Question 1

Assuming that actual activity turns out to be the same as expected activity,the total amount of overhead cost allocated to Product X would be closest to:

Accepted Answer

A)  $235,000. 
B)  $316,600. 
C)  $357,500. 
D)  $563,000. 
A)  $235,000. 
B)  $316,600. 
C)  $357,500. 
D)  $563,000.

Question 2

Suki Company uses activity-based costing to compute product costs for external reports.The company has three activity cost pools and applies overhead using predetermined overhead rates for each activity cost pool.Estimated costs and activities for the current year are presented below for the three activity cost pools:   Actual activity for the current year was as follows:   The amount of overhead applied for Activity 3 during the year was closest to

Accepted Answer

A)  $30,026.50. 
B)  $35,773.45. 
C)  $36,107.00. 
D)  $36,112.00. 
A)  $30,026.50. 
B)  $35,773.45. 
C)  $36,107.00. 
D)  $36,112.00.

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

The activity rate for Activity 3 is closest to:

Accepted Answer

A)  $26.67. 
B)  $56.74. 
C)  $116.18. 
D)  $119.72. 
A)  $26.67. 
B)  $56.74. 
C)  $116.18. 
D)  $119.72.

Question 5

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

Accepted Answer

A)  More accurate product costs may result in better decisions. 
B)  Changing from a traditional direct labour based costing system to an activity-based costing system changes product margins and other key performance indicators used by managers. 
C)  Implementing an activity based costing system is more costly than implementing a traditional direct labour-based costing system. 
D)  In practice,most managers insist on fully allocating all costs to products,customers,and other costing objects in an activity based costing system.This results in overstated costs. 
A)  More accurate product costs may result in better decisions. 
B)  Changing from a traditional direct labour based costing system to an activity-based costing system changes product margins and other key performance indicators used by managers. 
C)  Implementing an activity based costing system is more costly than implementing a traditional direct labour-based costing system. 
D)  In practice,most managers insist on fully allocating all costs to products,customers,and other costing objects in an activity based costing system.This results in overstated costs.

Question 6

Setting up equipment is an example of a:

Accepted Answer

A)  unit-level activity. 
B)  batch-level activity. 
C)  product-level activity. 
D)  facility-level activity. 
A)  unit-level activity. 
B)  batch-level activity. 
C)  product-level activity. 
D)  facility-level activity.

Question 7

Departmental overhead rates applied on the basis of a volume measure such as direct labour-hours or machine-hours will eliminate any distortions in unit costs due to product diversity.

Accepted Answer

A) True 
 B)False

Question 8

Matt Company uses activity-based costing.The company has two products: A andB.The annual production and sales of Product A are 8,000 units and of Product B are 6,000 units.There are three activity cost pools,with estimated total cost and expected activity as follows:   The cost per unit of Product A under activity-based costing is closest to:

Accepted Answer

A)  $2.40. 
B)  $3.90. 
C)  $6.60. 
D)  $10.59. 
A)  $2.40. 
B)  $3.90. 
C)  $6.60. 
D)  $10.59.

Question 9

The overhead cost per unit of Product S under activity-based costing is closest to:

Accepted Answer

A)  $1.83. 
B)  $1.98. 
C)  $5.00. 
D)  $10.00. 
A)  $1.83. 
B)  $1.98. 
C)  $5.00. 
D)  $10.00.

Question 10

When there are batch-level or product-level costs,in comparison to a traditional cost system,an activity-based costing system ordinarily will shift costs from high-volume to low-volume products.

Accepted Answer

A) True 
 B)False

Question 11

The overhead cost per unit of Product B under the traditional costing system is closest to:

Accepted Answer

A)  $5.49. 
B)  $11.45. 
C)  $26.09. 
D)  $50.66. 
A)  $5.49. 
B)  $11.45. 
C)  $26.09. 
D)  $50.66.

Question 12

Which of the following would be considered as a prevention cost?

Accepted Answer

A)  Inspection of completed products prior to shipment to customers. 
B)  Supplier management. 
C)  Rework costs. 
D)  Scrap costs. 
A)  Inspection of completed products prior to shipment to customers. 
B)  Supplier management. 
C)  Rework costs. 
D)  Scrap costs.

Question 13

Batch-level activities are performed each time a batch is handled or processed,regardless of how many units are in the batch.

Accepted Answer

A) True 
 B)False

Question 14

Using activity-based costing is not useful in determining costs of quality.

Accepted Answer

A) True 
 B)False

Question 15

The overhead cost per unit of Product B under the activity-based costing system is closest to

Accepted Answer

A)  $26.09. 
B)  $35.28. 
C)  $38.16. 
D)  $50.66. 
A)  $26.09. 
B)  $35.28. 
C)  $38.16. 
D)  $50.66.

Question 16

Overhead allocation based on volume alone:

Accepted Answer

A)  is a key aspect of the activity-based costing model. 
B)  will systematically overcost high-volume products and undercost low-volume products. 
C)  will systematically overcost low-volume products and undercost high-volume products. 
D)  must be used for external financial reporting. 
A)  is a key aspect of the activity-based costing model. 
B)  will systematically overcost high-volume products and undercost low-volume products. 
C)  will systematically overcost low-volume products and undercost high-volume products. 
D)  must be used for external financial reporting.

Question 17

The activity rate computed at the beginning of the year for the batch setup activity cost pool is closest to:

Accepted Answer

A)  $54.50. 
B)  $71.80. 
C)  $74.00. 
D)  $197.60. 
A)  $54.50. 
B)  $71.80. 
C)  $74.00. 
D)  $197.60.

Question 18

Facility-level costs can be easily and accurately allocated to different products using activity-based costing.

Accepted Answer

A) True 
 B)False

Question 19

Bridget Company uses activity-based costing.The company has two products: A andB.The annual production and sales of Product A are 2,000 units and of Product B are 3,000 units.There are three activity cost pools,with estimated total cost and expected activity as follows:   The cost per unit of Product A under activity-based costing is closest to:

Accepted Answer

A)  $6.40. 
B)  $8.63. 
C)  $9.60. 
D)  $13.80. 
A)  $6.40. 
B)  $8.63. 
C)  $9.60. 
D)  $13.80.

Question 20

Testing a prototype of a new product is an example of a:

Accepted Answer

A)  unit-level activity. 
B)  batch-level activity. 
C)  product-level activity. 
D)  facility-level activity. 
A)  unit-level activity. 
B)  batch-level activity. 
C)  product-level activity. 
D)  facility-level activity.

Assuming that actual activity turns out to be the same as expected activity,the total amount of overhead cost allocated to Product X would be closest to:

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

The activity rate for Activity 3 is closest to:

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

Setting up equipment is an example of a:

Departmental overhead rates applied on the basis of a volume measure such as direct labour-hours or machine-hours will eliminate any distortions in unit costs due to product diversity.

The overhead cost per unit of Product S under activity-based costing is closest to:

When there are batch-level or product-level costs,in comparison to a traditional cost system,an activity-based costing system ordinarily will shift costs from high-volume to low-volume products.

The overhead cost per unit of Product B under the traditional costing system is closest to:

Which of the following would be considered as a prevention cost?

Batch-level activities are performed each time a batch is handled or processed,regardless of how many units are in the batch.

Using activity-based costing is not useful in determining costs of quality.

The overhead cost per unit of Product B under the activity-based costing system is closest to

Overhead allocation based on volume alone:

The activity rate computed at the beginning of the year for the batch setup activity cost pool is closest to:

Facility-level costs can be easily and accurately allocated to different products using activity-based costing.

Testing a prototype of a new product is an example of a:

An Introduction to Managerial Accounting and Cost Concepts

Systems Design: Job-Order Costing

Systems Design: Activity-Based Costing

Systems Design: Process Costing

Cost Behavior: Analysis and Use

Profit Planning

Standard Costs

Flexible Budgets and Overhead Analysis

Decentralization

Relevant Costs for Decision Making

Capital Budgeting Decisions

How Well Am I Doing Statement of Cash Flows

How Well Am I Doing Financial Statement Analysis

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Exam 6: Cost-Volume-Profit Relationships

Assuming that actual activity turns out to be the same as expected activity,the total amount of overhead cost allocated to Product X would be closest to:

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

The activity rate for Activity 3 is closest to:

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

Setting up equipment is an example of a:

Departmental overhead rates applied on the basis of a volume measure such as direct labour-hours or machine-hours will eliminate any distortions in unit costs due to product diversity.

The overhead cost per unit of Product S under activity-based costing is closest to:

When there are batch-level or product-level costs,in comparison to a traditional cost system,an activity-based costing system ordinarily will shift costs from high-volume to low-volume products.

The overhead cost per unit of Product B under the traditional costing system is closest to:

Which of the following would be considered as a prevention cost?

Batch-level activities are performed each time a batch is handled or processed,regardless of how many units are in the batch.

Using activity-based costing is not useful in determining costs of quality.

The overhead cost per unit of Product B under the activity-based costing system is closest to

Overhead allocation based on volume alone:

The activity rate computed at the beginning of the year for the batch setup activity cost pool is closest to:

Facility-level costs can be easily and accurately allocated to different products using activity-based costing.

Testing a prototype of a new product is an example of a:

An Introduction to Managerial Accounting and Cost Concepts

Systems Design: Job-Order Costing

Systems Design: Activity-Based Costing

Systems Design: Process Costing

Cost Behavior: Analysis and Use

Profit Planning

Standard Costs

Flexible Budgets and Overhead Analysis

Decentralization

Relevant Costs for Decision Making

Capital Budgeting Decisions

How Well Am I Doing Statement of Cash Flows

How Well Am I Doing Financial Statement Analysis

Filters