81. Phelan 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. Phelan 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. Nite Lite 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 Nite Lite 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 Nite Lite 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 Nite Lite 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 Nite Lite 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
16,000
4,000
Desk Lamps – 8,000 units
16,000
8,000
24,000
Using the following information prepared by the Nite Lite Company, determine the total factory overhead rate 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 Nite Lite 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
16,000
4,000
Desk Lamps – 8,000 units
16,000
8,000
24,000
Using the following information prepared by the Nite Lite Company, determine the total factory overhead rate to be charged to 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. $380,000B. $240,000C. $152,000D. 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
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