Exam 5: Cost Allocation and Activity-Based Costing Systems

Allen Crabb Corporation had the following activities, traceable costs, and physical flow of driver units: The above activities are used by departments X and Y as follows: -A cost-management system

City Company has two service departments, Maintenance and Personnel, as well as two production departments, Mixing and Finishing. Maintenance costs are allocated based on square footage while personnel costs are allocated based on number of employees. The following information has been gathered for the current year: -If the step-down method is used to allocate costs, and the Personnel Department renders the greatest service, then the total cost of the Finishing Department after allocation would be

City Company has two service departments, Maintenance and Personnel, as well as two production departments, Mixing and Finishing. Maintenance costs are allocated based on square footage while personnel costs are allocated based on number of employees. The following information has been gathered for the current year: -If the step-down method is used to allocate costs, and the Maintenance Department renders the greatest service, then the total cost of the Mixing Department after allocation would be

Activity-based accounting systems

The necessary cost of an activity that cannot be eliminated without affecting a product's value to the customer is a

The company cafeteria is an example of a producing department.

John Gordan Company had the following activities, traceable costs, and physical flow of driver units: The above activities are used by departments A and B as follows: -How much of the correspondence cost will be assigned to Department B?

Activity-based costing is also known as

Rogers Company manufactures three products from a joint process. The Disk and the Jet can be sold at split-off, but the Beam must be processed further at a total cost of $36,000. Total joint costs for the year amounted to $1,740,000. Additional data are as follows: Required: Using the relative-sales-value method of allocating joint costs, determine the joint costs allocated to each product.

Upjohn Company manufactures four products from a joint process. Joint costs for the year amounted to $350,000. The following data are also available: -Assuming the physical-units method of allocating joint costs, the amount of joint costs allocated to product X would be

City Company has two service departments, Maintenance and Personnel, as well as two production departments, Mixing and Finishing. Maintenance costs are allocated based on square footage while personnel costs are allocated based on number of employees. The following information has been gathered for the current year: -If the step-down method is used to allocate costs, and the Maintenance Department renders the greatest service, the total amount of overhead that would be allocated from Personnel to Mixing is

Which of the following is NOT likely to be an activity in an activity-based costing system?

John Gordan Company had the following activities, traceable costs, and physical flow of driver units: The above activities are used by departments A and B as follows: -What is the cost per driver unit for the account billing activity?

One conventional way of allocating joint costs to products is the

Upjohn Company manufactures four products from a joint process. Joint costs for the year amounted to $350,000. The following data are also available: -Assuming the relative-sales-value method of allocating joint costs, the amount of joint costs allocated to product W would be

Boone Manufacturing has two production departments, Mixing and Finishing, served by one maintenance department. Budgeted fixed costs for the maintenance department for 20X3 were $20,000, and the variable cost per labour hour was $3.00. Other relevant data for 20X3 are as follows: Actual maintenance department costs for 20X3 were $24,000 fixed and $50,000 variable. ^*in labour hours -The amount of fixed maintenance costs allocated to the Mixing Department should be

City Company has two service departments, Maintenance and Personnel, as well as two production departments, Mixing and Finishing. Maintenance costs are allocated based on square footage while personnel costs are allocated based on number of employees. The following information has been gathered for the current year: -If the direct method is used to allocate costs, the total cost of the Finishing Department after allocation would be

Clark Corp. has three service departments, Chocolate, Caramel, and Nougat, as well as two production departments, Melting and Wrapping. The Chocolate and Caramel department costs are allocated based upon ounces, and the Nougat department's costs based upon pieces. The following information is also available: Required: Assume the step-down method of allocating costs is used, and the Chocolate department renders the greatest service, with the Caramel department a close second. Determine the amount of each service department's costs that will be allocated to each production department.

Which of the following statements is FALSE?

County Company has two service departments, Maintenance and Personnel, as well as two production departments, Mixing and Finishing. Maintenance costs are allocated based on square footage, while personnel costs are allocated based on number of employees. The following information has been gathered for the current year: -If the step-down method is used to allocate costs, and the Maintenance Department renders the greatest service, then the total amount of overhead that would be allocated from Personnel to Finishing is