POST ACC211 Unit 2 Quiz C3 Activity-Based Costing

| June 1, 2016

Question
Question 1

In activity-based costing, the total overhead cost in an activity cost pool can be computed by:

dividing the total activity in the activity cost pool by the activity rate for the activity cost pool.

multiplying the total activity in the activity cost pool by the activity rate for the activity cost pool.

dividing the total direct labor-hours in the activity cost pool by the activity rate for the activity cost pool.

multiplying the total direct labor-hours in the activity cost pool by the activity rate for the activity cost pool.

Question 2

Human resource management is an example of an activity at which of the following levels?

Unit-level activity.

Product-level activity.

Batch-level activity.

Facility-level activity.

Question 3

Designing a new product is an example of a:

Unit-level activity.

Batch-level activity.

Product-level activity.

Facility-level activity.

Question 4

Machining a part for a car axle is an example of a:

Unit-level activity.

Batch-level activity.

Product-level activity.

Facility-level activity.

Question 5

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

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

$6.00

$9.60

$8.63

$13.80

Question 6

Gaucher Corporation has provided the following data from its activity-based costing accounting system:

The activity rate for the “designing products” activity cost pool is closest to:

Estimated

Overhead

Activities Costs Expected Activity

Designing products $582,016 4,547 product design hours

Setting up batches $29,760 960 batch set ups

Assembling products $19,440 1,620 assembly hours

$78 per product design hour

$582,016 per product design hour

$128 per product design hour

$89 per product design hour

Question 7

Wecker Corporation uses the following activity rates from its activity-based costing to assign overhead costs to products:

Data concerning two products appear below:

V09X A09X

Number of batches 69 12

Number of customer orders 20 9

Number of assembly hours 492 697

How much overhead cost would be assigned to Product V09X using the activity-based costing system?

$157.87

$91,722.47

$10,385.22

$5,485.50

Question 8

Addy Company has two products: A and B. The annual production and sales of Product A is 1,700 units and of Product B is 1,100 units. The company has traditionally used direct labor-hours as the basis for applying all manufacturing overhead to products. Product A requires 0.3 direct labor-hours per unit and Product B requires 0.6 direct labor-hours per unit. The total estimated overhead for next period is $98,785.

The company is considering switching to an activity-based costing system for the purpose of computing unit product costs for external reports. The new activity-based costing system would have three overhead activity cost pools–Activity 1, Activity 2, and General Factory–with estimated overhead costs and expected activity as follows:

(Note: The General Factory activity cost pool’s costs are allocated on the basis of direct labor-hours.)

The predetermined overhead rate under the traditional costing system is closest to:

$9.15

$43.48

$84.43

$19.08

Question 9

Butscher Company allocates materials handling cost to the company’s two products using the below data:

The total materials handling cost for the year is expected to be $9,072.

If the materials handling cost is allocated on the basis of direct labor-hours, how much of the total materials handling cost should be allocated to the prefab barns? (Round off your answer to the nearest whole dollar.)

$3,187

$1,134

$9,072

$4,536

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