Question 1

Which of the following statements concerning the unit product cost of Product W7 is true?

Accepted Answer

A)  The unit product cost of Product W7 under traditional costing is greater than its unit product under activity-based costing by $244.36.
B)  The unit product cost of Product W7 under traditional costing is less than its unit product cost under activity-based costing by $66.13.
C)  The unit product cost of Product W7 under traditional costing is greater than its unit product under activity-based costing by $66.13.
D)  The unit product cost of Product W7 under traditional costing is less than its unit product cost under activity-based costing by $244.36. D

Question 2

Spates, Inc., manufactures and sells two products: Product H2 and Product E0.Data concerning the expected production of each product and the expected total direct labor-hours (DLHs)required to produce that output appear below:  The company's expected total manufacturing overhead is $266,468. If the company allocates all of its overhead based on direct labor-hours, the overhead assigned to each unit of Product H2 would be closest to:

Accepted Answer

A)  $141.00 per unit
B)  $123.42 per unit
C)  $496.86 per unit
D)  $1,453.44 per unit D

Question 3

A plantwide predetermined overhead rate based on direct labor-hours results in low overhead costs for products with a high direct labor-hour content and high overhead costs for products with a low direct labor-hour content.

Accepted Answer

A) True 
 B)False  False

Question 4

Brizendine, Inc., manufactures and sells two products: Product R0 and Product B6.The production of Product R0 is 900 units and of Product B6 is 700 units.The company has an  activity-based costing system with the following activity cost pools, activity measures, and expected activity:  The overhead applied to each unit of Product R0 under activity-based costing is closest to:

Accepted Answer

A)  $675.91 per unit
B)  $292.61 per unit
C)  $761.20 per unit
D)  $636.29 per unit

Question 5

The unit product cost of Product F3 under activity-based costing is closest to:

Accepted Answer

A)  $1,710.70 per unit
B)  $1,197.44 per unit
C)  $1,620.58 per unit
D)  $1,501.23 per unit

Question 6

Production order processing is an example of a:

Accepted Answer

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

Question 7

Strama, Inc., manufactures and sells two products: Product A6 and Product I5.The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity:  The activity rate for the General Factory activity cost pool under activity-based costing is closest to:

Accepted Answer

A)  $21.25 per MH
B)  $111.96 per MH
C)  $45.22 per MH
D)  $19.23 per MH

Question 8

If the company allocates all of its overhead based on direct labor-hours using its traditional costing method, the overhead assigned to each unit of Product G1 would be closest to:

Accepted Answer

A)  $412.02 per unit
B)  $780.12 per unit
C)  $720.63 per unit
D)  $691.83 per unit

Question 9

Which of the following activities would be classified as a batch-level activity?

Accepted Answer

A)  Setting up equipment.
B)  Designing a new product.
C)  Training employees.
D)  Milling a part required for the final product.

Question 10

The unit product cost of Product Z9 under the company's traditional costing method in which all overhead is allocated on the basis of direct labor-hours is closest to:

Accepted Answer

A)  $456.48 per unit
B)  $684.80 per unit
C)  $765.92 per unit
D)  $471.36 per unit

Question 11

If the company allocates all of its overhead based on direct labor-hours using its traditional costing method, the overhead assigned to each unit of Product U1 would be closest to:

Accepted Answer

A)  $261.40 per unit
B)  $188.56 per unit
C)  $213.28 per unit
D)  $659.60 per unit

Question 12

If the company allocates all of its overhead based on direct labor-hours using its traditional costing method, the overhead assigned to each unit of Product U4 would be closest to:

Accepted Answer

A)  $189.21 per unit
B)  $50.46 per unit
C)  $32.49 per unit
D)  $185.73 per unit

Question 13

Rutty, Inc., manufactures and sells two products: Product U6 and Product K9.Data concerning the expected production of each product and the expected total direct labor-hours (DLHs)required to produce that output appear below:  The direct labor rate is $28.70 per DLH.The direct materials cost per unit for each product is given below:  The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity:  Required:
In all computations involving dollars in the following requirements, round off your answer to the nearest whole cent.
a.Determine the unit product cost of each product under the company's traditional costing method.
b.Determine the unit product cost of each product under the activity-based costing method.

Accepted Answer

The answer of Rutty, Inc., manufactures and sells two products:...

Question 14

The overhead cost per unit of Product B under the activity-based costing system is closest to:

Accepted Answer

A)  $45.84
B)  $7.74 
C)  $34.38
D)  $18.41

Question 15

The unit product cost of Product Z9 under activity-based costing is closest to:

Accepted Answer

A)  $765.92 per unit
B)  $749.13 per unit
C)  $721.44 per unit
D)  $417.30 per unit

Question 16

Greenspan, Inc., manufactures and sells two products: Product O4 and Product L7.Data concerning the expected production of each product and the expected total direct labor-hours (DLHs)required to produce that output appear below:  The direct labor rate is $19.60 per DLH.The direct materials cost per unit for each product is given below:  The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity:  Required:
In all computations involving dollars in the following requirements, round off your answer to the nearest whole cent.
a.Compute the activity rates under the activity-based costing system.
b.Determine how much overhead would be assigned to each product under the activity-based costing system.
c.Determine the unit product cost of each product under the activity-based costing method.

Accepted Answer

The answer of Greenspan, Inc., manufactures and sells two products:...

Question 17

When a company implements activity-based costing, overhead cost often shifts from high-volume products to low-volume products, with a higher unit cost resulting for the low-volume products.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following would probably be the most accurate measure of activity to use for allocating the costs associated with a factory's purchasing department?

Accepted Answer

A)  Machine-hours
B)  Direct labor-hours
C)  Number of orders processed
D)  Cost of materials purchased

Question 19

Cazier, Inc., manufactures and sells two products: Product F8 and Product M3.Data concerning the expected production of each product and the expected total direct labor-hours  (DLHs)required to produce that output appear below:  The direct labor rate is $19.30 per DLH.The direct materials cost per unit is $204.50 for Product F8 and $199.90 for Product M3.

The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity:  Required:
Determine the unit product cost of each product under the activity-based costing method.

Accepted Answer

The answer of Cazier, Inc., manufactures and sells two products:...

Question 20

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

Accepted Answer

A)  $164.56 per MH
B)  $68.47 per MH
C)  $65.82 per MH
D)  $93.38 per MH

Exam 4: Activity-Based Costing