Question 1

What is the Fabrication Department overhead rate per machine hour?

Accepted Answer

A) $10.50 
B) $9.00 
C) $8.12 
D) $3.75 
A) $10.50 
B) $9.00 
C) $8.12 
D) $3.75

Question 2

Explain why it is imperative that proper factory overhead be allocated in factories that produce multiple products.

Accepted Answer

Proper allocation of factory overhead av

Question 3

Estimated activity-base usage quantities are the total activity-base quantities related to each product.

Accepted Answer

A) True 
 B)False

Question 4

Use of a plantwide factory overhead rate distorts product costs when there are differences in the factory overhead rates across different production departments and when products require different ratios of allocation-base usage in each production department.

Accepted Answer

A) True 
 B)False

Question 5

The Klamath Corp.produces two products, saws and drills.Three activities are used in their manufacture.These activities and their associated costs and bases are as follows:
   a Determine the activity rate for each activity.
b Determine the overhead cost per unit for each product.

Accepted Answer

a
Stamping: $200,000/10,000 = $20 per ma

Question 6

Determine the activity rate for product development per change.

Accepted Answer

A) $73,000 
B) $8,588 
C) $30,417 
D) $16,222 
A) $73,000 
B) $8,588 
C) $30,417 
D) $16,222

Question 7

Activity rates are computed by dividing the cost budgeted for each activity pool by the estimated activity base for that pool.

Accepted Answer

A) True 
 B)False

Question 8

What is the overhead cost per unit for Rings?

Accepted Answer

A) $65.25 
B) $23.25 
C) $44.10 
D) $64.50 
A) $65.25 
B) $23.25 
C) $44.10 
D) $64.50

Question 9

Shanghai Company sells glasses, fine china, and everyday dinnerware.They use activity-based costing to determine the cost of the shipping and handling activity.The shipping and handling activity has an activity rate of $14 per pound.A box of glasses weighs 2 lbs., the box of china weighs 4 lbs., and a box of everyday dinnerware weighs 6 lbs.a Determine the shipping and handling activity for each product and b determine the total shipping and receiving costs for the china if 3,500 boxes are shipped.

Accepted Answer

@#IMG-DLM& The Beauty Beyond Words Salon

Question 10

Calculate the overhead rate per unit for Product A in the painting department of Adirondack Marketing Inc.

Accepted Answer

A) $236.32 per unit 
B) $325.00 per unit 
C) $147.70 per unit 
D) $161.00 per unit 
A) $236.32 per unit 
B) $325.00 per unit 
C) $147.70 per unit 
D) $161.00 per unit

Question 11

Which of the following is a cost pool used with the activity-based costing method?

Accepted Answer

A) total selling and administrative overheads 
B) direct material dollars 
C) total factory overheads 
D) production setups 
A) total selling and administrative overheads 
B) direct material dollars 
C) total factory overheads 
D) production setups

Question 12

If the budgeted factory overhead cost is $460,000, the budgeted direct labor hours is 80,000, and the actual direct labor hours is 6,700 for the month, the factory overhead rate for the month is $68.65 if the allocation is based on direct labor hours.

Accepted Answer

A) True 
 B)False

Question 13

Activity-based costing can be used to allocate period costs to various products that the company sells.

Accepted Answer

A) True 
 B)False

Question 14

What is the overhead cost per unit for Dings?

Accepted Answer

A) $65.25 
B) $56.75 
C) $23.25 
D) $64.50 
A) $65.25 
B) $56.75 
C) $23.25 
D) $64.50

Question 15

Using a plantwide factory overhead rate distorts product costs when:

Accepted Answer

A) products require different ratios of allocation-base usage in each production department 
B) significant differences exist in the factory overhead rates used across different production departments 
C) both A and B are true 
D) neither A nor B are true 
A) products require different ratios of allocation-base usage in each production department 
B) significant differences exist in the factory overhead rates used across different production departments 
C) both A and B are true 
D) neither A nor B are true

Question 16

The Anazi Leather Company manufactures leather handbags and moccasins.The company has been using the factory overhead rate method but has decided to evaluate the multiple production department factory overhead rate to allocate factory overhead.The factory overhead estimated per unit together with direct materials and direct labor will help determine selling prices.
Handbags = 60,000 units, 3 hours of direct labor
Moccasins= 40,000 units, 2 hours of direct labor
Total budgeted factory overhead cost = $360,000
The company has two different production departments: Cutting and Sewing.The Cutting Department has a factory overhead budget of $80,000.Each unit will require 1 direct labor hour or a total of 100,000 direct labor hours.
The Sewing Department estimates factory overhead in the amount of $280,000.Handbags require 2 hours of sewing time and Moccasins require 1 hour for a total of 160,000 labor hours.
Calculate the total factory overhead to be allocated to each product using direct labor hours.

Accepted Answer

Cutting Department rate per ho

Question 17

The Ramapo Company uses a single overhead rate to apply all overhead costs.What would the single plantwide rate be if it was based on machine hours instead of labor hours?

Accepted Answer

A) $9.00 per machine hour 
B) $19.50 per machine hour 
C) $7.43 per machine hour 
D) $4.00 per machine hour 
A) $9.00 per machine hour 
B) $19.50 per machine hour 
C) $7.43 per machine hour 
D) $4.00 per machine hour

Question 18

Product costing consists of only direct materials and direct labor.

Accepted Answer

A) True 
 B)False

Question 19

Service companies can effectively use multiple department overhead rate costing to compute product service costs.

Accepted Answer

A) True 
 B)False

Question 20

Determine the overhead rate in the Finishing Department for each unit of Product A if Blue Ridge Marketing Inc.uses a multiple department rate system.

Accepted Answer

A) $99.20 per unit 
B) $49.60 per unit 
C) $64.00 per unit 
D) $28.80 per unit 
A) $99.20 per unit 
B) $49.60 per unit 
C) $64.00 per unit 
D) $28.80 per unit

What is the Fabrication Department overhead rate per machine hour?

Explain why it is imperative that proper factory overhead be allocated in factories that produce multiple products.

Estimated activity-base usage quantities are the total activity-base quantities related to each product.

Use of a plantwide factory overhead rate distorts product costs when there are differences in the factory overhead rates across different production departments and when products require different ratios of allocation-base usage in each production department.

The Klamath Corp.produces two products, saws and drills.Three activities are used in their manufacture.These activities and their associated costs and bases are as follows: a Determine the activity rate for each activity. b Determine the overhead cost per unit for each product.

Determine the activity rate for product development per change.

Activity rates are computed by dividing the cost budgeted for each activity pool by the estimated activity base for that pool.

What is the overhead cost per unit for Rings?

Calculate the overhead rate per unit for Product A in the painting department of Adirondack Marketing Inc.

Which of the following is a cost pool used with the activity-based costing method?

If the budgeted factory overhead cost is $460,000, the budgeted direct labor hours is 80,000, and the actual direct labor hours is 6,700 for the month, the factory overhead rate for the month is $68.65 if the allocation is based on direct labor hours.

Activity-based costing can be used to allocate period costs to various products that the company sells.

What is the overhead cost per unit for Dings?

Using a plantwide factory overhead rate distorts product costs when:

The Ramapo Company uses a single overhead rate to apply all overhead costs.What would the single plantwide rate be if it was based on machine hours instead of labor hours?

Product costing consists of only direct materials and direct labor.

Service companies can effectively use multiple department overhead rate costing to compute product service costs.

Determine the overhead rate in the Finishing Department for each unit of Product A if Blue Ridge Marketing Inc.uses a multiple department rate system.

Managerial Accounting Concepts and Principles

Job Order Costing

Process Cost Systems

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing for Management Analysis

Budgeting

Performance Evaluation Using Variances From Standard Costs

Performance Evaluation for Decentralized Operations

Differential Analysis, Product Pricing, and Activity-Based Costing

Capital Investment Analysis

Lean Principles, Lean Accounting, and Activity Analysis

Statement of Cash Flows

Financial Statement Analysis

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Exam 11: Cost Allocation and Activity-Based Costing

What is the Fabrication Department overhead rate per machine hour?

Explain why it is imperative that proper factory overhead be allocated in factories that produce multiple products.

Estimated activity-base usage quantities are the total activity-base quantities related to each product.

Use of a plantwide factory overhead rate distorts product costs when there are differences in the factory overhead rates across different production departments and when products require different ratios of allocation-base usage in each production department.

The Klamath Corp.produces two products, saws and drills.Three activities are used in their manufacture.These activities and their associated costs and bases are as follows: a Determine the activity rate for each activity. b Determine the overhead cost per unit for each product.

Determine the activity rate for product development per change.

Activity rates are computed by dividing the cost budgeted for each activity pool by the estimated activity base for that pool.

What is the overhead cost per unit for Rings?

Calculate the overhead rate per unit for Product A in the painting department of Adirondack Marketing Inc.

Which of the following is a cost pool used with the activity-based costing method?

If the budgeted factory overhead cost is $460,000, the budgeted direct labor hours is 80,000, and the actual direct labor hours is 6,700 for the month, the factory overhead rate for the month is $68.65 if the allocation is based on direct labor hours.

Activity-based costing can be used to allocate period costs to various products that the company sells.

What is the overhead cost per unit for Dings?

Using a plantwide factory overhead rate distorts product costs when:

The Ramapo Company uses a single overhead rate to apply all overhead costs.What would the single plantwide rate be if it was based on machine hours instead of labor hours?

Product costing consists of only direct materials and direct labor.

Service companies can effectively use multiple department overhead rate costing to compute product service costs.

Determine the overhead rate in the Finishing Department for each unit of Product A if Blue Ridge Marketing Inc.uses a multiple department rate system.

Managerial Accounting Concepts and Principles

Job Order Costing

Process Cost Systems

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing for Management Analysis

Budgeting

Performance Evaluation Using Variances From Standard Costs

Performance Evaluation for Decentralized Operations

Differential Analysis, Product Pricing, and Activity-Based Costing

Capital Investment Analysis

Lean Principles, Lean Accounting, and Activity Analysis

Statement of Cash Flows

Financial Statement Analysis

Filters