Exam 3: Activity-Based Costing

Kamerling, Inc., manufactures and sells two products: Product H0 and Product Q8. 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 $16.50 per DLH. The direct materials cost per unit for each product is given below: The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity: The overhead applied to each unit of Product H0 under activity-based costing is closest to:

When a company changes from a traditional cost system in which manufacturing overhead is applied based on direct labor-hours to an activity-based costing system in which there are batch-level and product-level costs, the unit product costs of high-volume products typically increase whereas the unit product costs of low-volume products typically decrease.

Whiteley, Inc., manufactures and sells two products: Product M5 and Product P4. 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 $27.50 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 P4 under activity-based costing is closest to:

Activities consume resources. In activity-based costing an attempt is made to trace the costs of those activities directly to the products that cause them.

Mellencamp, Inc., manufactures and sells two products: Product A3 and Product Y6. 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 $24.20 per DLH. The direct materials cost per unit is $146.60 for Product A3 and $256.20 for Product Y6. 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 Y6 under activity-based costing is closest to:

Data concerning three of the activity cost pools of Salcido LLC, a legal firm, have been provided below: The activity rate for the Meeting With Clients activity cost pool 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: If the company allocates all of its overhead based on direct labor-hours using its traditional costing method, the predetermined overhead rate would be closest to:

Randolph, Inc., manufactures and sells two products: Product T5 and Product Y7. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below: The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity: The total overhead applied to Product Y7 under activity-based costing is closest to:

Besser, Inc., manufactures and sells two products: Product D0 and Product S3. Data concerning the expected production of each product and the 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: Required: In all computations involving dollars in the following requirements, round off your answer to the nearest whole cent. a. The company currently uses a traditional costing method in which overhead is applied to products based solely on direct labor-hours. Compute the company's predetermined overhead rate under this costing method. b. How much overhead would be applied to each product under the company's traditional costing method? c. Determine the unit product cost of each product under the company's traditional costing method. d. Compute the activity rates under the activity-based costing system. e. Determine how much overhead would be assigned to each product under the activity-based costing system. f. Determine the unit product cost of each product under the activity-based costing method. g. What is the difference between the overhead per unit under the traditional costing method and the activity-based costing system for each of the two products? h. What is the difference between the unit product costs under the under the traditional costing method and the activity-based costing system for each of the two products?

Dobles Corporation has provided the following data from its activity-based costing system: The company makes 420 units of product D28K a year, requiring a total of 460 machine-hours, 80 orders, and 10 inspection-hours per year. The product's direct materials cost is $48.96 per unit and its direct labor cost is $25.36 per unit. According to the activity-based costing system, the unit product cost of product D28K is closest to:

Frogge, Inc., manufactures and sells two products: Product H0 and Product N3. 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 $23.60 per DLH. The direct materials cost per unit is $160.60 for Product H0 and $240.30 for Product N3. 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 Production Orders activity cost pool under activity-based costing is closest to:

Betenbaugh, Inc., manufactures and sells two products: Product E4 and Product L8. 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 $29.00 per DLH. The direct materials cost per unit is $223.90 for Product E4 and $122.30 for Product L8. 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 E4 would be closest to:

Molinas, Inc., manufactures and sells two products: Product G1 and Product S8. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear 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 predetermined overhead rate would be closest to:

Sylvest, Inc., manufactures and sells two products: Product O3 and Product L8. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below: The company's expected total manufacturing overhead is $913,376. If the company allocates all of its overhead based on direct labor-hours, the overhead assigned to each unit of Product O3 would be closest to:

Machuga, Inc., manufactures and sells two products: Product C1 and Product M2. 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 $18.70 per DLH. The direct materials cost per unit is $297.00 for Product C1 and $246.20 for Product M2. The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity: The overhead applied to each unit of Product M2 under activity-based costing is closest to:

Frogge, Inc., manufactures and sells two products: Product H0 and Product N3. 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 $23.60 per DLH. The direct materials cost per unit is $160.60 for Product H0 and $240.30 for Product N3. 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:

Serva, Inc., manufactures and sells two products: Product R4 and Product N4. 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 overhead applied to each unit of Product N4 under activity-based costing is closest to:

Sepulvado, Inc., manufactures and sells two products: Product N7 and Product D4. 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 $15.50 per DLH. The direct materials cost per unit is $197.00 for Product N7 and $290.50 for Product D4. The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity: The overhead applied to each unit of Product D4 under activity-based costing is closest to:

Onstad, Inc., manufactures and sells two products: Product E5 and Product C0. Expected production of Product E5 is 500 units and of Product C0 is 400 units. The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity: The overhead applied to each unit of Product C0 under activity-based costing is closest to:

Sampaga, Inc., manufactures and sells two products: Product S6 and Product U3. 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 $20.90 per DLH. The direct materials cost per unit is $145.30 for Product S6 and $221.50 for Product U3. 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 U3 would be closest to: