Exam 5: Activity-Based Costing and Management

Answer the following questions using the information below: Marpole Enterprises has identified three cost pools to allocate overhead costs.The following estimates are provided for the coming year: The accounting records show the Bossman Job consumed the following resources: -When selling prices are based on costs assigned using the single cost driver, direct labour hours, then the Bossman job

Answer the following question(s)using the information below.Ernsting Printers has contracts to complete weekly supplements required by forty-six customers.For the year 2018, manufacturing overhead cost estimates total $420,000 for an annual production capacity of 12 million pages.For 2018 Ernsting Printers has decided to evaluate the use of additional cost pools.After analyzing manufacturing overhead costs, it was determined that number of design changes, setups, and inspections are the primary manufacturing overhead cost drivers.The following information was gathered during the analysis: During 2018, two customers, Wealth Managers and Health Systems, are expected to use the following printing services: -Using activity-based costing to allocate overhead costs, what is the total manufacturing overhead cost estimate for Wealth Managers during 2018?

Answer the following questions using the information below: Marpole Enterprises has identified three cost pools to allocate overhead costs.The following estimates are provided for the coming year: The accounting records show the Bossman Job consumed the following resources: -If Marpole Enterprises uses an ABC system then what amount of indirect costs will be allocated to the Bossman job?

Activity-based costing can "unlock" savings, not apparent when traditional costing is used, because the system requires a closer examination of operations.

Which of the following is a sign that a "smoothing out" costing system exists?

Explain how a top-selling product may actually result in losses for the company.

The benefit of an ABC system is that it provides information to make better decisions at a lower costs than traditional (simple)cost systems.

Analyze the two costing systems below and determine which one is an ABC system, stating the reasons for your choice.

List four ways that activity-based management can be effective.

Use the information below to answer the following question(s).Fran Ferry Company had the following activities, pooled costs, and physical flow of driver units.The company uses activity-based costing. The above activities are used by departments A and B as follows: -How much of the account inquiry cost will be assigned to Department A?

Designing a new model of washing machine would be classified in the ABC cost hierarchy as a (an)

A primary reason for assigning selling and distribution costs to products for analytical purposes is

Asian Tools, a manufacturer of precision hand tools, is concerned with the apparent lack of controls over cost incurrence in its Hand Tool Division.The division has always used a plant-wide rate for allocating manufacturing overhead to its products.However, some products cost substantially more than competitors' retail prices while others are substantially less.The division manager believes that a better cost allocation method can be developed.With the assistance of a plant supervisor, the accounting department has been able to establish the following relationships between production activities and the indirect costs of the activities: The traditional allocation method is based upon direct manufacturing labour hours, and if that method is used the rate is $28 per hour.Required: Compute the unit indirect manufacturing costs of a batch of 200 tools if the batch required 220 parts, 8 machine hours, 52 minutes of finishing time, and 46 direct labour hours:

Answer the following question(s)using the information below.Wallace Printing has contracts to complete weekly supplements required by forty-six customers.For the year 2019, manufacturing overhead cost estimates total $420,000 for an annual production capacity of 10 million pages.For 2019 Wallace Printing decided to evaluate the use of additional cost pools.After analyzing manufacturing overhead costs, it was determined that number of design changes, setups, and inspections are the primary manufacturing overhead cost drivers.The following information was gathered during the analysis: During 2019, two customers, Wayward Insurance and Hapless Systems, are expected to use the following printing services: -If manufacturing overhead costs are considered one large cost pool and are assigned based on 10 million pages of production capacity, what is the cost driver rate?

A top-selling product might actually result in recorded losses for the company.

One of the aspects of ABM is eliminating activities that do not add value.

Use the information below to answer the following question(s).Bill Cobb Corporation had the following activities, pooled costs, and physical flow of driver units.The company uses activity-based costing. The above activities are used by departments X and Y as follows: -How much of the correspondence cost will be assigned to Department X?

Installing a new control panel on a factory production machine would be classified in the ABC cost hierarchy as a (an)

Answer the following question(s)using the information below.Products S5 and CP8 each are assigned $50.00 in indirect costs by a traditional costing system.An activity analysis revealed that although production requirements are identical, S5 requires 45 minutes less setup time than CP8. -According to an ABC system, S5 uses a disproportionately

Which of the following statements is TRUE regarding activity-based costing systems?