Question 1

Activity cost pools are cost accumulations associated with a given activity.

Accepted Answer

A) True 
 B)False

Question 2

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 3

Direct labor hours is not a cost pool that is regularly used in the activity-based costing method.

Accepted Answer

A) True 
 B)False

Question 4

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

Accepted Answer

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

Question 5

Use of a plantwide factory overhead rate does not distort product costs when there are differences in the factory overhead rates across different production departments.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following are the two most common allocation bases for factory overhead?

Accepted Answer

A)  Total overhead dollars and machine hours 
B)  Direct labor hours and machine hours 
C)  Direct labor hours and factory expenses 
D)  Machine hours and factory expenses 
A)  Total overhead dollars and machine hours 
B)  Direct labor hours and machine hours 
C)  Direct labor hours and factory expenses 
D)  Machine hours and factory expenses

Question 7

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

(a)Glasses

Question 8

Calculate the cost of services for a highlight.

Accepted Answer

The answer of Calculate the cost of services for a...

Question 9

The Ramapo Company uses a single overhead rate to apply all overhead costs based on labor hours.What is the overhead cost per unit for Blinks?

Accepted Answer

A)  $78.00 
B)  $19.50 
C)  $37.45 
D)  $56.00 
A)  $78.00 
B)  $19.50 
C)  $37.45 
D)  $56.00

Question 10

When a plantwide factory overhead rate is used,overhead costs are applied to all products by a single rate.

Accepted Answer

A) True 
 B)False

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

Pinacle Corp.budgeted $700,000 of overhead cost for the current year.Actual overhead costs for the year were $650,000.Pinacle's plantwide allocation base,machine hours,was budgeted at 100,000 hours.Actual machine hours were 80,000.A total of 100,000 units was budgeted to be produced and 98,000 units were actually produced.Pinacle's plantwide factory overhead rate for the current year is:

Accepted Answer

A)  $8.13 per machine hour 
B)  $7.00 per machine hour 
C)  $6.50 per machine hour 
D)  $8.75 per machine hour 
A)  $8.13 per machine hour 
B)  $7.00 per machine hour 
C)  $6.50 per machine hour 
D)  $8.75 per machine hour

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

The Sawtooth Leather Company manufactures leather handbags and moccasins.For simplicity,the company has decided to use a single plantwide factory overhead rate method to allocate factory overhead.Calculate the amount of factory overhead to be allocated to each unit using direct labor hours.
Handbags = 60,000 units,2 hours of direct labor
​
Moccasins= 40,000 units,3 hours of direct labor
​
Total budgeted factory overhead cost = $360,000

Accepted Answer

Handbags: 60,000 units × 2 direct labor

Question 15

Everest Co.uses a plantwide factory overhead rate based on direct labor hours.Overhead costs would be overcharged to which of the following departments?

Accepted Answer

A)  A labor-intensive department 
B)  A capital-intensive department 
C)  A materials-intensive department 
D)  All of the above 
A)  A labor-intensive department 
B)  A capital-intensive department 
C)  A materials-intensive department 
D)  All of the above

Question 16

Scoresby Co.uses 6 machine hours and 2 direct labor hours to produce Product X.It uses 8 machine hours and 16 direct labor hours to produce Product Y.Scoresby's Assembly and Finishing departments have factory overhead rates of $240 per machine hour and $160 per direct labor hour,respectively.How much overhead cost will be charged to the two products?

Accepted Answer

A)  Product X = $3,200; Product Y = $9,600 
B)  Product X = $800; Product Y = $800 
C)  Product X = $1,760; Product Y = $4,480 
D)  Product X = $1,440; Product Y = $2,560 
A)  Product X = $3,200; Product Y = $9,600 
B)  Product X = $800; Product Y = $800 
C)  Product X = $1,760; Product Y = $4,480 
D)  Product X = $1,440; Product Y = $2,560

Question 17

Multiple production department factory overhead rates are more accurate than are plantwide factory overhead rates.

Accepted Answer

A) True 
 B)False

Question 18

Determine the overhead from both production departments allocated to each unit of Product B if Blue Ridge Marketing Inc.uses a multiple department rate system. ​

Accepted Answer

A)  $425.60 per unit 
B)  $115.20 per unit 
C)  $214.40 per unit 
D)  $320.00 per unit 
A)  $425.60 per unit 
B)  $115.20 per unit 
C)  $214.40 per unit 
D)  $320.00 per unit

Question 19

Calculate the cost of services for a haircut.

Accepted Answer

A)  $4.00 
B)  $7.50 
C)  $3.50 
D)  $11.50 
A)  $4.00 
B)  $7.50 
C)  $3.50 
D)  $11.50

Question 20

Using the single plantwide factory overhead rate with an allocation base of direct labor hours,how much factory overhead will Challenger Factory allocate to regular widget production if budgeted production for the period is 75,000 units and actual production for the period is 72,000 units?

Accepted Answer

A)  $168,750 
B)  $324,000 
C)  $162,000 
D)  $337,500 
A)  $168,750 
B)  $324,000 
C)  $162,000 
D)  $337,500

Exam 18: Activity-Based Costing

Activity cost pools are cost accumulations associated with a given activity.

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

Direct labor hours is not a cost pool that is regularly used in the activity-based costing method.

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

Use of a plantwide factory overhead rate does not distort product costs when there are differences in the factory overhead rates across different production departments.

Which of the following are the two most common allocation bases for factory overhead?

Calculate the cost of services for a highlight.

The Ramapo Company uses a single overhead rate to apply all overhead costs based on labor hours.What is the overhead cost per unit for Blinks?

When a plantwide factory overhead rate is used,overhead costs are applied to all products by a single rate.

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

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

Everest Co.uses a plantwide factory overhead rate based on direct labor hours.Overhead costs would be overcharged to which of the following departments?

Multiple production department factory overhead rates are more accurate than are plantwide factory overhead rates.

Determine the overhead from both production departments allocated to each unit of Product B if Blue Ridge Marketing Inc.uses a multiple department rate system. ​

Calculate the cost of services for a haircut.

Using the single plantwide factory overhead rate with an allocation base of direct labor hours,how much factory overhead will Challenger Factory allocate to regular widget production if budgeted production for the period is 75,000 units and actual production for the period is 72,000 units?

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

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

Determine the overhead from both production departments allocated to each unit of Product B if Blue Ridge Marketing Inc.uses a multiple department rate system.