Question 1

Arranging for a shipment of a number of different products to a customer is an example of an activity at which of the following levels?

Accepted Answer

A)  Unit-level activity. 
B)  Batch-level activity. 
C)  Customer-level activity. 
D)  Organization-sustaining activity. 
A)  Unit-level activity. 
B)  Batch-level activity. 
C)  Customer-level activity. 
D)  Organization-sustaining activity. B

Question 2

Purchase order processing is an example of a:

Accepted Answer

A)  Unit-level activity. 
B)  Batch-level activity. 
C)  Product-level activity. 
D)  Organization-sustaining activity. 
A)  Unit-level activity. 
B)  Batch-level activity. 
C)  Product-level activity. 
D)  Organization-sustaining activity. B

Question 3

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

Accepted Answer

A)  $120,000 
B)  $216,000 
C)  $161,000 
D)  $108,000 
A)  $120,000 
B)  $216,000 
C)  $161,000 
D)  $108,000 C

Question 4

Trauscht Corporation has provided the following data from its activity-based costing system:  
The company makes 340 units of product P23F a year, requiring a total of 710 machine-hours, 80 orders, and 40 inspection-hours per year. The product's direct materials cost is $40.05 per unit and its direct labor cost is $14.35 per unit. The product sells for $121.90 per unit.
According to the activity-based costing system, the product margin for product P23F is:

Accepted Answer

A)  $9,223.20 
B)  $7,853.60 
C)  $5,401.60 
D)  $22,950.00 
A)  $9,223.20 
B)  $7,853.60 
C)  $5,401.60 
D)  $22,950.00

Question 5

Dilloo Company 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:   The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs.
You have been asked to complete the first-stage allocation of costs to the activity cost pools.
-How much cost, in total, would be allocated in the first-stage allocation to the Order Size activity cost pool?

Accepted Answer

A)  $271,000 
B)  $280,500 
C)  $297,000 
D)  $264,000 
A)  $271,000 
B)  $280,500 
C)  $297,000 
D)  $264,000

Question 6

Whitford Corporation uses the following activity rates from its activity-based costing to assign overhead costs to products.   
Required:
a. How much overhead cost would be assigned to Product W52Q using the company's activity-based costing system? Show your work!
b. How much overhead cost would be assigned to Product Q29D using the company's activity-based costing system? Show your work!

Accepted Answer

The answer of Whitford Corporation uses the following activity rates...

Question 7

In activity-based costing, as in traditional costing systems, nonmanufacturing costs are not assigned to products.

Accepted Answer

A) True 
 B)False

Question 8

Darter Company manufactures two products, Product F and Product G. The company expects to produce and sell 2,600 units of Product F and 6,000 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 9

Accola Company uses activity-based costing. The company has two products: A and B. The annual production and sales of Product A is 1,100 units and of Product B is 700 units. There are three activity cost pools, with estimated costs and expected activity as follows:

-If the materials handling cost is allocated on the basis of material moves, how much of the total materials handling cost would be allocated to the specialty windows? (Round off your answer to the nearest whole dollar.)

Accepted Answer

A)  $9,129 
B)  $6,639 
C)  $14,296 
D)  $15,649 
A)  $9,129 
B)  $6,639 
C)  $14,296 
D)  $15,649

Question 10

Kleppe Corporation has provided the following data from its activity-based costing accounting system:   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?

Accepted Answer

A)  $0 
B)  $68,000 
C)  $280,000 
D)  $200,000 
A)  $0 
B)  $68,000 
C)  $280,000 
D)  $200,000

Question 11

Emmette 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?

Accepted Answer

A)  $325,000 
B)  $312,000 
C)  $333,000 
D)  $429,000 
A)  $325,000 
B)  $312,000 
C)  $333,000 
D)  $429,000

Question 12

Daniele 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)  $3.72 per machine-hour 
B)  $4.44 per machine-hour 
C)  $7.44 per machine-hour 
D)  $1.24 per machine-hour 
A)  $3.72 per machine-hour 
B)  $4.44 per machine-hour 
C)  $7.44 per machine-hour 
D)  $1.24 per machine-hour

Question 13

Proudfoot 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?

Accepted Answer

The answer of Proudfoot Corporation uses the following activity rates...

Question 14

Suoboda Corporation uses the following activity rates from its activity-based costing to assign overhead costs to products:  
How much overhead cost would be assigned to Product I90W using the activity-based costing system?

Accepted Answer

A)  $316.56 
B)  $105.05 
C)  $4,371.90 
D)  $59,038.10 
A)  $316.56 
B)  $105.05 
C)  $4,371.90 
D)  $59,038.10

Question 15

Lifsey Wedding Fantasy Company makes very elaborate wedding cakes to order. The owner of the company has provided the following data concerning the activity rates in its activity-based costing system:   The measure of activity for the size-related activity cost pool is the number of planned guests at the wedding reception. The greater the number of guests, the larger the cake. The measure of complexity is the number of tiers in the cake. The activity measure for the order-related cost pool is the number of orders. (Each wedding involves one order.) The activity rates include the costs of raw ingredients such as flour, sugar, eggs, and shortening. The activity rates do not include the costs of purchased decorations such as miniature statues and wedding bells, which are accounted for separately.
Data concerning two recent orders appear below:  
-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 more than the average number of guests would go down. 
B)  The costs of all cakes would go up. 
C)  The cost of cakes for receptions with fewer than the average number of guests would go down. 
D)  The costs of all cakes would go down. 
A)  The cost of cakes for receptions with more than the average number of guests would go down. 
B)  The costs of all cakes would go up. 
C)  The cost of cakes for receptions with fewer than the average number of guests would go down. 
D)  The costs of all cakes would go down.

Question 16

Morsell Corporation has provided the following data from its activity-based costing accounting system:   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 NOT be assigned to products using the activity-based costing system?

Accepted Answer

A)  $0 
B)  $280,000 
C)  $240,000 
D)  $76,000 
A)  $0 
B)  $280,000 
C)  $240,000 
D)  $76,000

Question 17

Toma Nuptial Bakery makes very elaborate wedding cakes to order. The company has an activity-based costing system with three activity cost pools. The activity rate for the Size-Related activity cost pool is $1.14 per guest. (The greater the number of guests, the larger the cake.) The activity rate for the Complexity-Related cost pool is $31.86 per tier. (Cakes with more tiers are more complex.) Finally, the activity rate for the Order-Related activity cost pool is $59.66 per order. (Each wedding involves one order for a cake.) The activity rates include the costs of raw ingredients such as flour, sugar, eggs, and shortening. The activity rates do not include the costs of purchased decorations such as miniature statues and wedding bells, which are accounted for separately.
Data concerning two recent orders appear below:  
-Assuming that the company charges $458.08 for the Towry wedding cake, what would be the overall margin on the order?

Accepted Answer

A)  $106.76 
B)  $79.50 
C)  $139.16 
D)  $378.58 
A)  $106.76 
B)  $79.50 
C)  $139.16 
D)  $378.58

Question 18

Viren Corporation has provided the following data from its activity-based costing system:  
The company makes 240 units of product T91H a year, requiring a total of 550 machine-hours, 90 orders, and 40 inspection-hours per year. The product's direct materials cost is $16.98 per unit and its direct labor cost is $12.09 per unit.
According to the activity-based costing system, the average cost of product T91H is closest to:

Accepted Answer

A)  $79.66 per unit 
B)  $90.81 per unit 
C)  $29.07 per unit 
D)  $75.70 per unit 
A)  $79.66 per unit 
B)  $90.81 per unit 
C)  $29.07 per unit 
D)  $75.70 per unit

Question 19

Duration drivers ordinarily require more effort to record than transaction drivers.

Accepted Answer

A) True 
 B)False

Question 20

Fordham Florist specializes 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:   The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs.
The amount of activity for the year is as follows:  
-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)  $6.88 
B)  $5.50 
C)  $6.19 
D)  $6.00 
A)  $6.88 
B)  $5.50 
C)  $6.19 
D)  $6.00

Arranging for a shipment of a number of different products to a customer is an example of an activity at which of the following levels?

Purchase order processing is an example of a:

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

In activity-based costing, as in traditional costing systems, nonmanufacturing costs are not assigned to products.

Proudfoot 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?

Suoboda Corporation uses the following activity rates from its activity-based costing to assign overhead costs to products: How much overhead cost would be assigned to Product I90W using the activity-based costing system?

Duration drivers ordinarily require more effort to record than transaction drivers.

Managerial Accounting and the Business Environment

Managerial Accounting and Cost Concepts

Systems Design: Job-Order Costing

Systems Design: Process Costing

Cost Behavior Analysis and Use

Cost-Volume-Profit Relationship

Variable Costing: a Tool for Management

Profit Planning

Flexible Budgets and Performance Analysis

Standard Costs and Operating Performance Measures

Segment Reporting, Decentralization, and the Balanced Scorecard

Relevant Costs for Decision Making

Capital Budgeting Decisions

How Well Am I Doing Statement of Cash Flows

How Well Am I Doing Financial Statement Analysis

Pricing Products and Services

Profitability Analysis

Further Classification of Labor Costs

Cost of Quality

the Predetermined Overhead Rate and Capacity

Fifo Method

Service Department Allocations

Least-Squares Regression Computations

Abc Action Analysis

Using a Modified Form of Activity-Based Costing to

Predetermined Overhead Rates and Overhead Analysis

Journal Entries to Record Variances

Transfer Pricing

Service Department Charges

The Concept of Present Value

Income Taxes in Capital Budgeting Decisions

The Direct Method of Determining the Net Cash Provided by

Filters

Exam 8: Activity Based Costing: a Tool to Aid Decision-Making

Arranging for a shipment of a number of different products to a customer is an example of an activity at which of the following levels?

Purchase order processing is an example of a:

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

In activity-based costing, as in traditional costing systems, nonmanufacturing costs are not assigned to products.

Proudfoot 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?

Suoboda Corporation uses the following activity rates from its activity-based costing to assign overhead costs to products: How much overhead cost would be assigned to Product I90W using the activity-based costing system?

Duration drivers ordinarily require more effort to record than transaction drivers.

Managerial Accounting and the Business Environment

Managerial Accounting and Cost Concepts

Systems Design: Job-Order Costing

Systems Design: Process Costing

Cost Behavior Analysis and Use

Cost-Volume-Profit Relationship

Variable Costing: a Tool for Management

Profit Planning

Flexible Budgets and Performance Analysis

Standard Costs and Operating Performance Measures

Segment Reporting, Decentralization, and the Balanced Scorecard

Relevant Costs for Decision Making

Capital Budgeting Decisions

How Well Am I Doing Statement of Cash Flows

How Well Am I Doing Financial Statement Analysis

Pricing Products and Services

Profitability Analysis

Further Classification of Labor Costs

Cost of Quality

the Predetermined Overhead Rate and Capacity

Fifo Method

Service Department Allocations

Least-Squares Regression Computations

Abc Action Analysis

Using a Modified Form of Activity-Based Costing to

Predetermined Overhead Rates and Overhead Analysis

Journal Entries to Record Variances

Transfer Pricing

Service Department Charges

The Concept of Present Value

Income Taxes in Capital Budgeting Decisions

The Direct Method of Determining the Net Cash Provided by

Filters