Question : 81. Romanzof Systems Corporation estimating activity costs associated with producing disk : 1246986

 

 

81. Romanzof Systems Corporation is estimating activity costs associated with producing disk drives, tapes drives, and wire drives. The indirect labor can be traced to four separate activity pools. The budgeted activity cost and activity base information, along with the estimated activity-base information, is provided below. 

 

ActivityCost

Activity Base

Procurement

$  360,000 

Number of purchase orders

Scheduling

  240,000

Number of production orders

Materials handling

  480,000

Number of moves

Product development

  720,000

Number of engineering changes

Production

1,420,000

Machine hours

 

 

Number of PurchaseOrders

Number of ProductionOrders

NumberofMoves

Number of EngineeringChanges

MachineHours

NumberofUnits

Disk drives

4,000

300

1,400

10

 2,000

2,000

Tape drives

2,000

150

  600

 5

 8,000

4,000

Wire drives

12,000 

800

4,000

25

10,000

2,500

 

 

 

 

 

 

 

 

 

Determine the activity-based cost for each tape drive unit. A. $192.00B. $193.70C. $285.80D. $387.40

 

82. Waring Systems Corporation is estimating activity costs associated with producing disk drives, tapes drives, and wire drives. The indirect labor can be traced to four separate activity pools. The budgeted activity cost and activity base information, along with the estimated activity-base information, is provided below. 

 

ActivityCost

Activity Base

Procurement

$  360,000 

Number of purchase orders

Scheduling

  240,000

Number of production orders

Materials handling

  480,000

Number of moves

Product development

  720,000

Number of engineering changes

Production

1,420,000

Machine hours

 

 

Number of PurchaseOrders

Number of ProductionOrders

NumberofMoves

Number of EngineeringChanges

MachineHours

NumberofUnits

Disk drives

4,000

300

1,400

10

 2,000

2,000

Tape drives

2,000

150

  600

 5

 8,000

4,000

Wire drives

12,000 

800

4,000

25

10,000

2,500

 

 

 

 

 

 

 

 

 

 

Determine the activity-based cost for each wire drive unit. A. $187.36B. $192.00C. $749.44D. $468.40

 

83. Which of the following is not a cost pool used with the activity-based costing method? A. Direct Labor HoursB. Production SetupsC. Engineering D. All are used.

 

84. Activity rates are determined by A. dividing the actual cost for each activity pool by the actual activity base for that pool.B. dividing the cost budgeted for each activity pool by the estimated activity base for that pool.C. dividing the actual cost for each activity pool by the estimated activity base for that pool.D. dividing the cost budgeted for each activity pool by the actual activity base in that pool.

 

85. Shubelik Company is changing to an activity-based costing method. They have determined that they will use three cost pools. They are set-ups, inspections, and assembly. Which of the following would be used as the activity base for assembly? A. direct labor hoursB. inventory costC. inspectionsD. number of units to be produced

 

86. Using the following information prepared by the Endicott Company, determine the activity rate for set-ups. 

Activity Pool

Activity Base

Budgeted Amount

Set-ups

10,000

$60,000

Inspections

24,000

$120,000

Assembly (DLH)

80,000

$400,000

 

 

 

 A. $60.00B. $6.00C. $.06D. $.60

 

87. The Skagit Company manufactures small lamps and desk lamps. The following shows the activities per product: 

 

Set-ups

Inspections

Assembly (DLH)

Small Lamps – 4,000 units

1

4

1

Desk Lamps – 8,000 units

2

1

3

 

 

 

 

 

 

 

 

Using the following information prepared by the Skagit Company, determine the factory overhead rate to be charged to each unit of small lamps. 

Activity Pool

Activity Base

Budgeted Amount

Set-ups

20,000

$60,000

Inspections

24,000

$120,000

Assembly (DLH)

28,000

$420,000

 

 

 

 A. $38.00B. $35.00C. $10.00D. $20.00

 

88. The Dawson Company manufactures small lamps and desk lamps. The following shows the activities per product: 

 

Set-ups

Inspections

Assembly (DLH)

Small Lamps – 4,000 units

8,000

16,000

4,000

Desk Lamps – 8,000 units

16,000

8,000

24,000

 

 

 

 

 

 

 

 

Using the following information prepared by the Dawson Company, determine the total factory overhead to be charged to desk lamps. 

Activity Pool

Activity Base

Budgeted Amount

Set-ups

24,000

$60,000

Inspections

24,000

$120,000

Assembly (DLH)

28,000

$280,000

 

 

 

 A. $380,000B. $320,000C. $140,000D. cannot be determined

 

89. The Bonnington Company manufactures small lamps and desk lamps. The following shows the activities per product: 

 

Set-ups

Inspections

Assembly (DLH)

Small Lamps – 4,000 units

4,000

15,000

6,000

Desk Lamps – 8,000 units

16,000

7,000

20,000

 

 

 

 

 

 

 

 

Using the following information prepared by the Bonnington Company, determine the total factory overhead to be charged to small lamps. 

Activity Pool

Activity Base

Budgeted Amount

Set-ups

20,000

$80,000

Inspections

22,000

$132,000

Assembly (DLH)

26,000

$416,000

 

 

 

 A. $380,000B. $240,000C. $202,000D. cannot be determined

 

90. If selling and administrative expenses are allocated to different products, they should be reported as A. product costB. contra sales accountC. period costD. cost of goods sold

 

91. Activity based costing for selling and administrative expenses can also be beneficial in allocating expenses to various products. Which of the following can be used as a base in allocating help desk costs? A. Number of callsB. Square footage of the help desk officeC. Number of products soldD. Number of field failures

 

92. A bank may decide to use activity-based costing to determine all of the following except: A. the amounts charged to customers for services providedB. service qualityC. profitability by services providedD. all are correct

 

93. The Beauty Beyond Words Salon uses an activity-based costing system in its beauty salon to determine the cost of services. The salon has determined the costs of services by activity as follows: 

Activity

Activity Rate

Hair Washing

$2.50

Conditioning

$3.00

Chemical Treatment

$25.00

Styling

$10.00

 

 

 

 

Hair Washing

Conditioning

Chemical Treatment

Styling

Hair Cut

1

1

0

0

Complete Style

1

1

0

1

Perms

2

3

1

1

Hi-Lights

3

4

2

1

 

 

 

 

 

Determine the cost of services for a hair cut? A. $2.00B. $5.50C. $3.00D. $10.00

 

94. The Beauty Beyond Words Salon uses an activity-based costing system in its beauty salon to determine the cost of services. The salon has determined the costs of services by activity as follows: 

Activity

Activity Rate

Hair Washing

$2.50

Conditioning

$3.00

Chemical Treatment

$25.00

Styling

$10.00

 

 

 

 

Hair Washing

Conditioning

Chemical Treatment

Styling

Hair Cut

1

1

0

0

Complete Style

1

1

0

1

Perms

2

3

1

1

Hi-Lights

3

4

2

1

 

 

 

 

 

Determine the cost of services for a perm? A. $49.00B. $5.50C. $54.00D. $29.00

95. An airline can allocate overhead costs to each flight by using activity based costing by first identifying activity drivers, then allocating costs to the different flights. All but one of the following could be a viable activity drivers. A. Baggage handlersB. PilotsC. No. of tickets soldD. Number of inspections