Exam 13: 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?

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.

The costs of activities that are classified as unit-level should be fixed respect to the number of units produced.

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

How much overhead cost is allocated to the Supervising activity cost pool under 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?

Fife & Jones 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?

Foradori Corporation's activity-based costing system has three activity cost pools-Fabricating, Setting Up, and Other. The company's overhead costs have already been allocated to these cost pools as follows: 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 following table shows the machine-hours and number of batches associated with each of the company's two products: Required: Calculate activity rates for each activity cost pool using activity-based costing.

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 Nie wedding cake to just break even?

Assembling a product is an example of a:

Lovette Corporation has an activity-based costing system with three activity cost pools-Processing, Setting Up, and Other. The company's overhead costs, which consist of factory utilities and indirect labor, are allocated to the cost pools in proportion to the activity cost pools' consumption of resources. Data concerning the company's costs and activity-based costing system appear below: Required: Assign overhead costs to activity cost pools using activity-based costing.

What is the product margin for Product H2 under activity-based costing?

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

What is the overhead cost assigned to Product U4 under activity-based costing?

How much factory supervision and indirect factory labor cost would NOT be assigned to products using the activity-based costing system?

What is the overhead cost assigned to Product X6 under activity-based costing?

Activity-based management seeks to eliminate waste by allocating costs to products that waste resources.

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

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?

Activity-based costing is a costing method that is designed to provide managers with cost information for strategic and other decisions that potentially affect only variable costs.