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Exam 13: Activity-Based Costing: a Tool to Aid Decision Making

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Question 1

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Setting up a machine to change from producing one product to another is an example of a:

A) Unit-level activity.
B) Batch-level activity.
C) Product-level activity.
D) Organization-sustaining activity.

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Question 2

Multiple Choice

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The activity rate for the Processing activity cost pool under activity-based costing is closest to:

A) $2.00 per MH
B) $0.18 per MH
C) $0.24 per MH
D) $1.00 per MH

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C

Question 3

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The practice of assigning the costs of idle capacity to products results in more stable unit product costs.

The following data have been provided by Kilmartin Corporation from its activity-based costing accounting system: Distribution of Resource Consumption across Activity Cost Pools: The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs that are not assigned to products. Required: a. Determine the total amount of supervisory wages and factory utilities costs that would be allocated to the Machining activity cost pool. Show your work! b. Determine the total amount of supervisory wages and factory utilities costs that would NOT be assigned to products. Show your work!

Suppose that the company decides that the present activity-based costing system is too complex and that all costs (except for the costs of purchased decorations) should be allocated on the basis of the number of guests. In that event, what would you expect to happen to the costs of cakes?

Rosenbrook Corporation has provided the following data from its activity-based costing system: Data concerning one of the company's products, Product H73N, appear below: According to the activity-based costing system, the product margin for product H73N is:

Senff Corporation uses the following activity rates from its activity-based costing to assign overhead costs to products: Data concerning two products appear below: How much overhead cost would be assigned to Product V91Z using the activity-based costing system?

The activity rate for the Supervising activity cost pool under activity-based costing is closest to:

How much supervisory wages and salaries and factory supplies cost would NOT be assigned to products using the activity-based costing system?

What is the overhead cost assigned to Product K0 under activity-based costing?

How much overhead cost is allocated to the Supervising activity cost pool under activity-based costing?

How much factory supervision and indirect factory labor cost would be assigned to the Batch Set-Up activity cost pool?

The activity rate for the Processing activity cost pool under activity-based costing is closest to:

Poskey Corporation uses an activity-based costing system with three activity cost pools. The company has provided the following data concerning its costs and its activity based costing system: How much cost, in total, would be allocated in the first-stage allocation to the Assembly activity cost pool?

What is the overhead cost assigned to Product Z5 under activity-based costing?

How much cost, in total, should NOT be allocated to orders and products in the second stage of the allocation process if the activity-based costing system is used for internal decision-making?

A transaction driver provides a measure of the amount of time required to perform an activity.

The cost per unit of Product B is closest to:

Direct labor-hours or direct labor cost should not be used as a measure of activity in an activity-based costing system.

The activity rate for the Order Filling activity cost pool under activity-based costing is closest to: