Hinckley & Granger Company had the following activities,estimated indirect activity costs,and allocation bases: $\begin{array} { | l | r | r | } \hline \text { Activities } & \text { Indirect Activity Costs } & \text { Allocation Base } \\ \hline \text { Account inquiry (hours) } & \$ 75,000 & 2,500 \\ \hline \text { Account billing (lines) } & \$ 45,000 & 30,000 \\ \hline \text { Account verification (accounts) } & \$ 18,000 & 24,000 \\ \hline \text { Correspondence (letters) } & \$ 40,000 & 4,000 \\ \hline \end{array}$ Hinckley & Granger uses activity based costing. The above activities are used by Departments P and Q as follows: $\begin{array} { | l | r | r | } \hline & \text { Department P } & \text { Department Q } \\ \hline \text { Account inquiry (hours) } & 300 & 600 \\ \hline \text { Account billing (lines) } & 8,000 & 6,000 \\ \hline \text { Account verification (accounts) } & 5,000 & 4,500 \\ \hline \text { Correspondence (letters) } & 500 & 600 \\ \hline \end{array}$ - What is the cost per driver unit for the account verification activity?

A) $ 0.75 B) $ 1.50 C) $ 3.00 D) $10.00 A) $ 0.75 B) $ 1.50 C) $ 3.00 D) $10.00

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 total manufacturing cost per cuckoo clock?

A) $142.50 B) $ 24.00 C) $144.00 D) $ 25.00 A) $142.50 B) $ 24.00 C) $144.00 D) $ 25.00

Pittinger Company manufactures cuckoo clocks and uses an activity-based costing system.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 materials handling per cuckoo clock?

A) $3.00 B) $5.00 C) $4.50 D) $12.50 A) $3.00 B) $5.00 C) $4.50 D) $12.50

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

Hinckley & Granger Company had the following activities,estimated indirect activity costs,and allocation bases: Activities Indirect Activity Costs Allocation Base Account inquiry (hours) \ 75,000 2,500 Account billing (lines) \ 45,000 30,000 Account verification (accounts) \ 18,000 24,000 Correspondence (letters) \ 40,000 4,000 Hinckley & Granger uses activity based costing. The above activities are used by Departments P and Q as follows: Department P Department Q Account inquiry (hours) 300 600 Account billing (lines) 8,000 6,000 Account verification (accounts) 5,000 4,500 Correspondence (letters) 500 600 - What is the cost per driver unit for the account verification activity?

(Multiple Choice)

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Question 81

Companies often refine their cost allocation systems to minimize the amount of cost distortion caused by the simpler cost allocation systems.

(True/False)

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Question 82

Research and development would most likely be classified as a:

(Multiple Choice)

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Question 83

Lean production systems typically carry large inventories.

(True/False)

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Question 84

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 total manufacturing cost per cuckoo clock?

(Multiple Choice)

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Question 85

Vittoria Corporation manufactures two products-Carts and Wheelbarrows.The annual production and sales of Carts is 2,000 units,while 1,800 units of Wheelbarrows are produced and sold.The company has traditionally used direct labor hours to allocate its overhead to products.Carts require 1.0 direct labor hours per unit,while Wheelbarrows require 0.5 direct labor hours per unit.The total estimated overhead for the period is $117,500.The company is looking at the possibility of changing to an activity-based costing system for its products.If the company used an activity-based costing system,it would have the following three activity cost pools: - The cost pool activity rate for Engineering Costs would be closest to:

(Multiple Choice)

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Question 86

Pittinger Company manufactures cuckoo clocks and uses an activity-based costing system.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 materials handling per cuckoo clock?

(Multiple Choice)

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Question 87

Inspection is considered a value-added activity

(True/False)

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Question 88

It is easier to allocate indirect costs to the products that caused those costs if you use the ABC system rather than traditional costing systems.

(True/False)

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Question 89

Internal failure costs occur when poor-quality goods or services are not detected until after delivery to customers.

(True/False)

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Question 90

With increased competition,managers need more accurate estimates of product costs in order to set prices and to identify the most profitable products.

(True/False)

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Question 91

Why are the benefits of adopting ABC/ABM higher for companies in competitive markets?

(Multiple Choice)

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Question 92

What is the last step in developing an ABC system?

(Multiple Choice)

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Question 93

One condition that favors using departmental overhead rates,rather than a plantwide overhead rate,is that different jobs or products use the departments to a different extent.

(True/False)

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Question 94

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

(Multiple Choice)

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Question 95

Non-value-added activities are:

(Multiple Choice)

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Question 96

Lean production systems typically focus on lengthening the manufacturing cycle time.

(True/False)

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Question 97

Which of the following cost items should be classified as a prevention cost on a cost of quality report?

(Multiple Choice)

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Question 98

The costs incurred when poor quality goods or services are detected and corrected before delivery to customers are called:

(Multiple Choice)

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Question 99

Direct labor hours would be the most appropriate cost allocation base for a Machining Department that uses machine robotics extensively.

(True/False)

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Question 100

Showing 81 - 100 of 201

Companies often refine their cost allocation systems to minimize the amount of cost distortion caused by the simpler cost allocation systems.

Research and development would most likely be classified as a:

Lean production systems typically carry large inventories.

Inspection is considered a value-added activity

It is easier to allocate indirect costs to the products that caused those costs if you use the ABC system rather than traditional costing systems.

Internal failure costs occur when poor-quality goods or services are not detected until after delivery to customers.

With increased competition,managers need more accurate estimates of product costs in order to set prices and to identify the most profitable products.

Why are the benefits of adopting ABC/ABM higher for companies in competitive markets?

What is the last step in developing an ABC system?

One condition that favors using departmental overhead rates,rather than a plantwide overhead rate,is that different jobs or products use the departments to a different extent.

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

Non-value-added activities are:

Lean production systems typically focus on lengthening the manufacturing cycle time.

Which of the following cost items should be classified as a prevention cost on a cost of quality report?

The costs incurred when poor quality goods or services are detected and corrected before delivery to customers are called:

Direct labor hours would be the most appropriate cost allocation base for a Machining Department that uses machine robotics extensively.

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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