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Exam 18: Activity-Based Costing

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Question 31

True/False

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Estimated activity-base usage quantities are the total activity-base quantities related to each product.

A) True
B) False

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Question 32

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Determine the overhead in the Painting Department for each unit of Product B if Blue Ridge Marketing Inc.uses a multiple department rate system. ​

A) $49.60 per unit
B) $99.20 per unit
C) $28.80 per unit
D) $64.00 per unit

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

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Question 33

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Calculate the cost of services for a highlight.

Everest Co.uses a plantwide factory overhead rate based on direct labor hours.Overhead costs would be overcharged to which of the following departments?

Which of the following is a cost pool used with the activity-based costing method?

Shanghai Company sells glasses,fine china,and everyday dinnerware.They use activity-based costing to determine the cost of the shipping and handling activity.The shipping and handling activity has an activity rate of $14 per pound.A box of glasses weighs 2 lbs,the box of china weighs 4 lbs,and a box of everyday dinnerware weighs 6 lbs.(a)Determine the shipping and handling activity for each product and (b)determine the total shipping and receiving costs for the china if 3,500 boxes are shipped.

Multiple production department factory overhead rates are more accurate than are plantwide factory overhead rates.

Scoresby Co.uses 6 machine hours and 2 direct labor hours to produce Product X.It uses 8 machine hours and 16 direct labor hours to produce Product Y.Scoresby's Assembly and Finishing departments have factory overhead rates of $240 per machine hour and $160 per direct labor hour,respectively.How much overhead cost will be charged to the two products?

Using the single plantwide factory overhead rate with an allocation base of direct labor hours,how much factory overhead will Challenger Factory allocate to regular widget production if budgeted production for the period is 75,000 units and actual production for the period is 72,000 units?

The Ramapo Company uses a single overhead rate to apply all overhead costs based on labor hours.What is the overhead cost per unit for Blinks?

Pinacle Corp.budgeted $700,000 of overhead cost for the current year.Actual overhead costs for the year were $650,000.Pinacle's plantwide allocation base,machine hours,was budgeted at 100,000 hours.Actual machine hours were 80,000.A total of 100,000 units was budgeted to be produced and 98,000 units were actually produced.Pinacle's plantwide factory overhead rate for the current year is:

Direct labor hours is not a cost pool that is regularly used in the activity-based costing method.

Activity-based costing can be used to allocate period costs to various products that the company sells.

When a plantwide factory overhead rate is used,overhead costs are applied to all products by a single rate.

Determine the overhead from both production departments allocated to each unit of Product B if Blue Ridge Marketing Inc.uses a multiple department rate system. ​

Calculate the cost of services for a haircut.

The Sawtooth Leather Company manufactures leather handbags and moccasins.For simplicity,the company has decided to use a single plantwide factory overhead rate method to allocate factory overhead.Calculate the amount of factory overhead to be allocated to each unit using direct labor hours. Handbags = 60,000 units,2 hours of direct labor ​ Moccasins= 40,000 units,3 hours of direct labor ​ Total budgeted factory overhead cost = $360,000

Which of the following are the two most common allocation bases for factory overhead?

Use of a plantwide factory overhead rate does not distort product costs when there are differences in the factory overhead rates across different production departments.

Activity cost pools are cost accumulations associated with a given activity.