Exam 7: Activity-Based Costing: a Tool to Aid Decision Making

Callum Corporation is conducting a time-driven activity-based costing study in its Tech Support Department. The company has provided the following data to aid in that study: On the Customer Cost Analysis report in time-driven activity-based costing, the total cost assigned to Customer M would be closest to:

Time-based activity-based costing does NOT use which of the following types of data inputs?

Nourse Enterprises makes a variety of products that it sells to other businesses. The company's activity-based costing system has four activity cost pools for assigning costs to products and customers. Details concerning that ABC system are listed below: The cost of serving customers, $2,026.00 per customer, is the cost of serving a customer for one year. Koerner Corporation buys only one of the company's products. The details of last year's purchases of this product are listed below: According to the ABC system, the customer margin for this customer this past year was closest to:

Pierceall Corporation is conducting a time-driven activity-based costing study in its Tech Support Department. The company has provided the following data to aid in that study: The cost per minute of the resource supplied is $0.42. On the Customer Cost Analysis report in time-driven activity-based costing, the time-driven activity rate for Routing Calls would be closest to:

Doede Corporation uses activity-based costing to compute product margins. In the first stage, the activity-based costing system allocates two overhead accounts--equipment depreciation and supervisory expense--to three activity cost pools--Machining, Order Filling, and Other--based on resource consumption. Data to perform these allocations appear below: Distribution of Resource Consumption Across Activity Cost Pools: In the second stage, Machining costs are assigned to products using machine-hours (MHs) and Order Filling costs are assigned to products using the number of orders. The costs in the Other activity cost pool are not assigned to products.Activity: Finally, sales and direct cost data are combined with Machining and Order Filling costs to determine product margins.Sales and Direct Cost Data: What is the product margin for Product W1 under activity-based costing?

Leber Enterprises makes a variety of products that it sells to other businesses. The company's activity-based costing system has four activity cost pools for assigning costs to products and customers. Details concerning that ABC system are listed below: The cost of serving customers, $2,423.00 per customer, is the cost of serving a customer for one year. Solecki Corporation buys only one of the company's products. The details of last year's purchases of this product are listed below: According to the ABC system, the total overhead cost for this customer this past year was closest to:

Pierceall Corporation is conducting a time-driven activity-based costing study in its Tech Support Department. The company has provided the following data to aid in that study: The cost per minute of the resource supplied is $0.42.On the Customer Cost Analysis report in time-driven activity-based costing, the time-driven activity rate for Resolving Problems would be closest to:

Hails Corporation manufactures two products: Product Q21F and Product H44W. The company uses a plantwide overhead rate based on direct labor-hours. It is considering implementing an activity-based costing (ABC) system that allocates its manufacturing overhead to four cost pools. The following additional information is available for the company as a whole and for Products Q21F and H44W. Using the plantwide overhead rate, the percentage of the total overhead cost that is allocated to Product Q21F is closest to:

Figge and Mathews Public Limited Company, a consulting firm, uses an activity-based costing in which there are three activity cost pools. The company has provided the following data concerning its costs and its activity-based costing system: Distribution of resource consumption: Required:a. How much cost, in total, would be allocated to the Working On Engagements activity cost pool?b. How much cost, in total, would be allocated to the Business Development activity cost pool?c. How much cost, in total, would be allocated to the Other activity cost pool?

Fleisher Corporation is conducting a time-driven activity-based costing study in its Customer Support Department. The company has provided the following data to aid in that study: On the Customer Cost Analysis report in time-driven activity-based costing, the total cost assigned to Customer S would be closest to:

Weisgarber Corporation is conducting a time-driven activity-based costing study in its Customer Service Department. The company has provided the following data to aid in that study: Required:a. Prepare a time-driven activity-based costing Customer Cost Analysis report that determines the total Customer Service Department cost assigned to Customer G.b. Prepare a time-driven activity-based costing Capacity Analysis report for the Customer Service Department that determines the impact on expenses of matching capacity with demand.

Goertz Corporation has an activity-based costing system with three activity cost pools--Machining, Order Filling, and Other. In the first stage allocations, costs in the two overhead accounts, equipment depreciation and supervisory expense, are allocated to the three activity cost pools based on resource consumption. Data used in the first stage allocations follow: Distribution of Resource Consumption Across Activity Cost Pools: Machining costs are assigned to products using machine-hours (MHs) and Order Filling costs are assigned to products using the number of orders. The costs in the Other activity cost pool are not assigned to products. Activity data for the company's two products follow:Activity: Finally, the costs of Machining and Order Filling are combined with the following sales and direct cost data to determine product margins.Sales and Direct Cost Data: What is the overhead cost assigned to Product F7 under activity-based costing?

Horgen Corporation manufactures two products: Product M68B and Product H27T. The company is considering implementing an activity-based costing (ABC) system that allocates its manufacturing overhead to four cost pools. The following additional information is available for the company as a whole and for Products M68B and H27T. Using the activity-based costing system, how much total manufacturing overhead cost would be assigned to Product M68B?

Fleisher Corporation is conducting a time-driven activity-based costing study in its Customer Support Department. The company has provided the following data to aid in that study: On the Customer Cost Analysis report in time-driven activity-based costing, the total cost assigned to Customer S would be closest to:

An activity-based costing system that is designed for internal decision-making will not conform to generally accepted accounting principles because:

Organization-sustaining activities relate to specific customers and are not tied to any specific products.

Delauder Enterprises makes a variety of products that it sells to other businesses. The company's activity-based costing system has four activity cost pools for assigning costs to products and customers. Details concerning that activity-based costing system are listed below: The cost of serving customers, $1,608.00 per customer, is the cost of serving a customer for one year. Grennon Corporation buys only one of the company's products. The details of last year's purchases of this product are listed below: According to the activity-based costing system, the total overhead cost for this customer this past year was closest to:

Deemer Corporation has an activity-based costing system with three activity cost pools--Processing, Supervising, and Other. In the first stage allocations, costs in the two overhead accounts, equipment expense and indirect labor, are allocated to the three activity cost pools based on resource consumption. Data used in the first stage allocations follow: Distribution of Resource Consumption Across Activity Cost Pools: Processing costs are assigned to products using machine-hours (MHs) and Supervising costs are assigned to products using the number of batches. The costs in the Other activity cost pool are not assigned to products. Activity data for the company's two products follow:Activity: How much overhead cost is allocated to the Supervising activity cost pool under activity-based costing?

Doles Corporation uses the following activity rates from its activity-based costing to assign overhead costs to products. Data concerning two products appear below: Required:How much overhead cost would be assigned to each of the two products using the company's activity-based costing system?

Foster Florist specializes in large floral bouquets for hotels and other commercial spaces. The company has provided the following data concerning its annual overhead costs and its activity based costing system:Overhead costs: Distribution of resource consumption: The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs.The amount of activity for the year is as follows: What would be the total overhead cost per delivery according to the activity based costing system? In other words, what would be the overall activity rate for the deliveries activity cost pool? (Round to the nearest whole cent.)