Question 1

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

Accepted Answer

A) $39,800 
B) $200 
C) $8,000 
D) $7,800 
A) $39,800 
B) $200 
C) $8,000 
D) $7,800

Question 2

In activity-based costing, some manufacturing costs may be excluded from product costs.

Accepted Answer

A) True 
 B)False

Question 3

In activity-based costing, there are a number of activity cost pools, each of which is allocated to products and other costing objects using its own unique measure of activity.

Accepted Answer

A) True 
 B)False

Question 4

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

Accepted Answer

A) $1.50 
B) $1.58 
C) $1.60 
D) $1.65 
A) $1.50 
B) $1.58 
C) $1.60 
D) $1.65

Question 5

Drewniak Corporation has provided the following data from its activity-based costing system:   The company makes 430 units of product O37W a year, requiring a total of 690 machine-hours, 40 orders, and 10 inspection-hours per year. The product's direct materials cost is $35.72 per unit and its direct labor cost is $29.46 per unit. According to the activity-based costing system, the average cost of product O37W is closest to:

Accepted Answer

A) $94.11 per unit 
B) $89.72 per unit 
C) $65.18 per unit 
D) $92.49 per unit 
A) $94.11 per unit 
B) $89.72 per unit 
C) $65.18 per unit 
D) $92.49 per unit

Question 6

What is the overhead cost assigned to Product Q9 under activity-based costing?

Accepted Answer

A) $14,892 
B) $28,500 
C) $5,415 
D) $20,307 
A) $14,892 
B) $28,500 
C) $5,415 
D) $20,307

Question 7

Managing and sustaining product diversity requires many more overhead resources such as production schedulers and product design engineers than managing and sustaining a single product. The costs of these resources can be accurately allocated to products on the basis of direct labor-hours.

Accepted Answer

A) True 
 B)False

Question 8

Tresselt Corporation has provided the following data from its activity-based costing accounting system:   Distribution of Resource Consumption across Activity Cost Pools:   The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs that are not assigned to products.
Required:
a. Determine the total amount of indirect factory wages and factory equipment depreciation costs that would be allocated to the Product Processing activity cost pool. Show your work!
b. Determine the total amount of indirect factory wages and factory equipment depreciation costs that would NOT be assigned to products. Show your work!

Accepted Answer

a. Allocations to the Product

Question 9

Assuming that all of the costs listed above are avoidable costs in the event that an order is turned down, what amount would the company have to charge for the Winterhalter wedding cake to just break even?

Accepted Answer

A) $65.95 
B) $328.73 
C) $19.65 
D) $271.68 
A) $65.95 
B) $328.73 
C) $19.65 
D) $271.68

Question 10

Unit-level activities are performed each time a unit is produced.

Accepted Answer

A) True 
 B)False

Question 11

Matis Corporation's activity-based costing system has three activity cost pools-Fabricating, Setting Up, and Other. Costs in the Fabricating cost pool are assigned to products based on machine-hours (MHs) and costs in the Setting Up cost pool are assigned to products based on the number of batches. Costs in the Other cost pool are not assigned to products. The activity rate for Fabricating is $1.08 per MH; the activity rate for Setting Up is $5.20 per batch. The following table shows the machine-hours and number of batches associated with each of the company's two products:   Required:
Determine the amount of overhead cost that would be assigned to each product using activity-based costing.

Accepted Answer

The answer of Matis Corporation's activity-based costing system has three...

Question 12

Bossie Corporation uses an activity-based costing system with three activity cost pools. The company has provided the following data concerning its costs and its activity based costing system:     How much cost, in total, would be allocated in the first-stage allocation to the Assembly activity cost pool?

Accepted Answer

A) $196,333 
B) $209,000 
C) $310,000 
D) $155,000 
A) $196,333 
B) $209,000 
C) $310,000 
D) $155,000

Question 13

Mccaskey 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 Fabrication activity cost pool is closest to:

Accepted Answer

A) $1.65 per machine-hour 
B) $4.00 per machine-hour 
C) $0.80 per machine-hour 
D) $2.40 per machine-hour 
A) $1.65 per machine-hour 
B) $4.00 per machine-hour 
C) $0.80 per machine-hour 
D) $2.40 per machine-hour

Question 14

Which of the following is not a limitation of activity-based costing?

Accepted Answer

A) Maintaining an activity-based costing system is more costly than maintaining a traditional direct labor-based costing system. 
B) Changing from a traditional direct labor-based costing system to an activity-based costing system changes product margins and other key performance indicators used by managers.Such changes are often resisted by managers. 
C) In practice, most managers insist on fully allocating all costs to products, customers, and other costing objects in an activity-based costing system.This results in overstated costs. 
D) More accurate product costs may result in increasing the selling prices of some products. 
A) Maintaining an activity-based costing system is more costly than maintaining a traditional direct labor-based costing system. 
B) Changing from a traditional direct labor-based costing system to an activity-based costing system changes product margins and other key performance indicators used by managers.Such changes are often resisted by managers. 
C) In practice, most managers insist on fully allocating all costs to products, customers, and other costing objects in an activity-based costing system.This results in overstated costs. 
D) More accurate product costs may result in increasing the selling prices of some products.

Question 15

Maccarone Corporation has provided the following data from its activity-based costing system:   Data concerning one of the company's products, Product A43V, appear below:   According to the activity-based costing system, the product margin for product A43V is:

Accepted Answer

A) $2,891.90 
B) $5,931.30 
C) $11,917.50 
D) $2,236.90 
A) $2,891.90 
B) $5,931.30 
C) $11,917.50 
D) $2,236.90

Question 16

An activity-based costing system should include all of the activities carried out in an organization because any simplification will inevitably result in inaccuracy.

Accepted Answer

A) True 
 B)False

Question 17

How much cost, in total, should NOT be allocated to orders and products in the second stage of the allocation process if the activity-based costing system is used for internal decision-making?

Accepted Answer

A) $104,000 
B) $0 
C) $52,000 
D) $74,000 
A) $104,000 
B) $0 
C) $52,000 
D) $74,000

Question 18

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

Accepted Answer

A) $7.00 per order 
B) $31.00 per order 
C) $14.00 per order 
D) $10.30 per order 
A) $7.00 per order 
B) $31.00 per order 
C) $14.00 per order 
D) $10.30 per order

Question 19

Wecker 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 V09X using the activity-based costing system?

Accepted Answer

A) $157.87 
B) $91,722.47 
C) $10,385.22 
D) $5,485.50 
A) $157.87 
B) $91,722.47 
C) $10,385.22 
D) $5,485.50

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

In activity-based costing, some manufacturing costs may be excluded from product costs.

In activity-based costing, there are a number of activity cost pools, each of which is allocated to products and other costing objects using its own unique measure of activity.

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

What is the overhead cost assigned to Product Q9 under activity-based costing?

Managing and sustaining product diversity requires many more overhead resources such as production schedulers and product design engineers than managing and sustaining a single product. The costs of these resources can be accurately allocated to products on the basis of direct labor-hours.

Assuming that all of the costs listed above are avoidable costs in the event that an order is turned down, what amount would the company have to charge for the Winterhalter wedding cake to just break even?

Unit-level activities are performed each time a unit is produced.

Which of the following is not a limitation of activity-based costing?

Maccarone Corporation has provided the following data from its activity-based costing system: Data concerning one of the company's products, Product A43V, appear below: According to the activity-based costing system, the product margin for product A43V is:

An activity-based costing system should include all of the activities carried out in an organization because any simplification will inevitably result in inaccuracy.

How much cost, in total, should NOT be allocated to orders and products in the second stage of the allocation process if the activity-based costing system is used for internal decision-making?

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

Wecker 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 V09X using the activity-based costing system?

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 Order Filling activity cost pool under activity-based costing?

In activity-based costing, some manufacturing costs may be excluded from product costs.

In activity-based costing, there are a number of activity cost pools, each of which is allocated to products and other costing objects using its own unique measure of activity.

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

What is the overhead cost assigned to Product Q9 under activity-based costing?

Managing and sustaining product diversity requires many more overhead resources such as production schedulers and product design engineers than managing and sustaining a single product. The costs of these resources can be accurately allocated to products on the basis of direct labor-hours.

Assuming that all of the costs listed above are avoidable costs in the event that an order is turned down, what amount would the company have to charge for the Winterhalter wedding cake to just break even?

Unit-level activities are performed each time a unit is produced.

Which of the following is not a limitation of activity-based costing?

Maccarone Corporation has provided the following data from its activity-based costing system: Data concerning one of the company's products, Product A43V, appear below: According to the activity-based costing system, the product margin for product A43V is:

An activity-based costing system should include all of the activities carried out in an organization because any simplification will inevitably result in inaccuracy.

How much cost, in total, should NOT be allocated to orders and products in the second stage of the allocation process if the activity-based costing system is used for internal decision-making?

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

Wecker 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 V09X using the activity-based costing system?

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