Question 1

How much overhead cost is allocated to the Supervising activity cost pool under activity-based costing?

Accepted Answer

A) $15,400 
B) $17,000 
C) $34,800 
D) $1,600 
A) $15,400 
B) $17,000 
C) $34,800 
D) $1,600

Question 2

The costs of a particular department should not be split up among activity cost pools in an activity-based costing system.

Accepted Answer

A) True 
 B)False

Question 3

How much cost, in total, would be allocated in the first-stage allocation to the Customer Support activity cost pool?

Accepted Answer

A) $353,000 
B) $364,000 
C) $338,000 
D) $351,000 
A) $353,000 
B) $364,000 
C) $338,000 
D) $351,000

Question 4

The activity rate for the Processing activity cost pool under activity-based costing is closest to:

Accepted Answer

A) $3.08 per MH 
B) $7.80 per MH 
C) $3.10 per MH 
D) $0.50 per MH 
A) $3.08 per MH 
B) $7.80 per MH 
C) $3.10 per MH 
D) $0.50 per MH

Question 5

The activity rate for the Processing activity cost pool under activity-based costing is closest to:

Accepted Answer

A) $15.00 per MH 
B) $3.60 per MH 
C) $0.46 per MH 
D) $0.31 per MH 
A) $15.00 per MH 
B) $3.60 per MH 
C) $0.46 per MH 
D) $0.31 per MH

Question 6

The activity rate for the Supervising activity cost pool under activity-based costing is closest to:

Accepted Answer

A) $1.33 per batch 
B) $11.00 per batch 
C) $1.00 per batch 
D) $2.20 per batch 
A) $1.33 per batch 
B) $11.00 per batch 
C) $1.00 per batch 
D) $2.20 per batch

Question 7

How much overhead cost is allocated to the Machining activity cost pool under activity-based costing in the first stage of allocation?

Accepted Answer

A) $11,000 
B) $3,000 
C) $14,000 
D) $6,200 
A) $11,000 
B) $3,000 
C) $14,000 
D) $6,200

Question 8

The activity rate for the Supervising activity cost pool under activity-based costing is closest to:

Accepted Answer

A) $8.00 per batch 
B) $17.00 per batch 
C) $26.67 per batch 
D) $85.00 per batch 
A) $8.00 per batch 
B) $17.00 per batch 
C) $26.67 per batch 
D) $85.00 per batch

Question 9

Daba Company manufactures two products, Product F and ProductG. The company expects to produce and sell 1,400 units of Product F and 1,800 units of Product G during the current year. The company uses activity-based costing to compute unit product costs for external reports. Data relating to the company's three activity cost pools are given below for the current year:
   Required:
Using the activity-based costing approach, determine the overhead cost per unit for each product.

Accepted Answer

The activity rates for each activity cos

Question 10

How much cost, in total, would be allocated in the first-stage allocation to the Order Size activity cost pool?

Accepted Answer

A) $78,000 
B) $93,000 
C) $104,000 
D) $91,000 
A) $78,000 
B) $93,000 
C) $104,000 
D) $91,000

Question 11

What is the overhead cost assigned to Product T2 under activity-based costing?

Accepted Answer

A) $5,150 
B) $7,829 
C) $15,500 
D) $2,679 
A) $5,150 
B) $7,829 
C) $15,500 
D) $2,679

Question 12

Christiansen Corporation uses an activity-based costing system with the following three activity cost pools:   The Other activity cost pool is used to accumulate costs of idle capacity and organization-sustaining costs. The company has provided the following data concerning its costs:   The distribution of resource consumption across activity cost pools is given below:   The activity rate for the Order Processing activity cost pool is closest to:

Accepted Answer

A) $676 per order 
B) $780 per order 
C) $560 per order 
D) $312 per order 
A) $676 per order 
B) $780 per order 
C) $560 per order 
D) $312 per order

Question 13

Even departmental overhead rates will not correctly assign overhead costs in situations where a company has a range of products that differ in volume, lot size, or complexity of production.

Accepted Answer

A) True 
 B)False

Question 14

What is the overhead cost assigned to Product L7 under activity-based costing?

Accepted Answer

A) $1,672 
B) $9,022 
C) $7,350 
D) $19,000 
A) $1,672 
B) $9,022 
C) $7,350 
D) $19,000

Question 15

Cosgrove Company manufactures two products, Product K-7 and Product L-15. Product L-15 is of fairly recent origin, having been developed as an attempt to enter a market closely related to that of Product K-7. Product L-15 is the more complex of the two products, requiring 2.0 hours of direct labor time per unit to manufacture compared to 1.0 hour of direct labor time for Product K-7. Product L-15 is produced on an automated production line.
Overhead currently is applied to the products on the basis of direct labor-hours. The company estimated it would incur $510,000 in manufacturing overhead costs and produce 10,000 units of Product L-15 and 40,000 units of Product K- 7 during the current year.
Unit costs for materials and labor are:   Required:
a. Compute the predetermined overhead rate under the current method, and determine the unit product cost of each product for the current year.
b. The company is considering the use of activity-based costing as an alternative to its traditional costing method for manufacturing overhead. Data relating to the company's activity cost pools for the current year are given below:   Using the data above, determine the unit product cost of each product for the current year.
c. What items of overhead cost make Product L-15 so costly to produce according to the activity-based costing system? What influence might the activity-based costing data have on management's opinions regarding the profitability of Product L-15?

Accepted Answer

a. The company expects to work 60,000 di

Question 16

What would be the total overhead cost per delivery according to the activity based costing system? In other words, what would be the overall activity rate for the deliveries activity cost pool? (Round to the nearest whole cent.)

Accepted Answer

A) $4.71 
B) $5.14 
C) $3.43 
D) $6.00 
A) $4.71 
B) $5.14 
C) $3.43 
D) $6.00

Question 17

What is the overhead cost assigned to Product R9 under activity-based costing?

Accepted Answer

A) $624 
B) $2,660 
C) $8,000 
D) $3,284 
A) $624 
B) $2,660 
C) $8,000 
D) $3,284

Question 18

Kapoor Corporation uses the following activity rates from its activity-based costing to assign overhead costs to products.   Data concerning two products appear below:   Required:
a. How much overhead cost would be assigned to Product J00A using the company's activity-based costing system? Show your work!
b. How much overhead cost would be assigned to Product S06U using the company's activity-based costing system? Show your work!

Accepted Answer

a. Product

Question 19

How much factory supervision and indirect factory labor cost would NOT be assigned to products using the activity-based costing system?

Accepted Answer

A) $0 
B) $280,000 
C) $360,000 
D) $92,000 
A) $0 
B) $280,000 
C) $360,000 
D) $92,000

Question 20

Suppose that the company decides that the present activity-based costing system is too complex and that all costs (except for the costs of purchased decorations) should be allocated on the basis of the number of guests. In that event, what would you expect to happen to the costs of cakes?

Accepted Answer

A) The cost of cakes for receptions with fewer than the average number of guests would go down. 
B) The cost of cakes for receptions with more than the average number of guests would go down. 
C) The costs of all cakes would go up. 
D) The costs of all cakes would go down. 
A) The cost of cakes for receptions with fewer than the average number of guests would go down. 
B) The cost of cakes for receptions with more than the average number of guests would go down. 
C) The costs of all cakes would go up. 
D) The costs of all cakes would go down.

How much overhead cost is allocated to the Supervising activity cost pool under activity-based costing?

The costs of a particular department should not be split up among activity cost pools in an activity-based costing system.

How much cost, in total, would be allocated in the first-stage allocation to the Customer Support activity cost pool?

The activity rate for the Processing activity cost pool under activity-based costing is closest to:

The activity rate for the Processing activity cost pool under activity-based costing is closest to:

The activity rate for the Supervising activity cost pool under activity-based costing is closest to:

How much overhead cost is allocated to the Machining activity cost pool under activity-based costing in the first stage of allocation?

The activity rate for the Supervising activity cost pool under activity-based costing is closest to:

How much cost, in total, would be allocated in the first-stage allocation to the Order Size activity cost pool?

What is the overhead cost assigned to Product T2 under activity-based costing?

Even departmental overhead rates will not correctly assign overhead costs in situations where a company has a range of products that differ in volume, lot size, or complexity of production.

What is the overhead cost assigned to Product L7 under activity-based costing?

What would be the total overhead cost per delivery according to the activity based costing system? In other words, what would be the overall activity rate for the deliveries activity cost pool? (Round to the nearest whole cent.)

What is the overhead cost assigned to Product R9 under activity-based costing?

How much factory supervision and indirect factory labor cost would NOT be assigned to products using the activity-based costing system?

Suppose that the company decides that the present activity-based costing system is too complex and that all costs (except for the costs of purchased decorations) should be allocated on the basis of the number of guests. In that event, what would you expect to happen to the costs of cakes?

Managerial Accounting and Cost Concepts

Cost-Volume-Profit Relationships

Job-Order Costing

Variable Costing and Segment Reporting: Tools for Management

Differential Analysis: The Key to Decision Making

Capital Budgeting Decisions

Capital Budgeting Decisions

Profit Planning

Flexible Budgets and Performance Analysis

Standard Costs and Variances

Performance Measurement in Decentralized Organizations

Managerial Accounting and Cost Concepts

Job-Order Costing

Activity-Based-Costing: a Tool to Aid Decision Making

A Capital Budgeting Decisions

Standard Costs and Variances

Performance Measurement in Decentralized Organizations

Performance Measurement in Decentralized Organizations

Profitability Analysis

Pricing Products and Services

Filters

Exam 5: Activity-Based-Costing: a Tool to Aid Decision Making

How much overhead cost is allocated to the Supervising activity cost pool under activity-based costing?

The costs of a particular department should not be split up among activity cost pools in an activity-based costing system.

How much cost, in total, would be allocated in the first-stage allocation to the Customer Support activity cost pool?

The activity rate for the Processing activity cost pool under activity-based costing is closest to:

The activity rate for the Processing activity cost pool under activity-based costing is closest to:

The activity rate for the Supervising activity cost pool under activity-based costing is closest to:

How much overhead cost is allocated to the Machining activity cost pool under activity-based costing in the first stage of allocation?

The activity rate for the Supervising activity cost pool under activity-based costing is closest to:

How much cost, in total, would be allocated in the first-stage allocation to the Order Size activity cost pool?

What is the overhead cost assigned to Product T2 under activity-based costing?

Even departmental overhead rates will not correctly assign overhead costs in situations where a company has a range of products that differ in volume, lot size, or complexity of production.

What is the overhead cost assigned to Product L7 under activity-based costing?

What would be the total overhead cost per delivery according to the activity based costing system? In other words, what would be the overall activity rate for the deliveries activity cost pool? (Round to the nearest whole cent.)

What is the overhead cost assigned to Product R9 under activity-based costing?

How much factory supervision and indirect factory labor cost would NOT be assigned to products using the activity-based costing system?

Suppose that the company decides that the present activity-based costing system is too complex and that all costs (except for the costs of purchased decorations) should be allocated on the basis of the number of guests. In that event, what would you expect to happen to the costs of cakes?

Managerial Accounting and Cost Concepts

Cost-Volume-Profit Relationships

Job-Order Costing

Variable Costing and Segment Reporting: Tools for Management

Differential Analysis: The Key to Decision Making

Capital Budgeting Decisions

Capital Budgeting Decisions

Profit Planning

Flexible Budgets and Performance Analysis

Standard Costs and Variances

Performance Measurement in Decentralized Organizations

Managerial Accounting and Cost Concepts

Job-Order Costing

Activity-Based-Costing: a Tool to Aid Decision Making

A Capital Budgeting Decisions

Standard Costs and Variances

Performance Measurement in Decentralized Organizations

Performance Measurement in Decentralized Organizations

Profitability Analysis

Pricing Products and Services

Filters