Question 1

What is the product margin for Product T2 under activity-based costing?

Accepted Answer

A) $1,821 
B) $871 
C) $8,700 
D) $16,200

Question 2

The practice of assigning the costs of idle capacity to products can result in unstable unit product costs.

Accepted Answer

A) True 
 B)False

Question 3

Yoke Corporation has provided the following data 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 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!

Accepted Answer

The answer of Yoke Corporation has provided the following data...

Question 4

What is the overhead cost assigned to Product F2 under activity-based costing?

Accepted Answer

A) $10,000 
B) $3,075 
C) $12,413 
D) $9,338

Question 5

Narayan 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.

Accepted Answer

The answer of Narayan Corporation has an activity-based costing system...

Question 6

Spendlove Corporation has provided the following data from its activity-based costing system:  The company makes 430 units of product S78N a year, requiring a total of 1,120 machine-hours, 40 orders, and 30 inspection-hours per year. The product's direct materials cost is $49.81 per unit and its direct labor cost is $12.34 per unit. The product sells for $129.90 per unit. According to the activity-based costing system, the product margin for product S78N is:

Accepted Answer

A) $4,116.50 
B) $29,132.50 
C) $6,180.50 
D) $5,161.30

Question 7

What is the overhead cost assigned to Product I6 under activity-based costing?

Accepted Answer

A) $38,500 
B) $25,025 
C) $6,900 
D) $31,925

Question 8

What is the product margin for Product F2 under activity-based costing?

Accepted Answer

A) $13,800 
B) $11,262 
C) $1,387 
D) $19,000

Question 9

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

Accepted Answer

A) $91.20 
B) $68.40 
C) $77.90 
D) $39.10

Question 10

Murri 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. Costs in the Processing 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 and activity-based costing system appear below:     Required:
a. Assign overhead costs to activity cost pools using activity-based costing.
b. Calculate activity rates for each activity cost pool using activity-based costing.
c. Determine the amount of overhead cost that would be assigned to each product using activity-based costing.
d. Determine the product margins for each product using activity-based costing.

Accepted Answer

The answer of Murri Corporation has an activity-based costing system...

Question 11

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

Accepted Answer

A) $10.00 per batch 
B) $5.00 per batch 
C) $38.00 per batch 
D) $14.70 per batch

Question 12

Zee 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:

Accepted Answer

A) $2.70 per labor-hour 
B) $4.25 per labor-hour 
C) $4.05 per labor-hour 
D) $8.10 per labor-hour

Question 13

The total amount of overhead cost allocated to Product X would be closest to:

Accepted Answer

A) $272,600 
B) $196,800 
C) $234,000 
D) $274,000

Question 14

Activity-based costing is a costing method that is designed to provide managers with product cost information for external financial reports.

Accepted Answer

A) True 
 B)False

Question 15

What is the overhead cost assigned to Product B4 under activity-based costing?

Accepted Answer

A) $1,620 
B) $39,000 
C) $3,720 
D) $5,340

Question 16

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 Euertz wedding cake to just break even?

Accepted Answer

A) $297.27 
B) $78.19 
C) $245.68 
D) $15.45

Question 17

Data concerning three of the activity cost pools of Burlingame LLC, a legal firm, have been provided below:  The activity rate for the "meeting with clients" activity cost pool is closest to:

Accepted Answer

A) $1,102,050 per meeting hour 
B) $63 per meeting hour 
C) $116 per meeting hour 
D) $158 per meeting hour

Question 18

In general, duration drivers are more accurate measures of the consumption of resources than transaction drivers.

Accepted Answer

A) True 
 B)False

Question 19

The activity rate for Activity 2 is closest to:

Accepted Answer

A) $22.04 
B) $117.55 
C) $37.97 
D) $18.56

Question 20

What is the overhead cost assigned to Product Q7 under activity-based costing?

Accepted Answer

A) $1,650 
B) $3,812 
C) $18,000 
D) $2,162

Exam 5: Activity-Based-Costing: a Tool to Aid Decision Making

What is the product margin for Product T2 under activity-based costing?

The practice of assigning the costs of idle capacity to products can result in unstable unit product costs.

What is the overhead cost assigned to Product F2 under activity-based costing?

What is the overhead cost assigned to Product I6 under activity-based costing?

What is the product margin for Product F2 under activity-based costing?

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

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

The total amount of overhead cost allocated to Product X would be closest to:

Activity-based costing is a costing method that is designed to provide managers with product cost information for external financial reports.

What is the overhead cost assigned to Product B4 under 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 Euertz wedding cake to just break even?

Data concerning three of the activity cost pools of Burlingame LLC, a legal firm, have been provided below: The activity rate for the "meeting with clients" activity cost pool is closest to:

In general, duration drivers are more accurate measures of the consumption of resources than transaction drivers.

The activity rate for Activity 2 is closest to:

What is the overhead cost assigned to Product Q7 under activity-based costing?