Question : Answer the following questions using the information below: Racer X : 1217194

 

Answer the following questions using the information below:

 

Racer X Corporation manufactures two models of motorized go-carts, a standard and a deluxe model. The following activity and cost information has been compiled:

 

Number ofNumber ofNumber of

ProductSetupsComponentsDirect Labor Hours

Standard1510750

Deluxe3515500

 

Overhead costs$15,000$25,000

 

11) Assume a traditional costing system applies the $40,000 of overhead costs based on direct labor hours. What is the total amount of overhead cost assigned to the standard model?

A) $16,000

B) $24,000

C) $25,000

D) $15,000

 

12) Assume a traditional costing system applies the $40,000 of overhead costs based on direct labor hours. What is the total amount of overhead cost assigned to the deluxe model?

A) $16,000

B) $24,000

C) $25,000

D) $15,000

13) 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 cost assigned to the standard model?

A) $25,500

B) $15,000

C) $14,500

D) $24,000

Components: $25,000 / (10 + 15) = $1,000

($300 × 15) + ($1,000 × 10) = $14,500

 

14) 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 cost assigned to the deluxe model?

A) $25,500

B) $25,000

C) $24,000

D) $12,500

Components: $25,000 / (10 + 15) = $1,000

($300 × 35) + ($1,000 × 15) = $25,500

Answer the following questions using the information below:

 

Tiger Pride produces two product lines: T-shirts and Sweatshirts. Product profitability is analyzed as follows:

 

T-SHIRTSSWEATSHIRTS

Production and sales volume60,000 units35,000 units

Selling price$16.00$29.00

Direct material$ 2.00$ 5.00

Direct labor$ 4.50$ 7.20

Manufacturing overhead$ 2.00$ 3.00

Gross profit$ 7.50$13.80

Selling and administrative$ 4.00$ 7.00

Operating profit$ 3.50$ 6.80

 

What is projected operating income if direct materials costs of T-Shirts increase to $4.00 per unit and direct labor costs of Sweatshirts increase to $8.20 per unit.

15) Under the revised ABC system, the activity-cost driver rate for the supervision activity is:

A) $2.58

B) $2.40

C) $2.24

D) $1.16

 

16) Under the revised ABC system, supervision costs allocated to Sweatshirts will be:

A) $48,720

B) $100,800

C) $100,920

D) None of these answers are correct.

17) Under the revised ABC system, total overhead costs allocated to Sweatshirts will be:

A) $ 48,720

B) $ 76,720

C) $224,920

D) None of these answers are correct.

 

18) Under the revised ABC system, overhead costs per unit for the Sweatshirts will be:

A) $1.39 per unit

B) $1.60 per unit

C) $2.19 per unit

D) $2.47 per unit

 

19) Using an ABC system, next year’s estimates show manufacturing overhead costs will total $228,300 for 52,000 T-shirts. If all other T-shirt costs and sales prices remain the same, the profitability that can be expected is:

A) $5.41 per t-shirt

B) $4.39 per t-shirt

C) $1.11 per t-shirt

D) ($0.81) per t-shirt

Answer the following questions using the information below:

 

Mayan Potters manufactures two sizes of ceramic paperweights, regular and jumbo. The following information applies to their expectations for the planning period:

 

Cost PoolOverhead CostsActivity-cost driver

Materials handling$ 45,00090,000 orders

Machine maintenance$300,00015,000 maintenance hours

Setups$270,00045,000 setups

Inspections$105,00021,000 inspections

Total support costs$720,000

 

  Production Estimates  

Production units:

Regular= 8,000,000 units

Jumbo= 16,000,000 units

Machine-hours= 200,000 mh

Labor-hours= 400,000 dlh

 

Mayan Potters uses an ABC system and assigns overhead costs based on the overhead activity information provided above.

 

20) The activity-cost driver for the materials handling activity is:

A) orders

B) maintenance hours

C) production units

D) setups

 

 

 

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