Exam 19: Cost Management Systems: Activity-Based, just-In-Time, and Quality Management Systems

Stealth,Inc.produces two types of drones,rotary and fixed wing.Stealth estimated $1,210,000 of manufacturing overhead,and 55,000 machine hours for the year.The allocation base for overhead costs is machine hours.The rotary model actually consumed 26,000 machine hours,and the fixed wing type consumed 29,000 machine hours.How much overhead is allocated to the rotary model?

Reliable Car Parts,a manufacturer of spare parts,has two production departments-Assembling and Packaging.The Assembling Department is mechanized,while the Packaging Department is labor oriented.Estimated manufacturing overhead costs for the year were $17,400,000 for Assembling and $11,700,000 for Packaging.Calculate the department predetermined overhead allocation rates for the Assembling and Packaging Departments,respectively,if the total estimated machine hours were 35,000 and labor hours were 21,000 for the year.(Round your answer to the nearest cent.)

The ________ system pulls materials,labor,and overhead costs into production under a just-in-time management system.

Tungsten,Inc.manufactures both normal and premium tube lights.The company allocates manufacturing overhead using a single plantwide rate with machine hours as the allocation base.Estimated overhead costs for the year are $102,000.Additional estimated information is given below. Normal Premium Machine hours () 24,000 39,000 Direct materials \ 51,000 \ 480,000 Calculate the predetermined overhead allocation rate.(Round your answer to the nearest cent.)

Which of the following statements is true?

________ are costs incurred after the company delivers poor-quality goods or services to customers and then has to make things right with the customer.

A company is most likely to use value engineering ________.

Activity-based costing uses a common allocation base for all activities.

Goldberg Company,a manufacturer of small appliances,had the following activities,allocated costs,and allocation bases: Activities Allocated Costs Allocation Base Account inquiry (hours) \ 73,000 2100 hours Account billing (lines) \ 42,000 16,000 lines Account verification (accounts) \ 19,000 29,000 accounts Correspondence (letters) \ 13,000 1400 letters The above activities are carried out at two of its regional offices. Activities Northeast Office Midwest Office Account inquiry (hours) 160 hours 250 hours Account billing (lines) 10,000 lines 9000 lines Account verification (accounts) 1800 accounts 650 accounts Correspondence (letters) 40 letters 100 letters What is the cost per account for the account verification activity? (Round your answer to the nearest cent.)

Internal failure costs are costs incurred ________.

Manufacturing overhead costs,which are also known as indirect costs,cannot be cost-effectively traced to products.

Just-in-time costing systems use a combined account for Raw Materials Inventory and Work-in-Process Inventory known as the ________.

Which of the following decisions will most likely involve the use of activity-based management?

You are concerned that your current single plantwide allocation rate is giving inaccurate results and would like to switch to an activity-based costing method.Why is activity-based costing considered more accurate than traditional costing methods?

A product mix decision focuses on generating the maximum profit for a company but does not consider the company's limited production capabilities.

Blade Breeze Company manufactures ceiling fans and uses an activity-based costing system.Each ceiling fan has 20 separate parts.The direct materials cost is $70,and each ceiling fan requires 2.50 hours of machine time to manufacture.Additional information is as follows: Activity Allocation Base Predetermined Overhead Allocation Rate Materials handling Number of parts \ 0.08 Machining Machine hours 7.20 Assembling Number of parts 0.35 Packaging Number of finished units 2.80 What is the cost of machining per ceiling fan? (Round any intermediate calculations and your final answer to the nearest cent.)

Camilleri,Inc.completed the production of 500 units with standard costs of $520 for direct materials and $75 for conversion costs.During the current year,it incurred $260,000 for direct materials and $44,000 for conversion costs.The company uses a just-in-time costing system.Record the adjusting entry for the amount of underallocated or overallocated conversion costs.Omit explanation.

Bella,Inc.manufactures two kinds of bags-totes and satchels.The company allocates manufacturing overhead using a single plantwide rate with direct labor cost as the allocation base.Estimated overhead costs for the year are $25,750.Additional estimated information is given below. Totes Satchels Direct materials cost per unit \ 33 \ 44 Direct labor cost per unit \ 52 \ 60 Number of units 520 370 Calculate the predetermined overhead allocation rate.(Round your answer to two decimal places.)

A radial tire manufacturer produces products in two departments-Divisions A and B.The company uses separate predetermined overhead allocation rates for each department to allocate its overhead.Divisions A and B have estimated manufacturing overhead costs of $160,000 and $360,000,respectively.Division A uses machine hours as the allocation base,and Division B uses direct labor hours as the allocation base.The total estimated machine hours were 31,000,and direct labor hours were 22,000 for the year.Calculate the departmental predetermined overhead allocation rates.(Round your answer to the nearest cent.)

Appraisal costs are costs incurred ________.