Exam 4: Cost Management Systems and Activity-Based Costing

Where a specific product is the cost object, the hourly wages of assembly workers who work on only that product would be classified as a(n):

Costs can denote an asset and an expense.

Baylor Corporation had the following activities, traceable costs, and physical flow of driver units: Traceable Physical Flow of Activities Costs DriverUnits Account inquiry (hours) \ 8,000 500 hours Account billing(lines) 8,000 200,000 lines Account verification (accounts) 3,000 2,000 accounts Correspondence (letters) 1,000 200 letters The above activities are used by departments A and B as follows: Accountinquiry (hours) 50 hours 80 hours Account billing (lines) 25,000 lines 20,000 lines Account verification (accounts) 200 contracts 100 contracts Correspondence (letters) 20 letters 100 letters The account verification cost assigned to Department A is:

If ending finished goods inventory is larger than beginning finished goods inventory, then cost of goods sold is less than the sum of direct materials + direct labor + overhead.

County Bank had the following activities, traceable costs, and physical flow of driver units: Traceable Physical Flow of Activities Costs Driver Units Open new accounts \ 90,000 1,000 accounts Process deposits 36,000 400,000 dep osits Process withdrawals 30,000 200,000 withdrawals Process loan applications 36,000 900 applications The above activities are used by North County branch and South County branch: North South New accounts 200 400 Deposits 40,000 20,000 With drawals 15,000 18,000 Loan applications 100 160 The cost per driver unit for the new account activity is:

Benchmarks can come from within the organization, from competing organizations, or from other organizations having similar products.

The Sylvester Company has gathered the following information: Sales \ 67,000 Direct materials used 10,900 Direct labor 3,200 Fixed: Factory overhead 5,400 Selling expenses 2,300 Administrative expenses 1,700 Variable: Factory overhead 2,300 Selling expenses 5,700 Administrative expenses 8,300 There were no beginning or ending inventories. The total product costs are:

Why are more and more organizations in both manufacturing and nonmanufacturing industries adopting activity- based costing systems?

A _ is an activity for which a separate measurement is desired.

Where a specific product is the cost object, the materials used to manufacture the product would probably be classified as a(n):

The William Wallace Company has gathered the following information for the year ended December 31, 20X0: Sales \ 67,000 Direct materials used 12,900 Direct labor 5,200 Fixed: Factory overhead 6,400 Selling expenses 5,300 Administrative expenses 3,700 Variable: Factory overhead 3,300 Selling expenses 9,700 Administrative expenses 2,300 There were no beginning or ending inventories. Gross margin is:

The first step of an activity- based costing study determines all of the following except:

Unallocated costs have no identifiable relationship to a cost objective.

All costs, other than direct material or direct labor, that are associated with the manufacturing process

A is not an example of a cost objective.

Sometimes the cost to collect data is too high, so some individual activities are lumped into "other activities" and no cost driver is determined.