Exam 17: Activity-Based Costing

Exhibit 17-2 BigView Monitors manufactures three different sizes of computer monitors: 15-inch, 17-inch, and 20-inch. The company has recently implemented an activity-based costing system. BigView has identified five different production activities as well as the best cost driver for each activity. Each activity and driver is listed below, along with the budgeted amount that is associated with each activity for next year. The following information relates to each size of monitor and next year's anticipated manufacturing operations: -Refer to Exhibit 17-2. What is BigView's cost per cost driver for automated processing for next year (rounded)?

Which of the following is an example of a cost driver?

Exhibit 17-4 The Dormir Company uses an activity-based costing system to account for its process of manufacturing camping tents. Each tent has $140 of direct materials, includes 15 parts, and requires 3 hours of machine time. Information on conversion costs, manufacturing activities, and cost drivers is listed below. -Refer to Exhibit 17-4. The cost of material handling per tent is:

Which of the following costs is usually NOT directly attributable to specific products?

Exhibit 17-3 Bird's Eye View manufactures three different sizes of bird cages: small (for finches and canaries), medium (for cockatiels and small parrots), and large (for cockatoos and other large parrots). The company has recently implemented an activity-based costing system. Bird's Eye View has identified five different production activities as well as the best cost driver for each activity. Each activity and driver is listed below, along with the budgeted amount that is associated with each activity for next year. The following information relates to each size of bird cage and next year's anticipated manufacturing operations: -Refer to Exhibit 17-3. Under an activity-based costing system, what is the per unit cost for manufacturing overhead of a medium cage (rounded)?

When using activity-based costing, the cost associated with producing each batch is an example of a:

The allocation of which of the following can cause the greatest errors when computing product costs?

The result of cross-subsidization is that:

Define activity-based costing and list the five steps in implementing and using an activity-based costing system.

Exhibit 17-2 BigView Monitors manufactures three different sizes of computer monitors: 15-inch, 17-inch, and 20-inch. The company has recently implemented an activity-based costing system. BigView has identified five different production activities as well as the best cost driver for each activity. Each activity and driver is listed below, along with the budgeted amount that is associated with each activity for next year. The following information relates to each size of monitor and next year's anticipated manufacturing operations: -Refer to Exhibit 17-2. What is BigView's cost per cost driver for testing for next year (rounded)?

Exhibit 17-2 BigView Monitors manufactures three different sizes of computer monitors: 15-inch, 17-inch, and 20-inch. The company has recently implemented an activity-based costing system. BigView has identified five different production activities as well as the best cost driver for each activity. Each activity and driver is listed below, along with the budgeted amount that is associated with each activity for next year. The following information relates to each size of monitor and next year's anticipated manufacturing operations: -Refer to Exhibit 17-2. Under an activity-based product costing system, what is the per unit cost for manufacturing overhead of 20-inch monitors (rounded)?

An appropriate cost driver for engineering changes is:

Tracing overhead costs to activities involves dividing overhead costs into:

Activity-based costing is most useful when there are variations in:

Exhibit 17-3 Bird's Eye View manufactures three different sizes of bird cages: small (for finches and canaries), medium (for cockatiels and small parrots), and large (for cockatoos and other large parrots). The company has recently implemented an activity-based costing system. Bird's Eye View has identified five different production activities as well as the best cost driver for each activity. Each activity and driver is listed below, along with the budgeted amount that is associated with each activity for next year. The following information relates to each size of bird cage and next year's anticipated manufacturing operations: -Refer to Exhibit 17-3. What is Bird's Eye View cost per cost driver for automated processing for next year (rounded)?

Exhibit 17-4 The Dormir Company uses an activity-based costing system to account for its process of manufacturing camping tents. Each tent has $140 of direct materials, includes 15 parts, and requires 3 hours of machine time. Information on conversion costs, manufacturing activities, and cost drivers is listed below. - Refer to Exhibit 17-4. The total manufacturing cost per tent is:

An activity that affects a particular cost is a(n):

Westvaco Inc. has two divisions. Gross profit computations for these two divisions for the year 2012 are given below: *Manufacturing overhead is allocated to products based on the amount of direct labor dollars. Westvaco has determined that its total manufacturing overhead cost of $400,000 is a mixture of batch-level and product line costs. The following information has been assembled regarding overhead:

Traditional product costing systems (e.g. job order costing and process costing) usually assume that: