Rach & Johnson is an advertising agency.The firm uses an activity-based costing system to allocate overhead costs to its services.Information about the firm's activity cost pool rates follows: \[\begin{array} { | l | r | l | } \hline \text { Activity cost pool } & { \text { Activity rate } } \\ \hline \text { Clerical costs } & \$ 26 & \text { per administrative assistant hour } \\ \hline \text { Legal filing fees } & \$ 150 & \text { per new ad campaign } \\ \hline \text { Client meeting time } & \$ 57 & \text { per meting hour } \\ \hline \end{array}\] Smythe Company was a client of Rach & Johnson.Recently,8 administrative assistant hours,2 new ad campaigns,and 6 meeting hours were incurred for the Smythe Company account. Using the activity-based costing system,how much overhead cost would be allocated to the Smythe Company account?

A) $ 233 B) $ 508 C) $ 850 D) $ 3,912 A) $ 233 B) $ 508 C) $ 850 D) $ 3,912

Pittinger Company manufactures cuckoo clocks and uses an activity-based costing system to allocate all manufacturing conversion costs.Each cuckoo clock consists of 10 separate parts totaling $120 in direct materials,and requires 2.0 hours of machine time to produce.Additional information follows: $\begin{array}{|l|l|r|} \hline \text { Activity } & \text { Allocation Base } & \text { Cost Allocation Rate } \\ \hline \text { Materials handling } & \text { Number of parts } & \$ 1.25 \text { per part } \\ \hline \text { Machining } & \text { Machine hours } & \$ 2.50 \text { per machine hour } \\ \hline \text { Assembling } & \text { Number of parts } & \$ 0.50 \text { per part } \\ \hline \text { Packaging } & \text { Number of finished units } & \$ 1.50 \text { per finished unit } \\ \hline \end{array}$ -What is the cost of machining per cuckoo clock?

A) $5.00 B) $3.00 C) $10.50 D) $25.00 A) $5.00 B) $3.00 C) $10.50 D) $25.00

Dudley & Spahr,Attorneys at Law,provide a variety of legal services.The law firm uses an activity-based costing system and has developed the following activity pool cost rates: \[\begin{array} { | l | r | l | } \hline { \text { Activity cast poul } } &{ \text { Activity rate } } \\ \hline \text { Legal research } & \$ 48 & \text { per hour of paralegal time } \\ \hline \text { Court fling costs } & \$ 500 & \text { per case filed } \\ \hline \text { Document preparation } & \$ 17 & \text { per document } \\ \hline \end{array}\] Cost and activity data related to two clients is as follows: 11ea84ce_c55a_4bc3_83dc_3d5cf829d38d How much overhead cost would be allocated to Client 103 using the activity-based costing system?

A) $ 565 B) $ 3,113 C) $ 8,743 D) $ 32,205 A) $ 565 B) $ 3,113 C) $ 8,743 D) $ 32,205

Exam 4: Activity-Based Costing, lean Production, and the Costs of Quality

Jason Corporation uses activity-based costing.The company produces two products: Snaps and Pops.The expected annual production of Snaps is 1,000 units,while the expected annual production of Pops is 3,000 units.There are three activity cost pools: Assembly,Testing,and Packing.The estimated costs and activities for each of these three activity pools follows: Expected activity Activity cost pool Estimated cost Snaps Pops Total Assembly 4,550 600 100 700 Testing \ 22,320 1,100 700 1,800 Packing \ 1,738 60 160 220 The cost pool activity rate for Testing would be:

(Multiple Choice)

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Question 21

In using an ABC system,which of the following steps is NOT performed before the company's year begins?

(Multiple Choice)

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Question 22

The cost to research and develop,design and market new models would be considered a unit- level cost.

(True/False)

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Question 23

Rach & Johnson is an advertising agency.The firm uses an activity-based costing system to allocate overhead costs to its services.Information about the firm's activity cost pool rates follows: Activity cost pool Activity rate Clerical costs \ 26 per administrative assistant hour Legal filing fees \ 150 per new ad campaign Client meeting time \ 57 per meting hour Smythe Company was a client of Rach & Johnson.Recently,8 administrative assistant hours,2 new ad campaigns,and 6 meeting hours were incurred for the Smythe Company account. Using the activity-based costing system,how much overhead cost would be allocated to the Smythe Company account?

(Multiple Choice)

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Question 24

Green Bags Company manufactures cloth grocery bags to be sold to grocery stores and other retailers.Green Bags Company sells the bags in cases of 1,000 bags.The bags come in three sizes: Large,Medium,and Small.Currently,Green Bags Company uses a single plantwide overhead rate to allocate its $7,141,100 of annual manufacturing overhead.Of this amount,$1,875,000 is associated with the Large Bag line,$2,992,500 is associated with the Medium Bag line,and $2,273,000 is associated with the Small Bag line.Green Bags Company is currently running a total of 37,000 machine hours: 12,500 in the Large Bag line,13,300 in the Medium Bag line,and 11,200 in the Small Bag line.Green Bags Company uses machine hours as the cost driver for manufacturing overhead costs. - Which product line(s)have been overcosted or undercosted by using the plantwide manufacturing overhead rate? A.Large Bags has been overcosted; Medium and Small have been undercosted. B.Large,Medium,and Small Bags have all been overcosted. C.Large,Medium,and Small Bags have all been undercosted. D.Large Bags has been undercosted; Medium and Small have been overcosted.

(Essay)

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Question 25

Product-level activities and costs are incurred for a particular product,regardless of the number of units or batches of the product produced.

(True/False)

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Question 26

The cost of maintenance on the entire production plant would be considered a batch-level cost.

(True/False)

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Question 27

Which term listed below describes a system where companies purchase raw materials when needed in production and complete finished goods when needed by customers?

(Multiple Choice)

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Question 28

Pittinger Company manufactures cuckoo clocks and uses an activity-based costing system to allocate all manufacturing conversion costs.Each cuckoo clock consists of 10 separate parts totaling $120 in direct materials,and requires 2.0 hours of machine time to produce.Additional information follows: Activity Allocation Base Cost Allocation Rate Materials handling Number of parts \ 1.25 per part Machining Machine hours \ 2.50 per machine hour Assembling Number of parts \ 0.50 per part Packaging Number of finished units \ 1.50 per finished unit -What is the cost of machining per cuckoo clock?

(Multiple Choice)

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Question 29

The production system designed to eliminate waste is called a(n):

(Multiple Choice)

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Question 30

Which is NOT a characteristic of companies using lean production systems?

(Multiple Choice)

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Question 31

Which term listed below describes costs incurred when the company detects poor quality goods or services before delivery to the customer?

(Multiple Choice)

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Question 32

Dudley & Spahr,Attorneys at Law,provide a variety of legal services.The law firm uses an activity-based costing system and has developed the following activity pool cost rates: Activity cast poul Activity rate Legal research \ 48 per hour of paralegal time Court fling costs \ 500 per case filed Document preparation \ 17 per document Cost and activity data related to two clients is as follows: 11ea84ce_c55a_4bc3_83dc_3d5cf829d38d How much overhead cost would be allocated to Client 103 using the activity-based costing system?

(Multiple Choice)

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Question 33

Lean production systems typically strive for shorter setup times.

(True/False)

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Question 34

Which of the following pertains to a lean costing or production system?

(Multiple Choice)

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Question 35

Green Bags Company manufactures cloth grocery bags to be sold to grocery stores and other retailers.Green Bags Company sells the bags in cases of 1,000 bags.The bags come in three sizes-Large,Medium,and Small.Currently,Green Bags Company uses a single plant-wide overhead rate to allocate its $7,141,100 of annual manufacturing overhead.Of this amount,$1,875,000 is associated with the Large Bag line,$2,992,500 is associated with the Medium Bag line,and $2,273,000 is associated with the Small Bag line.Green Bags Company is currently running a total of 37,000 machine hours-12,500 in the Large Bag line,13,300 in the Medium Bag line,and 11,200 in the Small Bag line.Green Bags Company uses machine hours as the cost driver for manufacturing overhead costs. - The plant-wide manufacturing overhead rate would be closest to:

(Multiple Choice)

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Question 36

Rhapsody Corporation manufactures several different products and uses an activity-based costing system.Information from its system for the year for all products follows: Activity cast poul Tatal cast Tatal activity Assembly \ 120,000 12,000 machine-haurs Pracessing arders \ 80,750 4,750 arders Inspection \ 22,880 1,760 inspection-hours The annual production and sales of one of its products,the Sizzler,are 1,000 units.The following data relate to the production and sales of Sizzlers in the most recent year: Annual machine hours 750 Annual number of orders 180 Annual number of inspections 350 Direct materials cost per unit \ 125.00 Direct labor cost per unit \ 67.00 Required: 1.Calculate the activity cost pool rates for each of the three activity cost pools listed. 2.Calculate the average cost of one Sizzler.

(Essay)

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Question 37

Which of the following is one of the four cost categories typically found on a cost of quality report?

(Multiple Choice)

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Question 38

The cost of testing incoming raw materials from a supplier would be classified as a(n):

(Multiple Choice)

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Question 39

Machine set-up would most likely be classified as a:

(Multiple Choice)

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Question 40

Showing 21 - 40 of 201

In using an ABC system,which of the following steps is NOT performed before the company's year begins?

The cost to research and develop,design and market new models would be considered a unit- level cost.

Product-level activities and costs are incurred for a particular product,regardless of the number of units or batches of the product produced.

The cost of maintenance on the entire production plant would be considered a batch-level cost.

Which term listed below describes a system where companies purchase raw materials when needed in production and complete finished goods when needed by customers?

The production system designed to eliminate waste is called a(n):

Which is NOT a characteristic of companies using lean production systems?

Which term listed below describes costs incurred when the company detects poor quality goods or services before delivery to the customer?

Lean production systems typically strive for shorter setup times.

Which of the following pertains to a lean costing or production system?

Which of the following is one of the four cost categories typically found on a cost of quality report?

The cost of testing incoming raw materials from a supplier would be classified as a(n):

Machine set-up would most likely be classified as a:

Introduction to Managerial Accounting

Building Blocks of Managerial Accounting

Job Costing

Process Costing

Cost Behavior

Cost-Volume-Profit Analysis

Short Term Business Decisions

The Master Budget and Responsibility Accounting

Flexible Budgets and Standard Costs

Performance Evaluation and the Balanced Scorecard

Capital Investment Decisions and the Time Value of Money

Statement of Cash Flows

Financial Statement Analysis

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