Exam 3: Activity-Based Costing

Lamon, Inc., manufactures and sells two products: Product J9 and Product R6. 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 overhead assigned to each unit of Product J9 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: 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 C1 would be closest to:

Drucker, Inc., manufactures and sells two products: Product F0 and Product M6. 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 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 M6 under activity-based costing 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: 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 J1 would be closest to:

Hane Corporation uses the following activity rates from its activity-based costing to assign overhead costs to products: Data for one of the company's products follow: How much overhead cost would be assigned to Product U94W using the activity-based costing system?

Companies use three common approaches to assign overhead costs to products-plantwide overhead rate, departmental overhead rates, and activity-based costing. The most accurate of these three approaches is departmental overhead rates.

Dunnivan, Inc., manufactures and sells two products: Product T4 and Product A1. 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 $29.90 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 unit product cost of Product A1 under activity-based costing is closest to:

An activity in activity-based costing is an event that causes the consumption of overhead resources.

The activity rates in activity-based costing are not intended to set targets for how quickly a task should be completed.

Boutet, Inc., manufactures and sells two products: Product G5 and Product U1. 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 $21.10 per DLH. The direct materials cost per unit is $241.40 for Product G5 and $283.80 for Product U1. 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 U1 is true?

Pachero, Inc., manufactures and sells two products: Product T1 and Product U6. 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 $15.90 per DLH. The direct materials cost per unit is $259.80 for Product T1 and $188.80 for Product U6. 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 T1 under activity-based costing is closest to:

The controller of Hartis Company estimates the amount of materials handling overhead cost that should be allocated to the company's two products using the data that are given below: The total materials handling cost for the year is expected to be $38,448.00. If the materials handling cost is allocated on the basis of material moves, the total materials handling cost allocated to the specialty windows 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: Which of the following statements concerning the unit product cost of Product U3 is true?

Masiclat, Inc., manufactures and sells two products: Product K2 and Product O8. 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 $21.10 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 K2 under activity-based costing is closest to:

Bohringer, Inc., manufactures and sells two products: Product A1 and Product X5. 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 $28.20 per DLH. The direct materials cost per unit is $256.50 for Product A1 and $165.20 for Product X5. The company has 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:

Hammer, Inc., manufactures and sells two products: Product W7 and Product I5. 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 $27.10 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: 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?

Punches, Inc., manufactures and sells two products: Product H7 and Product Y2. 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 $17.80 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 Y2 would be closest to:

Karsten, Inc., manufactures and sells two products: Product M8 and Product I2. 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 $21.20 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 I2 under activity-based costing is closest to:

Hewett, Inc., manufactures and sells two products: Product E7 and Product U7. 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 $29.50 per DLH. The direct materials cost per unit is $164.10 for Product E7 and $289.50 for Product U7. 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 U7 under activity-based costing is closest to:

Pachero, Inc., manufactures and sells two products: Product T1 and Product U6. 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 $15.90 per DLH. The direct materials cost per unit is $259.80 for Product T1 and $188.80 for Product U6. 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: