Question :
Objective 5.5
1) Put the following ABC implementation steps in order : 1212082
Objective 5.5
1) Put the following ABC implementation steps in order ________.
ACompute the allocation rates.
BCompute the total cost of the products.
CIdentify the products that are the cost objects.
DSelect the cost allocation bases.
A) DACB
B) DBCA
C) BADC
D) CDAB
2) ________ is considered while choosing a cost allocation base for activity costs in ABC costing.
A) Marketing strategy and material price level
B) Availability of reliable data and measures
C) Product price level
D) Market share of a product
3) Which of the following cost and cost allocation base have a strong cause and effect relationship?
A) administration costs and cubic feet
B) setup costs and square feet
C) machine depreciation and output units
D) machine maintenance and setup hours
4) Management accountants use the cost hierarchy to first calculate the ________.
A) labor costs of each product and then they compute material costs
B) overhead costs of each product and then they compute prime costs
C) factory costs of each product and then they compute labor costs
D) total costs of each product and then they compute per-unit costs
5) ABC assumes all costs are ________ because over the long run management can adjust the amount of resources employed.
A) fixed
B) variable
C) committed
D) nondiscretionary
6) A manufacturing firm produces multiple families of products requiring various combinations of different types of parts. Of the following, the most appropriate cost driver for assigning materials handling costs to the various products is ________.
A) direct labor hours
B) number of units produced
C) number of parts used
D) number of suppliers involved
Answer the following questions using the information below:
Comfort Corporation manufactures two models of office chairs, a standard and a deluxe model. The following activity and cost information has been compiled:
Number ofNumber ofNumber of
ProductSetupsComponentsDirect Labor Hours
Standard128255
Deluxe2812245
Overhead costs$52,000$78,000
7) Assume a traditional costing system applies the overhead costs based on direct labor hours. What is the total amount of overhead costs assigned to the standard model?
A) $65,700
B) $63,600
C) $66,300
D) $66,700
8) Assume a traditional costing system applies the overhead costs based on direct labor hours. What is the total amount of overhead costs assigned to the deluxe model?
A) $64,300
B) $63,700
C) $63,300
D) $63,600
9) Number of setups and number of components are identified as activity-cost drivers for overhead. Assuming an activity-based costing system is used, what is the total amount of overhead costs assigned to the standard model?
A) $49,200
B) $45,600
C) $46,800
D) $47,400
10) Number of setups and number of components are identified as activity-cost drivers for overhead. Assuming an activity-based costing system is used, what is the total amount of overhead costs assigned to the deluxe model?
A) $84,400
B) $83,200
C) $82,600
D) $80,800
