Exam 4: Activity-Based Costing

Non-unit-based drivers are factors that measure the demands that cost objects place on activities.

Figure 4-22 The Wellness Clinic is considering a time-driven activity based costing system. Given the following data: Refer to Figure 4-22. What is the activity rate for responding to requests?

Figure 4-5 The Brookstone Company produces 9 volt batteries and AAA batteries. The Brookstone Company uses a plantwide rate to apply overhead based on direct labor hours. The following data is given: Refer to Figure 4-5. How much overhead is applied to each 9 volt batteries and AAA batteries respectively? (round to 2 decimal places)

In a time-driven ABC system, once the managers determine the cost of per time unit of supplying resources to activities, the next step would be

Figure 4-21 Appleby Manufacturing uses an activity-based costing system. The company produces Model F and Model G. Information relating to the two products is as follows: The following overhead costs are reported for the following activities of the production process: Jones manufacturing has used activity based costing to assign costs to Models F and G as given in the table below: Appleby Manufacturing wants to implement an approximately relevant ABC system by using the two most expensive activities for cost assignment. Refer to Figure 4-21. Under the equally accurate reduced ABC system, using consumption ratios for labor related and batch inspections, the overhead assigned to labor related activities would be? (round to 5 decimal places)

Figure 4-5 The Brookstone Company produces 9 volt batteries and AAA batteries. The Brookstone Company uses a plantwide rate to apply overhead based on direct labor hours. The following data is given: Refer to Figure 4-5. How much was overhead over/underapplied?

In the __________ ABC systems, managers directly estimate the resource demands imposed by each product. or

The proportion of an overhead activity consumed by a product is the __________ ratio.

The activity that aids management in achieving objectives such as product or customer costing, continuous improvement and environmental management is called:

Figure 4-18 Marion Manufacturing uses an activity-based costing system. The company produces Model X and Model Y. Information relating to the two products is as follows: The following costs are reported: Refer to Figure 4-18. Setups would be classified as a

The following information is provided for the year: If normal costing is used, the amount of overhead applied for the year is

If activity-based costing is used, electricity usage would be an example of a

Figure 4-10 The Manoli Company has collected the following data for use in calculating product costs: Activity Data: (expected and actual) Departmental Data: (expected and actual) Refer to Figure 4-10. What is the unit product cost for rug cleaners using activity based costing?

Which is NOT a characteristic of a unit-based costing system?

A department that is capital-intensive most likely would use a predetermined departmental overhead rate based on which of the following activity bases?

Figure 4-20 Quasi-Tech Corporation produces specially machined parts. The parts are produced in batches in one continuous manufacturing process. Each part is custom produced and requires special engineering design activity (based on customer specifications). Once the design is completed, the equipment can be set up for batch production. Once the batch is completed, a sample is taken and inspected to see if the parts are within the tolerances allowed. Thus, the manufacturing process has four activities: engineering, setups, machining, and inspecting. Costs have been assigned to each activity using direct tracing and resource drivers: Owens produces two models: Model X and Model Y. The following table shows how the two products consume activity. Refer to Figure 4-20. How much overhead is assigned to Model D using the 4 activity drivers?

Figure 4-8 Tandem Company manufactures two products (D and F). The overhead costs ($84,000) have been divided into three cost pools that use the following activity drivers: Refer to Figure 4-8. What is the allocation rate per setup using activity-based costing?

A secondary activity is

Figure 4-4 Mannitou Company made the following predictions for 2014: Job A2 (which was started and completed in June) used 3,000 direct labor hours, 2,000 machine hours, and $57,000 of prime costs. Refer to Figure 4-4. If factory overhead is applied based on direct labor hours, the cost of Job A2 for the Mannitou Company is

Figure 4-11 Longview Manufacturing Company manufactures two products (I and II). The overhead costs ($58,000) have been divided into three cost pools that use the following activity drivers: Refer to Figure 4-11. Using functional-based costing, what is the amount of overhead cost to be assigned to Product II using labor hours as the allocation base?