Reynoso Corporation manufactures titanium and aluminum tennis racquets.Reynoso's total overhead costs consist of assembly costs and inspection costs.The following information is available: $\begin{array}{lccc}\text { Cost }&\text { Titanium }&\text { Aluminum }&\text { Total Cost }\\ \text { Assembly } & 500 \text { mach. hours } & 500 \text { mach. hours } & \$ 60,000 \\ \text { Inspections } & 350 & 150 & \$ 100,000 \\ & 2,100 \text { labor hours } & 1,900 \text { labor hours } & \end{array}$ Reynoso is considering switching from one overhead rate based on labor hours to activity-based costing. Total overhead costs assigned to titanium racquets, using a single overhead rate, are

A) $80,000. B) $84,000. C) $100,000. D) $112,000. A) $80,000. B) $84,000. C) $100,000. D) $112,000.

Tidwell Industries has the following overhead costs and cost drivers.Direct labor hours are estimated at 100,000 for the year. $\begin{array}{llrl} \text { Activitu Cost Pool }&\text { Cost Driver }&\text { Est Overhead }&\text { Cost Driver Activity }\\\hline \text { Ordering and Receiving } & \text { Orders } & \$ 120,000 & 500 \text { orders } \\ \text { Machine Setup } & \text { Setups } & 297,000 & 450 \text { setups } \\ \text { Machining } & \text { Machine hours } & 1,500,000 & 125,000 \mathrm{MH} \\ \text { Assembly } & \text { Parts } & 1,200,000 & 1,000,000 \text { parts } \\ \text { Inspection } & \text { Inspections } & 300,000 & 500 \text { inspections } \end{array}$ If overhead is applied using activity-based costing, the overhead application rate for ordering and receiving is

A) $1.20 per direct labor hour. B) $240 per order. C) $0.12 per part. D) $6,834 per order. A) $1.20 per direct labor hour. B) $240 per order. C) $0.12 per part. D) $6,834 per order.

Reynoso Corporation manufactures titanium and aluminum tennis racquets.Reynoso's total overhead costs consist of assembly costs and inspection costs.The following information is available: $\begin{array}{lccc}\text { Cost }&\text { Titanium }&\text { Aluminum }&\text { Total Cost }\\ \text { Assembly } & 500 \text { mach. hours } & 500 \text { mach. hours } & \$ 60,000 \\ \text { Inspections } & 350 & 150 & \$ 100,000 \\ & 2,100 \text { labor hours } & 1,900 \text { labor hours } & \end{array}$ Reynoso is considering switching from one overhead rate based on labor hours to activity-based costing. Using activity-based costing, how much assembly cost is assigned to titanium racquets?

A) $21,000. B) $30,000. C) $31,500. D) $42,000. A) $21,000. B) $30,000. C) $31,500. D) $42,000.

Boswell Company manufactures two products, Regular and Supreme.Boswell's overhead costs consist of machining, $3,000,000; and assembling, $1,500,000.Information on the two products is: \[\begin{array} { l c r } & \text { Reqular } & \text { Supreme } \\ \text { Direct labor hours } & 10,000 & 15,000 \\ \text { Machine hours } & 10,000 & 30,000 \\ \text { Number of parts } & 90,000 & 160,000 \end{array}\] Overhead applied to Regular using activity-based costing is

A) $1,290,000. B) $1,800,000. C) $2,700,000. D) $3,210,000. A) $1,290,000. B) $1,800,000. C) $2,700,000. D) $3,210,000.

Exam 4: Accrual Accounting Concepts

Peters, Inc.produces 3 products: P1, Q2, and R3.P1 requires 400 purchase orders, Q2 requires 600 purchase orders, and R3 requires 1,000 purchase orders.Peters has identified an ordering and receiving activity cost pool with allocated overhead of $240,000 for which the cost driver is purchase orders.Direct labor hours used on each product are 50,000 for P1, 40,000 for Q2, and 110,000 for R3.How much ordering and receiving overhead is assigned to each product? P1 Q2 R3 a. \ 80,000 \ 80,000 \ 80,000 b. \ 60,000 \ 48,000 \ 132,000 c. \ 48,000 \ 72,000 \ 120,000 d. \ 54,000 \ 60,000 \ 126,000

(Short Answer)

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Question 81

Quality control is less important in just-in-time than in traditional manufacturing philosophies.

(True/False)

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Question 82

One of Stine Company's activity cost pools is machine setups, with estimated overhead of $360,000.Stine produces sparklers (400 setups) and lighters (600 setups).How much of the machine setup cost pool should be assigned to sparklers?

(Multiple Choice)

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Question 83

A value-added activity in a service enterprise is

(Multiple Choice)

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Question 84

Activity-based costing allocates overhead to multiple cost pools and assigns the cost pools to products using cost drivers.

(True/False)

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Question 85

ABC is generally more costly to implement than traditional costing.

(True/False)

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Question 86

To assign overhead costs to each product, the company

(Multiple Choice)

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Question 87

Reynoso Corporation manufactures titanium and aluminum tennis racquets.Reynoso's total overhead costs consist of assembly costs and inspection costs.The following information is available: Cost Titanium Aluminum Total Cost Assembly 500 mach. hours 500 mach. hours \ 60,000 Inspections 350 150 \ 100,000 2,100 labor hours 1,900 labor hours Reynoso is considering switching from one overhead rate based on labor hours to activity-based costing. Total overhead costs assigned to titanium racquets, using a single overhead rate, are

(Multiple Choice)

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Question 88

Low-volume products often require more special handling than high-volume products.

(True/False)

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Question 89

Tidwell Industries has the following overhead costs and cost drivers.Direct labor hours are estimated at 100,000 for the year. Activitu Cost Pool Cost Driver Est Overhead Cost Driver Activity Ordering and Receiving Orders \ 120,000 500 orders Machine Setup Setups 297,000 450 setups Machining Machine hours 1,500,000 125,000 Assembly Parts 1,200,000 1,000,000 parts Inspection Inspections 300,000 500 inspections If overhead is applied using activity-based costing, the overhead application rate for ordering and receiving is

(Multiple Choice)

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Question 90

Ordering materials, setting up machines, assembling products, and inspecting products are examples of

(Multiple Choice)

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Question 91

Machining is a non-value-added activity.

(True/False)

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Question 92

An element of just-in-time processing is

(Multiple Choice)

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Question 93

Reynoso Corporation manufactures titanium and aluminum tennis racquets.Reynoso's total overhead costs consist of assembly costs and inspection costs.The following information is available: Cost Titanium Aluminum Total Cost Assembly 500 mach. hours 500 mach. hours \ 60,000 Inspections 350 150 \ 100,000 2,100 labor hours 1,900 labor hours Reynoso is considering switching from one overhead rate based on labor hours to activity-based costing. Using activity-based costing, how much assembly cost is assigned to titanium racquets?

(Multiple Choice)

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Question 94

Baxter Accounting Services estimates for next year revenues of $3,000,000, direct labor of $600,000, and overhead of $1,050,000.Under traditional costing, overhead is applied to audit jobs using the rate of

(Multiple Choice)

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Question 95

As compared to high-volume products, low-volume products

(Multiple Choice)

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Question 96

Boswell Company manufactures two products, Regular and Supreme.Boswell's overhead costs consist of machining, $3,000,000; and assembling, $1,500,000.Information on the two products is: Reqular Supreme Direct labor hours 10,000 15,000 Machine hours 10,000 30,000 Number of parts 90,000 160,000 Overhead applied to Regular using activity-based costing is

(Multiple Choice)

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Question 97

Which of the following is not an example of an activity cost pool?

(Multiple Choice)

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Question 98

For its inspecting cost pool, Ellsworth, Inc.expected overhead cost of $400,000 and 4,000 inspections.The actual overhead cost for that cost pool was $480,000 for 5,000 inspections.The activity-based overhead rate used to assign the costs of the inspecting cost pool to products is

(Multiple Choice)

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Question 99

Non-value-added activities

(Multiple Choice)

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Question 100

Quality control is less important in just-in-time than in traditional manufacturing philosophies.

One of Stine Company's activity cost pools is machine setups, with estimated overhead of $360,000.Stine produces sparklers (400 setups) and lighters (600 setups).How much of the machine setup cost pool should be assigned to sparklers?

A value-added activity in a service enterprise is

Activity-based costing allocates overhead to multiple cost pools and assigns the cost pools to products using cost drivers.

ABC is generally more costly to implement than traditional costing.

To assign overhead costs to each product, the company

Low-volume products often require more special handling than high-volume products.

Ordering materials, setting up machines, assembling products, and inspecting products are examples of

Machining is a non-value-added activity.

An element of just-in-time processing is

Baxter Accounting Services estimates for next year revenues of $3,000,000, direct labor of $600,000, and overhead of $1,050,000.Under traditional costing, overhead is applied to audit jobs using the rate of

As compared to high-volume products, low-volume products

Which of the following is not an example of an activity cost pool?

For its inspecting cost pool, Ellsworth, Inc.expected overhead cost of $400,000 and 4,000 inspections.The actual overhead cost for that cost pool was $480,000 for 5,000 inspections.The activity-based overhead rate used to assign the costs of the inspecting cost pool to products is

Non-value-added activities

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: the Big Picture

Managerial Accounting

Time Value of Money

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