Exam 6: Activity-Based Costing: a Tool to Aid Decision Making

Which of the following activities would be classified as a batch-level activity?

Customer-level activities relate to specific customers and are not tied to any specific products.

Ballweg 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 the 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: Finally, the costs of Machining and Order Filling are combined with the following sales and direct cost data to determine product margins. -What is the product margin for Product T2 under activity-based costing?

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.

Madson 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?

Umanzor 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: Processing, $42,700; Supervising, $26,900; and Other, $17,400. Processing costs are assigned to products using machine-hours (MHs) and Supervising costs are assigned to products using the number of batches. The costs in the Other activity cost pool are not assigned to products. Activity data appear below: -The activity rate for the Processing activity cost pool under activity-based costing is closest to:

McKenrick 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?

Capizzi 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?

Youd 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 Other activity cost pool?

Groch Corporation uses activity-based costing to compute product margins. Overhead costs have already been allocated to the company's three activity cost pools-Processing, Supervising, and Other. The costs in those activity cost pools appear below: Processing costs are assigned to products using machine-hours (MHs) and Supervising costs are assigned to products using the number of batches. The costs in the Other activity cost pool are not assigned to products. Activity data appear below: Finally, sales and direct cost data are combined with Processing and Supervising costs to determine product margins. -What is the overhead cost assigned to Product Q9 under activity-based costing?

Figurski 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, $38,500; Order Filling, $23,000; and Other, $15,500. 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: -The activity rate for the Order Filling activity cost pool under activity-based costing is closest to:

Figurski 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, $38,500; Order Filling, $23,000; and Other, $15,500. 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 I6 under activity-based costing?

A duration driver 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.

Ollivier Corporation has an activity-based costing system with three activity cost pools-Processing, Supervising, and Other. In the first stage allocations, costs in the two overhead accounts, equipment expense and indirect labor, are allocated to the three activity cost pools based on resource consumption. Data used in the first stage allocations follow: Processing costs are assigned to products using machine-hours (MHs) and Supervising costs are assigned to products using the number of batches. The costs in the Other activity cost pool are not assigned to products. Activity data for the company's two products follow: -The activity rate for the Supervising activity cost pool under activity-based costing is closest to:

A transaction driver is:

Findt & Thompson PLC,a consulting firm,uses an activity-based costing in which there are three activity cost pools.The company has provided the following data concerning its costs and its activity based costing system: Costs: Distribution of resource consumption: Required: a.How much cost,in total,would be allocated to the Working On Engagements activity cost pool? b.How much cost,in total,would be allocated to the Business Development activity cost pool? c.How much cost,in total,would be allocated to the Other activity cost pool?

Loffredo Corporation has provided the following data from its activity-based costing accounting system: Distribution of Resource Consumption across Activity Cost Pools: 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 supervisory wages and factory supplies cost would be assigned to the Batch Processing activity cost pool?

Lehner Corporation has provided the following data from its activity-based costing accounting system: Distribution of Resource Consumption across Activity Cost Pools: 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?

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