Question 1

A(n) __________ is a grouping of logically related information.

Accepted Answer

The answer of A(n) __________ is a grouping of logically...

Question 2

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, what is the new pool rate for batch inspection costs?

Accepted Answer

A)  0 
B)  $5 
C)  $10.625 
D)  $15.525 
A)  0 
B)  $5 
C)  $10.625 
D)  $15.525

Question 3

The Sterling Company applies manufacturing overhead. At the end of the year the following data were available:   The following accounts had the unadjusted balances:
  What is the journal entry if the amount is considered material?

Accepted Answer

A)  Work in Process $ 1,000 Finished Goods $ 1,000
Cost of goods sold $ 3,000
Manufacturing overhead $5,000 
B)  Work in Process $ 3,000 Finished Goods $ 3,000
Cost of goods sold $ 9,000
Manufacturing overhead $15,000 
C)  Manufacturing Overhead $5,000 Work in Process $ 1,000
Finished Goods $ 1,000
Cost of goods sold $ 3,000 
D)  Manufacturing Overhead $15,000 Work in Process $ 3,000
Finished Goods $ 3,000
Cost of goods sold $ 9,000 
E)  none of these 
A)  Work in Process $ 1,000 Finished Goods $ 1,000
Cost of goods sold $ 3,000
Manufacturing overhead $5,000 
B)  Work in Process $ 3,000 Finished Goods $ 3,000
Cost of goods sold $ 9,000
Manufacturing overhead $15,000 
C)  Manufacturing Overhead $5,000 Work in Process $ 1,000
Finished Goods $ 1,000
Cost of goods sold $ 3,000 
D)  Manufacturing Overhead $15,000 Work in Process $ 3,000
Finished Goods $ 3,000
Cost of goods sold $ 9,000 
E)  none of these

Question 4

The simple list of activities identified in an ABC system is called:

Accepted Answer

A)  Activity inventory 
B)  Activity dictionary 
C)  Activity attributes 
D)  Activity driver 
A)  Activity inventory 
B)  Activity dictionary 
C)  Activity attributes 
D)  Activity driver

Question 5

Figure 4-16 Samson Company recently installed an activity-based relational database. Using the information contained in the activity relational table, the following pool rates were computed:
$400 per purchase order
$24 per machine hour, Process 1
$30 per machine hour, Process 2
$80 per engineering hour
Two products are produced by Special Products: L and M. The plant has two manufacturing processes, Process 1 and Process 2. Other processes include engineering, product handling, and procurement. Product L goes through Process 1 while Product M goes through Process 2. The product relational table for Special Products is as follows:
  Refer to Figure 4-16. What is the unit cost of Product M?

Accepted Answer

A)  $ 18.80 
B)  $504.00 
C)  $ 10.60 
D)  $ 12.00 
A)  $ 18.80 
B)  $504.00 
C)  $ 10.60 
D)  $ 12.00

Question 6

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 underapplied and considered material, what is the journal entry?

Accepted Answer

A)  Cost of Goods Sold $12,000 Manufacturing Overhead $12,000 
B)  Work in Process $4,800 Finished Goods $1,200
Cost of Goods Sold $6,000
Manufacturing Overhead $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)  Work in Process $4,800 Finished Goods $1,200
Cost of Goods Sold $6,000
Manufacturing Overhead $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 7

Material amounts of underapplied or overapplied overhead should be

Accepted Answer

A)  treated as an adjustment to cost of goods sold. 
B)  treated as an adjustment to work in process. 
C)  allocated to direct materials, work in process, and finished goods. 
D)  allocated to work in process, finished goods, and cost of goods sold. 
A)  treated as an adjustment to cost of goods sold. 
B)  treated as an adjustment to work in process. 
C)  allocated to direct materials, work in process, and finished goods. 
D)  allocated to work in process, finished goods, and cost of goods sold.

Question 8

Figure 4-17 X-TREME Corporation has the following activities: creating bills of materials (BOM), studying manufacturing capabilities, improving manufacturing processes, training employees, and designing tooling. The general ledger accounts reveal the following expenditures for manufacturing engineering:
  The equipment is used for two activities: improving processes and designing tooling. Thirty-five percent of the equipment's time is used for improving processes and 65 percent is used for designing tools. The salaries are for two engineers. One is paid $50,000, while the other earns $25,000. The $50,000 engineer spends 40 percent of his time training employees in new processes and 60 percent of his time on improving processes. The remaining engineer spends equal time on all activities. Supplies are consumed in the following proportions:
  Refer to Figure 4-17. What is the cost assigned to the improving processes activity?

Accepted Answer

A)  $250,000 
B)  $25,000 
C)  $43,750 
D)  $51,000 
A)  $250,000 
B)  $25,000 
C)  $43,750 
D)  $51,000

Question 9

Figure 4-14 Lawson Manufacturing has four categories of overhead. The four categories and expected overhead costs for each category for next year are as follows:
  Currently, overhead is applied using a predetermined overhead rate based upon budgeted direct labor hours. 20,000 direct labor hours are budgeted for next year.
The company has been asked to submit a bid for a proposed job. The plant manager feels that obtaining this job would result in new business in future years. Usually bids are based upon full manufacturing cost plus 15 percent. Estimates for the proposed job are as follows:
  In the past, full manufacturing cost has been calculated by allocating overhead using a volume-based activity driver, direct labor hours. The plant manager has heard of a new way of applying overhead that uses cost pools and activity drivers. Expected activity for the four activity drivers that would be used are:
  Refer to Figure 4-14. If the number of inspections is used to assign inspection costs, the amount of inspection costs allocated to the proposed job would be

Accepted Answer

A)  $2,700. 
B)  $ 990. 
C)  $ 900. 
D)  $ 540. 
A)  $2,700. 
B)  $ 990. 
C)  $ 900. 
D)  $ 540.

Question 10

Common measures of production activity include

Accepted Answer

A)  units produced. 
B)  direct labor hours. 
C)  machine hours. 
D)  all of these. 
A)  units produced. 
B)  direct labor hours. 
C)  machine hours. 
D)  all of these.

Question 11

Figure 4-17 X-TREME Corporation has the following activities: creating bills of materials (BOM), studying manufacturing capabilities, improving manufacturing processes, training employees, and designing tooling. The general ledger accounts reveal the following expenditures for manufacturing engineering:
  The equipment is used for two activities: improving processes and designing tooling. Thirty-five percent of the equipment's time is used for improving processes and 65 percent is used for designing tools. The salaries are for two engineers. One is paid $50,000, while the other earns $25,000. The $50,000 engineer spends 40 percent of his time training employees in new processes and 60 percent of his time on improving processes. The remaining engineer spends equal time on all activities. Supplies are consumed in the following proportions:
  Refer to Figure 4-17. What is the cost assigned to the creating BOMs activity?

Accepted Answer

A)  $31,250 
B)  $43,750 
C)  $7,500 
D)  $125,000 
A)  $31,250 
B)  $43,750 
C)  $7,500 
D)  $125,000

Question 12

Materials handling would be classified as a __________ activity when using activity-level costing.
or

Accepted Answer

batch-leve

Question 13

Lavender Company has decided to use a predetermined rate to assign factory overhead to production. The following predictions have been made for 2014:
   Required:

Accepted Answer

The answer of Lavender Company has decided to use a...

Question 14

Unit-level product costing assigns

Accepted Answer

A)  direct materials and direct labor directly to products and assigns overhead to departmental pools which are assigned to products using predetermined overhead rates based on unit-level drivers. 
B)  direct materials, direct labor and overhead to departmental cost pools which are assigned to products using predetermined overhead rates based on unit-level drivers. 
C)  direct materials and direct labor directly to products and assigns overhead to departmental pools which are assigned to products using predetermined overhead rates based on non-unit level drivers. 
D)  direct materials, direct labor and overhead to departmental cost pools which are assigned to products using predetermined overhead rates based on non-unit level drivers. 
A)  direct materials and direct labor directly to products and assigns overhead to departmental pools which are assigned to products using predetermined overhead rates based on unit-level drivers. 
B)  direct materials, direct labor and overhead to departmental cost pools which are assigned to products using predetermined overhead rates based on unit-level drivers. 
C)  direct materials and direct labor directly to products and assigns overhead to departmental pools which are assigned to products using predetermined overhead rates based on non-unit level drivers. 
D)  direct materials, direct labor and overhead to departmental cost pools which are assigned to products using predetermined overhead rates based on non-unit level drivers.

Question 15

Figure 4-2 The following information is provided by the Sandman Corporation for the year:
  Refer to Figure 4-2. If normal costing is used, the amount of overhead applied for the year is

Accepted Answer

A)  $414,000. 
B)  $400,000. 
C)  $480,000. 
D)  $460,000. 
A)  $414,000. 
B)  $400,000. 
C)  $480,000. 
D)  $460,000.

Question 16

Motorsports, Inc. had a predetermined overhead rate of $2 per direct labor hour. The direct labor hours were estimated to be 25,000. The actual manufacturing overhead incurred was $47,000 and 24,000 actual direct labor hours were worked. How much was overhead over/under applied last year?

Accepted Answer

A)  $1,000 underapplied 
B)  $2,000 underapplied 
C)  $1,000 overapplied 
D)  $3,000 overapplied 
A)  $1,000 underapplied 
B)  $2,000 underapplied 
C)  $1,000 overapplied 
D)  $3,000 overapplied

Question 17

Which of the following statements is TRUE?

Accepted Answer

A)  A vital attribute of an ABC database is the cost of individual departments. 
B)  The ultimate objective of activity classification is to build homogeneous cost pools. 
C)  When unbundling general ledger costs to an ABC database, we are more concerned about "How are the dollars spent?" than "What is spent?" 
D)  Both b and c are true. 
A)  A vital attribute of an ABC database is the cost of individual departments. 
B)  The ultimate objective of activity classification is to build homogeneous cost pools. 
C)  When unbundling general ledger costs to an ABC database, we are more concerned about "How are the dollars spent?" than "What is spent?" 
D)  Both b and c are true.

Question 18

The overhead rates of the traditional functional-based product costing use

Accepted Answer

A)  non-unit-based activity drivers. 
B)  unit-based activity drivers. 
C)  process costing. 
D)  job order costing. 
A)  non-unit-based activity drivers. 
B)  unit-based activity drivers. 
C)  process costing. 
D)  job order costing.

Question 19

Figure 4-11 Longview Manufacturing Company manufactures two products (I and II). The overhead costs ($58,000) have been divided into three cost pools that use the following activity drivers:
  Refer to Figure 4-11. If the number of labor hours is used to assign labor costs from the cost pool, determine the amount of overhead cost to be assigned to Product I.

Accepted Answer

A)  $58,000 
B)  $ 8,000 
C)  $ 9,600 
D)  $32,000 
A)  $58,000 
B)  $ 8,000 
C)  $ 9,600 
D)  $32,000

Question 20

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

Accepted Answer

A)  number of setups 
B)  number of orders placed 
C)  number of machine hours 
D)  all of the above 
A)  number of setups 
B)  number of orders placed 
C)  number of machine hours 
D)  all of the above

A(n) __________ is a grouping of logically related information.

The Sterling Company applies manufacturing overhead. At the end of the year the following data were available: The following accounts had the unadjusted balances: What is the journal entry if the amount is considered material?

The simple list of activities identified in an ABC system is called:

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 underapplied and considered material, what is the journal entry?

Material amounts of underapplied or overapplied overhead should be

Common measures of production activity include

Materials handling would be classified as a __________ activity when using activity-level costing. or

Lavender Company has decided to use a predetermined rate to assign factory overhead to production. The following predictions have been made for 2014: Required:

Unit-level product costing assigns

Figure 4-2 The following information is provided by the Sandman Corporation for the year: Refer to Figure 4-2. If normal costing is used, the amount of overhead applied for the year is

Motorsports, Inc. had a predetermined overhead rate of $2 per direct labor hour. The direct labor hours were estimated to be 25,000. The actual manufacturing overhead incurred was $47,000 and 24,000 actual direct labor hours were worked. How much was overhead over/under applied last year?

Which of the following statements is TRUE?

The overhead rates of the traditional functional-based product costing use

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

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

A(n) __________ is a grouping of logically related information.

The Sterling Company applies manufacturing overhead. At the end of the year the following data were available: The following accounts had the unadjusted balances: What is the journal entry if the amount is considered material?

The simple list of activities identified in an ABC system is called:

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 underapplied and considered material, what is the journal entry?

Material amounts of underapplied or overapplied overhead should be

Common measures of production activity include

Materials handling would be classified as a __________ activity when using activity-level costing. or

Lavender Company has decided to use a predetermined rate to assign factory overhead to production. The following predictions have been made for 2014: Required:

Unit-level product costing assigns

Figure 4-2 The following information is provided by the Sandman Corporation for the year: Refer to Figure 4-2. If normal costing is used, the amount of overhead applied for the year is

Motorsports, Inc. had a predetermined overhead rate of $2 per direct labor hour. The direct labor hours were estimated to be 25,000. The actual manufacturing overhead incurred was $47,000 and 24,000 actual direct labor hours were worked. How much was overhead over/under applied last year?

Which of the following statements is TRUE?

The overhead rates of the traditional functional-based product costing use

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

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