Long Industries uses a job-order costing system.The Moulding Department applies overhead based on machine hours,while the Assembly Department applies overhead based on direct labour hours.The company made the following estimates at the beginning of the current year: $\begin{array}{lcc} & \text { Moulding } & \text { Assembly } \\ \text { Manufacturing overhead cost } & \$ 600,000 & \$ 400,000 \\ \text { Machine hours } & 10,000 & 4,000 \\ \text { Direct labour hours } & 12,000 & 16,000 \end{array}$ The following information was available for Job No.7-29,which was started and completed during July: $\begin{array}{lrr}&\text { Job No. 7-29 }\\ &\text { Moulding }&\text { Assembly }\\ \text { Direct materials } & \$ 3,500 & \$ 7,500 \\ \text { Direct labour } & \$ 9,000 & \$ 12,500 \\ \text { Direct labour hours } & 900 & 1,250 \\ \text { Marhine hours } & 500 & 400 \end{array}$ What is the predetermined overhead rate for the Moulding Department?

A) $50 B) $60 C) $83 D) $100 A) $50 B) $60 C) $83 D) $100

Yang Manufacturing Company manufactures two products (A and B). The overhead costs ($58,000) have been divided into three cost pools that use the following activity drivers: $\begin{array}{ccrr} &&\text { Number of Labour }\\ \underline{\text { Product }}&\underline{\text { Number of Orders }} & \underline{\text { Transactions }} & \underline{\text { Labour Hours }}\\ \text { A } & 15 & 50 & 500 \\ \text {B} & 10 & 150 & 2,000 \\\\ \text { Cost per pool } & \$ 10,000 & \$ 8,000 & \$ 40,000 \end{array}$ -Refer to the figure.If the number of labour hours is used to assign labour costs from the cost pool,what is the amount of overhead cost to be assigned to Product A?

A) $8,000 B) $9,600 C) $32,000 D) $58,000 A) $8,000 B) $9,600 C) $32,000 D) $58,000

The following information is provided for the year: $\begin{array}{lr} \text { Actual direct labour hours worked } & 36,000 \\ \text { Budgeted overhead } & \$ 300,000 \\ \text { Budgeted direct labour hours } & 30,000 \\ \text { Actual overhead costs incurred } & \$ 360,000 \end{array}$ -Refer to the figure.If normal costing is used,what is the amount of overhead applied for the year?

A) $299,880 B) $300,000 C) $360,000 D) $380,000 A) $299,880 B) $300,000 C) $360,000 D) $380,000

The following information pertains to Black Corporation for the current year: $\begin{array}{llr} \text { Estmated total overhead costs for the current year} &\$37,500\\ \text {Estimated direct labour costs for the current year } &25,000\\ \text { Actual direct labour costs} &22,500\\ \text { Actual overhead costs } &36,000\\ \text { Activity base} &\text { Direct labour cost } &\\ \end{array}$ What is the predetermined overhead rate for Black Corporation for the current year?

A) 62.5% B) 66.7% C) 150% D) 160% A) 62.5% B) 66.7% C) 150% D) 160%

Owens Corporation produces specially machined parts. The parts are produced in batches in one continuous manufacturing process. Each part is custom produced and requires special engineering design activity (based on customer specifications). Once the design is completed, the equipment can be set up for batch production. Once the batch is completed, a sample is taken and inspected to see if the parts are within the tolerances allowed. Thus, the manufacturing process has four activities: engineering, setups, machining, and inspecting. Costs have been assigned to each activity using direct tracing and resource drivers: $\begin{array}{llll} \text { Activity } & \text { Expected Cost } & \text { Activity Driver }&\text { Activity Capacity }\\ \text { Engineering } & \$ 1,000,000 & \text { engineerng hours } & 5,000 \text { hours } \\ \text { Setups } & \$ 900,000 & \text { setups } & 200 \text { setups } \\ \text { Machining } & \$ 2,000,000 & \text { machine hours } & 25,000 \text { machine hours } \\ \text { Inspection } & \$ \quad 800,000 & \text { inspection hours } & 2,500 \text { inspection hour } \end{array}$ Owens produces two models: Model X and Model Y.The following table shows how the two products consume activity. $\begin{array}{lll}&\text { Model X }&\text { Model Y }\\ \hline \text { Units completed } & 300,000 & 200,000 \\ \text { Engineering hours } & 1,000 & 4,000 \\ \text { Setups } & 80 & 120 \\ \text { Machine hours } & 20,000 & 5,000 \\ \text { Inspection hours } & 1,500 & 1,000 \end{array}$ -Refer to the figure.If overhead costs assigned to model Y using the machining and engineering activities for cost pools and the costs of the set-ups and inspection activities are allocated to the two machining and engineering activities in proportion to their costs (Round to two decimal places.)what is the error in the overhead cost assigned to model Y using ABC (4 driver model)as the benchmark?

A) $180,030.00 B) $240,700.00 C) $313,330.00 D) $626,650.00 A) $180,030.00 B) $240,700.00 C) $313,330.00 D) $626,650.00

Cabrini Company produces two products: toy trucks and toy cars. The company uses departmental overhead rates for the two production departments: Moulding and Finishing. Moulding uses machine hours to assign overhead and Finishing uses direct labour hours; 50,000 trucks and 250,000 cars are produced. Please find the following data: $\begin{array}{|l|c|c|c|} \hline & \text { Moulding } & \text { Finishing } & \text { Total } \\ \hline \text { Estimated overhead } & \$ 250,000 & \$ 100,000 & \$ 350,000 \\ \hline \text { Actual overhead } & \$ 240,000 & \$ 120,000 & \$ 360,000 \\ \hline & & & \\\hline \text { Expected direct labour hours } & & & \\ \hline \text { Trucks } & 5,000 & 5,000 & 10,000 \\ \hline \text { Cars } & 5,000 & 35,000 & 40,000 \\ \hline \text { Expected machine hours } & & & \\\hline \text { Trucks } & 17,000 & 3,000 & 20,000 \\ \hline \text { Cars } & 3,000 & 7,000 & 10,000 \\ \hline \text { Actual direct labour hours } & & & \\ \hline \text { Trucks } & 4,500 & 5,300 & 10,000 \\ \hline \text { Cars } & 5,500 & 34,500 & 40,000 \\\hline \text { Actual machine hours } & & & \\ \hline \text { Trucks } & 16,500 & 3,500 & 20,000 \\ \hline \text { Cars } & 3,200 & 6,800 & 10,000 \\ \hline \end{array}$ -Refer to the figure.What is the overhead per unit for cars (rounded to two decimal places)?

A) $0.32 B) $0.50 C) $0.51 D) $1.40 A) $0.32 B) $0.50 C) $0.51 D) $1.40

Owens Corporation produces specially machined parts. The parts are produced in batches in one continuous manufacturing process. Each part is custom produced and requires special engineering design activity (based on customer specifications). Once the design is completed, the equipment can be set up for batch production. Once the batch is completed, a sample is taken and inspected to see if the parts are within the tolerances allowed. Thus, the manufacturing process has four activities: engineering, setups, machining, and inspecting. Costs have been assigned to each activity using direct tracing and resource drivers: $\begin{array}{llll} \text { Activity } & \text { Expected Cost } & \text { Activity Driver }&\text { Activity Capacity }\\ \text { Engineering } & \$ 1,000,000 & \text { engineerng hours } & 5,000 \text { hours } \\ \text { Setups } & \$ 900,000 & \text { setups } & 200 \text { setups } \\ \text { Machining } & \$ 2,000,000 & \text { machine hours } & 25,000 \text { machine hours } \\ \text { Inspection } & \$ \quad 800,000 & \text { inspection hours } & 2,500 \text { inspection hour } \end{array}$ Owens produces two models: Model X and Model Y.The following table shows how the two products consume activity. $\begin{array}{lll}&\text { Model X }&\text { Model Y }\\ \hline \text { Units completed } & 300,000 & 200,000 \\ \text { Engineering hours } & 1,000 & 4,000 \\ \text { Setups } & 80 & 120 \\ \text { Machine hours } & 20,000 & 5,000 \\ \text { Inspection hours } & 1,500 & 1,000 \end{array}$ -Refer to the figure.How much overhead is assigned to Model Y using the four activity drivers?

A) $560,000 B) $2,060,000 C) $2,640,000 D) $2,820,000 A) $560,000 B) $2,060,000 C) $2,640,000 D) $2,820,000

Portland Company applies manufacturing overhead.At the end of the year the following data were available: $\begin{array}{|l|l|} \hline \text { Actual manufacturing overhead } & \$ 115,000 \\ \hline \text { Estimated manufacturing overhead } & \$ 110,000 \\ \hline \text { Applied manufacturing overhead } & \$ 100,000 \\ \hline \end{array}$ The following accounts had the unadjusted balances: $\begin{array}{|l|l|} \hline \text { Raw materials inventory } & \$ 100,000 \\ \hline \text { Work-in-process inventory } & \$ 100,000 \\ \hline \text { Finished goods inventory } & \$ 100,000 \\ \hline \text { Cost of goods sold } & \$ 300,000 \\ \hline \end{array}$ What is the journal entry if the amount is considered material?

A) $\begin{array}{ll} \text { Work in Process } & \$ 1,000 \\ \text { Finished Goods } & \$ 1,000 \\ \text { Cost of Goods Sold } & \$ 3,000\\ \text { Manufacturing Overhead }&&\$5,000 \end{array}$ B) \[\begin{array} { c c c } \text { Manufacturing Overhead } & \$ 5,000 & \\ \text { Work in Process } & & \$ 1,000 \\ \text { Finished Goods } && \$ 1,000 \\ \text { Cost of Goods Sold } && \$ 3,000 \end{array}\] C) $\begin{array}{l} \begin{array}{ll} \text { Work in Process } & \$ 3,000 \\ \text { Finished Goods } & \$ 3,000 \\ \text { Cost of Goods Sold } & \$ 9,000 \end{array}\\ \text { Manufacturing Overhead } &\$ 15,000 \end{array}$ D) $\begin{array} { c c c } \text { Manufacturing Overhead } & \$ 15,000 & \\ \text { Work in Process } & &\$ 3,000 \\ \text { Finished Goods } && \$ 3,000 \\ \text { Cost of Goods Sold } && \$ 9,000 \end{array}$ A) $\begin{array}{ll} \text { Work in Process } & \$ 1,000 \\ \text { Finished Goods } & \$ 1,000 \\ \text { Cost of Goods Sold } & \$ 3,000\\ \text { Manufacturing Overhead }&&\$5,000 \end{array}$ B) \[\begin{array} { c c c } \text { Manufacturing Overhead } & \$ 5,000 & \\ \text { Work in Process } & & \$ 1,000 \\ \text { Finished Goods } && \$ 1,000 \\ \text { Cost of Goods Sold } && \$ 3,000 \end{array}\] C) $\begin{array}{l} \begin{array}{ll} \text { Work in Process } & \$ 3,000 \\ \text { Finished Goods } & \$ 3,000 \\ \text { Cost of Goods Sold } & \$ 9,000 \end{array}\\ \text { Manufacturing Overhead } &\$ 15,000 \end{array}$ D) $\begin{array} { c c c } \text { Manufacturing Overhead } & \$ 15,000 & \\ \text { Work in Process } & &\$ 3,000 \\ \text { Finished Goods } && \$ 3,000 \\ \text { Cost of Goods Sold } && \$ 9,000 \end{array}$

The Emmanuele Company has collected the following data for use in calculating product costs: Activity Data: (expected and actual) $\begin{array}{|l|l|l|l|} \hline & \text { Mops } & \text { Brooms } & \text { Total } \\ \hline \text { Units produced } & 50,000 & 250,000 & 300,000 \\ \hline \text { Prime costs } & \$ 200,000 & \$ 750,000 & \$ 950,000 \\ \hline \text { Direct labour hours } & 10,000 & 40,000 & 50,000 \\\hline \text { Machine hours } & 20,000 & 10,000 & 30,000 \\ \hline \text { Number of setups } & 25 & 75 & 100 \\ \hline \text { Inspection hours } & 1,200 & 2,800 & 4,000 \\ \hline \text { Number of moves } & 140 & 210 & 350\\ \hline \end{array}$ Departmental Data: (expected and actual) $\begin{array}{|l|r|r|r|} \hline & \text { Moulding } & {\text { Assembly }} & \text { Total } \\ \hline \text { Direct labour hours } & & & \\ \hline \text { Mops } & 5,000 & 5,000 & 10,000 \\ \hline \text { Brooms } & 5,000 & 35,000 & 40,000 \\ \hline \text { Total } & 10,000 & 40,000 & 50,000 \\\hline \text { Machine hours } & & & \\ \hline \text { Mops } & 17,000 & 3,000 & 20,000 \\ \hline \text { Brooms } & 3,000 & 7,000 & 10,000 \\ \hline \text { Total } & 20,000 & 10,000 & 30,000 \\ \hline \text { Overhead costs } & & & \\\hline \text { Machining } & \$ 120,000 & \$ 30,000 & \$ 150,000 \\ \hline \text { Moving materials } & 40,000 & 30,000 & 70,000 \\ \hline \text { Setting up } & 70,000 & 10,000 & 80,000 \\ \hline \text { Inspecting products } & 20,000 & 30,000 & 50,000 \\ \hline \text { Total } & 250,000 & \$ 100,000 & \$ 350,000 \\ \hline \end{array}$ -Refer to the figure.What is the consumption ratio for the plant-wide activity rate?

A) 0.2; 0.8 B) 0.25; 0.75 C) 0.71; 0.29 D) 0.8; 0.2 A) 0.2; 0.8 B) 0.25; 0.75 C) 0.71; 0.29 D) 0.8; 0.2

The following information is provided for the year: $\begin{array}{llr} \text { Actual overhead } &\$450,000\\ \text {Actual machine hours worked } &25,000\\ \text { Budgeted machine hours} &27,500\\ \text {Applied overhead } &\$487,500 \end{array}$ If normal costing is used,what would be the budgeted overhead used to calculate the predetermined rate?

A) $443,250 B) $450,000 C) $487,500 D) $536,250 A) $443,250 B) $450,000 C) $487,500 D) $536,250

Owens Corporation produces specially machined parts. The parts are produced in batches in one continuous manufacturing process. Each part is custom produced and requires special engineering design activity (based on customer specifications). Once the design is completed, the equipment can be set up for batch production. Once the batch is completed, a sample is taken and inspected to see if the parts are within the tolerances allowed. Thus, the manufacturing process has four activities: engineering, setups, machining, and inspecting. Costs have been assigned to each activity using direct tracing and resource drivers: $\begin{array}{llll} \text { Activity } & \text { Expected Cost } & \text { Activity Driver }&\text { Activity Capacity }\\ \text { Engineering } & \$ 1,000,000 & \text { engineerng hours } & 5,000 \text { hours } \\ \text { Setups } & \$ 900,000 & \text { setups } & 200 \text { setups } \\ \text { Machining } & \$ 2,000,000 & \text { machine hours } & 25,000 \text { machine hours } \\ \text { Inspection } & \$ \quad 800,000 & \text { inspection hours } & 2,500 \text { inspection hour } \end{array}$ Owens produces two models: Model X and Model Y.The following table shows how the two products consume activity. $\begin{array}{lll}&\text { Model X }&\text { Model Y }\\ \hline \text { Units completed } & 300,000 & 200,000 \\ \text { Engineering hours } & 1,000 & 4,000 \\ \text { Setups } & 80 & 120 \\ \text { Machine hours } & 20,000 & 5,000 \\ \text { Inspection hours } & 1,500 & 1,000 \end{array}$ -Refer to the figure.Using machining and engineering for cost pools and the costs of set-ups and inspection are allocated machining and engineering in proportion to their costs.(Round to two decimal places.),what would be the engineering cost assigned to model X?

A) $313,330.00 B) $566,666.67 C) $1,566,666.67 D) $2,819,930.00 A) $313,330.00 B) $566,666.67 C) $1,566,666.67 D) $2,819,930.00

Adams Company predicted factory overhead for Year 2 and Year 3 would be $120,000 for each year. The predicted activity for Year 2 and Year 3 would be 30,000 and 20,000 direct labour hours, respectively. Additional data are as follows: $\begin{array}{lcc} &\underline{\text { Year } 1} & \underline{\text { Year } 2}\\ \text { Sales in units } & 25,000 & 25,000 \\ \text { Selling price per unit } & \$ 20 & \$ 20 \\ \text { Direct materials and direct labour per unit } & \$ 10 & \$ 10 \end{array}$ The company assumes that the long-run normal production level is 20,000 direct labour hours per year.The actual factory overhead cost for the end of Year 1 and Year 2 was $120,000.Assume that it takes one direct labour hour to make one finished unit. -Refer to the figure.When the normal factory overhead rate is used,what are the gross profits for Year 2 and Year 3,respectively?

A) $80,000 and $80,000 B) $100,000 and $100,000 C) $120,000 and $140,000 D) $200,000 and $200,000 A) $80,000 and $80,000 B) $100,000 and $100,000 C) $120,000 and $140,000 D) $200,000 and $200,000

Elbert Manufacturing has recently installed an activity-based relational data base.Using the information contained in the activity relational table,the following pool rates were computed: \[\begin{array} { l l } \$ 400 & \text { per purchase order } \\ \$ 24 & \text { per machine hour, Process R } \\ \$ 30 & \text { per machine hour, Process S } \\ \$ 80 & \text { per enpineering hour } \\ \$ 4 & \text { per packing order } \\ \$ 200 & \text { per square metre } \end{array}\] Two products are produced by Elbert: Regular and Super.Each product has an area in the plant that is dedicated to its production.The plant has two manufacturing processes,the regular process (Process R)and the super process (Process S).Other processes include engineering,product handling,and procurement.The product relational table for Elbert is as follows: \[\begin{array}{l} \text { Regular Praduct: }\\ \begin{array} { l l c } { \text { Activit Driver \# and Name } } & \text { Activity Ustape } \\ \hline 1 \quad \text { Units } & 800,000 \\ 2 \quad \text { Purchase orders } & 1,000 \\ 3 \quad \text { Machine hours } & 320,000 \\ 4 \quad \text { Engineering hours } & 5,000 \\ 5 \quad \text { Packing orders } & 400,000 \\ 6 \quad \text { Square metres } & 6,000 \end{array} \end{array}\] \[\begin{array} { l } \text { Super Praduct: } \\ \begin{array} { c l r } \text { Activit Driver \# and Name } & \text { Activity Ustage } \\ \hline 1 \quad \text { Units } & 100,000 \\ 2 \quad \text { Purchase arders } & 500 \\ 3 \quad \text { Machine hours } & 40,000 \\ 4 \quad \text { Enpineering hours } & 6,000 \\ 5 \quad \text { Packing arders } & 100,000 \\ 6 \quad \text { Square metres } & 4,000 \end{array} \end{array}\] a.Identify two different concatenated keys.What is the purpose of concatenated keys? b.Using the pool rates and the information from the product relational table,calculate the unit overhead cost for each product. c.Does the product relational table indicate how many activities are in each pool? Is this necessary for product costing? Explain.

a.First key: Product Name and Driver Nam

Exam 6: Activity-Based Costing

Long Industries uses a job-order costing system.The Moulding Department applies overhead based on machine hours,while the Assembly Department applies overhead based on direct labour hours.The company made the following estimates at the beginning of the current year: Moulding Assembly Manufacturing overhead cost \ 600,000 \ 400,000 Machine hours 10,000 4,000 Direct labour hours 12,000 16,000 The following information was available for Job No.7-29,which was started and completed during July: Job No. 7-29 Moulding Assembly Direct materials \ 3,500 \ 7,500 Direct labour \ 9,000 \ 12,500 Direct labour hours 900 1,250 Marhine hours 500 400 What is the predetermined overhead rate for the Moulding Department?

(Multiple Choice)

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Question 41

Yang Manufacturing Company manufactures two products (A and B). The overhead costs ($58,000) have been divided into three cost pools that use the following activity drivers: Number of Labour A 15 50 500 B 10 150 2,000 Cost per pool \ 10,000 \ 8,000 \ 40,000 -Refer to the figure.If the number of labour hours is used to assign labour costs from the cost pool,what is the amount of overhead cost to be assigned to Product A?

(Multiple Choice)

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Question 42

An activity-based costing system uses which of the following procedures?

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Question 43

The following information is provided for the year: Actual direct labour hours worked 36,000 Budgeted overhead \ 300,000 Budgeted direct labour hours 30,000 Actual overhead costs incurred \ 360,000 -Refer to the figure.If normal costing is used,what is the amount of overhead applied for the year?

(Multiple Choice)

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Question 44

The following information pertains to Black Corporation for the current year: Estmated total overhead costs for the current year \3 7,500 Estimated direct labour costs for the current year 25,000 Actual direct labour costs 22,500 Actual overhead costs 36,000 Activity base Direct labour cost What is the predetermined overhead rate for Black Corporation for the current year?

(Multiple Choice)

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Question 45

Owens Corporation produces specially machined parts. The parts are produced in batches in one continuous manufacturing process. Each part is custom produced and requires special engineering design activity (based on customer specifications). Once the design is completed, the equipment can be set up for batch production. Once the batch is completed, a sample is taken and inspected to see if the parts are within the tolerances allowed. Thus, the manufacturing process has four activities: engineering, setups, machining, and inspecting. Costs have been assigned to each activity using direct tracing and resource drivers: Activity Expected Cost Activity Driver Activity Capacity Engineering \ 1,000,000 engineerng hours 5,000 hours Setups \ 900,000 setups 200 setups Machining \ 2,000,000 machine hours 25,000 machine hours Inspection \ 800,000 inspection hours 2,500 inspection hour Owens produces two models: Model X and Model Y.The following table shows how the two products consume activity. Model X Model Y Units completed 300,000 200,000 Engineering hours 1,000 4,000 Setups 80 120 Machine hours 20,000 5,000 Inspection hours 1,500 1,000 -Refer to the figure.If overhead costs assigned to model Y using the machining and engineering activities for cost pools and the costs of the set-ups and inspection activities are allocated to the two machining and engineering activities in proportion to their costs (Round to two decimal places.)what is the error in the overhead cost assigned to model Y using ABC (4 driver model)as the benchmark?

(Multiple Choice)

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Question 46

Kryzski Company has a predetermined overhead rate of $6 per direct labour hour.Last year the company incurred $156,600 of actual manufacturing overhead cost and the account was $12,600 underapplied.How many direct labour hours were worked during the year?

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Question 47

Cabrini Company produces two products: toy trucks and toy cars. The company uses departmental overhead rates for the two production departments: Moulding and Finishing. Moulding uses machine hours to assign overhead and Finishing uses direct labour hours; 50,000 trucks and 250,000 cars are produced. Please find the following data: Moulding Finishing Total Estimated overhead \ 250,000 \ 100,000 \ 350,000 Actual overhead \ 240,000 \ 120,000 \ 360,000 Expected direct labour hours Trucks 5,000 5,000 10,000 Cars 5,000 35,000 40,000 Expected machine hours Trucks 17,000 3,000 20,000 Cars 3,000 7,000 10,000 Actual direct labour hours Trucks 4,500 5,300 10,000 Cars 5,500 34,500 40,000 Actual machine hours Trucks 16,500 3,500 20,000 Cars 3,200 6,800 10,000 -Refer to the figure.What is the overhead per unit for cars (rounded to two decimal places)?

(Multiple Choice)

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Question 48

Owens Corporation produces specially machined parts. The parts are produced in batches in one continuous manufacturing process. Each part is custom produced and requires special engineering design activity (based on customer specifications). Once the design is completed, the equipment can be set up for batch production. Once the batch is completed, a sample is taken and inspected to see if the parts are within the tolerances allowed. Thus, the manufacturing process has four activities: engineering, setups, machining, and inspecting. Costs have been assigned to each activity using direct tracing and resource drivers: Activity Expected Cost Activity Driver Activity Capacity Engineering \ 1,000,000 engineerng hours 5,000 hours Setups \ 900,000 setups 200 setups Machining \ 2,000,000 machine hours 25,000 machine hours Inspection \ 800,000 inspection hours 2,500 inspection hour Owens produces two models: Model X and Model Y.The following table shows how the two products consume activity. Model X Model Y Units completed 300,000 200,000 Engineering hours 1,000 4,000 Setups 80 120 Machine hours 20,000 5,000 Inspection hours 1,500 1,000 -Refer to the figure.How much overhead is assigned to Model Y using the four activity drivers?

(Multiple Choice)

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Question 49

Portland Company applies manufacturing overhead.At the end of the year the following data were available: Actual manufacturing overhead \ 115,000 Estimated manufacturing overhead \ 110,000 Applied manufacturing overhead \ 100,000 The following accounts had the unadjusted balances: Raw materials inventory \ 100,000 Work-in-process inventory \ 100,000 Finished goods inventory \ 100,000 Cost of goods sold \ 300,000 What is the journal entry if the amount is considered material?

(Multiple Choice)

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Question 50

The Emmanuele Company has collected the following data for use in calculating product costs: Activity Data: (expected and actual) Mops Brooms Total Units produced 50,000 250,000 300,000 Prime costs \ 200,000 \ 750,000 \ 950,000 Direct labour hours 10,000 40,000 50,000 Machine hours 20,000 10,000 30,000 Number of setups 25 75 100 Inspection hours 1,200 2,800 4,000 Number of moves 140 210 350 Departmental Data: (expected and actual) Moulding Assembly Total Direct labour hours Mops 5,000 5,000 10,000 Brooms 5,000 35,000 40,000 Total 10,000 40,000 50,000 Machine hours Mops 17,000 3,000 20,000 Brooms 3,000 7,000 10,000 Total 20,000 10,000 30,000 Overhead costs Machining \ 120,000 \ 30,000 \ 150,000 Moving materials 40,000 30,000 70,000 Setting up 70,000 10,000 80,000 Inspecting products 20,000 30,000 50,000 Total 250,000 \ 100,000 \ 350,000 -Refer to the figure.What is the consumption ratio for the plant-wide activity rate?

(Multiple Choice)

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Question 51

The following information is provided for the year: Actual overhead \4 50,000 Actual machine hours worked 25,000 Budgeted machine hours 27,500 Applied overhead \4 87,500 If normal costing is used,what would be the budgeted overhead used to calculate the predetermined rate?

(Multiple Choice)

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Question 52

The Jewnoe plant has two production departments: Moulding and Assembly.The plant produces two products: A and B.Cost information for the production departments is given below: Moulding \ 360,000 Assembly 750,000 The following table presents activity information about the departments and products: Moulding Assembly Total Direct labour hours: A 10,000 20,000 30,000 B 10,000 30,000 40,000 Total 20,000 50,000 70,000 Machine hours: A 5,000 1,000 6,000 B 15,000 2,000 17,000 Total 20,000 3,000 23,000 a.Compute the predetermined overhead rate for each department if Moulding uses machine hours and Assembly uses labour hours. b.Calculate the per unit overhead rate for each product if 80,000 units of A were produced and 90,000 units of B were produced.

(Essay)

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Question 53

Moss Corporation has the following activities: creating bills of materials (BOM), studying manufacturing capabilities, improving manufacturing processes, training employees, and designing tooling. The general ledger accounts reveal the following expenditures for manufacturing engineering: Salaries \ 5,000 Equpment 40,000 Supplies 10,000 Total \ 125000 The equipment is used for two activities: improving processes and designing tooling.Thirty-five percent of the equipment's time is used for improving processes and 65 percent is used for designing tools.The salaries are for two engineers.One is paid $50,000,while the other earns $25,000.The $50,000 engineer spends 40 percent of his time training employees in new processes and 60 percent of his time on improving processes.The remaining engineer spends equal time on all activities.Supplies are consumed in the following proportions: Creating BOMs 25\% Studying capabilities 10\% Improving processes 20\% Training employees 25\% Designing tooling 20\% -Refer to the figure.What is the cost assigned to the designing tooling activity?

(Multiple Choice)

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Question 54

Owens Corporation produces specially machined parts. The parts are produced in batches in one continuous manufacturing process. Each part is custom produced and requires special engineering design activity (based on customer specifications). Once the design is completed, the equipment can be set up for batch production. Once the batch is completed, a sample is taken and inspected to see if the parts are within the tolerances allowed. Thus, the manufacturing process has four activities: engineering, setups, machining, and inspecting. Costs have been assigned to each activity using direct tracing and resource drivers: Activity Expected Cost Activity Driver Activity Capacity Engineering \ 1,000,000 engineerng hours 5,000 hours Setups \ 900,000 setups 200 setups Machining \ 2,000,000 machine hours 25,000 machine hours Inspection \ 800,000 inspection hours 2,500 inspection hour Owens produces two models: Model X and Model Y.The following table shows how the two products consume activity. Model X Model Y Units completed 300,000 200,000 Engineering hours 1,000 4,000 Setups 80 120 Machine hours 20,000 5,000 Inspection hours 1,500 1,000 -Refer to the figure.Using machining and engineering for cost pools and the costs of set-ups and inspection are allocated machining and engineering in proportion to their costs.(Round to two decimal places.),what would be the engineering cost assigned to model X?

(Multiple Choice)

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Question 55

Igor Inc.had a predetermined overhead rate of $2 per direct labour hour.The direct labour hours were estimated to be 25,000.The actual manufacturing overhead incurred was $47,000,and 24,000 actual direct labour hours were worked.How much was overhead either overapplied or underapplied last year?

(Multiple Choice)

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Question 56

Adams Company predicted factory overhead for Year 2 and Year 3 would be $120,000 for each year. The predicted activity for Year 2 and Year 3 would be 30,000 and 20,000 direct labour hours, respectively. Additional data are as follows: Sales in units 25,000 25,000 Selling price per unit \ 20 \ 20 Direct materials and direct labour per unit \ 10 \ 10 The company assumes that the long-run normal production level is 20,000 direct labour hours per year.The actual factory overhead cost for the end of Year 1 and Year 2 was $120,000.Assume that it takes one direct labour hour to make one finished unit. -Refer to the figure.When the normal factory overhead rate is used,what are the gross profits for Year 2 and Year 3,respectively?

(Multiple Choice)

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Question 57

Elbert Manufacturing has recently installed an activity-based relational data base.Using the information contained in the activity relational table,the following pool rates were computed: \ 400 per purchase order \ 24 per machine hour, Process R \ 30 per machine hour, Process S \ 80 per enpineering hour \ 4 per packing order \ 200 per square metre Two products are produced by Elbert: Regular and Super.Each product has an area in the plant that is dedicated to its production.The plant has two manufacturing processes,the regular process (Process R)and the super process (Process S).Other processes include engineering,product handling,and procurement.The product relational table for Elbert is as follows: Regular Praduct: Activit Driver \# and Name Activity Ustape 1 Units 800,000 2 Purchase orders 1,000 3 Machine hours 320,000 4 Engineering hours 5,000 5 Packing orders 400,000 6 Square metres 6,000 Super Praduct: Activit Driver \# and Name Activity Ustage 1 Units 100,000 2 Purchase arders 500 3 Machine hours 40,000 4 Enpineering hours 6,000 5 Packing arders 100,000 6 Square metres 4,000 a.Identify two different concatenated keys.What is the purpose of concatenated keys? b.Using the pool rates and the information from the product relational table,calculate the unit overhead cost for each product. c.Does the product relational table indicate how many activities are in each pool? Is this necessary for product costing? Explain.

(Essay)

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Question 58

If activity-based costing is used,what type of activity would materials handling be classified as?

(Multiple Choice)

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Question 59

If activity-based costing is used,what type of activity would electricity usage be an example of?

(Multiple Choice)

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Question 60

An activity-based costing system uses which of the following procedures?

The following information is provided for the year: Actual direct labour hours worked 36,000 Budgeted overhead \ 300,000 Budgeted direct labour hours 30,000 Actual overhead costs incurred \ 360,000 -Refer to the figure.If normal costing is used,what is the amount of overhead applied for the year?

Kryzski Company has a predetermined overhead rate of $6 per direct labour hour.Last year the company incurred $156,600 of actual manufacturing overhead cost and the account was $12,600 underapplied.How many direct labour hours were worked during the year?

The following information is provided for the year: Actual overhead \4 50,000 Actual machine hours worked 25,000 Budgeted machine hours 27,500 Applied overhead \4 87,500 If normal costing is used,what would be the budgeted overhead used to calculate the predetermined rate?

Igor Inc.had a predetermined overhead rate of $2 per direct labour hour.The direct labour hours were estimated to be 25,000.The actual manufacturing overhead incurred was $47,000,and 24,000 actual direct labour hours were worked.How much was overhead either overapplied or underapplied last year?

If activity-based costing is used,what type of activity would materials handling be classified as?

If activity-based costing is used,what type of activity would electricity usage be an example of?

A: Basic Cost Management Concepts

B: Basic Cost Management Concepts

Cost Behaviour

Cost-Volume-Profit Analysis

Job-Order Costing Systems

Process Costing

Allocating Costs of Support Departments and Joint Products

Budgeting for Planning and Control

Standard Costing: a Functional-Based Control Approach

Responsibility Accounting,performance Evaluation,and Transfer Pricing

Tactical Decision Making

Pricing and Profitability Analysis

Strategic Cost Management

Activity-Based Management

The Balanced Scorecard: Strategic-Based Control

Quality and Environmental Cost Management

Lean Accounting and Productivity Measurement

Inventory Management: Economic Order Quantity,jit,and the Theory of Constraints

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