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

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Question 71

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

A) $7.00 per order
B) $31.00 per order
C) $14.00 per order
D) $10.30 per order

E) C) and D)
F) A) and B)

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Question 72

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How much overhead cost is allocated to the Order Filling activity cost pool under activity-based costing?

A) $39,800
B) $200
C) $8,000
D) $7,800

E) All of the above
F) C) and D)

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Question 73

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Matis Corporation's activity-based costing system has three activity cost pools-Fabricating, Setting Up, and Other. Costs in the Fabricating 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. The activity rate for Fabricating is $1.08 per MH; the activity rate for Setting Up is $5.20 per batch. The following table shows the machine-hours and number of batches associated with each of the company's two products: Required: Determine the amount of overhead cost that would be assigned to each product using activity-based costing.

What is the overhead cost assigned to Product Q9 under activity-based costing?

Tresselt 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 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!

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?

Which of the following is not a limitation of activity-based costing?

In activity-based costing, there are a number of activity cost pools, each of which is allocated to products and other costing objects using its own unique measure of activity.

Bossie 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?

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 Winterhalter wedding cake to just break even?

Wecker Corporation uses the following activity rates from its activity-based costing to assign overhead costs to products: Data concerning two products appear below: How much overhead cost would be assigned to Product V09X using the activity-based costing system?

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

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.)

In activity-based costing, some manufacturing costs may be excluded from product costs.

Managing and sustaining product diversity requires many more overhead resources such as production schedulers and product design engineers than managing and sustaining a single product. The costs of these resources can be accurately allocated to products on the basis of direct labor-hours.

An activity-based costing system should include all of the activities carried out in an organization because any simplification will inevitably result in inaccuracy.

Maccarone Corporation has provided the following data from its activity-based costing system: Data concerning one of the company's products, Product A43V, appear below: According to the activity-based costing system, the product margin for product A43V is:

Drewniak Corporation has provided the following data from its activity-based costing system: The company makes 430 units of product O37W a year, requiring a total of 690 machine-hours, 40 orders, and 10 inspection-hours per year. The product's direct materials cost is $35.72 per unit and its direct labor cost is $29.46 per unit. According to the activity-based costing system, the average cost of product O37W is closest to:

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