Exam 7: Activity-Based Costing: a Tool to Aid Decision Making

The controller of Hallowell Company estimates the amount of materials handling overhead cost that should be allocated to the company's two products using the data that are given below: The total materials handling cost for the year is expected to be $18,257.40. -The cost per unit of Product A is closest to:

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. )

The following data have been provided by Walch Corporation from its activity-based costing accounting system: Distribution of Resource Consumption across 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. Required: a.Determine the total amount of supervisory wages and factory utilities costs that would be allocated to the Machining activity cost pool.Show your work! b.Determine the total amount of supervisory wages and factory utilities costs that would NOT be assigned to products.Show your work!

Worker recreational facilities is an example of a cost that would ordinarily be considered to be:

The controller of Hallowell Company estimates the amount of materials handling overhead cost that should be allocated to the company's two products using the data that are given below: The total materials handling cost for the year is expected to be $18,257.40. -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 modular homes? (Round off your answer to the nearest whole dollar. )

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

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?

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?

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 Order Processing activity cost pool is closest to: A.$1,050 per order B.$1,680 per order C.$1,190 per order <underLine>D.</underLine> $1,350 per order Total Order Processing Cost: -Stoudmire 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?

The first-stage allocation in activity-based costing is the process by which overhead costs are assigned to products before they are assigned to customers.

An activity-based costing system is generally easier to set up and run than a traditional cost system.

In activity-based costing,organization-sustaining costs should not be included in product costs for internal management reports that are used for decision-making.However,companies frequently include organization-sustaining costs in product costs to satisfy external reporting requirements.

Aujla 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: -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:

The controller of Hallowell Company estimates the amount of materials handling overhead cost that should be allocated to the company's two products using the data that are given below: The total materials handling cost for the year is expected to be $18,257.40. -If the materials handling cost is allocated on the basis of direct labor-hours,how much of the total materials handling cost would be allocated to the prefab barns? (Round off your answer to the nearest whole dollar. )

If a company switches from a traditional costing system to an activity-based costing system in which some activities are batch-level and product-level,costs ordinarily shift from high-volume to low-volume products.