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Time-driven ABC provides a direct way to measure:


A) Production efficiency
B) Unused capacity
C) Product line profitability
D) Value adding activities
E) Customer value

F) C) and E)
G) All of the above

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Sheen Co.manufacturers laser printers.It has outlined the following overhead cost drivers: Sheen Co.manufacturers laser printers.It has outlined the following overhead cost drivers: Sheen Co.has an order for 1,000 laser printers that has the following production requirements: Using activity-based costing,applied miscellaneous factory overhead for the 1000 laser printer order based on direct labor hours is: A) $7,800. B) $10,000. C) $10,500. D) $150. E) $21,600. Sheen Co.has an order for 1,000 laser printers that has the following production requirements: Sheen Co.manufacturers laser printers.It has outlined the following overhead cost drivers: Sheen Co.has an order for 1,000 laser printers that has the following production requirements: Using activity-based costing,applied miscellaneous factory overhead for the 1000 laser printer order based on direct labor hours is: A) $7,800. B) $10,000. C) $10,500. D) $150. E) $21,600. Using activity-based costing,applied miscellaneous factory overhead for the 1000 laser printer order based on direct labor hours is:


A) $7,800.
B) $10,000.
C) $10,500.
D) $150.
E) $21,600.

F) A) and E)
G) All of the above

Correct Answer

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A

Diamond Cleats Co.manufactures cleats for baseball shoes.It has outlined the following overhead cost drivers: Diamond Cleats Co.manufactures cleats for baseball shoes.It has outlined the following overhead cost drivers: Diamond Cleats Co.has an order for cleats that has the following production requirements: Using activity-based costing,applied machine overhead for the baseball cleat order is: A) $47,800. B) $55,300. C) $40,500. D) $59,150. E) $51,700. Diamond Cleats Co.has an order for cleats that has the following production requirements: Diamond Cleats Co.manufactures cleats for baseball shoes.It has outlined the following overhead cost drivers: Diamond Cleats Co.has an order for cleats that has the following production requirements: Using activity-based costing,applied machine overhead for the baseball cleat order is: A) $47,800. B) $55,300. C) $40,500. D) $59,150. E) $51,700. Using activity-based costing,applied machine overhead for the baseball cleat order is:


A) $47,800.
B) $55,300.
C) $40,500.
D) $59,150.
E) $51,700.

F) B) and D)
G) A) and B)

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Wings Co.budgeted $555,600 manufacturing direct wages,2,315 direct labor hours and had the following manufacturing overhead: Wings Co.budgeted $555,600 manufacturing direct wages,2,315 direct labor hours and had the following manufacturing overhead: Requirements for Job #971 which manufactured 4 units of product: Using ABC,overhead cost assigned to Job #971 for machine repair is: A) $2,300. B) $990. C) $6,500. D) $690. E) $1,020. Requirements for Job #971 which manufactured 4 units of product: Wings Co.budgeted $555,600 manufacturing direct wages,2,315 direct labor hours and had the following manufacturing overhead: Requirements for Job #971 which manufactured 4 units of product: Using ABC,overhead cost assigned to Job #971 for machine repair is: A) $2,300. B) $990. C) $6,500. D) $690. E) $1,020. Using ABC,overhead cost assigned to Job #971 for machine repair is:


A) $2,300.
B) $990.
C) $6,500.
D) $690.
E) $1,020.

F) A) and C)
G) C) and D)

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The general sales manager's salary is an example of a:


A) Customer unit-level cost.
B) Customer batch-level cost.
C) Customer-sustaining cost.
D) Distribution-channel cost.
E) Sales-level cost.

F) A) and B)
G) A) and C)

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Activity-based costing systems:


A) Accumulate overhead costs by departments.
B) Are less complex and therefore less costly than volume-based systems.
C) Can be used in manufacturing firms only.
D) Have separate overhead rates for each activity.
E) Eliminate multiple-stage cost allocation.

F) A) and D)
G) A) and E)

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Cost to process monthly statements is an example of a:


A) Customer unit-level cost.
B) Customer batch-level cost.
C) Customer-sustaining cost.
D) Distribution-channel cost.
E) Sales-level cost.

F) C) and D)
G) A) and E)

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C

Demski Company has used a two-stage cost allocation system for many years.In the first stage,plant overhead costs are allocated to two production departments,P1 and P2,based on machine hours.In the second stage,Demski uses direct labor hours to assign overhead costs from the production departments to individual products A andB. Budgeted factory overhead costs for the year are $300,000.Both the budgeted and actual machine hours in P1 and P2 are 12,000 and 28,000 hours,respectively. After attending a seminar to learn the potential benefits of adopting an activity-based costing system (ABC),Ted Demski,the president of Demski Company,is considering implementing an ABC system.Upon his request,the controller at Demski Company has compiled the following information for analysis: Demski Company has used a two-stage cost allocation system for many years.In the first stage,plant overhead costs are allocated to two production departments,P1 and P2,based on machine hours.In the second stage,Demski uses direct labor hours to assign overhead costs from the production departments to individual products A andB. Budgeted factory overhead costs for the year are $300,000.Both the budgeted and actual machine hours in P1 and P2 are 12,000 and 28,000 hours,respectively. After attending a seminar to learn the potential benefits of adopting an activity-based costing system (ABC),Ted Demski,the president of Demski Company,is considering implementing an ABC system.Upon his request,the controller at Demski Company has compiled the following information for analysis: Demski manufactures two types of product,A and B,for which the following information is available: Required: (1)Determine the unit cost for each of the two products using the traditional two-stage allocation method.Round calculations to 2 decimal places. (2)Determine the unit cost for each of the two products using the proposed ABC system. (3)(a)Compare the unit manufacturing costs for product A and product B computed in requirements 1 and 2.Why do two the cost systems differ in their total cost for each product? (b)Why might these differences be important to the Demski Company? Please see Feedback for answers. Demski manufactures two types of product,A and B,for which the following information is available: Demski Company has used a two-stage cost allocation system for many years.In the first stage,plant overhead costs are allocated to two production departments,P1 and P2,based on machine hours.In the second stage,Demski uses direct labor hours to assign overhead costs from the production departments to individual products A andB. Budgeted factory overhead costs for the year are $300,000.Both the budgeted and actual machine hours in P1 and P2 are 12,000 and 28,000 hours,respectively. After attending a seminar to learn the potential benefits of adopting an activity-based costing system (ABC),Ted Demski,the president of Demski Company,is considering implementing an ABC system.Upon his request,the controller at Demski Company has compiled the following information for analysis: Demski manufactures two types of product,A and B,for which the following information is available: Required: (1)Determine the unit cost for each of the two products using the traditional two-stage allocation method.Round calculations to 2 decimal places. (2)Determine the unit cost for each of the two products using the proposed ABC system. (3)(a)Compare the unit manufacturing costs for product A and product B computed in requirements 1 and 2.Why do two the cost systems differ in their total cost for each product? (b)Why might these differences be important to the Demski Company? Please see Feedback for answers. Required: (1)Determine the unit cost for each of the two products using the traditional two-stage allocation method.Round calculations to 2 decimal places. (2)Determine the unit cost for each of the two products using the proposed ABC system. (3)(a)Compare the unit manufacturing costs for product A and product B computed in requirements 1 and 2.Why do two the cost systems differ in their total cost for each product? (b)Why might these differences be important to the Demski Company? Please see Feedback for answers.

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Demski manufactures two types of produ...

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Multistage ABC is used when:


A) There are many departments in the organization.
B) Management wants a higher level of accuracy from the ABC calculations.
C) There are complex relationships among the activities.
D) To simplify the ABC calculations.
E) There is no such thing as Multistage ABC.

F) A) and D)
G) C) and D)

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Wings Co.budgeted $555,600 manufacturing direct wages,2,315 direct labor hours and had the following manufacturing overhead: Wings Co.budgeted $555,600 manufacturing direct wages,2,315 direct labor hours and had the following manufacturing overhead: Requirements for Job #971 which manufactured 4 units of product: If Wings uses a volume-based overhead rate based on direct labor hours,the manufacturing overhead for Job #971 is: A) $990. B) $1,020. C) $1,600. D) $3,460. E) $6,400. Requirements for Job #971 which manufactured 4 units of product: Wings Co.budgeted $555,600 manufacturing direct wages,2,315 direct labor hours and had the following manufacturing overhead: Requirements for Job #971 which manufactured 4 units of product: If Wings uses a volume-based overhead rate based on direct labor hours,the manufacturing overhead for Job #971 is: A) $990. B) $1,020. C) $1,600. D) $3,460. E) $6,400. If Wings uses a volume-based overhead rate based on direct labor hours,the manufacturing overhead for Job #971 is:


A) $990.
B) $1,020.
C) $1,600.
D) $3,460.
E) $6,400.

F) None of the above
G) A) and D)

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The controller for Alabama Cooking Oil Co.established the following overhead cost pools and cost drivers:

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An order of 800 barrels of cooking oil...

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Which of the following has the weakest linkage between activity and cost driver? Which of the following has the weakest linkage between activity and cost driver? A) A B) B C) C D) D


A) A
B) B
C) C
D) D

E) A) and B)
F) A) and C)

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In an organization that makes furniture,which of the following is a high value-added activity?


A) Using direct materials in production.
B) Inspecting production.
C) Storing finished goods inventory.
D) Moving work-in-process inventory between work stations.
E) Reworking the product to repair defects.

F) B) and E)
G) C) and D)

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The major limitation of volume-based costing systems is the use of volume-based:


A) Criteria.
B) Standards.
C) Rates.
D) Variances.
E) Restrictions.

F) C) and D)
G) B) and E)

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Which one of the following is a high value-added activity?


A) Set up.
B) Rework.
C) Repair.
D) Storage.
E) Processing.

F) All of the above
G) B) and D)

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Wings Co.budgeted $555,600 manufacturing direct wages,2,315 direct labor hours,and had the following manufacturing overhead: Wings Co.budgeted $555,600 manufacturing direct wages,2,315 direct labor hours,and had the following manufacturing overhead: Requirements for Job #971 which manufactured 4 units of product: The total overhead of Job #971 under the ABC costing is: A) $95. B) $380. C) $1,520. D) $2,300. E) $9,200. Requirements for Job #971 which manufactured 4 units of product: Wings Co.budgeted $555,600 manufacturing direct wages,2,315 direct labor hours,and had the following manufacturing overhead: Requirements for Job #971 which manufactured 4 units of product: The total overhead of Job #971 under the ABC costing is: A) $95. B) $380. C) $1,520. D) $2,300. E) $9,200. The total overhead of Job #971 under the ABC costing is:


A) $95.
B) $380.
C) $1,520.
D) $2,300.
E) $9,200.

F) B) and E)
G) All of the above

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Invoicing cost is an example of a:


A) Customer unit-level cost.
B) Customer batch-level cost.
C) Customer-sustaining cost.
D) Distribution-channel cost.
E) Sales-level cost.

F) A) and B)
G) B) and E)

Correct Answer

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Sheen Co.manufacturers laser printers.It has outlined the following overhead cost drivers: Sheen Co.manufacturers laser printers.It has outlined the following overhead cost drivers: Sheen Co.has an order for 1,000 laser printers that has the following production requirements: Using activity-based costing,applied machine repetition overhead for the 1000 laser printer order is: A) $7,800. B) $10,000. C) $10,500. D) $150. E) $21,600. Sheen Co.has an order for 1,000 laser printers that has the following production requirements: Sheen Co.manufacturers laser printers.It has outlined the following overhead cost drivers: Sheen Co.has an order for 1,000 laser printers that has the following production requirements: Using activity-based costing,applied machine repetition overhead for the 1000 laser printer order is: A) $7,800. B) $10,000. C) $10,500. D) $150. E) $21,600. Using activity-based costing,applied machine repetition overhead for the 1000 laser printer order is:


A) $7,800.
B) $10,000.
C) $10,500.
D) $150.
E) $21,600.

F) B) and C)
G) A) and C)

Correct Answer

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An activity that is performed for each unit of production is a(n) :


A) Product-level activity.
B) Facility-level activity.
C) Unit-level activity.
D) Performance-level activity.
E) Batch-level activity.

F) C) and D)
G) B) and D)

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C

Shaver Co.manufactures a variety of electric razors for men and women.The company's plant is partially automated.Listed below is cost driver information used in the product-costing system: Shaver Co.manufactures a variety of electric razors for men and women.The company's plant is partially automated.Listed below is cost driver information used in the product-costing system: In addition,Shaver expects to spend $514,368 for 8,037 direct labor-hours.Two current product orders had the following requirements: What is the total manufacturing overhead assigned to the current order for Women's Razors if the firm uses a volume-based plantwide overhead rate based on the direct labor dollars? A) $112.50. B) $150.00. C) $187.50. D) $9,600.00. E) $12,000.00. In addition,Shaver expects to spend $514,368 for 8,037 direct labor-hours.Two current product orders had the following requirements: Shaver Co.manufactures a variety of electric razors for men and women.The company's plant is partially automated.Listed below is cost driver information used in the product-costing system: In addition,Shaver expects to spend $514,368 for 8,037 direct labor-hours.Two current product orders had the following requirements: What is the total manufacturing overhead assigned to the current order for Women's Razors if the firm uses a volume-based plantwide overhead rate based on the direct labor dollars? A) $112.50. B) $150.00. C) $187.50. D) $9,600.00. E) $12,000.00. What is the total manufacturing overhead assigned to the current order for Women's Razors if the firm uses a volume-based plantwide overhead rate based on the direct labor dollars?


A) $112.50.
B) $150.00.
C) $187.50.
D) $9,600.00.
E) $12,000.00.

F) C) and D)
G) B) and D)

Correct Answer

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