Question 1

Offering greater product accuracy than an activity-based costing system is not a characteristic of a __________ costing system.
or

Accepted Answer

unit-based

Question 2

Which of the following is NOT an advantage of a time-driven ABC system?

Accepted Answer

A)  There are more activity pools used to allocate costs 
B)  Managers can review the costs of unused capacity 
C)  Managers can determine how to reduce the cost of supplying unused resources in subsequent periods 
D)  Managers can monitor efforts to reduce costs with unused capacity 
A)  There are more activity pools used to allocate costs 
B)  Managers can review the costs of unused capacity 
C)  Managers can determine how to reduce the cost of supplying unused resources in subsequent periods 
D)  Managers can monitor efforts to reduce costs with unused capacity

Question 3

Figure 4-21 Appleby Manufacturing uses an activity-based costing system. The company produces Model F and Model G. Information relating to the two products is as follows:   The following overhead costs are reported for the following activities of the production process:
  Jones manufacturing has used activity based costing to assign costs to Models F and G as given in the table below:
  Appleby Manufacturing wants to implement an approximately relevant ABC system by using the two most expensive activities for cost assignment.
Refer to Figure 4-21. Under equally accurate reduced ABC system, using consumption ratios for labor related and batch inspections, the overhead cost assigned to Model F would be? (round to 5 decimal places)

Accepted Answer

A)  $204,000 
B)  $318,750 
C)  $306,000 
D)  $191,250 
A)  $204,000 
B)  $318,750 
C)  $306,000 
D)  $191,250

Question 4

Avatar Corporation uses a predetermined rate to apply overhead. At the beginning of the year, Avatar estimated its overhead costs at $240,000, direct labor hours at 40,000, and machine hours at 10,000. Actual overhead costs incurred were $249,280, actual direct labor hours were 41,000, and actual machine hours were 11,000. What is the predetermined overhead rate per machine hour for Avatar?

Accepted Answer

A)  $ 6.08 
B)  $ 5.85 
C)  $22.66 
D)  $24.00 
A)  $ 6.08 
B)  $ 5.85 
C)  $22.66 
D)  $24.00

Question 5

If a firm has implemented activity-based procedures for home office expenses, it will

Accepted Answer

A)  allocate all home office expenses on the basis of sales revenues. 
B)  allocate all home office expenses to homogeneous cost pools. 
C)  allocate the costs in a pool using a predetermined rate per unit of activity. 
D)  both a and b. 
A)  allocate all home office expenses on the basis of sales revenues. 
B)  allocate all home office expenses to homogeneous cost pools. 
C)  allocate the costs in a pool using a predetermined rate per unit of activity. 
D)  both a and b.

Question 6

Figure 4-21 Appleby Manufacturing uses an activity-based costing system. The company produces Model F and Model G. Information relating to the two products is as follows:   The following overhead costs are reported for the following activities of the production process:
  Jones manufacturing has used activity based costing to assign costs to Models F and G as given in the table below:
  Appleby Manufacturing wants to implement an approximately relevant ABC system by using the two most expensive activities for cost assignment.
Refer to Figure 4-21. Under this new approach using the new rates, what labor cost is assigned to Model F in this approximately relevant ABC system?

Accepted Answer

A)  $60,000 
B)  $102,000 
C)  $153,000 
D)  $225,000 
A)  $60,000 
B)  $102,000 
C)  $153,000 
D)  $225,000

Question 7

Figure 4-12 The Gardenview Corporation has identified the following overhead costs and activity drivers for next year:
  The following are two of the jobs completed during the year:
  The company's normal activity is 2,000 direct labor hours.
Refer to Figure 4-12. If the number of setups is used to assign setup costs, the amount of setup costs assigned to Job 6A would be

Accepted Answer

A)  $1,600. 
B)  $1,000. 
C)  $800. 
D)  $1,680. 
A)  $1,600. 
B)  $1,000. 
C)  $800. 
D)  $1,680.

Question 8

A(n) __________ costing system first traces costs to activities and then to products.
or

Accepted Answer

activity-b

Question 9

The difference between actual overhead and applied overhead is an underapplied overhead.

Accepted Answer

A) True 
 B)False

Question 10

Figure 4-21 Appleby Manufacturing uses an activity-based costing system. The company produces Model F and Model G. Information relating to the two products is as follows:   The following overhead costs are reported for the following activities of the production process:
  Jones manufacturing has used activity based costing to assign costs to Models F and G as given in the table below:
  Appleby Manufacturing wants to implement an approximately relevant ABC system by using the two most expensive activities for cost assignment.
Refer to Figure 4-21. Using ABC as the benchmark, what is the percentage error in the cost assigned to Model G using the approximately relevant ABC approach? (round to 4 decimal places)

Accepted Answer

A)  0.25% 
B)  0.12% 
C)  1.2% 
D)  2.5% 
A)  0.25% 
B)  0.12% 
C)  1.2% 
D)  2.5%

Question 11

Figure 4-7 The Cherokee Company uses a predetermined overhead rate. The following accounts have these unadjusted balances:
  Refer to Figure 4-7. If Manufacturing overhead was $12,000 overapplied and considered immaterial, what is the journal entry?

Accepted Answer

A)  Cost of Goods Sold $12,000 Manufacturing Overhead $12,000 
B)  Manufacturing Overhead $12,000 Cost of Goods Sold $12,000 
C)  Manufacturing Overhead $12,000 Raw Materials $2,000
Work in Process $4,000
Finished Goods $1,000
Cost of Goods Sold $5,000 
D)  Raw Materials $2,000 Work in process $4,000
Finished Goods $1,000
Cost of Goods Sold $5,000
Manufacturing Overhead $12,000 
E)  Manufacturing Overhead $12,000 Work in Process $4,800
Finished Goods $1,200
Cost of Goods Sold $6,000 
A)  Cost of Goods Sold $12,000 Manufacturing Overhead $12,000 
B)  Manufacturing Overhead $12,000 Cost of Goods Sold $12,000 
C)  Manufacturing Overhead $12,000 Raw Materials $2,000
Work in Process $4,000
Finished Goods $1,000
Cost of Goods Sold $5,000 
D)  Raw Materials $2,000 Work in process $4,000
Finished Goods $1,000
Cost of Goods Sold $5,000
Manufacturing Overhead $12,000 
E)  Manufacturing Overhead $12,000 Work in Process $4,800
Finished Goods $1,200
Cost of Goods Sold $6,000

Question 12

Lonestar Corporation uses a job-order costing system to account for product costs. The following information pertains to 2014:   Factory overhead rate is $18 per direct labor hour.
What is the amount of under- or overapplied overhead for Lonestar Corporation in 2014?

Accepted Answer

A)  $40,000 overapplied 
B)  $20,000 overapplied 
C)  $40,000 underapplied 
D)  $20,000 underapplied 
A)  $40,000 overapplied 
B)  $20,000 overapplied 
C)  $40,000 underapplied 
D)  $20,000 underapplied

Question 13

Figure 4-15 Carriage Manufacturing uses an activity-based costing system. The company produces
Model 21 and Model 22. Information relating to the two products is as follows:
  The following costs are reported:
  Refer to Figure 4-15. Labor-related overhead costs assigned to Model 21 are

Accepted Answer

A)  $60,000. 
B)  $58,000. 
C)  $54,400. 
D)  $48,000. 
A)  $60,000. 
B)  $58,000. 
C)  $54,400. 
D)  $48,000.

Question 14

Which of the following quantities is an example of an activity driver in activity-based costing?

Accepted Answer

A)  number of direct labor hours 
B)  number of labor transactions 
C)  number of machine hours 
D)  all of these 
A)  number of direct labor hours 
B)  number of labor transactions 
C)  number of machine hours 
D)  all of these

Question 15

Activity-based costing assigns cost to cost objects by first tracing costs to

Accepted Answer

A)  products and then tracing costs to cost objects. 
B)  departments and then tracing costs to products. 
C)  activities and then tracing costs to cost objects. 
D)  customers and then tracing costs to products. 
A)  products and then tracing costs to cost objects. 
B)  departments and then tracing costs to products. 
C)  activities and then tracing costs to cost objects. 
D)  customers and then tracing costs to products.

Question 16

Figure 4-10 The Manoli Company has collected the following data for use in calculating product costs:
Activity Data: (expected and actual)
  Departmental Data: (expected and actual)
  Refer to Figure 4-10. What are the consumption ratios for rug cleaners for the departments on the basis of the departmental drivers (molding;assembly)?

Accepted Answer

A)  .33; .87 
B)  .85; .125 
C)  .33; .25 
D)  .85; .5 
A)  .33; .87 
B)  .85; .125 
C)  .33; .25 
D)  .85; .5

Question 17

If activity-based costing is used, set-ups would be classified as a

Accepted Answer

A)  unit-level activity. 
B)  batch-level activity. 
C)  product-level activity. 
D)  facility-level activity. 
A)  unit-level activity. 
B)  batch-level activity. 
C)  product-level activity. 
D)  facility-level activity.

Question 18

Figure 4 - 3 The records of Family Manufacturing show the following information:
  Refer to Figure 4-3. The company uses a predetermined overhead rate to apply overhead. Manufacturing overhead applied is

Accepted Answer

A)  $750,000. 
B)  $700,000. 
C)  $690,000. 
D)  $648,000. 
A)  $750,000. 
B)  $700,000. 
C)  $690,000. 
D)  $648,000.

Question 19

More accurate product costing information is produced by assigning costs using

Accepted Answer

A)  a volume-based, plantwide rate. 
B)  volume-based, departmental rates. 
C)  activity-based pool rates. 
D)  all of these. 
A)  a volume-based, plantwide rate. 
B)  volume-based, departmental rates. 
C)  activity-based pool rates. 
D)  all of these.

Question 20

Batch-level costs are assigned using

Accepted Answer

A)  non-unit-based activity drivers. 
B)  unit-based activity drivers. 
C)  cost pools. 
D)  departmental rates. 
A)  non-unit-based activity drivers. 
B)  unit-based activity drivers. 
C)  cost pools. 
D)  departmental rates.

Offering greater product accuracy than an activity-based costing system is not a characteristic of a __________ costing system. or

Which of the following is NOT an advantage of a time-driven ABC system?

If a firm has implemented activity-based procedures for home office expenses, it will

A(n) __________ costing system first traces costs to activities and then to products. or

The difference between actual overhead and applied overhead is an underapplied overhead.

Figure 4-7 The Cherokee Company uses a predetermined overhead rate. The following accounts have these unadjusted balances: Refer to Figure 4-7. If Manufacturing overhead was $12,000 overapplied and considered immaterial, what is the journal entry?

Lonestar Corporation uses a job-order costing system to account for product costs. The following information pertains to 2014: Factory overhead rate is $18 per direct labor hour. What is the amount of under- or overapplied overhead for Lonestar Corporation in 2014?

Figure 4-15 Carriage Manufacturing uses an activity-based costing system. The company produces Model 21 and Model 22. Information relating to the two products is as follows: The following costs are reported: Refer to Figure 4-15. Labor-related overhead costs assigned to Model 21 are

Which of the following quantities is an example of an activity driver in activity-based costing?

Activity-based costing assigns cost to cost objects by first tracing costs to

If activity-based costing is used, set-ups would be classified as a

Figure 4 - 3 The records of Family Manufacturing show the following information: Refer to Figure 4-3. The company uses a predetermined overhead rate to apply overhead. Manufacturing overhead applied is

More accurate product costing information is produced by assigning costs using

Batch-level costs are assigned using

Introduction to Cost Management

Basic Cost Management Concepts

Cost Behavior

Product and Service Costing: Job-Order System

Process Costing

Allocating Costs of Support Departments and Joint Products

Budgeting for Planning and Control Key

Standard Costing: a Functional-Based Control Approach

Decentralization: Responsibility Accounting, Performance Evaluation, and Transfer Pricing

Strategic Cost Management

Activity-Based Management

The Balanced Scorecard: Strategic-Based Control

Quality and Environmental Cost Management

Lean Accounting and Productivity Measurement

Cost-Volume-Profit Analysis

Activity Resource Usage Model and Tactical Decision Making

Pricing and Profitability Analysis

Capital Investment

Inventory Management: Economic Order Quantity, Jit, and the Theory of Constraints

Filters

Exam 4: Activity-Based Costing

Offering greater product accuracy than an activity-based costing system is not a characteristic of a __________ costing system. or

Which of the following is NOT an advantage of a time-driven ABC system?

If a firm has implemented activity-based procedures for home office expenses, it will

A(n) __________ costing system first traces costs to activities and then to products. or

The difference between actual overhead and applied overhead is an underapplied overhead.

Figure 4-7 The Cherokee Company uses a predetermined overhead rate. The following accounts have these unadjusted balances: Refer to Figure 4-7. If Manufacturing overhead was $12,000 overapplied and considered immaterial, what is the journal entry?

Lonestar Corporation uses a job-order costing system to account for product costs. The following information pertains to 2014: Factory overhead rate is $18 per direct labor hour. What is the amount of under- or overapplied overhead for Lonestar Corporation in 2014?

Figure 4-15 Carriage Manufacturing uses an activity-based costing system. The company produces Model 21 and Model 22. Information relating to the two products is as follows: The following costs are reported: Refer to Figure 4-15. Labor-related overhead costs assigned to Model 21 are

Which of the following quantities is an example of an activity driver in activity-based costing?

Activity-based costing assigns cost to cost objects by first tracing costs to

If activity-based costing is used, set-ups would be classified as a

Figure 4 - 3 The records of Family Manufacturing show the following information: Refer to Figure 4-3. The company uses a predetermined overhead rate to apply overhead. Manufacturing overhead applied is

More accurate product costing information is produced by assigning costs using

Batch-level costs are assigned using

Introduction to Cost Management

Basic Cost Management Concepts

Cost Behavior

Product and Service Costing: Job-Order System

Process Costing

Allocating Costs of Support Departments and Joint Products

Budgeting for Planning and Control Key

Standard Costing: a Functional-Based Control Approach

Decentralization: Responsibility Accounting, Performance Evaluation, and Transfer Pricing

Strategic Cost Management

Activity-Based Management

The Balanced Scorecard: Strategic-Based Control

Quality and Environmental Cost Management

Lean Accounting and Productivity Measurement

Cost-Volume-Profit Analysis

Activity Resource Usage Model and Tactical Decision Making

Pricing and Profitability Analysis

Capital Investment

Inventory Management: Economic Order Quantity, Jit, and the Theory of Constraints

Filters