Question 1

The overhead cost per unit of Product G under activity-based costing is closest to which of the following?

Accepted Answer

A)  $4.00. 
B)  $28.66. 
C)  $2.59. 
D)  $10.04. 
A)  $4.00. 
B)  $28.66. 
C)  $2.59. 
D)  $10.04. C

Question 2

(Appendix 7A)Why would an activity-based costing system that is designed for internal decision making NOT conform to generally accepted accounting principles?

Accepted Answer

A)  Some manufacturing costs (i.e. ,the costs of idle capacity and organization-sustaining costs)will not be assigned to products. 
B)  Some non-manufacturing costs are assigned to products. 
C)  First-stage allocations may be based on subjective interview data. 
D)  All of the above. 
A)  Some manufacturing costs (i.e. ,the costs of idle capacity and organization-sustaining costs)will not be assigned to products. 
B)  Some non-manufacturing costs are assigned to products. 
C)  First-stage allocations may be based on subjective interview data. 
D)  All of the above. D

Question 3

Activity-based costing is a costing method that is designed to provide managers with cost information for strategic and other decisions that potentially affect only variable costs.

Accepted Answer

A) True 
 B)False  False

Question 4

The predetermined overhead rate (i.e. ,activity rate)for Activity 2 under the activity-based costing system is closest to which of the following?

Accepted Answer

A)  $10.25. 
B)  $16.77. 
C)  $24.91. 
D)  $26.36. 
A)  $10.25. 
B)  $16.77. 
C)  $24.91. 
D)  $26.36.

Question 5

(Appendix 7A)The unit product cost of product M91F under the activity-based costing system is closest to:

Accepted Answer

A)  $95.20 
B)  $121.57 
C)  $216.77 
D)  $197.95 
A)  $95.20 
B)  $121.57 
C)  $216.77 
D)  $197.95

Question 6

How much cost,in total should not be allocated to orders and customer support in the second stage of the allocation process if the activity-based costing system is used for internal decision making?

Accepted Answer

A)  $0. 
B)  $60,000. 
C)  $80,000. 
D)  $120,000. 
A)  $0. 
B)  $60,000. 
C)  $80,000. 
D)  $120,000.

Question 7

How much cost,in total,would be allocated in the first-stage allocation to the Customer Support activity cost pool?

Accepted Answer

A)  $180,000. 
B)  $255,000. 
C)  $280,000. 
D)  $330,000. 
A)  $180,000. 
B)  $255,000. 
C)  $280,000. 
D)  $330,000.

Question 8

The overhead cost per unit of Product A is closest to which of the following?

Accepted Answer

A)  $22.70. 
B)  $47.89. 
C)  $57.20. 
D)  $59.23. 
A)  $22.70. 
B)  $47.89. 
C)  $57.20. 
D)  $59.23.

Question 9

Costs incurred at which of the following activity levels should NOT be allocated to products for decision-making purposes?

Accepted Answer

A)  Unit-level activities. 
B)  Batch-level activities. 
C)  Product-level activities. 
D)  Organization-sustaining activities. 
A)  Unit-level activities. 
B)  Batch-level activities. 
C)  Product-level activities. 
D)  Organization-sustaining activities.

Question 10

What would be the total overhead cost per bouquet according to the activity-based costing system,rounded to the nearest whole cent? In other words,what would be the overall activity rate for the Making Bouquets activity cost pool?

Accepted Answer

A)  $0.90. 
B)  $1.05. 
C)  $1.10. 
D)  $1.20. 
A)  $0.90. 
B)  $1.05. 
C)  $1.10. 
D)  $1.20.

Question 11

How much cost,in total,would be allocated in the first-stage allocation to the Customer Support activity cost pool?

Accepted Answer

A)  $120,000. 
B)  $255,000. 
C)  $282,000. 
D)  $390,000. 
A)  $120,000. 
B)  $255,000. 
C)  $282,000. 
D)  $390,000.

Question 12

To the nearest whole dollar,how much wages and salaries cost would be allocated to a customer who placed eight orders in a year?

Accepted Answer

A)  $7,474. 
B)  $9,191. 
C)  $10,908. 
D)  $14,948. 
A)  $7,474. 
B)  $9,191. 
C)  $10,908. 
D)  $14,948.

Question 13

(Appendix 7A)The total cost of a unit of product C43S under the activity-based costing system is closest to:

Accepted Answer

A)  $165.34 
B)  $233.26 
C)  $162.22 
D)  $105.34 
A)  $165.34 
B)  $233.26 
C)  $162.22 
D)  $105.34

Question 14

According to the activity-based costing system,what was the total cost (including the costs of raw ingredients)of the function mentioned above,rounded to the nearest whole dollar?

Accepted Answer

A)  $505. 
B)  $655. 
C)  $1,155. 
D)  $1,355. 
A)  $505. 
B)  $655. 
C)  $1,155. 
D)  $1,355.

Question 15

The overhead cost per unit of Product A under the activity-based costing system is closest to which of the following?

Accepted Answer

A)  $11.24. 
B)  $70.79. 
C)  $81.20. 
D)  $86.97. 
A)  $11.24. 
B)  $70.79. 
C)  $81.20. 
D)  $86.97.

Question 16

Cabanos Company manufactures two products,Product C and Product D.The company estimated it would incur $160,790 in manufacturing overhead costs during the current period.Overhead currently is applied to the products on the basis of direct labour hours.Data concerning the current period's operations appear below:
   Required:
a)Compute the predetermined overhead rate under the current method,and determine the unit product cost of each product for the current year.
b)The company is considering using an activity-based costing system to compute unit product costs for external financial reports instead of its traditional system based on direct labour hours.The activity-based costing system would use three activity cost pools.Data relating to these activities for the current period are given below:

Accepted Answer

@#IMG-DLM& 
Determine the unit product cost of eac

Question 17

Daba Company manufactures two products,Product F and Product G.During the current year,the company expects to produce and sell 1,400 units of Product F and 1,800 units of Product
G.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 overhead rates for each activity cen

Question 18

Phoenix Company makes custom covers for air conditioning units for homes and businesses.The company uses an activity-based costing system for its overhead costs.The company has provided the following data concerning its annual overhead costs and its activity cost pools:   
Distribution of Resource Consumption:   
The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs.The amount of activity for the year is as follows:   
Required:
a)Prepare the first-stage allocation of overhead costs to the activity cost pools by filling in the table below:

Accepted Answer

@#IMG-DLM& 
b)Compute the activity rates (i.e. ,co

Question 19

The cost per unit of Product B is closest to which of the following?

Accepted Answer

A)  $17.69. 
B)  $41.58. 
C)  $74.73. 
D)  $81.53. 
A)  $17.69. 
B)  $41.58. 
C)  $74.73. 
D)  $81.53.

Question 20

Human resource management is an example of an activity at which of the following levels?

Accepted Answer

A)  Unit-level activity. 
B)  Product-level activity. 
C)  Batch-level activity. 
D)  Organization-sustaining activity. 
A)  Unit-level activity. 
B)  Product-level activity. 
C)  Batch-level activity. 
D)  Organization-sustaining activity.

The overhead cost per unit of Product G under activity-based costing is closest to which of the following?

(Appendix 7A)Why would an activity-based costing system that is designed for internal decision making NOT conform to generally accepted accounting principles?

Activity-based costing is a costing method that is designed to provide managers with cost information for strategic and other decisions that potentially affect only variable costs.

The predetermined overhead rate (i.e. ,activity rate)for Activity 2 under the activity-based costing system is closest to which of the following?

(Appendix 7A)The unit product cost of product M91F under the activity-based costing system is closest to:

How much cost,in total should not be allocated to orders and customer support in the second stage of the allocation process if the activity-based costing system is used for internal decision making?

How much cost,in total,would be allocated in the first-stage allocation to the Customer Support activity cost pool?

The overhead cost per unit of Product A is closest to which of the following?

Costs incurred at which of the following activity levels should NOT be allocated to products for decision-making purposes?

What would be the total overhead cost per bouquet according to the activity-based costing system,rounded to the nearest whole cent? In other words,what would be the overall activity rate for the Making Bouquets activity cost pool?

How much cost,in total,would be allocated in the first-stage allocation to the Customer Support activity cost pool?

To the nearest whole dollar,how much wages and salaries cost would be allocated to a customer who placed eight orders in a year?

(Appendix 7A)The total cost of a unit of product C43S under the activity-based costing system is closest to:

According to the activity-based costing system,what was the total cost (including the costs of raw ingredients)of the function mentioned above,rounded to the nearest whole dollar?

The overhead cost per unit of Product A under the activity-based costing system is closest to which of the following?

The cost per unit of Product B is closest to which of the following?

Human resource management is an example of an activity at which of the following levels?

Managerial Accounting and the Business Environment

Cost Terms, Concepts, and Classifications

Cost Behaviour: Analysis and Use

Cost-Volume-Profit Relationships

Systems Design: Job-Order Costing

Systems Design: Process Costing

Variable Costing: a Tool for Management

Budgeting

Standard Costs and Overhead Analysis

Reporting for Control

Relevant Costs for Decision Making

Capital Budgeting Decisions

Financial Statement Analysis Online

Filters

Exam 7: Activity-Based Costing: a Tool to Aid Decision Making

The overhead cost per unit of Product G under activity-based costing is closest to which of the following?

(Appendix 7A)Why would an activity-based costing system that is designed for internal decision making NOT conform to generally accepted accounting principles?

Activity-based costing is a costing method that is designed to provide managers with cost information for strategic and other decisions that potentially affect only variable costs.

The predetermined overhead rate (i.e. ,activity rate)for Activity 2 under the activity-based costing system is closest to which of the following?

(Appendix 7A)The unit product cost of product M91F under the activity-based costing system is closest to:

How much cost,in total should not be allocated to orders and customer support in the second stage of the allocation process if the activity-based costing system is used for internal decision making?

How much cost,in total,would be allocated in the first-stage allocation to the Customer Support activity cost pool?

The overhead cost per unit of Product A is closest to which of the following?

Costs incurred at which of the following activity levels should NOT be allocated to products for decision-making purposes?

What would be the total overhead cost per bouquet according to the activity-based costing system,rounded to the nearest whole cent? In other words,what would be the overall activity rate for the Making Bouquets activity cost pool?

How much cost,in total,would be allocated in the first-stage allocation to the Customer Support activity cost pool?

To the nearest whole dollar,how much wages and salaries cost would be allocated to a customer who placed eight orders in a year?

(Appendix 7A)The total cost of a unit of product C43S under the activity-based costing system is closest to:

According to the activity-based costing system,what was the total cost (including the costs of raw ingredients)of the function mentioned above,rounded to the nearest whole dollar?

The overhead cost per unit of Product A under the activity-based costing system is closest to which of the following?

The cost per unit of Product B is closest to which of the following?

Human resource management is an example of an activity at which of the following levels?

Managerial Accounting and the Business Environment

Cost Terms, Concepts, and Classifications

Cost Behaviour: Analysis and Use

Cost-Volume-Profit Relationships

Systems Design: Job-Order Costing

Systems Design: Process Costing

Variable Costing: a Tool for Management

Budgeting

Standard Costs and Overhead Analysis

Reporting for Control

Relevant Costs for Decision Making

Capital Budgeting Decisions

Financial Statement Analysis Online

Filters