Question 1

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 2

Bugaboo Co.manufactures three types of cookies: Fluffs,Crinkles,and Snaps.The production process is relatively simple,and factory overhead costs are allocated to products using a single plantwide factory rate based on direct labor hours.Information for the month of May,Bugaboo's first month of operations,follows:
​
   Bugaboo has budgeted direct labor costs for May at $8.50 per hour.Budgeted direct materials costs for May are: Fluffs,$0.75 / unit; Crinkles $0.40 / unit; and Snaps $0.30 / unit.
Bugaboo's budgeted overhead costs for May are:
​
   Assume that Bugaboo sells all the boxes it produces in May.

Accepted Answer

The answer of Bugaboo Co.manufactures three types of cookies: Fluffs,Crinkles,and...

Question 3

The Bonnington Company manufactures small lamps and desk lamps.The following shows the activities per product: ​
  Using the following information prepared by the Bonnington Company,determine the total factory overhead to be charged to small lamps.

Accepted Answer

A)  $314,000 
B)  $209,333 
C)  $202,000 
D)  $104,000 
A)  $314,000 
B)  $209,333 
C)  $202,000 
D)  $104,000

Question 4

Service companies can effectively use single facility-wide overhead costing to compute product (service)costs.

Accepted Answer

A) True 
 B)False

Question 5

Determine the activity-based cost for each tape drive unit.

Accepted Answer

A)  $97.73 
B)  $232.69 
C)  $394.12 
D)  $103.84 
A)  $97.73 
B)  $232.69 
C)  $394.12 
D)  $103.84

Question 6

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 7

Determine the overhead 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

Question 8

The Roget Factory has determined that its budgeted factory overhead budget for the year is $15,500,000.They plan to produce 2,000,000 units.Budgeted direct labor hours are 1,050,000 and budgeted machine hours are 750,000.Using the single plantwide factory overhead rate based on direct labor hours,calculate the factory overhead rate for the year.

Accepted Answer

A)  $14.76 
B)  $20.67 
C)  $7.75 
D)  $77.50 
A)  $14.76 
B)  $20.67 
C)  $7.75 
D)  $77.50

Question 9

When a plantwide factory overhead rate is used,the total overhead costs allocated to all products are the same.

Accepted Answer

A) True 
 B)False

Question 10

Using the single plantwide factory overhead rate with an allocation base of direct labor hours,how much factory overhead will Blackwelder Factory allocate to small lamp production if actual direct hours for the period is 285,000?

Accepted Answer

A)  $275,000 
B)  $285,000 
C)  $440,000 
D)  $456,000 
A)  $275,000 
B)  $285,000 
C)  $440,000 
D)  $456,000

Question 11

If the budget estimates that a table lamp will require 2 hours of finishing and 1 hours of production,how much factory overhead will the Kaumajet Factory allocate to each unit of table lamp using the multiple production department factory overhead rate method with an allocation base of direct labor hours?

Accepted Answer

A)  $6.33 
B)  $4.91 
C)  $5.00 
D)  $7.20 
A)  $6.33 
B)  $4.91 
C)  $5.00 
D)  $7.20

Question 12

Tulip Company produces two products,T and U.The indirect labor costs include the following two items:
​
   The following activity-base usage and unit production information is available for the two products:
​

Accepted Answer

@#IMG-DLM& ​ (c) Activity rates:Setup Supervision

Question 13

Determine the activity rate for production per machine hour.

Accepted Answer

A)  $62.50 
B)  $150.00 
C)  $75.00 
D)  $176.47 
A)  $62.50 
B)  $150.00 
C)  $75.00 
D)  $176.47

Question 14

The Valhalla Company manufactures small lamps and desk lamps.The following shows the activities per product:
​
   Using the following information prepared by the Valhalla Company,determine (a)the activity rates for each activity and (b)the activity-based factory overhead per unit for each product.
​

Accepted Answer

(a)Setups: $160,000 / 40,000 =

Question 15

Determine the activity-based cost for each disk drive unit.

Accepted Answer

A)  $92.25 
B)  $130.69 
C)  $394.12 
D)  $279.57 
A)  $92.25 
B)  $130.69 
C)  $394.12 
D)  $279.57

Question 16

What is the Assembly Department overhead rate per labor hour?

Accepted Answer

A)  $10.50 
B)  $19.50 
C)  $3.75 
D)  $4.38 
A)  $10.50 
B)  $19.50 
C)  $3.75 
D)  $4.38

Question 17

Using multiple department factory overhead instead of a single plantwide factory overhead rate:

Accepted Answer

A)  results in more accurate product costs 
B)  results in distorted product costs 
C)  is simpler and less expensive to compute than a plantwide rate 
D)  applies overhead costs to all departments equally 
A)  results in more accurate product costs 
B)  results in distorted product costs 
C)  is simpler and less expensive to compute than a plantwide rate 
D)  applies overhead costs to all departments equally

Question 18

If the activities causing overhead costs are different across different departments and products,use of a plantwide factory overhead rate will cause distorted product costs.

Accepted Answer

A) True 
 B)False

Question 19

When production departments differ significantly in their manufacturing process,it is recommended that the single plantwide factory overhead rate be used for allocating factory overhead.

Accepted Answer

A) True 
 B)False

Question 20

Condelezza Co.manufactures two products,A and B,in two production departments,Assembly and Finishing.Condelezza Co.expects to produce 10,000 units of Product A and 20,000 units of Product B in the coming year.Budgeted factory overhead costs for the coming year are:
​
   The machine hours expected to be used in the coming year are as follows:
​
   (c) Which method is better (plantwide or department)? Why?

Accepted Answer

@#IMG-DLM& ​ ​ @#IMG-DLM& (c)The department rate m

Exam 18: Activity-Based Costing

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

The Bonnington Company manufactures small lamps and desk lamps.The following shows the activities per product: ​ Using the following information prepared by the Bonnington Company,determine the total factory overhead to be charged to small lamps.

Service companies can effectively use single facility-wide overhead costing to compute product (service)costs.

Determine the activity-based cost for each tape drive unit.

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?

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

When a plantwide factory overhead rate is used,the total overhead costs allocated to all products are the same.

Using the single plantwide factory overhead rate with an allocation base of direct labor hours,how much factory overhead will Blackwelder Factory allocate to small lamp production if actual direct hours for the period is 285,000?

Tulip Company produces two products,T and U.The indirect labor costs include the following two items: ​ The following activity-base usage and unit production information is available for the two products: ​

Determine the activity rate for production per machine hour.

Determine the activity-based cost for each disk drive unit.

What is the Assembly Department overhead rate per labor hour?

Using multiple department factory overhead instead of a single plantwide factory overhead rate:

If the activities causing overhead costs are different across different departments and products,use of a plantwide factory overhead rate will cause distorted product costs.

When production departments differ significantly in their manufacturing process,it is recommended that the single plantwide factory overhead rate be used for allocating factory overhead.

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting for Merchandising Businesses

Inventories

Internal Control and Cash

Receivables

Long-Term Assets: Fixed and Intangible

Liabilities: Current,installment Notes,and Contingencies

Liabilities: Bonds Payable

Corporations: Organization, stock Transactions, and Dividends

Statement of Cash Flows

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

Process Cost Systems

Cost-Volume-Profit Analysis

Variable Costing for Management Analysis

Budgeting

Evaluating Variances From Standard Costs

Evaluating Decentralized Operations

Differential Analysis and Product Pricing

Capital Investment Analysis

Lean Manufacturing and Activity Analysis

Filters

The Bonnington Company manufactures small lamps and desk lamps.The following shows the activities per product: Using the following information prepared by the Bonnington Company,determine the total factory overhead to be charged to small lamps.

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

Tulip Company produces two products,T and U.The indirect labor costs include the following two items: The following activity-base usage and unit production information is available for the two products: