Exam 3: Activity-Based Costing

Activity-based costing involves a two-stage allocation process in which overhead costs are first assigned to departments and then allocated to products using activity measures.

Brenneis, Inc., manufactures and sells two products: Product T9 and Product T2. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below: The direct labor rate is $18.10 per DLH. The direct materials cost per unit is $115.20 for Product T9 and $221.40 for Product T2. The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Which of the following statements concerning the unit product cost of Product T9 is true?

Would the following activities at a manufacturer of canned soup be best classified as unit-level, batch-level, product-level, or facility-level activities?

Cassano, Inc., manufactures and sells two products: Product C8 and Product E6. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below: The direct labor rate is $19.80 per DLH. The direct materials cost per unit is $145.10 for Product C8 and $181.00 for Product E6. The estimated total manufacturing overhead is $671,598. The unit product cost of Product C8 under the company's traditional costing method in which all overhead is allocated on the basis of direct labor-hours is closest to:

Minon, Inc., manufactures and sells two products: Product J1 and Product E7. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below: The direct labor rate is $19.90 per DLH. The direct materials cost per unit for each product is given below: The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity: The activity rate for the Labor-Related activity cost pool under activity-based costing is closest to:

Mcleese, Inc., manufactures and sells two products: Product I6 and Product L1. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below: The direct labor rate is $26.60 per DLH. The direct materials cost per unit for each product is given below: The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity: The activity rate for the Machine Setups activity cost pool under activity-based costing is closest to:

Paolello, Inc., manufactures and sells two products: Product P5 and Product N5. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below: The direct labor rate is $24.60 per DLH. The direct materials cost per unit for each product is given below: The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity: If the company allocates all of its overhead based on direct labor-hours using its traditional costing method, the overhead assigned to each unit of Product P5 would be closest to:

Sow, Inc., manufactures and sells two products: Product I4 and Product P3. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below: The direct labor rate is $24.70 per DLH. The direct materials cost per unit for each product is given below: The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity: The unit product cost of Product P3 under the company's traditional costing method in which all overhead is allocated on the basis of direct labor-hours is closest to: