Question 1

The ________________________ overhead rate method uses a single rate for allocating overhead costs to products.

Accepted Answer

The answer of The ________________________ overhead rate method uses a...

Question 2

Compute Aztec's departmental overhead rate for the mixing department based on direct labor hours.

Accepted Answer

A) $1.50 per DLH. 
B) $5.00 per DLH. 
C) $0.75 per DLH. 
D) $0.50 per DLH. 
E) $2.08 per DLH. 
A) $1.50 per DLH. 
B) $5.00 per DLH. 
C) $0.75 per DLH. 
D) $0.50 per DLH. 
E) $2.08 per DLH.

Question 3

From an ABC perspective, what causes costs to be incurred?

Accepted Answer

A) Financial transactions. 
B) The volume of units produced. 
C) Debits and credits. 
D) Management decisions. 
E) Activities. 
A) Financial transactions. 
B) The volume of units produced. 
C) Debits and credits. 
D) Management decisions. 
E) Activities.

Question 4

Allocated overhead costs vary depending upon the allocation methods used.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following companies would be best served by a plantwide overhead rate?

Accepted Answer

A) A company that manufactures many different products and whose operations are an equal mix of labor and mechanized work. 
B) A company that manufactures few products and whose operations are labor intensive. 
C) A company that manufactures many different products and whose operations are highly mechanized. 
D) A company whose products use overhead resources in very different ways. 
E) A company whose products differ in batch size and complexity and consume different amounts of overhead resources. 
A) A company that manufactures many different products and whose operations are an equal mix of labor and mechanized work. 
B) A company that manufactures few products and whose operations are labor intensive. 
C) A company that manufactures many different products and whose operations are highly mechanized. 
D) A company whose products use overhead resources in very different ways. 
E) A company whose products differ in batch size and complexity and consume different amounts of overhead resources.

Question 6

A company estimates that overhead costs for the next year will be $9,234,000 for indirect labor and $156,800 for factory utilities.The company uses machine hours as its overhead allocation base.If 500,000 machine hours are planned for this next year, what is the company's plantwide overhead rate? (Round to two decimal places)

Accepted Answer

A) $0.05 per machine hour. 
B) $18.47 per machine hour. 
C) $18.78 per machine hour. 
D) $0.31 per machine hour. 
E) $3.19 per machine hour. 
A) $0.05 per machine hour. 
B) $18.47 per machine hour. 
C) $18.78 per machine hour. 
D) $0.31 per machine hour. 
E) $3.19 per machine hour.

Question 7

A cost pool is a collection of costs that are related to the same or similar activity.

Accepted Answer

A) True 
 B)False

Question 8

When products differ in batch size and complexity, they usually consume different amounts of overhead resources.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following are advantages of using the plantwide overhead rate method?

Accepted Answer

A) The use of cost pools is considerably more accurate than other overhead allocations. 
B) The necessary information is readily available. 
C) It is more accurate than traditional overhead allocations. 
D) Each department has its own overhead rate and its own allocation base. 
E) It takes into account that when products differ in batch size and complexity, they usually consume different amounts of overhead resources. 
A) The use of cost pools is considerably more accurate than other overhead allocations. 
B) The necessary information is readily available. 
C) It is more accurate than traditional overhead allocations. 
D) Each department has its own overhead rate and its own allocation base. 
E) It takes into account that when products differ in batch size and complexity, they usually consume different amounts of overhead resources.

Question 10

Compute Aztec's departmental overhead rate for the mixing department based on machine hours.

Accepted Answer

A) $1.50 per MH. 
B) $5.00 per MH. 
C) $0.75 per MH. 
D) $0.50 per MH. 
E) $2.08 per MH. 
A) $1.50 per MH. 
B) $5.00 per MH. 
C) $0.75 per MH. 
D) $0.50 per MH. 
E) $2.08 per MH.

Question 11

How does ABC differ from using multiple departmental rates?

Accepted Answer

ABC differs from using multiple departme

Question 12

________________________focuses on activities and the cost of carrying out activities.

Accepted Answer

Activity-b

Question 13

Distorted product cost information can result in poor decisions.

Accepted Answer

A) True 
 B)False

Question 14

Ridley Company estimates that overhead costs for the next year will be $6,870,000 for indirect labor and $450,000 for factory utilities.The company uses machine hours as its overhead allocation base.If 160,000 machine hours are planned for this next year, what is the company's plantwide overhead rate?

Accepted Answer

A) $.02186 per machine hour. 
B) $42.9375 per machine hour. 
C) $45.75 per machine hour. 
D) $2.8125 per machine hour. 
E) $.3555 per machine hour. 
A) $.02186 per machine hour. 
B) $42.9375 per machine hour. 
C) $45.75 per machine hour. 
D) $2.8125 per machine hour. 
E) $.3555 per machine hour.

Question 15

Direct labor, direct materials, and manufacturing overhead are all product costs.Why is overhead more difficult to account for than either direct labor or direct materials?

Accepted Answer

Overhead costs are not directl

Question 16

The major advantages of using a single plantwide overhead rate are ____________________ and ____________________.

Accepted Answer

readily available in

Question 17

Case Company allocates $5.00 overhead to each unit produced.The company uses a plantwide overhead rate with machine hours as the allocation base.Given the amounts below, how many machine hours does the company expect in department 2? $$\begin{array} { l c c } 
\text { Estimated: } & \text { Department 1 } & \text { Department } 2 \
\text { Marufacturing overhead costs } & \$ 250,000 & \$ 150,000 \
\text { Direct labor hours } & { 8 , 0 0 0 D L H } & 12,000 \mathrm { DLH } \
\text { Machine hours } & 55,000 \mathrm { MH } & ? \mathrm { MH }
\end{array}$$

Accepted Answer

A) 25,000 MH 
B) 137,500 MH 
C) 82,500 MH 
D) 88,000 MH 
E) 33,000 MH 
A) 25,000 MH 
B) 137,500 MH 
C) 82,500 MH 
D) 88,000 MH 
E) 33,000 MH

Question 18

Facility level costs are not traceable to individual product lines, batches or units.

Accepted Answer

A) True 
 B)False

Question 19

Kinetic Company estimates that overhead costs for the next year will be $1,600,000 for indirect labor and $400,000 for factory utilities.The company uses direct labor hours as its overhead allocation base.If 50,000 direct labor hours are planned for this next year, then the plantwide overhead rate is $.025 per direct labor hour.

Accepted Answer

A) True 
 B)False

Question 20

Explain cost flows for the departmental overhead rate method.

Accepted Answer

The departmental overhead rate method us

The ________________________ overhead rate method uses a single rate for allocating overhead costs to products.

Compute Aztec's departmental overhead rate for the mixing department based on direct labor hours.

From an ABC perspective, what causes costs to be incurred?

Allocated overhead costs vary depending upon the allocation methods used.

Which of the following companies would be best served by a plantwide overhead rate?

A cost pool is a collection of costs that are related to the same or similar activity.

When products differ in batch size and complexity, they usually consume different amounts of overhead resources.

Which of the following are advantages of using the plantwide overhead rate method?

Compute Aztec's departmental overhead rate for the mixing department based on machine hours.

How does ABC differ from using multiple departmental rates?

________________________focuses on activities and the cost of carrying out activities.

Distorted product cost information can result in poor decisions.

Direct labor, direct materials, and manufacturing overhead are all product costs.Why is overhead more difficult to account for than either direct labor or direct materials?

The major advantages of using a single plantwide overhead rate are and .

Facility level costs are not traceable to individual product lines, batches or units.

Explain cost flows for the departmental overhead rate method.

Managerial Accounting Concepts and Principles

Job Order Costing and Analysis

Process Costing and Analysis

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing and Performance Reporting

Master Budgets and Performance Planning

Flexible Budgets and Standard Costing

Performance Measurement and Responsibility Accounting

Relevant Costing for Managerial Decisions

Capital Budgeting and Investment Analysis

Reporting and Analyzing Cash Flows

Analyzing Financial Statements

Time Value of Money

Basic Accounting for Transactions

Accounting for Partnerships

Filters

Exam 4: Activity-Based Costing and Analysis

The ________________________ overhead rate method uses a single rate for allocating overhead costs to products.

Compute Aztec's departmental overhead rate for the mixing department based on direct labor hours.

From an ABC perspective, what causes costs to be incurred?

Allocated overhead costs vary depending upon the allocation methods used.

Which of the following companies would be best served by a plantwide overhead rate?

A cost pool is a collection of costs that are related to the same or similar activity.

When products differ in batch size and complexity, they usually consume different amounts of overhead resources.

Which of the following are advantages of using the plantwide overhead rate method?

Compute Aztec's departmental overhead rate for the mixing department based on machine hours.

How does ABC differ from using multiple departmental rates?

________________________focuses on activities and the cost of carrying out activities.

Distorted product cost information can result in poor decisions.

Direct labor, direct materials, and manufacturing overhead are all product costs.Why is overhead more difficult to account for than either direct labor or direct materials?

The major advantages of using a single plantwide overhead rate are ____________________ and ____________________.

Facility level costs are not traceable to individual product lines, batches or units.

Explain cost flows for the departmental overhead rate method.

Managerial Accounting Concepts and Principles

Job Order Costing and Analysis

Process Costing and Analysis

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing and Performance Reporting

Master Budgets and Performance Planning

Flexible Budgets and Standard Costing

Performance Measurement and Responsibility Accounting

Relevant Costing for Managerial Decisions

Capital Budgeting and Investment Analysis

Reporting and Analyzing Cash Flows

Analyzing Financial Statements

Time Value of Money

Basic Accounting for Transactions

Accounting for Partnerships

Filters

The major advantages of using a single plantwide overhead rate are and .