budgets: Bridging Planning and Control

Budgetary Control and Variance Analysis

Cost Allocations

Activity-Based Costing Management

Capital Budgeting

Performance Evaluation in Decentralized Organizations

Strategic Planning and Control

Job-Costing Systems

Process-Costing Systems

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