Exam 4: Activity-Based Costing, lean Operations, and the Costs of Quality

Hummingbird Manufacturing manufactures small parts and uses an activity-based costing system. The following parts were produced in October with the following information: Total manufacturing costs for part C is

Which of the following is a result of cost distortion?

The cost of maintaining quality control testing equipment would be classified as a(n)________ cost.

The costs incurred when poor quality goods or services are detected and corrected before delivery to customers are called ________ costs.

Which of the following cost of quality categories represent the cost incurred "lost profits from lost customers?"

The management strategy designed to eliminate waste is called a(n)

Which of the following cost of quality categories represent the cost incurred to "rework a defective product" before the product is shipped to a consumer?

Beartowne Enterprises uses an activity-based costing system to assign costs in its auto-parts division. The following units were produced in December with the following information: Total packaging fees for all three parts is:

Carrol Company,which uses an activity-based costing system,produces travel trailers and boat trailers.The company allocates batch setup costs to the two products using the following basic data: Total budgeted setup costs for the year are $158,400. If the setup costs are allocated using direct labor hours,how much of the total setup costs would be allocated to boat trailers?

Which of the following cost of quality categories represent the cost incurred to "perform preventative maintenance on machinery?"

Howard,Fine,& Howard is an advertising agency.The firm uses an activity-based costing system to allocate overhead costs to its services.Information about the firm's activity cost pool rates follows: Stooge Company was a client of Howard,Fine,& Howard.Recently,7 administrative assistant hours,3 new ad campaigns,and 8 meeting hours were incurred for the Stooge Company account. Using the activity-based costing system,how much overhead cost would be allocated to the Stooge Company account?

Which of the following cost of quality categories represent the cost incurred to detect poor quality goods or services prior to consumer delivery in the marketplace?

Duquesne Incorporated recently implemented an activity-based costing system.Total results from all products manufactured in the current year are: Duquesne manufactures sprinkler heads for commercial applications.Annual production and sales of one of its heads,is 2,300.The following relates to the most recent year. Required: 1.Calculate the activity cost pool rates for each of the three activity cost pools listed. 2.Calculate the average cost of one sprinkler head.

There will be little benefit to using an activity-based costing system when products are vastly different from each other and consume different amounts of resources.

The Braveheart Corporation uses departmental overhead rates to allocate its manufacturing overhead to jobs.The company has two departments: cutting and painting.The Cutting Department uses a departmental overhead rate of $12 per machine hour,while the Painting Department uses a departmental overhead rate of $17 per direct labor hour.Job 422 used the following direct labor hours and machine hours in the two departments: The cost for direct labor is $20 per direct labor hour and the cost of the direct materials used by Job 422 is $800. Required: What was the total cost of Job 422 if the Braveheart Corporation used the departmental overhead rates to allocate manufacturing overhead?

Vandalay Industries manufactures two products: toasters and blenders.The annual production and sales of toasters is 2,200 units,while 1,500 units of blenders are produced and sold.The company has traditionally used direct labor hours to allocate its overhead to products.Toasters require 1.25 direct labor hours per unit,while blenders require .75 direct labor hours per unit.The total estimated overhead for the period is $149,115.The company is looking at the possibility of changing to an activity-based costing system for its products.If the company used an activity-based costing system,it would have the following three activity cost pools: The predetermined overhead allocation rate using the traditional costing system would be closest to

Lean thinking is a management strategy that includes maintaining large inventories.

The managerial accountant at the Umbrella Manufacturing Plant allocates manufacturing overhead from each activity to the individual jobs that use the activities for Product A. Product A: Two Products Compute the total MOH allotted to Product A.Next,use the same Activity Cost Allocation Rates to compute the Activity Cost Allocation Rates and the MOH allocated to produce two products.What is the total MOH allocated to manufacture two products?

On a Cost of Quality report,which of the following cost items should be classified as an internal failure cost?

James Industries uses departmental overhead rates to allocate its manufacturing overhead to jobs.The company has two departments: Assembly and Sanding.The Assembly Department uses a departmental overhead rate of $35 per machine hour,while the Sanding Department uses a departmental overhead rate of $20 per direct labor hour.Job 603 used the following direct labor hours and machine hours in the two departments: The cost for direct labor is $30 per direct labor hour and the cost of the direct materials used by Job 542 is $1,400. What was the total cost of Job 542 if James Industries used the departmental overhead rates to allocate manufacturing overhead?