Question : 91. An activity-based cost allocation system: A. Is one form of a direct : 1225570

91. An activity-based cost allocation system: 

A. Is one form of a direct or variable costing system.

B. Does not provide total unit cost data.

C. Traces costs to products on the basis of activities performed on them.

D. Does not provide for the allocation of any cost to products that cannot be directly attributable to those products.

E. Does not involve the level of detail and the number of allocations that companies make with traditional allocation methods.

92. A basis for allocating the cost of a resource to an activity cost pool or allocating the cost of an activity cost pool to a cost object is a(n): 

A. Direct factor.

B. Indirect factor.

C. Cost driver.

D. Joint cost.

E. Opportunity cost.

93. If a firm uses activity-based costing to allocate costs, it must: 

A. Combine costs in appropriate pools.

B. Select appropriate cost drivers.

C. Calculate an appropriate rate for each pool.

D. Allocate costs based on predetermined rates for cost pools.

E. Perform all of these steps.

94. A college uses advisors who work with all students in all divisions of the college. The most useful allocation basis for the salaries of these employees would likely be 

A. number of classes offered in each division.

B. student graduation rate.

C. square footage of each division.

D. number of students advised from each division.

E. relative salaries of division heads.

95. A firm produces and sells two products, Mica and Plax. The following information is available relating to setup costs (a part of factory overhead):

With traditional two-stage allocation of overhead costs, using direct labor hours as the allocation base, the setup cost portion of overhead that is allocated to each unit of product for Mica and Plax, respectively is: 

A. $80; $.80.

B. $3.20; $3.20.

C. $4.00; $4.00.

D. $160.00; $12,800.00.

E. $200.00; $16,000.00.

96. A firm produces and sells two products, Mica and Plax. The following information is available relating to setup costs (a part of factory overhead):

Using number of setups as the activity base, the amount of setup cost allocated to each unit of product for Mica and Plax, respectively is: 

A. $21.60; $.54.

B. $54.00; $27.00.

C. $60.00; $60.00.

D. $108.00; $2.70.

E. $200.00; $16,000.00

97. Rent and maintenance expenses would most likely be allocated based on: 

A. Sales volume by department.

B. Square feet of floor space occupied.

C. Number of hours worked.

D. Number of invoices processed.

E. Number of employees in each department.

98. In the preparation of departmental income statements, the preparer completes the following steps in the following order: 

A. Identify direct expenses; allocate indirect expenses; allocate service department expenses.

B. Identify indirect expenses; allocate direct expenses; allocate service department expenses.

C. Identify service department expenses; allocate direct expenses; allocate indirect expenses.

D. Identify direct expenses, allocate service department expenses, allocate indirect expenses.

E. Allocate all expenses.

99. Jamesway Corporation has two separate divisions that operate as profit centers. The following information is available for the most recent year:

The White Division occupies 20,000 square feet in the plant. The Grey Division occupies 30,000 square feet. Rent is an indirect expense and is allocated based on square footage. Rent expense for the year was $50,000. Compute gross profit for the White and Grey Divisions, respectively. 

A. $72,000; $193,000.

B. $172,000; $352,000.

C. $100,000; $241,000.

D. $52,000; $163,000.

E. $72,000; $163,000.

100. Jamesway Corporation has two separate divisions that operate as profit centers. The following information is available for the most recent year:

The White Division occupies 20,000 square feet in the plant. The Grey Division occupies 30,000 square feet. Rent is an indirect expense and is allocated based on square footage. Rent expense for the year was $50,000. Compute departmental income for the White and Grey Divisions, respectively. 

A. $52,000; $163,000.

B. $172,000; $352,000.

C. $72,000; $163,000.

D. $72,000; $193,000.

E. $100,000; $241,000.