Question : 14) How much of the total costs will be assigned : 1212097

 

14) How much of the total costs will be assigned to Department A?

A) $90,250

B) $90,650

C) $90,350

D) $90,750

Account inquiry costs= ($200,000 ÷ 10,000) × 2,500 = $50,000

Billing costs= ($140,000 ÷ 4,000,000) × 400,000 =  $14,000

Account verification costs= ($75,000 ÷ 40,000) × 10,000=  $18,750

Correspondence costs= ($25,000 ÷ 4,000)× 1,200=    $7,500

$90,250

 

15) How much of the total costs will be assigned to Department B?

A) $117,350

B) $113,250

C) $113,750

D) $112,350

Account inquiry costs= ($200,000 ÷ 10,000) × 4,000 = $80,000

Billing costs= ($140,000 ÷ 4,000,000) × 250,000 =  $  8,750

Account verification costs= ($75,000 ÷ 40,000) × 8,000=  $15,000

Correspondence costs= ($25,000 ÷ 4,000)× 1,600=  $10,000

$113,750

16) Dalrymple Company produces a special spray nozzle. The budgeted indirect total cost of inserting the spray nozzle is $80,000. The budgeted number of nozzles to be inserted is 40,000. What is the budgeted indirect cost allocation rate for this activity?

A) $0.50

B) $1.00

C) $1.50

D) $2.00

 

17) Activity-based costing is most likely to yield benefits for companies ________.

A) with complex product design processes

B) with operations that remain fairly consistent

C) in a monopolistic market

D) having nominal percentage of indirect costs

 

18) Which of the following statements is true of ABC systems?

A) ABC systems are time-driven cost systems.

B) ABC systems classify some direct costs as indirect costs and some indirect costs as direct costs.

C) ABC systems provide valuable information to managers beyond accurate product costs.

D) ABC systems assume all costs are variable costs.

Teecorp Company provides the following ABC costing information:

 

ActivitiesTotal CostsActivity-cost drivers

Labor              $320,000              8,000              hours

Gas              $36,000              6,000              gallons

Invoices              $40,000              2,500              invoices

Total costs              $396,000

 

The above activities used by their three departments are:

 

Lawn DepartmentBush Department Plowing Department

Labor              2,500              hours              1,200              hours                            4,300 hours

Gas              1,700              gallons              800              gallons                            3,500 gallons

Invoices              1,600              invoices              400              invoices                            500 invoices

 

19) How much of the labor cost will be assigned to the Bush Department?

A) $42,000

B) $48,000

C) $40,000

D) $50,000

 

20) If labor hours are used to allocate the non-labor, overhead costs, what is the overhead allocation rate?

A) $49.50 per hour

B) $24 per hour

C) $4.60 per hour

D) $9.50 per hour

 

21) How much of invoice cost will be assigned to the Bush Department?

A) $6,400

B) $8,000

C) $25,600

D) $40,000

22) How much of the gas cost will be assigned to the Lawn Department?

A) $12,000

B) $10,200

C) $10,020

D) $10,000

 

23) How much of the total cost will be assigned to the Plowing Department?

A) $396,000

B) $201,000

C) $134,600

D) $172,000