Exam 3: Activity-Based Costing

Fullard, Inc., manufactures and sells two products: Product E2 and Product G3. 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 total overhead applied to Product E2 under activity-based costing is closest to:

Adams Company has two products: A andB. The annual production and sales of Product A is 500 units and of Product B is 900 units. The company has traditionally used direct labor-hours (DLHs) as the basis for applying all manufacturing overhead to products. Product A requires 0.4 direct labor-hours per unit and Product B requires 0.5 direct labor-hours per unit. The total estimated overhead for next period is $67,522. The company is considering switching to an activity-based costing system for the purpose of computing unit product costs for external reports. The new activity-based costing system would have three overhead activity cost pools-Activity 1, Activity 2, and General Factory-with estimated overhead costs and expected activity as follows: (Note: The General Factory activity cost pool's costs are allocated on the basis of direct labor-hours.) The predetermined overhead rate (i.e., activity rate) for Activity 1 under the activity-based costing system is closest to:

Luckado, Inc., manufactures and sells two products: Product O5 and Product F4. 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 $164.00 for Product O5 and $139.80 for Product F4. The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Required: Determine the unit product cost of each product under the activity-based costing method.

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 O8 under activity-based costing is 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 M2 would be closest to:

Bolerjack, Inc., manufactures and sells two products: Product G9 and Product B6. 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 is $204.30 for Product G9 and $284.50 for Product B6. 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 B6 under activity-based costing is closest to:

Testing a prototype of a new product is an example of a:

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 predetermined overhead rate would be closest to:

Gould Corporation uses the following activity rates from its activity-based costing to assign overhead costs to products: Data concerning two products appear below: How much overhead cost would be assigned to Product K91B using the activity-based costing system?

Nakayama, Inc., manufactures and sells two products: Product Z1 and Product Q5. 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 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. Determine the unit product cost of each product under the company's traditional costing method. b. Determine the unit product cost of each product under the activity-based costing method.

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: Which of the following statements concerning the unit product cost of Product H7 is true?

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 overhead applied to each unit of Product E7 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 General Factory activity cost pool under activity-based costing is closest to:

Millner Corporation has provided the following data from its activity-based costing accounting system: The activity rate for the Designing Products activity cost pool is closest to:

Bewig, Inc., manufactures and sells two products: Product E8 and Product R4. The company has 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 is closest to:

Sill, Inc., manufactures and sells two products: Product V9 and Product B1. 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 $27.40 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 V9 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 overhead applied to each unit of Product H0 under activity-based costing is closest to:

If a company has a great deal of product diversity, activity-based costing will generally yield less accurate product costs than traditional methods based on direct labor or machine hours.

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 C1 under activity-based costing is closest to:

Trisdale, Inc., manufactures and sells two products: Product V5 and Product X3. 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 total manufacturing overhead is $372,695. If the company allocates all of its overhead based on direct labor-hours, the predetermined overhead rate would be closest to: