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

Question 1

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

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

Answer 1

D

Question 2

In activity-based costing,a plantwide overhead rate is used to apply overhead to products.

Answer 2

False

Question 3

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.

Answer 3

False

Question 4

Rank the following methods of assigning overhead costs from least accurate to most accurate.

A)departmental rates,plantwide rate,activity-based costing
B)plantwide rate,departmental rates,activity-based costing
C)plantwide rate,activity-based costing,departmental rates
D)activity-based costing,departmental rates,plantwide rate

Question 5

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.

Question 6

Activity-based costing uses a number of activity cost pools,each of which is allocated to products on the basis of direct labor-hours.

Question 7

Testing a prototype of a new product is an example of a(n):

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

Question 8

When combining activities in an activity-based costing system,activities should be grouped together at the same level.For example,batch-level activities should not be combined with unit-level activities.

Question 9

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

Question 10

The clerical activity associated with processing purchase orders to produce an order for a standard product is an example of a(n):

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

Question 11

Setting up equipment is an example of a(n):

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

Question 12

Overhead allocation based solely on a measure of volume such as direct labor-hours:

A)is a key aspect of the activity-based costing model.
B)will systematically overcost high-volume products and undercost low-volume products.
C)will systematically overcost low-volume products and undercost high-volume products.
D)must be used for external financial reporting.

Question 13

An action analysis report reconciles activity-based costing product costs with traditional product costs based on direct labor.

Question 14

Changing a cost accounting system is likely to meet with little resistance in an organization since it is a technical matter of little interest to individuals outside of the accounting department.

Question 15

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

Question 16

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?

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

Question 17

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.

Question 18

Unit-level production activities are performed each time a unit is made.

Question 19

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

Question 20

Purchase order processing is an example of a(n):

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

Question 21

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
D. $1,350 per order
Total Order Processing Cost:
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?

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

Question 22

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
D. $1,350 per order
Total Order Processing Cost:
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:

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

Question 23

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
D. $1,350 per order
Total Order Processing Cost:
Marton Corporation has provided the following data from its activity-based costing accounting system: The activity rate for the "designing products" activity cost pool is closest to:

A)$124 per product design hour
B)$181 per product design hour
C)$55 per product design hour
D)$1,526,916 per product design hour

Question 24

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
D. $1,350 per order
Total Order Processing Cost:
Cuna Corporation has provided the following data concerning its overhead costs for the coming year: The company has an activity-based costing system with the following three activity cost pools and estimated activity for the coming year: The Other activity cost pool does not have a measure of activity;it is used to accumulate costs of idle capacity and organization-sustaining 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)$905 per order
B)$630 per order
C)$1,080 per order
D)$840 per order

Question 25

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
D. $1,350 per order
Total Order Processing Cost:
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?

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

Question 26

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
D. $1,350 per order
Total Order Processing Cost:
Whiting Corporation has provided the following data concerning its overhead costs for the coming year: The company has an activity-based costing system with the following three activity cost pools and estimated activity for the coming year: The Other activity cost pool does not have a measure of activity;it is used to accumulate costs of idle capacity and organization-sustaining costs. The distribution of resource consumption across activity cost pools is given below: The activity rate for the Assembly activity cost pool is closest to:

A)$4.30 per labor-hour
B)$7.00 per labor-hour
C)$8.60 per labor-hour
D)$12.90 per labor-hour

Question 27

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
D. $1,350 per order
Total Order Processing Cost:
Graney 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?

A)$143,000
B)$144,000
C)$108,000
D)$135,000

Question 28

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
D. $1,350 per order
Total Order Processing Cost:
Kassabian 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 Assembly activity cost pool?

A)$314,000
B)$272,333
C)$215,000
D)$430,000

Question 29

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 be assigned to the Customer Orders activity cost pool?

A)$240,000
B)$72,000
C)$68,000
D)$480,000

Question 30

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
D. $1,350 per order
Total Order Processing Cost:
Data concerning three of the activity cost pools of Bramhall LLC,a legal firm,have been provided below: The activity rate for the "meeting with clients" activity cost pool is closest to:

A)$125 per meeting hour
B)$65 per meeting hour
C)$80 per meeting hour
D)$665,500 per meeting hour

Question 31

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
D. $1,350 per order
Total Order Processing Cost:
Laib 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 Other activity cost pool?

A)$187,000
B)$133,000
C)$264,000
D)$66,000

Question 32

Daniele Corporation uses an activity-based costing system with the following three activity cost pools:

Question 33

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
D. $1,350 per order
Total Order Processing Cost:
Activity rates from Hample Corporation's activity-based costing system are listed below.The company uses the activity rates to assign overhead costs to products: Last year,Product J27W involved 30 customer orders,152 assembly hours,and 54 batches.How much overhead cost would be assigned to Product J27W using the activity-based costing system?

A)$24,702.12
B)$5,419.38
C)$4,634.28
D)$104.67

Question 34

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
D. $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?

A)$462,000
B)$407,000
C)$396,000
D)$431,000

Question 35

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
D. $1,350 per order
Total Order Processing Cost:
Vodopich Corporation has provided the following data from its activity-based costing system: According to the activity-based costing system,the average cost of product P58Z is closest to:

A)$113.33 per unit
B)$58.30 per unit
C)$123.40 per unit
D)$118.30 per unit

Question 36

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
D. $1,350 per order
Total Order Processing Cost:
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:

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

Question 37

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:
A.$3.72 per machine-hour
B. $4.44 per machine-hour
C.$7.44 per machine-hour
D.$1.24 per machine-hour
Total Fabrication Cost:
Lippincott Corporation uses an activity-based costing system with the following three activity cost pools:

Question 38

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
D. $1,350 per order
Total Order Processing Cost:
Kraska Corporation has provided the following data from its activity-based costing system: Data concerning one of the company's products,Product O11W,appear below: According to the activity-based costing system,the product margin for product O11W is:

A)$4,651.80
B)$1,688.10
C)$17,934.00
D)$3,956.10

Question 39

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
D. $1,350 per order
Total Order Processing Cost:
Pauls 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 X60R using the activity-based costing system?

A)$5,523.58
B)$87,070.14
C)$115.02
D)$7,212.38

Question 40

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
D. $1,350 per order
Total Order Processing Cost:
Vanfleet 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 Fabricating activity cost pool?

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

Question 41

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 activity rate for Activity 3 is closest to:

A)$119.72
B)$116.18
C)$26.67
D)$56.74

Question 42

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?

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

Question 43

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. )

A)$109,395
B)$48,620
C)$125,238
D)$68,640

Question 44

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. )

A)$182,325
B)$170,170
C)$93,552
D)$109,395

Question 45

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:
Costs: 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?

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

Question 46

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 be assigned to the Batch Processing activity cost pool?

A)$286,000
B)$520,000
C)$284,000
D)$260,000

Question 47

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:
Costs: 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 Customer Support activity cost pool?

A)$330,000
B)$231,000
C)$280,500
D)$309,000

Question 48

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 bouquet according to the activity based costing system? In other words,what would be the overall activity rate for the making bouquets activity cost pool? (Round to the nearest whole cent. )

A)$1.58
B)$1.24
C)$1.93
D)$1.68

Question 49

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?

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

Question 50

The following data have been provided by Letze Corporation 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 factory supervision and indirect factory labor cost would be assigned to the Batch Set-Up activity cost pool?

A)$680,000
B)$385,000
C)$391,000
D)$340,000

Question 51

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:
Assuming that the company charges $556.96 for the Smith wedding cake,what would be the overall margin on the order?

A)$152.45
B)$96.66
C)$460.30
D)$165.41

Question 52

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:
Costs: 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,should NOT be allocated to orders and products in the second stage of the allocation process if the activity-based costing system is used for internal decision-making?

A)$80,000
B)$132,000
C)$0
D)$66,000

Question 53

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:
The activity rate for the batch setup activity cost pool is closest to:

A)$70.40
B)$29.40
C)$26.10
D)$234.90

Question 54

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:

A)$59.23
B)$57.20
C)$47.89
D)$22.70

Question 55

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:

A)$235,000
B)$563,000
C)$316,600
D)$357,500

Question 56

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:
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 Pyburn wedding cake to just break even?

A)$279.87
B)$55.79
C)$29.92
D)$338.64

Question 57

The following data have been provided by Letze Corporation 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 factory supervision and indirect factory labor cost would NOT be assigned to products using the activity-based costing system?

A)$220,000
B)$90,000
C)$0
D)$460,000

Question 58

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 wall mirrors? (Round off your answer to the nearest whole dollar. )

A)$6,086
B)$9,129
C)$11,618
D)$3,961

Question 59

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 specialty windows? (Round off your answer to the nearest whole dollar. )

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

Question 60

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. )

A)$6.88
B)$5.50
C)$6.19
D)$6.00

Question 61

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?

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

Question 62

Andracki Housecleaning provides housecleaning services to its clients.The company uses an activity-based costing system for its overhead costs.The company has provided the following data from its activity-based costing system. The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs.
One particular client,the Lason family,requested 46 jobs during the year that required a total of 92 hours of housecleaning.For this service,the client was charged $2,230.
Required:
a.Compute the activity rates (i.e. ,cost per unit of activity) for the activity cost pools.Round off all calculations to the nearest whole cent.
b.Using the activity-based costing system,compute the customer margin for the Lason family.Round off all calculations to the nearest whole cent.
c.Assume the company decides instead to use a traditional costing system in which ALL costs are allocated to customers on the basis of cleaning hours.Compute the margin for the Lason family.Round off all calculations to the nearest whole cent.

Question 63

Finkel & Robbins 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: 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?

Question 64

Data concerning three of Hatt Corporation's activity cost pools appear below: Required:
Compute the activity rates for each of the three cost pools.Show your work!

Question 65

Sailer Corporation uses the following activity rates from its activity-based costing to assign overhead costs to products. Last year,Product J34U involved 48 batches,22 customer orders,and 395 assembly hours.
Required:
How much overhead cost would be assigned to Product J34U using the company's activity-based costing system? Show your work!

Question 66

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.

Question 67

Proudfoot Corporation uses the following activity rates from its activity-based costing to assign overhead costs to products. Required:
How much overhead cost would be assigned to each of the two products using the company's activity-based costing system?

Question 68

The Coletti Cleaning Brigade Company provides housecleaning services to its clients.The company uses an activity-based costing system for its overhead costs.The company has provided the following data from its activity-based costing system. The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs.
One particular client,the Tubman family,requested 26 jobs during the year that required a total of 104 hours of housecleaning.For this service,the client was charged $1,420.
Required:
a.Using the activity-based costing system,compute the customer margin for the Tubman family.Round off all calculations to the nearest whole cent.
b.Assume the company decides instead to use a traditional costing system in which ALL costs are allocated to customers on the basis of cleaning hours.Compute the margin for the Tubman family.Round off all calculations to the nearest whole cent.

Question 69

Tomczak 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.
Required:
a.Determine the total amount of supervisory wages and factory utilities costs that would be allocated to the Unit Processing 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!

Question 70

Ternasky 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.
Required:
a.Determine the total amount of indirect factory wages and factory equipment depreciation costs that would be allocated to the Product Processing activity cost pool.Show your work!
b.Determine the total amount of indirect factory wages and factory equipment depreciation costs that would NOT be assigned to products.Show your work!

Question 71

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!

Question 72

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 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 Zedian wedding cake to just break even?

A)$247.60
B)$18.55
C)$59.66
D)$204.63

Question 73

Lakes Corporation has provided the following data from its activity-based costing accounting system: Required:
Compute the activity rates for each of the three cost pools.Show your work!

Question 74

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!

Question 75

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?

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.