Angel Corporation uses activity-based costing to determine product costs for external financial reports. The company has provided the following data concerning its activity-based costing system: $\begin{array}{lrr} &\text { Estimated } \\ \text {Activity Cost Pools (and Activity Meseasure } & \text {overhead Cost}\\ \text { Machine related (machine-hours). } &£ 81,600\\ \text { Batch setup (setups).} &£ 387,000 \\ \text { General factory (direct labour-hours). } & £ 274,800 \\ \end{array}$ $\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $ $\quad $$\text { Expected Activity } $ $\begin{array}{lrr} \text { Activity Cost Pools }& \text { Total } & \text {Product X}& \text { Product Y}\\ \text {Machine related. } &8,000&3,000&5,000\\ \text { Batch setup. } &10,000&2,000&8,000\\ \text {General factory } &12,000&7,000&5,000\\ \end{array}$ Assuming that actual activity turns out to be the same as expected activity, the total amount of overhead cost allocated to Product X would be closest to:

A) £371,700 B) £387,000 C) £268,300 D) £149,000 A) £371,700 B) £387,000 C) £268,300 D) £149,000

Bristol Electronics produces wide range of electronic products. The company has a labour based costing system that was introduced in the 1970s and is now considering implementing an activity based costing (ABC) system. Managers are concerned about how they should compare the ABC data with the existing costing system. Selected data from the management accounts for the year ending 31st December 2000 \[\begin{array} { | l | l | } \hline \text { Cost data } & \\ \hline \text { Total manufacturing overhead for year } & £ 1,000,000 \\ \hline \text { Total hours for year } & 60,000 \text { hours } \\ \hline \text { Direct labour cost per hour } & £ 10 \\ \hline \end{array}\] Data for 3 products only \[\begin{array} { | l | r | r | r | } \hline & \text { Product A } & \text { F roduct B } & \text { Product C } \\ \hline \text { Annual production } & 1,000 \text { units } & 2,000 \text { units } & 5,000 \text { units } \\ \hline \text { Material cost per unit } & £ 5.00 & £ 6.00 & £ 7.00 \\ \hline \text { Direct labour hours per unit } & 1.00 & 1.50 & 0.50 \\ \hline \end{array}\] \[\begin{array} { | l | r | r | } \hline \text { ABC data for all products } & & \\ \hline \text { Cost pool / driver } & \text { Annual costs (£s) } & \text { Annual volume } \\ \hline \text { Number of set-ups } & 200,000 & 1,000 \\ \hline \text { Inspection time (hours) } & 500,000 & 3,000 \\ \hline \text { Machine maintenance (hours) } & 100,000 & 5,000 \\ \hline \text { Number of purchases } & 100,000 & 500\\ \hline \text { Number of shipments } & 100,000 & 500\\ \hline &1,000,000\\ \hline \end{array}\] \[\begin{array} { | l | c | c | c | } \hline \text { ABC data 3 products } & \text { Froduct A } & \text { Froduct B } & \text { Froduct C } \\ \hline \text { Number of set-ups } & 20 & 180 & 30 \\ \hline \text { Inspection time (hours) } & 20 & 50 & 300 \\ \hline \text { Machine maintenance (hours) } & 30 & 40 & 20 \\ \hline \text { Number of purchases } & 3 & 4 & 5 \\ \hline \text { Number of shipments } & 3 & 4 & 6 \\ \hline \end{array}\] -Determine the total unit cost for product B using the number of hours to apply overhead

A) £20.00 B) £46.00 C) £25.00 D) £21.67 A) £20.00 B) £46.00 C) £25.00 D) £21.67

Bristol Electronics produces wide range of electronic products. The company has a labour based costing system that was introduced in the 1970s and is now considering implementing an activity based costing (ABC) system. Managers are concerned about how they should compare the ABC data with the existing costing system. Selected data from the management accounts for the year ending 31st December 2000 \[\begin{array} { | l | l | } \hline \text { Cost data } & \\ \hline \text { Total manufacturing overhead for year } & £ 1,000,000 \\ \hline \text { Total hours for year } & 60,000 \text { hours } \\ \hline \text { Direct labour cost per hour } & £ 10 \\ \hline \end{array}\] Data for 3 products only \[\begin{array} { | l | r | r | r | } \hline & \text { Product A } & \text { F roduct B } & \text { Product C } \\ \hline \text { Annual production } & 1,000 \text { units } & 2,000 \text { units } & 5,000 \text { units } \\ \hline \text { Material cost per unit } & £ 5.00 & £ 6.00 & £ 7.00 \\ \hline \text { Direct labour hours per unit } & 1.00 & 1.50 & 0.50 \\ \hline \end{array}\] \[\begin{array} { | l | r | r | } \hline \text { ABC data for all products } & & \\ \hline \text { Cost pool / driver } & \text { Annual costs (£s) } & \text { Annual volume } \\ \hline \text { Number of set-ups } & 200,000 & 1,000 \\ \hline \text { Inspection time (hours) } & 500,000 & 3,000 \\ \hline \text { Machine maintenance (hours) } & 100,000 & 5,000 \\ \hline \text { Number of purchases } & 100,000 & 500\\ \hline \text { Number of shipments } & 100,000 & 500\\ \hline &1,000,000\\ \hline \end{array}\] \[\begin{array} { | l | c | c | c | } \hline \text { ABC data 3 products } & \text { Froduct A } & \text { Froduct B } & \text { Froduct C } \\ \hline \text { Number of set-ups } & 20 & 180 & 30 \\ \hline \text { Inspection time (hours) } & 20 & 50 & 300 \\ \hline \text { Machine maintenance (hours) } & 30 & 40 & 20 \\ \hline \text { Number of purchases } & 3 & 4 & 5 \\ \hline \text { Number of shipments } & 3 & 4 & 6 \\ \hline \end{array}\] -Determine the total overhead cost for product A using the using the activity based data

A) £9,133 B) £20,000 C) £21,667 D) £21,000 A) £9,133 B) £20,000 C) £21,667 D) £21,000

Exam 8: Process Costing Systems

Angel Corporation uses activity-based costing to determine product costs for external financial reports. The company has provided the following data concerning its activity-based costing system: Estimated Activity Cost Pools (and Activity Meseasure overhead Cost Machine related (machine-hours). £81,600 Batch setup (setups). £387,000 General factory (direct labour-hours). £274,800 $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\text { Expected Activity }$ Activity Cost Pools Total Product X Product Y Machine related. 8,000 3,000 5,000 Batch setup. 10,000 2,000 8,000 General factory 12,000 7,000 5,000 Assuming that actual activity turns out to be the same as expected activity, the total amount of overhead cost allocated to Product X would be closest to:

(Multiple Choice)

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Question 61

Outline the advantages and disadvantages of using the simplified ABC approach.

(Essay)

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Question 62

Bristol Electronics produces wide range of electronic products. The company has a labour based costing system that was introduced in the 1970s and is now considering implementing an activity based costing (ABC) system. Managers are concerned about how they should compare the ABC data with the existing costing system. Selected data from the management accounts for the year ending 31st December 2000 Cost data Total manufacturing overhead for year £1,000,000 Total hours for year 60,000 hours Direct labour cost per hour £10 Data for 3 products only Product A F roduct B Product C Annual production 1,000 units 2,000 units 5,000 units Material cost per unit £5.00 £6.00 £7.00 Direct labour hours per unit 1.00 1.50 0.50 ABC data for all products Cost pool / driver Annual costs (£s) Annual volume Number of set-ups 200,000 1,000 Inspection time (hours) 500,000 3,000 Machine maintenance (hours) 100,000 5,000 Number of purchases 100,000 500 Number of shipments 100,000 500 1,000,000 ABC data 3 products Froduct A Froduct B Froduct C Number of set-ups 20 180 30 Inspection time (hours) 20 50 300 Machine maintenance (hours) 30 40 20 Number of purchases 3 4 5 Number of shipments 3 4 6 -Determine the total unit cost for product B using the number of hours to apply overhead

(Multiple Choice)

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Question 63

Distinguish between unit, batch, product and customer level activities.

(Essay)

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Question 64

Bristol Electronics produces wide range of electronic products. The company has a labour based costing system that was introduced in the 1970s and is now considering implementing an activity based costing (ABC) system. Managers are concerned about how they should compare the ABC data with the existing costing system. Selected data from the management accounts for the year ending 31st December 2000 Cost data Total manufacturing overhead for year £1,000,000 Total hours for year 60,000 hours Direct labour cost per hour £10 Data for 3 products only Product A F roduct B Product C Annual production 1,000 units 2,000 units 5,000 units Material cost per unit £5.00 £6.00 £7.00 Direct labour hours per unit 1.00 1.50 0.50 ABC data for all products Cost pool / driver Annual costs (£s) Annual volume Number of set-ups 200,000 1,000 Inspection time (hours) 500,000 3,000 Machine maintenance (hours) 100,000 5,000 Number of purchases 100,000 500 Number of shipments 100,000 500 1,000,000 ABC data 3 products Froduct A Froduct B Froduct C Number of set-ups 20 180 30 Inspection time (hours) 20 50 300 Machine maintenance (hours) 30 40 20 Number of purchases 3 4 5 Number of shipments 3 4 6 -Determine the total overhead cost for product A using the using the activity based data

(Multiple Choice)

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Question 65

Forrest Florist specialises in large floral bouquets for hotels and other commercial spaces. The company has provided the following data concerning its annual overhead costs and its activity based costing system: Overhead costs: Wages and salaries £70,000 Other expenses. £40,000 Total. £110,000 Distribution of resource consumption: $Forrest Florist specialises in large floral bouquets for hotels and other commercial spaces. The company has provided the following data concerning its annual overhead costs and its activity based costing system: Overhead costs: \begin{array}{lrr} \text { Wages and salaries } & £ 70,000\\ \text {Other expenses. } &£ 40,000\\ \text {Total. } &£ 110,000 \end{array} Distribution of resource consumption: The 'Other' activity cost pool consists of the costs of idle capacity and organisation-sustaining costs. The amount of activity for the year is as follows: \begin{array}{lrr} \text { Activity Cost Pool} & \text { Activity} \\ \text { Making bouquets} & \text { 20,000 bouquets } \\ \text { Delivery. } &\text {1,000 deliveries } &\\ \end{array} - What would be the total overhead cost per bouquet according to the activity based costing system? In other words, what would be the overall activity rate for the making bouquets activity cost pool? (Round your answer to the nearest whole pence.)$ The 'Other' activity cost pool consists of the costs of idle capacity and organisation-sustaining costs. The amount of activity for the year is as follows: Activity Cost Pool Activity Making bouquets 20,000 bouquets Delivery. 1,000 deliveries - 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 your answer to the nearest whole pence.)

(Multiple Choice)

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Question 66

An activity-based costing system that is designed for internal decision-making will not conform to generally accepted accounting principles because:

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Question 67

Showing 61 - 67 of 67

Outline the advantages and disadvantages of using the simplified ABC approach.

Distinguish between unit, batch, product and customer level activities.

An activity-based costing system that is designed for internal decision-making will not conform to generally accepted accounting principles because:

The Role of Accounting Information in Management Decision Making

Cost Concepts, Behaviour and Estimation

A Costing Framework and Cost Allocation

Costvolumeprofit Cvp Analysis

Planning Budgeting and Behaviour

Operational Budgets

Job Costing Systems

Absorption and Variable Costing

Flexible Budgets, Standard Costs and Variance Analysis

Variance Analysis: Revenue and Cost

Activity Analysis: Costing and Management

Relevant Costs for Decision Making

Strategy and Control

Capital Budgeting and Strategic Investment Decisions

The Strategic Management of Costs and Revenues

Strategic Management Control: a Lean Perspective

Responsibility Accounting, Performance Evaluation and Transfer Pricing

The Balanced Scorecard and Strategy Maps

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