Question 1

A major disadvantage of using a plantwide overhead rate is the extreme difficulty in gathering the needed information.

Accepted Answer

A) True 
 B)False

Question 2

The plantwide overhead rate is total plantwide allocation base divided by total budgeted plantwide overhead cost.

Accepted Answer

A) True 
 B)False

Question 3

Explain cost flows for the plantwide overhead rate method.

Accepted Answer

The plantwide overhead rate me

Question 4

A company allocates $7.50 overhead to products based on the number of direct labor hours worked. The company uses a plantwide overhead rate with direct labor hours as the allocation base. Given the amounts below, how many direct labor hours does the company expect in department 2?
'

Accepted Answer

A)  9,914 DLH 
B)  6,612 DLH 
C)  3,109 DLH 
D)  7,454 DLH 
E)  16,254 DLH 
A)  9,914 DLH 
B)  6,612 DLH 
C)  3,109 DLH 
D)  7,454 DLH 
E)  16,254 DLH

Question 5

ABC can be used to assign costs to any cost object that is of management interest.

Accepted Answer

A) True 
 B)False

Question 6

________ is considered while choosing a cost allocation base for activity costs in ABC costing.

Accepted Answer

A)  The marketing strategy of the products being produced 
B)  The product sales price 
C)  The availability of reliable data and metrics 
D)  The number of employees in direct labor 
E)  The number of departments 
A)  The marketing strategy of the products being produced 
B)  The product sales price 
C)  The availability of reliable data and metrics 
D)  The number of employees in direct labor 
E)  The number of departments

Question 7

The use of departmental overhead rates will generally result in:

Accepted Answer

A)  The use of a single cost allocation base. 
B)  The use of a single overhead cost pool for the factory. 
C)  The use of a separate cost allocation base for each department in the factory. 
D)  The use of a separate cost allocation base for each activity in the factory. 
E)  The use of a separate cost allocation base for each month. 
A)  The use of a single cost allocation base. 
B)  The use of a single overhead cost pool for the factory. 
C)  The use of a separate cost allocation base for each department in the factory. 
D)  The use of a separate cost allocation base for each activity in the factory. 
E)  The use of a separate cost allocation base for each month.

Question 8

The ________ is the target of the cost assignment.

Accepted Answer

The answer of The ________ is the target of the...

Question 9

Because departmental overhead costs are allocated based on measures closely related to production volume, they accurately assign overhead, such as utility costs.

Accepted Answer

A) True 
 B)False

Question 10

[The following information applies to the questions displayed below.]
Assume that the Oregon Ice Cream Company is considering the costs of two of their product lines-ice cream sandwiches and dessert bars. The company identified the following partial list of activities, costs, and activity drivers expected for the next year.

-How much overhead cost will be assigned to the dessert bar product line using activity-based costing (ABC)?

Accepted Answer

A)  $340,750 
B)  $247,818 
C)  $16,000 
D)  $297,500 
E)  $313,500 
A)  $340,750 
B)  $247,818 
C)  $16,000 
D)  $297,500 
E)  $313,500

Question 11

A company uses activity-based costing to determine the costs of its three products: A, B, and C. The activity rates and activity levels for each of the company's three activity cost pools are shown below.
   Compute the company's budgeted cost for each of the three activities under activity-based costing.

Accepted Answer

The answer of A company uses activity-based costing to determine...

Question 12

Red Raider Company uses a plantwide overhead rate with direct labor hours as the allocation base. Next year, 400,000 units are expected to be produced requiring 0.9 direct-labor hours each. How much overhead will be assigned to each unit produced given the following estimated amounts?

Accepted Answer

A)  $19.00 per unit 
B)  $17.10 per unit 
C)  $139.00 per unit 
D)  $125.10 per unit 
E)  None of the choices 
A)  $19.00 per unit 
B)  $17.10 per unit 
C)  $139.00 per unit 
D)  $125.10 per unit 
E)  None of the choices

Question 13

Identify each of the following activities as unit level (U), batch level (B), product level (P), or facility level (F) to indicate the way each is incurred with respect to production.
_____ (1) Providing electricity
_____ (2) Sampling product quality
_____ (3) Cutting parts
_____ (4) Receiving shipments
_____ (5) Organizing production
_____ (6) Printing checks
_____ (7) Providing personnel support
_____ (8) Calibrating machines
_____ (9) Cleaning workplace
_____ (10) Assembling components

Accepted Answer

(1) F, (2) B, (3) U,

Question 14

Inside Out, Company designs custom showroom spaces in interior design marts across the country. The following data pertain to a recent reporting period.

$$\begin{array}{l}
\text { Design Department }\
\begin{array} { | l | l | l | } 
\hline \text { Client consultation } & 750 \text { contact hours } & \$ 127,500 \
\hline \text { Drawing } & 1,200 \text { design hours } & \$ 96,000 \
\hline \text { Models } & 15,000 \text { square feet } & \$ 21,000 \
\hline \text { Project Management } & & \
\hline \text { Supervision } & 225 \text { days } & \$ 40,500 \
\hline \text { Billings } & 150 \text { jobs } & \$ 54,000 \
\hline
\end{array}
\end{array}$$ 
Required
a. Use ABC to compute overhead rates for each activity.
b. Assign costs to a 3,000 square-foot job that requires 70 contact hours, 20 design hours, and 14 days to complete.

Accepted Answer

The answer of Inside Out, Company designs custom showroom spaces...

Question 15

Would the following activities at a manufacturer of shampoo be best classified as unit-level, batch-level, product-level, or facility level activities? Researching new formulas Shipping orders to stores

Accepted Answer

A)  Batch Batch 
B)  Unit Unit 
C)  Product Batch 
D)  Product Unit 
E)  Facility Product 
A)  Batch Batch 
B)  Unit Unit 
C)  Product Batch 
D)  Product Unit 
E)  Facility Product

Question 16

The departmental overhead rate method uses a different overhead rate for each production department.

Accepted Answer

A) True 
 B)False

Question 17

[The following information applies to the questions displayed below.]
Assume that a pet food manufacturer is considering adding two types of pet food to its existing product line. Research had determined that good demand exists for dog food in 40-pound bags and cat food in 0.5 pound cans.
The company identified the following partial list of activities, costs, and activity drivers expected for the next year:

-What are the overhead rates used to apply material handling (MH) and storage costs (SC) using activity-based costing?

Accepted Answer

A)  MH $300/batch; SC $2.73/unit. 
B)  MH $300/batch; SC $.20/lb. 
C)  MH $525/batch; SC $.205/unit. 
D)  MH $700/batch; SC $.205/lb. 
E)  MH $700/batch; SC $8.20/lb. 
A)  MH $300/batch; SC $2.73/unit. 
B)  MH $300/batch; SC $.20/lb. 
C)  MH $525/batch; SC $.205/unit. 
D)  MH $700/batch; SC $.205/lb. 
E)  MH $700/batch; SC $8.20/lb.

Question 18

Bond Company uses a plantwide overhead rate with direct labor hours as the allocation base. Use the following information to solve for the amount of direct labor hours estimated per unit of product G2.

Accepted Answer

A)  1.75 DLH per unit of G2. 
B)  6.14 DLH per unit of G2. 
C)  9.3 DLH per unit of G2. 
D)  0.66 DLH per unit of G2. 
E)  11.25 DLH per unit of G2. 
A)  1.75 DLH per unit of G2. 
B)  6.14 DLH per unit of G2. 
C)  9.3 DLH per unit of G2. 
D)  0.66 DLH per unit of G2. 
E)  11.25 DLH per unit of G2.

Question 19

[The following information applies to the questions displayed below.]
Angle Max Industries produces a product which goes through two operations, Assembly and Finishing, before it is ready to be shipped. Next year's expected costs and activities are shown below.
  
-Assume that Angle Max Industries allocates overhead using a plantwide overhead rate based on machine hours. How much total overhead will be assigned to a product that requires 1 direct labor hour and 2.5 machine hours in the Assembly Department, and 3.5 direct labor hours and 0.5 machine hours in the Finishing Department?

Accepted Answer

A)  $7.50. 
B)  $13.00. 
C)  $10.50. 
D)  $6.00. 
E)  $11.00. 
A)  $7.50. 
B)  $13.00. 
C)  $10.50. 
D)  $6.00. 
E)  $11.00.

Question 20

Red Raider Company uses a plantwide overhead rate with machine hours as the allocation base. Next year, 400,000 units are expected to be produced requiring 1.2 machine hours each. How much overhead will be assigned to each unit produced given the following estimated amounts?

Accepted Answer

A)  $19.00 per unit 
B)  $139.00 per unit 
C)  $22.68 per unit 
D)  $166.80 per unit 
E)  None of the choices 
A)  $19.00 per unit 
B)  $139.00 per unit 
C)  $22.68 per unit 
D)  $166.80 per unit 
E)  None of the choices

A major disadvantage of using a plantwide overhead rate is the extreme difficulty in gathering the needed information.

The plantwide overhead rate is total plantwide allocation base divided by total budgeted plantwide overhead cost.

Explain cost flows for the plantwide overhead rate method.

A company allocates $7.50 overhead to products based on the number of direct labor hours worked. The company uses a plantwide overhead rate with direct labor hours as the allocation base. Given the amounts below, how many direct labor hours does the company expect in department 2? '

ABC can be used to assign costs to any cost object that is of management interest.

________ is considered while choosing a cost allocation base for activity costs in ABC costing.

The use of departmental overhead rates will generally result in:

The ________ is the target of the cost assignment.

Because departmental overhead costs are allocated based on measures closely related to production volume, they accurately assign overhead, such as utility costs.

Red Raider Company uses a plantwide overhead rate with direct labor hours as the allocation base. Next year, 400,000 units are expected to be produced requiring 0.9 direct-labor hours each. How much overhead will be assigned to each unit produced given the following estimated amounts?

Would the following activities at a manufacturer of shampoo be best classified as unit-level, batch-level, product-level, or facility level activities? Researching new formulas Shipping orders to stores

The departmental overhead rate method uses a different overhead rate for each production department.

Bond Company uses a plantwide overhead rate with direct labor hours as the allocation base. Use the following information to solve for the amount of direct labor hours estimated per unit of product G2.

Red Raider Company uses a plantwide overhead rate with machine hours as the allocation base. Next year, 400,000 units are expected to be produced requiring 1.2 machine hours each. How much overhead will be assigned to each unit produced given the following estimated amounts?

Managerial Accounting Concepts and Principles

Job Order Costing and Analysis

Process Costing and Analysis

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing and Analysis

Master Budgets and Performance Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Relevant Costing for Managerial Decisions

Capital Budgeting and Investment Analysis

Reporting Cash Flows

Analysis of Financial Statements

Time Value of Money

Lean Principles and Accounting

Accounting for Business Transactions

Filters

Exam 4: Activity-Based Costing and Analysis

A major disadvantage of using a plantwide overhead rate is the extreme difficulty in gathering the needed information.

The plantwide overhead rate is total plantwide allocation base divided by total budgeted plantwide overhead cost.

Explain cost flows for the plantwide overhead rate method.

A company allocates $7.50 overhead to products based on the number of direct labor hours worked. The company uses a plantwide overhead rate with direct labor hours as the allocation base. Given the amounts below, how many direct labor hours does the company expect in department 2? '

ABC can be used to assign costs to any cost object that is of management interest.

________ is considered while choosing a cost allocation base for activity costs in ABC costing.

The use of departmental overhead rates will generally result in:

The ________ is the target of the cost assignment.

Because departmental overhead costs are allocated based on measures closely related to production volume, they accurately assign overhead, such as utility costs.

Red Raider Company uses a plantwide overhead rate with direct labor hours as the allocation base. Next year, 400,000 units are expected to be produced requiring 0.9 direct-labor hours each. How much overhead will be assigned to each unit produced given the following estimated amounts?

Would the following activities at a manufacturer of shampoo be best classified as unit-level, batch-level, product-level, or facility level activities? Researching new formulas Shipping orders to stores

The departmental overhead rate method uses a different overhead rate for each production department.

Bond Company uses a plantwide overhead rate with direct labor hours as the allocation base. Use the following information to solve for the amount of direct labor hours estimated per unit of product G2.

Red Raider Company uses a plantwide overhead rate with machine hours as the allocation base. Next year, 400,000 units are expected to be produced requiring 1.2 machine hours each. How much overhead will be assigned to each unit produced given the following estimated amounts?

Managerial Accounting Concepts and Principles

Job Order Costing and Analysis

Process Costing and Analysis

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing and Analysis

Master Budgets and Performance Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Relevant Costing for Managerial Decisions

Capital Budgeting and Investment Analysis

Reporting Cash Flows

Analysis of Financial Statements

Time Value of Money

Lean Principles and Accounting

Accounting for Business Transactions

Filters