Question 1

Under traditional cost allocation methods,low-volume complex products are often ________________ and high-volume simpler products are likely to be ________________.

Accepted Answer

undercosted; overcosted

Question 2

If a firm uses activity-based costing to allocate costs,it must:

Accepted Answer

A) Combine costs in appropriate pools. 
B) Select appropriate cost drivers. 
C) Calculate an appropriate rate for each pool. 
D) Allocate costs based on predetermined rates for cost pools. 
E) Perform all of these steps. 
A) Combine costs in appropriate pools. 
B) Select appropriate cost drivers. 
C) Calculate an appropriate rate for each pool. 
D) Allocate costs based on predetermined rates for cost pools. 
E) Perform all of these steps. E

Question 3

Activity-based costing attempts to better allocate costs to the proper users of overhead by focusing on activities.

Accepted Answer

A) True 
 B)False  True

Question 4

Tresselt Corporation has provided the following data from its activity-based costing accounting system:
   Distribution of Resource Consumption across Activity Cost Pools:
   The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs that are not assigned to products.
Required:
a.Determine the total amount of indirect factory wages and factory equipment depreciation costs that would be allocated to the Product Processing activity cost pool.Show your work!
b.Determine the total amount of indirect factory wages and factory equipment depreciation costs that would NOT be assigned to products.Show your work!

Accepted Answer

a.Allocations to the Product P

Question 5

A basis for allocating the cost of a resource to an activity cost pool or allocating the cost of an activity cost pool to a cost object is a(n):

Accepted Answer

A) Direct factor. 
B) Indirect factor. 
C) Cost driver. 
D) Joint cost. 
E) Opportunity cost. 
A) Direct factor. 
B) Indirect factor. 
C) Cost driver. 
D) Joint cost. 
E) Opportunity cost.

Question 6

Precision Brackets,Co.is considering switching from traditional allocation of overhead based on direct labor hours to an activity-based costing system.The manager has accumulated the following information on engineering changes for two of the company's major products:
   Compute the cost per unit using:
(1)The traditional two-stage allocation of the costs of engineering changes based on direct labor hours.
(2)The activity-based cost allocation of the costs of engineering changes.

Accepted Answer

($400 * 5)+ ($400 * 25)= $12,000 total c

Question 7

Drewniak Corporation has provided the following data from its activity-based costing system:   The company makes 430 units of product O37W a year,requiring a total of 690 machine-hours,40 orders,and 10 inspection-hours per year.The product's direct materials cost is $35.72 per unit and its direct labor cost is $29.46 per unit.According to the activity-based costing system,the average cost of product O37W is closest to:

Accepted Answer

A) $94.11 per unit 
B) $89.72 per unit 
C) $65.18 per unit 
D) $92.49 per unit 
E) $64.99 per unit 
A) $94.11 per unit 
B) $89.72 per unit 
C) $65.18 per unit 
D) $92.49 per unit 
E) $64.99 per unit

Question 8

Wecker Corporation uses the following activity rates from its activity-based costing to assign overhead costs to products:   Data concerning two products appear below:
  How much overhead cost would be assigned to Product V09X using the activity-based costing system?

Accepted Answer

A) $157.87 
B) $91,722.47 
C) $10,385.22 
D) $5,485.50 
E) $16,640.87 
A) $157.87 
B) $91,722.47 
C) $10,385.22 
D) $5,485.50 
E) $16,640.87

Question 9

Why would a firm use activity-based costing (ABC)rather than traditional two-stage methods of cost allocation for overhead?

Accepted Answer

ABC provides a potentially gre

Question 10

Outdoor Sports,Inc.,produces two types of skis,downhill skis and cross country skis.Product and production information about the two items is shown below:
   Required:
1.If Outdoor Sports uses the traditional two-stage method of allocating overhead costs based on direct labor hours,what is the amount of indirect costs per set of skis for each of the two types of skis?
2.If Outdoor Sports uses activity based costing,what is the total amount of indirect costs per set of skis for each of the two types of skis?
 Assume that depreciation is allocated based on machine hours,setup costs based on the number of setups,and miscellaneous costs based on the number of direct labor hours.

Accepted Answer

1.Traditional costin

Question 11

The following is taken from Ames Company's internal records of its factory with two operating departments.The cost driver for indirect labor is direct labor costs,and the cost driver for the remaining items is number of hours of machine use.Compute the total amount of overhead allocated to Dept.2 using activity-based costing.

Accepted Answer

A) $18,720. 
B) $12,930. 
C) $13,400. 
D) $19,190. 
E) $19,440. 
A) $18,720. 
B) $12,930. 
C) $13,400. 
D) $19,190. 
E) $19,440.

Question 12

A factor that causes the cost of an activity to go up or down is a(n):

Accepted Answer

A) Direct factor. 
B) Indirect factor. 
C) Cost driver. 
D) Product cost. 
E) Contribution factor. 
A) Direct factor. 
B) Indirect factor. 
C) Cost driver. 
D) Product cost. 
E) Contribution factor.

Question 13

Billabong Resources provides the following data to enable you to calculate overhead rates:
 Machining Department Overhead is $16,000,which is to be allocated on estimated machine hours of 25,000.The rate per Machine Hour would be ___________________.If Machining cost is to be allocated to three jobs which consumed A = 3,000 hours,B = 6,000 hours,and C = 1,000 hours respectively; then Job A should be charged $ _______________; Job B should be charged $_______________; and Job C $_______________.

Accepted Answer

all answers need to

Question 14

Unit costs can be significantly different when using activity-based costing compared to traditional cost allocation methods.

Accepted Answer

A) True 
 B)False

Question 15

Ekmark Corporation uses the following activity rates from its activity-based costing to assign overhead costs to products:   Data for one of the company's products follow:
  How much overhead cost would be assigned to Product P59G using the activity-based costing system?

Accepted Answer

A) $54,482.56 
B) $5,301.76 
C) $10,014.40 
D) $154.78 
E) $5,301. 76 
A) $54,482.56 
B) $5,301.76 
C) $10,014.40 
D) $154.78 
E) $5,301. 76

Question 16

Daba Company manufactures two products,Product F and Product G.The company expects to produce and sell 1,400 units of Product F and 1,800 units of Product G during the current year.The company uses activity-based costing to compute unit product costs for external reports.Data relating to the company's three activity cost pools are given below for the current year:
   
Required:
 Using the activity-based costing approach,determine the overhead cost per unit for each product.

Accepted Answer

The activity rates for each activity cos

Question 17

Bossie Corporation uses an activity-based costing system with three activity cost pools.The company has provided the following data concerning its costs and its activity based costing system:     How much cost,in total,would be allocated in the first-stage allocation to the Assembly activity cost pool?

Accepted Answer

A) $196,333 
B) $209,000 
C) $310,000 
D) $155,000 
E) $200,000 
A) $196,333 
B) $209,000 
C) $310,000 
D) $155,000 
E) $200,000

Question 18

Larabee Company produces two types of product,flat and round,on the same production line.For the current period,the company reports the following data.
   Larabee's controller wishes to apply activity-based costing (ABC)to allocate the $60,000 of overhead costs incurred by the two product lines to see whether cost per unit would change markedly from that reported above.She has collected the following information.
   She has also collected the following information about the cost drivers for each category (cost pool)and the amount of each driver used by the two product lines.
   Assign these three overhead cost pools to each of the two products using ABC.Show each overhead cost allocation by product and the total overhead allocated to each product.Determine average cost per unit for each of the two products using ABC.(Round your answer to 2 decimal places.)Which overhead cost allocation method would you recommend to the controller?

Accepted Answer

@#IMG-DLM& @#IMG-DLM& @#IMG-DLM& The average cost of flat increases an

Question 19

Activity-based costing assigns costs first to activity pools,and then costs from activity cost pools are assigned to the cost objects benefiting from the activities.

Accepted Answer

A) True 
 B)False

Question 20

Spendlove Corporation has provided the following data from its activity-based costing system:   The company makes 430 units of product S78N a year,requiring a total of 1,120 machine-hours,40 orders,and 30 inspection-hours per year.The product's direct materials cost is $49.81 per unit and its direct labor cost is $12.34 per unit.The product sells for $129.90 per unit.According to the activity-based costing system,the product margin for product S78N is:

Accepted Answer

A) $4,116.50 
B) $29,132.50 
C) $6,180.50 
D) $5,161.30 
E) $4,981.00 
A) $4,116.50 
B) $29,132.50 
C) $6,180.50 
D) $5,161.30 
E) $4,981.00

Under traditional cost allocation methods,low-volume complex products are often and high-volume simpler products are likely to be .

If a firm uses activity-based costing to allocate costs,it must:

Activity-based costing attempts to better allocate costs to the proper users of overhead by focusing on activities.

A basis for allocating the cost of a resource to an activity cost pool or allocating the cost of an activity cost pool to a cost object is a(n):

Wecker Corporation uses the following activity rates from its activity-based costing to assign overhead costs to products: Data concerning two products appear below: How much overhead cost would be assigned to Product V09X using the activity-based costing system?

Why would a firm use activity-based costing (ABC)rather than traditional two-stage methods of cost allocation for overhead?

A factor that causes the cost of an activity to go up or down is a(n):

Unit costs can be significantly different when using activity-based costing compared to traditional cost allocation methods.

Ekmark Corporation uses the following activity rates from its activity-based costing to assign overhead costs to products: Data for one of the company's products follow: How much overhead cost would be assigned to Product P59G using the activity-based costing system?

Bossie Corporation uses an activity-based costing system with three activity cost pools.The company has provided the following data concerning its costs and its activity based costing system: How much cost,in total,would be allocated in the first-stage allocation to the Assembly activity cost pool?

Activity-based costing assigns costs first to activity pools,and then costs from activity cost pools are assigned to the cost objects benefiting from the activities.

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets, natural Resources, and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Capital Budgeting and Managerial Decisions

Time Value of Money B

Filters

Exam 27: Activity-Based Costing C

Under traditional cost allocation methods,low-volume complex products are often ________________ and high-volume simpler products are likely to be ________________.

If a firm uses activity-based costing to allocate costs,it must:

Activity-based costing attempts to better allocate costs to the proper users of overhead by focusing on activities.

A basis for allocating the cost of a resource to an activity cost pool or allocating the cost of an activity cost pool to a cost object is a(n):

Wecker Corporation uses the following activity rates from its activity-based costing to assign overhead costs to products: Data concerning two products appear below: How much overhead cost would be assigned to Product V09X using the activity-based costing system?

Why would a firm use activity-based costing (ABC)rather than traditional two-stage methods of cost allocation for overhead?

A factor that causes the cost of an activity to go up or down is a(n):

Unit costs can be significantly different when using activity-based costing compared to traditional cost allocation methods.

Ekmark Corporation uses the following activity rates from its activity-based costing to assign overhead costs to products: Data for one of the company's products follow: How much overhead cost would be assigned to Product P59G using the activity-based costing system?

Bossie Corporation uses an activity-based costing system with three activity cost pools.The company has provided the following data concerning its costs and its activity based costing system: How much cost,in total,would be allocated in the first-stage allocation to the Assembly activity cost pool?

Activity-based costing assigns costs first to activity pools,and then costs from activity cost pools are assigned to the cost objects benefiting from the activities.

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets, natural Resources, and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Capital Budgeting and Managerial Decisions

Time Value of Money B

Filters

Under traditional cost allocation methods,low-volume complex products are often and high-volume simpler products are likely to be .