Exam 7: Activity-Based Costing and Activity Based Management

What is an activity cost pool and how are activity cost pool rates calculated?

When using an activity-based costing system,which of the following is the formula for allocating costs to products or services?

Customer-level activities and the resources consumed to perform them do not affect product costs.

In implementing an activity-based costing system,once the activity pools have been determined,manufacturing overhead costs can be assigned to them.This is referred to as

For a

Which of the following would probably not be included in the allocation of overhead costs to products,but would be included in the "general" category?

The process of using activity-based costing information to manage a business's activities,and thus its costs,is called activity-based management.How do managers use the information provided by an activity-based costing system?

Austin Company manufactures 2 products,Flacca and Gordo.Overhead costs are comprised of machine set-ups $1,600,000; machining $3,600,000; and inspecting $1,200,000.Recent data are shown below: Flacca Gordo Direct labor hours 15,000 25,000 Machine setups 600 400 Machine hours 24,000 26,000 Inspections 800 700 Overhead assigned to Flacca using a single overhead rate based on direct labor hours and using ABC,respectively,would be:

Sampson Company manufactures two products,plain and complex.The company has estimated its overhead in the order-processing department to be $480,000.The company produces 50,000 plain and 80,000 complex each year.Plain production requires 25,000 machine hours,complex production requires 50,000 machine hours.The company places raw materials orders 10 times per month,2 times for raw materials for plain and the remainder for raw materials for complex.How much of the order processing overhead should be allocated to complex?

Which of the following would be considered a

In an activity-based costing system,after all the activities have been identified and the appropriate level of detail selected,the activities are combined into activity cost pools based on their cost drivers.

The main reason for generating new information provided by activity-based costing is to

Under activity-based costing,selling and administrative costs should be allocated to products if they are incurred to provide resources that are consumed by

The following list includes activities that are performed in a manufacturing company that produces children's toys..Classify each activity as value-added or non-value added.

The activity rate for each cost pool is

The following list includes activities that are performed in a women's retail store..Classify each activity as value-added or non-value added.

Auburn,Inc.'s overhead costs of $700,000 consist of machining $400,000; inspecting $200,000; and packaging $100,000.Machining works 4,000 hours a year,500 inspections occur each year,and 1,000 packing order occur each year.Information on the company's two products are as follows: Alpha Omega Machining hours 1,000 3,000 Inspections 100 400 Packing orders 350 650 Direct labor hours 1,700 1,800 Determine how much overhead is allocated to Omega assuming the use of a single overhead rate based on direct labor hours and assuming the use of ABC,respectively.

In an activity-based costing system,which of the following is not a category in which activities are classified?

Which of the following is not a characteristic of a non-value-added activity?

An example of an organization-level activity is