Q&A Hero

Q: The ________________________ overhead rate method uses a single rate for allocating overhead costs to products.

Q: Overhead costs cannot be ________________________ in the same way that direct materials and direct labor can.

Q: Product costs consist of direct labor, direct materials, and ______________.

Q: In competitive markets, price is established through the forces of _______________ and _______________.

Q: Product pricing, product mix decisions, and cost control are examples of _________________ activities.

Q: Inside Out, Company designs custom showroom spaces in interior design marts across the country. The following data pertain to a recent reporting period. Design Department Client consultation 750 contact hours $127,500 Drawing 1,200 design hours $96,000 Models 15,000 square feet $21,000 Project Management Supervision 225 days $40,500 Billings 150 jobs $54,000 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.

Q: Upside Down, Incorporated designs custom storage spaces to eliminate clutter in both residential and business settings. The following data pertain to a recent reporting period: 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.

Q: Sparks Company produces and distributes two types of garden sculptures, Plain and Fancy. Budgeted cost and activity for each of its three activity cost pools are shown below. The company plans to produce and sell 64,000 plain units and 49,150 fancy units. Budgeted Activity Activity Cost Pool Budgeted Cost Plain Fancy Packaging $360,000 70,000 finished units 130,000 finished units Material handling $262,500 140,000 total parts 210,000 total parts Production setups $125,000 5 total setups 20 total setups a. Compute the approximate overhead cost per unit of Plain under activity-based costing. b. Compute the approximate overhead cost per unit of Fancy under activity-based costing.

Q: Bark Mode, Incorporated produces and distributes two types of security systems, Standard and Deluxe. Budgeted cost and activity for each of its three activity cost pools are shown below. The company plans to produce and sell 120,000 standard units and 80,000 deluxe units. Budgeted Activity Activity Cost Pool Budgeted Cost Standard Deluxe Packaging $100,000 120,000 finished units 80,000 finished units Material handling $49,600 600,000 total parts 640,000 total parts Production setups $120,000 6 total setups 14 total setups a. Compute the approximate overhead cost per unit of standard under activity-based costing. b. Compute the approximate overhead cost per unit of deluxe under activity-based costing.

Q: A company has two products: Big and Little. It uses activity-based costing and has prepared the following analysis showing budgeted cost and activity for each of its three activity cost pools: Budgeted Activity Activity Cost Pool Budgeted Cost Big Product Little Product Activity 1 $72,000 1,200 2,800 Activity 2 $91,000 5,250 1,750 Activity 3 $88,000 3,200 4,800 Annual production and sales level of big product is 62,525 units, and the annual production and sales level of little product is 251,900 units. a. Compute the approximate overhead cost per unit of big product under activity-based costing. b. Compute the approximate overhead cost per unit of little product under activity-based costing.

Q: A company has two products: X and Y. It uses activity-based costing and has prepared the following analysis showing budgeted cost and activity for each of its three activity cost pools. Budgeted Activity Activity Cost Pool Budgeted Cost Product X Product Y Activity 1 $3,600 25,200 46,800 Activity 2 $4,800 36,000 44,000 Activity 3 $6,300 43,200 46,800 Annual production and sales level of Product X is 161,100 units, and the annual production and sales level of Product Y is 275,200 units. a. Compute the approximate overhead cost per unit of Product X under activity-based costing. b. Compute the approximate overhead cost per unit of Product Y under activity-based costing.

Q: 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 companys three activity cost pools are shown in the following table: Budgeted Activity Activity Cost Pool Activity Rate Product A Product B Product C Activity 1 $48 3,500 1,000 500 Activity 2 $51 300 2,100 600 Activity 3 $73 400 200 1,400 Compute the companys budgeted overhead cost for each of the three products under activity-based costing.

Q: 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 companys three activity cost pools are shown below. Budgeted Activity Activity Cost Pool Activity Rate Product A Product B Product C Activity 1 $19 700 1,150 650 Activity 2 $27 2,400 2,100 1,500 Activity 3 $62 600 1,350 1,050 Compute the companys budgeted cost for each of the three activities under activity-based costing.

Q: A company uses activity-based costing to determine the costs of its three products: A, B, and C. The budgeted cost and activity for each of the companys three activity cost pools are shown in the following table: Budgeted Activity Activity Cost Pool Budgeted Cost Product A Product B Product C Activity 1 $425,000 1,700 680 1,870 Activity 2 $144,900 1,890 1,575 2,835 Activity 3 $85,000 2,400 1,000 1,600 Compute the companys activity rates under activity-based costing for each of the three activities.

Q: A company uses activity-based costing to determine the costs of its three products: A, B, and C. The budgeted cost and activity for each of the companys three activity cost pools are shown below. Budgeted Activity Activity Cost Pool Budgeted Cost Product A Product B Product C Activity 1 $140,000 7,500 4,000 6,000 Activity 2 $54,000 2,500 2,000 1,500 Activity 3 $28,000 15,000 25,000 30,000 Compute the companys activity rates under activity-based costing for each of the three activities.

Q: Lemon Yellow Company produces childrens clothing that requires two processes, cutting and sewing, to complete. The company is concerned about one product, a hooded jacket, which hasnt been selling as well as it had in past years. Information related to the 20,000 jackets produced annually is shown in the following table: Direct materials $26,000 Direct labor Cutting Department (200 DLH x $20 per DLH) $4,000 Sewing Department (2,000 DLH x $22 per DLH) $44,000 Machine hours Cutting Department 160 MH Sewing Department 1,500 MH Lemon Yellows total expected overhead costs and related overhead data are shown below. The company uses departmental overhead rates based on direct labor hours in the Cutting Department and machine hours in the Sewing Department. Cutting Department Sewing Department Direct labor hours 16,000 DLH 175,000 DLH Machine hours 3,200 MH 30,000 MH Manufacturing overhead costs $480,000 $240,000 Assume this jacket currently sells for $10. How much profit does the company make per jacket?

Q: Slosh, Inc. produces washing machines that require two processes, assembling and finishing, to complete. The companys bestselling machine is the commercial washer. Information related to the 500 commercial washers produced annually is shown below. Direct materials $161,000 Direct labor Assembling Department (1,000 DLH x $25 per DLH) $25,000 Finishing Department (250 DLH x $22 per DLH) $5,500 Machine hours Assembling Department 1,500 MH Finishing Department 400 MH Sloshs total expected overhead costs and related overhead data are shown below. The company uses departmental overhead rates based on direct labor hours in the Assembling Department and machine hours in the Finishing Department. Assembling Department Finishing Department Direct labor hours 50,000 DLH 275,000 DLH Machine hours 37,500 MH 8,000 MH Manufacturing overhead costs $4,000,000 $60,000 Determine the total product cost of this product line and each individual commercial washer.

Q: Rising Sun, Inc. produces granola that requires two processes, mixing and baking, to complete. The best-selling type of granola is cherry almond delight. Information related to the 100,000 units of cherry almond delight produced annually is shown in the following table: Direct materials $230,000 Direct labor Mixing Department (600 DLH x $24 per DLH) $14,400 Baking Department (400 DLH x $22 per DLH) $8,800 Machine hours Mixing Department 200 MH Baking Department 300 MH Rising Suns total expected overhead costs and related overhead data are shown below. The company uses departmental overhead rates based on machine hours in the mixing department and direct labor hours in the baking department. Mixing Department Baking Department Direct labor hours 11,000 DLH 5,000 DLH Machine hours 4,000 MH 3,000 MH Manufacturing overhead costs $80,000 $12,500 Determine the total product cost of this product line and each unit of cherry almond delight.

Q: A companys total expected overhead costs and related overhead data are shown in the following table: Department A Department B Direct labor hours 85,000 DLH 72,000 DLH Machine hours 79,050 MH 37,395 MH Manufacturing overhead costs ? ? Departmental overhead rate $4 per MH $8.31 per DLH a. Compute estimated manufacturing overhead costs for Department A. (b. Compute estimated manufacturing overhead costs for Department B. c. Compute the departmental overhead rate based on direct labor hours for Department A. d. Compute the departmental overhead rate based on machine hours for Department B.

Q: A companys total expected overhead costs and related overhead data are shown below. Department A Department B Direct labor hours 75,000 DLH 30,000 DLH Machine hours 3,000 MH 6,000 MH Manufacturing overhead costs ? ? Departmental overhead rate $2.40 per DLH $36 per MH a. Compute estimated manufacturing overhead costs for Department A. b. Compute estimated manufacturing overhead costs for Department B.

Q: Outer Limits, Inc. produces fencing units which require two processes, A and B, to complete. The best-selling type of fence is made of pvc. Information related to the 8,000 units of pvc fencing produced annually is shown below. Direct materials $450,000 Direct labor Department A (5,000 DLH x $23 per DLH) $115,000 Department B (4,000 DLH x $25 per DLH) $100,000 Machine hours Department A 2,000 MH Department B 3,000 MH Outer Limits total expected overhead costs and related overhead data are shown below. The company uses departmental overhead rates based on machine hours in department A and direct labor hours in department B. Department A Department B Direct labor hours 9,000 DLH 7,000 DLH Machine hours 6,500 MH 13,000 MH Manufacturing overhead costs $54,600 $67,060 Determine the total amount of overhead assigned to each unit of pvc fencing.

Q: Freeze Frame, Inc. produces cameras that require three processes, A, B, and C, to complete. Digital camera model #789 is the best-selling of all the many types of cameras produced. Information related to the 550,000 units of digital camera model #789 produced annually is shown below: Direct materials $450,000 Direct Labor Department A (7,000 DLH x $21 per DLH) $147,000 Department B (25,000 DLH x $19 per DLH) $475,000 Department C (10,000 DLH x $26 per DLH) $260,000 Machine Hours Department A 42,000 MH Department B 23,000 MH Department C 38,000 MH Freeze Frames total expected overhead costs and related overhead data are shown in the following table: Department A Department B Department C Direct labor hours 90,000 DLH 75,000 DLH 42,000 DLH Machine hours 67,500 MH 135,000 MH 53,200 MH Manufacturing overhead costs $540,000 $675,000 $399,000 a. Compute a departmental overhead rate for department A based on machine hours. b. How much overhead is associated with model 789 from department A? c. Compute a departmental overhead rate for department B based on direct labor hours. d. How much overhead is associated with model 789 from department B? e. Compute a departmental overhead rate for department C based on machine hours. f. How much overhead is associated with model 789 from department C? g What is the per unit cost of the 550,000 units of model 789?

Q: Freeze Frame, Inc. produces cameras that require three processes, A, B, and C, to complete. Digital camera model #789 is the best-selling of all the many types of cameras produced. Information related to the 550,000 units of digital camera model #789 produced annually is shown below. Direct materials $450,000 Direct labor Department A (7,000 DLH x $21 per DLH) $147,000 Department B (25,000 DLH x $19 per DLH) $475,000 Department C (10,000 DLH x $26 per DLH) $260,000 Machine Hours Department A 42,000 MH Department B 23,000 MH Department C 38,000 MH Freeze Frames total expected overhead costs and related overhead data are shown below: Department A Department B Department C Direct labor hours 90,000 DLH 75,000 DLH 42,000 DLH Machine hours 67,500 MH 135,000 MH 53,200 MH Manufacturing overhead costs $540,000 $675,000 $399,000 a. Compute a departmental overhead rate for department A based on direct labor hours. b. How much overhead is associated with model 789 from department A? c. Compute a departmental overhead rate for department B based on direct labor hours. d. How much overhead is associated with model 789 from department B? e. Compute a departmental overhead rate for department C based on direct labor hours. f. How much overhead is associated with model 789 from department C? g What is the per unit cost of the 550,000 units of model 789?

Q: Blast Rocket Company manufactures candy-coated popcorn treats that go through two operations, popping and baking, before they are complete. Expected costs and activities for the two departments are shown in the following table: Popping Baking Direct labor hours 238,000 DLH 50,000 DLH Machine hours 25,000 MH 141,500 MH Overhead costs $357,000 $452,800 a. Compute a departmental overhead rate for the popping department based on direct labor hours. b. Compute a departmental overhead rate for the baking department based on machine hours.

Q: Base Runner, Inc. manufactures baseball bats that go through two operations, cutting and sanding, before they are complete. Expected costs and activities for the two departments are shown in the following table: Cutting Sanding Direct labor hours 50,000 DLH 5,000 DLH Machine hours 25,000 MH 50,000 MH Overhead costs $50,000 $37,500 a. Compute a departmental overhead rate for the cutting department based on machine hours. b. Compute a departmental overhead rate for the sanding department based on machine hours.

Q: Time Bender Company makes watches and clocks. The following estimated data are available for the companys next fiscal year: Total direct labor costs: $1,700,000 Total setup costs: $190,000 Watches Clocks Expected production 800,000 100,000 Direct labor hours needed 68,000 DLH 17,000 DLH Machine setups needed 1,000 setups 1,000 setups Determine the setup cost per unit for the watches and the clocks if setup costs are assigned using a plantwide overhead rate based on direct labor hours. (Round to two decimal places.)

Q: Assume New Belgium Brewing Company manufactures and distributes three types of beer and that estimated per unit product costs and related information for the next year are shown in the following table: Blue Paddle Somersault Cocoa Mole Ale Cost data per unit: Direct materials $100,000 $500,000 $750,000 Direct labor $3,600 $4,800 $6,000 Overhead $12,000 $16,000 $20,000 Total product cost per unit $115,600 $520,800 $776,000 Machine hours per unit 30 MH 40 MH 50 MH Number of units produced per year 30 units 20 units 10 units a. If New Belgium Brewing Company uses a plantwide overhead rate based on machine hours, what is the total product cost per unit of Cocoa Mole Ale? Answer:

Q: Fischer Company identified the following activities, costs, and activity drivers: Activity Expected Costs Expected Activity Handling parts $425,000 25,000 parts in stock Inspecting product $390,000 940 batches Processing purchase orders $220,000 440 orders Designing packaging $230,000 5 models a. Compute a plantwide overhead rate assuming the company assigns overhead based on 70,000 budgeted direct labor hours (Round to two decimals). b. Compute separate rates for each of the four activities using the activity based costing.

Q: Superior Products Manufacturing identified the following data in its two production departments: Assembly Finishing Manufacturing overhead costs $225,000 $420,000 Direct labor hours worked 6,600 DLH 10,000 DLH Machine hours used 2,400 MH 5,200 MH Compute departmental overhead rates assuming the Assembly rate is based on machine hours and the Finishing rate is based on direct labor hours.

Q: Superior Products Manufacturing identified the following data in its two production departments. Assembly Finishing Manufacturing overhead costs $225,000 $420,000 Direct labor hours worked 6,600 DLH 9,000 DLH Machine hours used 2,400 MH 5,200 MH Make the following independent calculations (Round to two decimals). a. Compute a plantwide overhead rate using machine hours as the allocation base. b. Compute a plantwide overhead rate using direct labor hours as the allocation base.

Q: A company expects next years overhead costs to be $400,000. During this time, the company also expects to produce 1,000,000 units, have 200,000 direct labor hours, and 800,000 machine hours. Make the following independent calculations. a. Compute a plantwide overhead rate using units of production as the allocation base. b. Compute a plantwide overhead rate using direct labor hours as the allocation base. c. Compute a plantwide overhead rate using machine hours as the allocation base.

Q: A company has two products: AA and BB. It uses a plantwide overhead allocation method based on activity 33 and has prepared the following analysis showing budgeted costs and activities. Use this information to compute the companys plantwide overhead rate. Activity Cost Pool Budgeted Overhead Cost Budgeted Activity Product AA Product BB Total Activity 11 $40,000 100 400 500 Activity 22 $55,000 500 250 750 Activity 33 $90,000 300 1,700 2,000 Total budgeted overhead $185,000

Q: A company has two products: A and B. It uses activity-based costing and has prepared the following analysis showing budgeted costs and activities. Use this information to compute (a) the companys overhead rates for each of the three activities and (b) the amount of overhead allocated to Product A. Activity Cost Pool Budgeted Overhead Cost Budgeted Activity Product A Product B Total Activity 1 $160,000 400 1,600 2,000 Activity 2 $110,000 2,000 1,000 3,000 Activity 3 $180,000 1,200 10,800 12,000 Total budgeted overhead $450,000

Q: A company has two products: A and B. It uses a plantwide overhead allocation method based on activity 2 and has prepared the following analysis showing budgeted costs and activities. Use this information to compute (a) the companys plantwide overhead rate and (b) the amount of overhead allocated to Product A. Activity Cost Pool Budgeted Overhead Cost Budgeted Activity Product A Product B Total Activity 1 $160,000 400 1,600 2,000 Activity 2 $110,000 2,000 1,000 3,000 Activity 3 $180,000 1,200 10,800 12,000 Total budgeted overhead $450,000

Q: A company estimates that overhead costs for the next year will be $3,600,000 for indirect labor, $200,000 for factory utilities, and $21,500 for depreciation on factory machinery. The company uses machine hours as its overhead allocation base. If 764,300 machine hours are planned for this next year, what is the companys plantwide overhead rate?

Q: A company estimates that overhead costs for the next year will be $7,200,000 for indirect labor, $400,000 for factory utilities, and $43,000 for depreciation on factory machinery. The company uses direct labor hours as its overhead allocation base. If 955,375 direct labor hours are planned for this next year, what is the companys plantwide overhead rate?

Q: Identify and explain the four control levels associated with activity-based costing.

Q: Why is overhead allocation under ABC usually more accurate than either the plantwide overhead allocation method or the departmental overhead allocation method?

Q: Explain some of the disadvantages of the departmental overhead rate method.

Q: What are the major advantages of using a plantwide overhead rate?

Q: How does ABC differ from using multiple departmental rates?

Q: What is the basic principle underlying activity-based costing?

Q: Explain cost flows for activity-based costing.

Q: Explain cost flows for the departmental overhead rate method.

Q: Explain cost flows for the plantwide overhead rate method.

Q: Name and briefly describe three overhead rate methods.

Q: Direct labor, direct materials, and manufacturing overhead are all product costs. Why is overhead more difficult to account for than either direct labor or direct materials?

Q: 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

Q: Match each of the following terms a through j with the appropriate definitions 1 through 10. (a) Cost object (b) Activity (c) Cost driver (d) Activity-based costing (e) Batch level activities (f) Activity-based management (g) Pool rate (h) Activity cost driver (i) Activity driver (j) Cost pool _____ (1) A measure of activity level. _____ (2) Actions which cause resources to be used. _____ (3) A collection of costs that are related to the same or similar activity. _____ (4) An outgrowth of ABC that draws on the link between activities and cost incurrence for better management. _____ (5) The target of a cost assignment. _____ (6) Actions performed only on groups of units. _____ (7) Variable that causes an activitys cost to go up or down. _____ (8) An allocation rate used to assign a collection of related costs to a cost object. _____ (9) A cost allocation method that focuses on activities performed. _____(10) Variable that causes a cost to go up or down.

Q: A company identified the following partial list of activities, costs, and activity drivers expected for the next year: Activity Expected Costs Cost Driver Extrusion costs $83,600 Number batches made Handling costs $8,800 Number of orders filled Packaging costs $40,500 Number of units made Product A Product B Production volume 750,000 units 600,000 units Batches made 200 batches 750 batches Orders filled 75 200 How much overhead in total will be assigned to the Product A line using activity based costing? A. $42,500. B. $132,900. C. $90,400. D. $66,000. E. $66,450.

Q: A company identified the following partial list of activities, costs, and activity drivers expected for the next year: Activity Expected Costs Cost Driver Extrusion costs $83,600 Number batches made Handling costs $8,800 Number of orders filled Packaging costs $40,500 Number of units made Product A Product B Production volume 750,000 units 600,000 units Batches made 200 batches 750 batches Orders filled 75 200 Calculate activity rates for each of the three activities using activity-based costing (ABC). A. Extrusion: $304 per batch; handling: $32 per unit; packaging: $.03 per unit. B. Extrusion: $88 per batch; handling: $32 per order; packaging: $.03 per unit. C. Extrusion: $88 per order; handling: $32 per unit; packaging: $.03 per batch. D. Extrusion: $418 per batch; handling: $117.33 per order; packaging: $.054 per unit. E. Extrusion: $118.13 per batch; handling: $44 per order; packaging: $.0675 per unit.

Q: Refer to the data above. How much overhead cost will be assigned to the dessert bar product line using activity-based costing (ABC)? A. 340,750 B. $247,818 C. $16,000 D. $297,500 E. $313,500

Q: Refer to the data in the preceding tables. How much overhead cost will be assigned to the ice cream sandwich product line using activity-based costing (ABC)? A. $340,000 B. $368,000 C. $28,000 D. $850.08 E. $433,682

Q: Refer to the data above. How much overhead cost will be assigned to each unit of product using activity-based costing (ABC)? A. Dog food: $4.62; cat food: $4.62. B. Dog food: $2.64; cat food: $2.64. C. Dog food: $8.60; cat food: $0.33. D. Dog food: $0.26; cat food: $8.60. E. Dog food: $0.12; cat food: $3.85.

Q: Refer to the data in the preceding tables. How much overhead cost will be assigned to each product line using activity-based costing (ABC)? A. Dog food: $462,500; cat food: $462,500. B. Dog food: $860,000; cat food: $65,000. C. Dog food: $60,000; cat food: $45,000. D. Dog food: $800,000; cat food: $20,000. E. Dog food: $320; cat food: $320.

Q: Refer to the data above. What are the overhead rates used to apply material handling (MH) and storage costs (SC) using activity-based costing? 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.

Q: A company has two products: A1 and B2. It uses activity-based costing and has prepared the following analysis showing budgeted cost and activity for each of its three activity cost pools: Budgeted Activity Activity Cost Pool Budgeted Cost Product A1 Product B2 Activity 1 $48,000 1,200 4,800 Activity 2 $63,000 2,240 4,760 Activity 3 $80,000 7,200 800 Annual production and sales level of Product A1 is 8,480 units, and the annual production and sales level of Product B2 is 22,310 units. What is the approximate overhead cost per unit of Product B2 under activity-based costing? A. $8.00 B. $9.00 C. $10.00 D. $12.00 E. $4.00

Q: A company has two products: A1 and B2. It uses activity-based costing and has prepared the following analysis showing budgeted cost and activity for each of its three activity cost pools: Budgeted Activity Activity Cost Pool Budgeted Cost Product A1 Product B2 Activity 1 $48,000 1,200 4,800 Activity 2 $63,000 2,240 4,760 Activity 3 $80,000 7,200 800 Annual production and sales level of Product A1 is 8,480 units, and the annual production and sales level of Product B2 is 22,310 units. What is the approximate overhead cost per unit of Product A1 under activity-based costing? A. $8.00 B. $9.00 C. $10.00 D. $12.00 E. $4.00

Q: A company has two products: A and B. It uses activity-based costing and has prepared the following analysis showing budgeted cost and activity for each of its three activity cost pools: Budgeted Activity Activity Cost Pool Budgeted Cost Product A Product B Activity 1 $87,000 3,000 2,800 Activity 2 $62,000 4,500 5,500 Activity 3 $93,000 2,500 5,250 Annual production and sales level of Product A is 34,300 units, and the annual production and sales level of Product B is 69,550 units. What is the approximate overhead cost per unit of Product A under activity-based costing? A. $3.00 B. $2.00 C. $10.28 D. $15.00 E. $2.33

Q: A company has two products: A and B. It uses activity-based costing and has prepared the following analysis showing budgeted cost and activity for each of its three activity cost pools: Budgeted Activity Activity Cost Pool Budgeted Cost Product A Product B Activity 1 $87,000 3,000 2,800 Activity 2 $62,000 4,500 5,500 Activity 3 $93,000 2,500 5,250 Annual production and sales level of Product A is 34,300 units, and the annual production and sales level of Product B is 69,550 units. What is the approximate overhead cost per unit of Product B under activity-based costing? A. $3.00 B. $2.00 C. $10.28 D. $15.00 E. $2.33

Q: A company uses activity-based costing to determine the costs of its three products: A, B and C. The budgeted cost and activity for each of the companys three activity cost pools are shown in the following table: Budgeted Activity Activity Cost Pool Budgeted Cost Product A Product B Product C Activity 1 $70,000 6,000 9,000 20,000 Activity 2 $45,000 7,000 15,000 8,000 Activity 3 $82,000 2,500 1,000 1,625 How much overhead will be assigned to Product B using activity-based costing? A. $56,500 B. $78,000 C. $62,500 D. $197,000 E. $70,000

Q: A company uses activity-based costing to determine the costs of its three products: A, B, and C. The budgeted cost and activity for each of the companys three activity cost pools are shown in the following table: Budgeted Activity Activity Cost Pool Budgeted Cost Product A Product B Product C Activity 1 $70,000 6,000 9,000 20,000 Activity 2 $45,000 7,000 15,000 8,000 Activity 3 $82,000 2,500 1,000 1,625 What are the activity rates for the three activities under activity based costing? A. (1) $2.00; (2) $3.00; (3) $3.50. B. (1) $3.50; (2) $1.50; (3) $32,80. C. (1) $3.50; (2) $3.00; (3) $16.00. D. (1) $2.00; (2) $1.50; (3) $16.00. E. (1) $2.00; (2) $1.50; (3) $32.80.

Q: A company uses activity-based costing to determine the costs of its three products: A, B, and C. The budgeted cost and activity for each of the companys three activity cost pools are shown in the following table: Budgeted Activity Activity Cost Pool Budgeted Cost Product A Product B Product C Activity 1 $70,000 6,000 9,000 20,000 Activity 2 $45,000 7,000 15,000 8,000 Activity 3 $82,000 2,500 1,000 1,625 Which of the following statements is true regarding this companys activity rates? A. The activity rate under the activity-based costing system for Activity 2 is $2.00. B. The activity rate under the activity-based costing system for Activity 2 is $16.00. C. The activity rate under the activity-based costing system for Activity 2 is $1.50. D. The activity rate under the activity-based costing system for Activity 2 is $19.50. E. The activity rate under the activity-based costing system for Activity 2 is $2.81.

Q: All of the following are examples of facility sustaining costs except: A. Costs of cleaning the workplace. B. Costs of custodial work. C. Costs of personnel support. D. Costs of sampling product quality. E. Costs of employee recreational facilities.

Q: Consider the following activities that take place in a medical clinic. (a.) Cleaning exam rooms. (b.) Heating and air conditioning the clinic. (c.) Sending blood work to a lab. (d.) Dispensing medicine. Which of the following statements is true? A. Cleaning rooms and heating the clinic are both unit level activities. B. Sending blood work to the lab is a batch level activity. C. Sending blood work and dispensing medicine are both batch level activities. D. Cleaning rooms and dispensing medication are both product or service level activities. E. Heating the clinic and dispensing medication are both batch level activities.

Q: Consider the following activities that take place in a veterinary clinic. (a.) Cleaning cages. (b.) Heating and air conditioning the clinic. (c.) Sending blood work to a lab. (d.) Dispensing medicine. Which of the following statements is true? A. Service entities cannot use ABC for overhead allocation. B. Cleaning cages is a facility level activity. C. Dispensing medicine is a facility level activity. D. Heating and air conditioning the clinic is a facility level activity. E. Sending blood work to a lab is a facility level activity.

Q: Aurora Corporation produces outdoor security lighting products. All products go through three processes before completion. Use the expected overhead costs and related data shown below to compute departmental overhead rates based on machine hours in Department A1A; based on direct labor hours in Department B2B; and machine hours in Department C3C. Department A1A Department B2B Department C3C Direct labor hours 90,000 DLH 80,000 DLH 72,000 DLH Machine hours 54,000 MH 32,000 MH 54,000 MH Manufacturing overhead costs $540,000 $160,000 $216,000 A. Dept. A: $10 per MH; Dept B: $2 per DLH; Dept C: $4 per MH. B. Dept. A: $6 per MH; Dept B: $5 per DLH; Dept C: $3 per MH. C. Dept. A: $10 per MH; Dept B: $5 per DLH; Dept C: $4 per MH. D. Dept. A: $6 per MH; Dept B: $5 per DLH; Dept C: $4 per MH. E. Dept. A: $10 per MH; Dept B: $2 per DLH; Dept C: $3 per MH.

Q: Use the above data for Wall Nuts, Inc. to compute the total manufacturing cost per unit of oak paneling assuming the company uses departmental overhead rates based on machine hours in Department A and machine hours in Department B. A. $8.70 B. $18.20 C. $21.95 D. $27.30 E. $36.00

Q: Use the data for Wall Nuts, Inc. to compute the dollar amount of overhead applied to each unit of oak paneling, assuming the company uses departmental overhead rates based on machine hours in Department A and machine hours in Department B. A. $8.70 B. $1.40 C. $14.40 D. $26.25 E. $41.00

Q: Use the data for Wall Nuts, Inc. to compute departmental overhead rates based on machine hours in Department A and machine hours in Department B. A. $4.50 per MH in Dept A; $4.50 per MH in Dept B. B. $7.50 per MH in Dept A; $7.50 per MH in Dept. B. C. $4.50 per MH in Dept A; $7.50 per MH in Dept B. D. $2.70 per MH in Dept A; $6.00 per MH in Dept B. E. $0.60 per MH in Dept A; $0.80 per MH in Dept B.

Q: Heritage Industries uses departmental overhead rates and is planning on a $3.20 per machine hour overhead rate for the finishing department. Compute the estimated manufacturing overhead cost for the finishing department given the information shown in the table. A. $208,000 B. $312,000 C. $520,000 D. $260,000 E. $572,000

Q: Heritage Industries uses departmental overhead rates and is planning on a $2 per machine hour overhead rate for the molding department. Compute the estimated manufacturing overhead cost for the molding department given the information shown in the table. A. $195,000 B. $162,500 C. $130,000 D. $325,000 E. $357,500

Q: Heritage Industries uses departmental overhead rates and is planning on a $1.60 per direct labor hour overhead rate for the finishing department. Compute the estimated manufacturing overhead cost for the finishing department given the information shown in the table. A. $104,000 B. $156,000 C. $260,000 D. $130,000 E. $286,000

Q: Heritage Industries uses departmental overhead rates and is planning on a $3 per direct labor hour overhead rate for the molding department. Compute the estimated manufacturing overhead cost for the molding department given the information shown in the table. A. $487,500 B. $195,000 C. $292,500 D. $243,750 E. $692,500

Q: Compute Aztecs departmental overhead rate for the baking department based on machine hours. A. $1.50 per MH B. $5.00 per MH C. $0.75 per MH D. $0.50 per MH E. $2.08 per MH

Q: Compute Aztecs departmental overhead rate for the baking department based on direct labor hours. A. $1.50 per DLH B. $5.00 per DLH C. $0.75 per DLH D. $0.50 per DLH E. $2.08 per DLH

Q: Compute Aztecs departmental overhead rate for the mixing department based on machine hours. A. $1.50 per MH. B. $5.00 per MH. C. $0.75 per MH. D. $0.50 per MH. E. $2.08 per MH.

Q: Compute Aztecs departmental overhead rate for the mixing department based on direct labor hours. A. $1.50 per DLH. B. $5.00 per DLH. C. $0.75 per DLH. D. $0.50 per DLH. E. $2.08 per DLH.

Q: Crinkle Cut Clothes Company manufactures two products CC1 and CC2. Current direct material and direct labor costs are detailed below. Next year the company wishes to use a plantwide overhead rate with direct labor hours as its allocation base. Next years overhead is estimated to be $338,250. The direct labor and direct materials costs are estimated to be consistent with the current year. Direct labor costs $28 per hour and the company expects to manufacture 22,000 units of CC1 and 91,000 units of CC2 next year. Direct Material per Unit Direct Labor Dollars per Unit CC1 $37.10 $22.40 CC2 $25.20 $15.40 Compute the plantwide overhead rate for next year. A. $28.00 per DLH. B. $37.80 per DLH. C. $1.35 per DLH. D. $5.00 per DLH. E. $.20 per DLH.

Q: Kamper Company sells two products Big Z and Little Z. Current direct material and direct labor costs are detailed below. Next year, the company wishes to use a plantwide overhead rate with direct labor hours as its allocation base. Next years overhead is estimated to be $475,000. The direct labor and direct materials costs are estimated to be consistent with the current year. Direct labor costs $20 per hour and the company expects to manufacture 32,000 units of Big Z and 9,000 units of Little Z next year. Direct Material per Unit Direct Labor Dollars per Unit Big Z $6 $17 Little Z $12 $8 What are total estimated direct labor hours for this next year? A. 30,800 total DLH. B. 616,000 total DLH. C. 300,000 total DLH. D. 1,025,000 total DLH. E. 916,000 total DLH.