1. Spencer 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 for Activity 3 total $40,000 and expected activity equals 2,500 for this activity cost pool. Actual activity for the current year was 2,490. What is the amount of overhead applied for Activity 3 during the year?
a. $39,840
b. $96,190
c. $36,300
d. $40,000
2. Taylor Company has two products: A and B. The annual production and sales level of Product A is 9,094 units. The annual production and sales level of Product B is 15,826. The company uses activity-based costing and has prepared the following analysis showing the estimated total cost and expected activity for each of its three activity cost pools.
What is the activity rate for Activity 3?
a.$29.32
b.$30.00
c.$33.33
d.$41.53
3. Favreau Company uses activity-based costing to determine the costs of its two products: A and B. The estimated total cost and expected activity for one of the company's three activity cost pools are as follows.
What is the activity rate for this activity?
a. $20.00
b. $18.00
c. $8.59
d. $4.00
4. Taylor Company has two products: A and B. The annual production and sales level of Product A is 9,094 units. The annual production and sales level of Product B is 15,826. The company uses activity-based costing and has prepared the following analysis showing the estimated total cost and expected activity for each of its three activity cost pools.
What is the overhead cost per unit of Product A?
a.$10.00
b.$1.83
c.$5.00
d.$1.98
5. Clancy 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 costs and activities for the current year were as follows.
What is the total amount of overhead applied during the year?
a. $248,988
b. $250,155
c. $251,334
d. $248,508
6. Clancy 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 costs and activities for the current year were as follows.
What is the total amount of the debits to the Manufacturing Overhead account during the year?
a.$248,988
b.$250,334
c.$251,110
d.$248,508
7. When there are batch-level or product-level costs, in comparison to a traditional cost system, how will an activity-based costing system ordinarily shift costs?
a. From standardized to specialized products
b. Form high-volume to low-volume products
c. From specialized to standardized products
d. From low-volume to high-volume products
8. Which of the following statements is correct?
a. Activity rates in activity-based costing are computed by dividing costs from the first-stage allocations by the activity measure for each activity cost pool.
b. Activity-based costing uses a number of activity cost pools, each of which is allocated to products on the basis of direct labor-hours.
c. One of the goals of activity-based management is the elimination of waste by allocating costs to products that waste resources.
d. An activity-based costing system is generally easier to implement and maintain than a traditional costing system.
9. Which of the following would not be considered a batch-level activity?
a. Purchase order processing
b. Worker recreational facilities
c. Setting up equipment
d. Clerical activity associated with processing purchase orders to produce an order for a standard product
10. Which of the following would not be considered a product-level activity?
a. Parts administration
b. Advertising a product
c. Human resource management
d. Testing a prototype of a new product
a. $39,840
b. $96,190
c. $36,300
d. $40,000
2. Taylor Company has two products: A and B. The annual production and sales level of Product A is 9,094 units. The annual production and sales level of Product B is 15,826. The company uses activity-based costing and has prepared the following analysis showing the estimated total cost and expected activity for each of its three activity cost pools.
What is the activity rate for Activity 3?
a.$29.32
b.$30.00
c.$33.33
d.$41.53
3. Favreau Company uses activity-based costing to determine the costs of its two products: A and B. The estimated total cost and expected activity for one of the company's three activity cost pools are as follows.
What is the activity rate for this activity?
a. $20.00
b. $18.00
c. $8.59
d. $4.00
4. Taylor Company has two products: A and B. The annual production and sales level of Product A is 9,094 units. The annual production and sales level of Product B is 15,826. The company uses activity-based costing and has prepared the following analysis showing the estimated total cost and expected activity for each of its three activity cost pools.
What is the overhead cost per unit of Product A?
a.$10.00
b.$1.83
c.$5.00
d.$1.98
5. Clancy 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 costs and activities for the current year were as follows.
What is the total amount of overhead applied during the year?
a. $248,988
b. $250,155
c. $251,334
d. $248,508
6. Clancy 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 costs and activities for the current year were as follows.
What is the total amount of the debits to the Manufacturing Overhead account during the year?
a.$248,988
b.$250,334
c.$251,110
d.$248,508
7. When there are batch-level or product-level costs, in comparison to a traditional cost system, how will an activity-based costing system ordinarily shift costs?
a. From standardized to specialized products
b. Form high-volume to low-volume products
c. From specialized to standardized products
d. From low-volume to high-volume products
8. Which of the following statements is correct?
a. Activity rates in activity-based costing are computed by dividing costs from the first-stage allocations by the activity measure for each activity cost pool.
b. Activity-based costing uses a number of activity cost pools, each of which is allocated to products on the basis of direct labor-hours.
c. One of the goals of activity-based management is the elimination of waste by allocating costs to products that waste resources.
d. An activity-based costing system is generally easier to implement and maintain than a traditional costing system.
9. Which of the following would not be considered a batch-level activity?
a. Purchase order processing
b. Worker recreational facilities
c. Setting up equipment
d. Clerical activity associated with processing purchase orders to produce an order for a standard product
10. Which of the following would not be considered a product-level activity?
a. Parts administration
b. Advertising a product
c. Human resource management
d. Testing a prototype of a new product
