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

Vontungeln Corporation uses activity-based costing to compute product margins.In the first stage, the activity-based costing system allocates two overhead accounts-equipment depreciation and supervisory expense-to three activity cost pools-Machining, Order Filling, and Other-based on resource consumption.Data to perform these allocations appear below: In the second stage, Machining costs are assigned to products using machine-hours (MHs)and Order Filling costs are assigned to products using the number of orders.The costs in the Other activity cost pool are not assigned to products. Finally, sales and direct cost data are combined with Machining and Order Filling costs to determine product margins. The activity rate for the Machining activity cost pool under activity-based costing is closest to:

Duerr Corporation uses an activity-based costing system with three activity cost pools.The company has provided the following data concerning its costs: The distribution of resource consumption across the three activity cost pools is given below: How much cost, in total, would be allocated in the first-stage allocation to the Order Processing activity cost pool?

Ginger 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 Setting Up activity cost pool?

Hettich 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:

Orzel Corporation has provided the following data concerning its overhead costs for the coming year: The company has an activity-based costing system with the following three activity cost pools and estimated activity for the coming year: The Other activity cost pool does not have a measure of activity;it is used to accumulate costs of idle capacity and organization-sustaining costs. The distribution of resource consumption across activity cost pools is given below: The activity rate for the Assembly activity cost pool is closest to:

Benoist Corporation has an activity-based costing system with three activity cost pools-Machining, Setting Up, and Other.The company's overhead costs have already been allocated to the cost pools and total $17, 200 for the Machining cost pool, $7, 700 for the Setting Up cost pool, and $52, 100 for the Other cost pool. Costs in the Machining 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.Data concerning the two products and the company's costs appear below: Required: a.Calculate activity rates for each activity cost pool using activity-based costing. b.Determine the amount of overhead cost that would be assigned to each product using activity-based costing. c.Determine the product margins for each product using activity-based costing.

Which of the following costs should not be included in product costs for internal management reports that are used for decision-making?

Betterton Corporation uses an activity based costing system to assign overhead costs to products.In the first stage, two overhead costs-equipment depreciation and supervisory expense-are allocated to three activity cost pools-Machining, Order Filling, and Other-based on resource consumption.Data to perform these allocations appear below: In the second stage, Machining costs are assigned to products using machine-hours (MHs)and Order Filling costs are assigned to products using the number of orders.The costs in the Other activity cost pool are not assigned to products.Activity data for the company's two products follow: How much overhead cost is allocated to the Machining activity cost pool under activity-based costing in the first stage of allocation?

Grammer Corporation uses an activity-based costing system with three activity cost pools.The company has provided the following data concerning its costs: The distribution of resource consumption across the three activity cost pools is given below: How much cost, in total, would be allocated in the first-stage allocation to the Other activity cost pool?

Tomek 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 $0.82 per MH;the activity rate for Setting Up is $5.40 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.

Mciver Corporation uses activity-based costing to assign overhead costs to products.Overhead costs have already been allocated to the company's three activity cost pools as follows: Machining, $10, 900;Order Filling, $10, 500;and Other, $75, 600.Machining costs are assigned to products using machine-hours (MHs)and Order Filling costs are assigned to products using the number of orders.The costs in the Other activity cost pool are not assigned to products.Activity data appear below: What is the overhead cost assigned to Product K0 under activity-based costing?

Moyle 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:

Ort 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. How much indirect factory wages and factory equipment depreciation cost would be assigned to the Customer Orders activity cost pool?

Activity-based costing uses a number of activity cost pools, each of which may have a different allocation base.

In traditional costing systems, manufacturing costs that are not caused by products are not assigned to products.

Loader Corporation has an activity-based costing system with three activity cost pools-Processing, Setting Up, and Other.The company's overhead costs consist of equipment depreciation and indirect labor and are allocated to the cost pools in proportion to the activity cost pools' consumption of resources.Equipment depreciation totals $88, 000 and indirect labor totals $1, 000.Data concerning the distribution of resource consumption across activity cost pools appear below: Required: Assign overhead costs to activity cost pools using activity-based costing.

Ort 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. How much indirect factory wages and factory equipment depreciation cost would NOT be assigned to products using the activity-based costing system?

Villeda Corporation uses the following activity rates from its activity-based costing to assign overhead costs to products. Data concerning two products appear below: Required: How much overhead cost would be assigned to each of the two products using the company's activity-based costing system?

Somani Corporation has an activity-based costing system with three activity cost pools-Machining, Setting Up, and Other.The company's overhead costs, which consist of equipment depreciation and indirect labor, have been allocated to the cost pools already and are provided in the table below. Costs in the Machining 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.Data concerning the two products and the company's costs appear below: Required: a.Calculate activity rates for each activity cost pool using activity-based costing. b.Determine the amount of overhead cost that would be assigned to each product using activity-based costing. c.Determine the product margins for each product using activity-based costing.

Mussenden Corporation has an activity-based costing system with three activity cost pools-Machining, Order Filling, and Other.In the first stage allocations, costs in the two overhead accounts, equipment depreciation and supervisory expense, are allocated to three activity cost pools based on resource consumption.Data used in the first stage allocations follow: Machining costs are assigned to products using machine-hours (MHs)and Order Filling costs are assigned to products using the number of orders.The costs in the Other activity cost pool are not assigned to products.Activity data for the company's two products follow: How much overhead cost is allocated to the Order Filling activity cost pool under activity-based costing?