Question : 24) How much of the total costs will be assigned : 1212098

 

24) How much of the total costs will be assigned to the Lawn Department?

A) $134,500

B) $135,600

C) $135,800

D) $134,600

Answer the following questions using the information below:

 

Gregory Company has identified three cost pools to allocate overhead costs. The following estimates are provided for the coming year:

 

Cost PoolOverhead CostsCost driverActivity level

Supervision of direct labor$326,000Direct labor-hours900,000

Machine maintenance$132,000Machine-hours960,000

Facility rent$217,000Square feet of area100,000

Total overhead costs$675,000

 

The accounting records show the Mossman Job consumed the following resources:

 

Cost driverActual level

Direct labor-hours200

Machine-hours1,500

Square feet of area70

 

25) If direct labor-hours are considered the only overhead cost driver, what is the single cost driver rate for Gregory?

A) $1.33 per direct labor-hour

B) $0.80 per direct labor-hour

C) $0.75 per direct labor-hour

D) $1.25 per direct labor-hour

 

26) Under activity-based costing, what is the amount of machine maintenance costs allocated to the Mossman Job?

A) $206.00

B) $206.25

C) $206.75

D) $206.50

Answer the following questions using the information below:

 

Velshi Printers has contracts to complete weekly supplements required by forty-six customers. For the year 2015, manufacturing overhead cost estimates total $840,000 for an annual production capacity of 12 million pages.

 

For 2015 Velshi Printers has decided to evaluate the use of additional cost pools. After analyzing manufacturing overhead costs, it was determined that number of design changes, setups, and inspections are the primary manufacturing overhead cost drivers. The following information was gathered during the analysis:

 

Cost poolManufacturing overhead costsActivity level

Design changes$ 120,000300 design changes

Setups640,0005,000 setups

Inspections80,0008,000 inspections

Total manufacturing overhead costs$840,000

 

During 2015, two customers, Money Managers and Hospital Systems, are expected to use the following printing services:

 

ActivityMoney ManagersHospital Systems

Pages60,00076,000

Design changes100

Setups2010

Inspections3038

 

27) What is the cost driver rate if manufacturing overhead costs are considered one large cost pool and are assigned based on 12 million pages of production capacity?

A) $0.10 per page

B) $0.07 per page

C) $0.70 per page

D) $0.05 per page

 

28) Using pages printed as the only overhead cost driver, what is the manufacturing overhead cost estimate for Money Managers during 2015?

A) $5,000

B) $3,500

C) $4,200

D) $6,000

Answer the following questions using the information below:

 

Xylon Corp. has contracts to complete weekly supplements required by forty-six customers. For the year 2015, manufacturing overhead cost estimates total $840,000 for an annual production capacity of 10 million pages.

 

For 2015, Xylon decided to evaluate the use of additional cost pools. After analyzing manufacturing overhead costs, it was determined that number of design changes, setups, and inspections are the primary manufacturing overhead cost drivers. The following information was gathered during the analysis:

 

Cost pool              Manufacturing overhead costs              Activity level

Design changes              $ 160,000              200 design changes

Setups              670,000              4,000 setups

Inspections              80,000              16,000 inspections

Total manufacturing overhead costs              $910,000

 

During 2015, two customers, Money Managers and Hospital Systems, are expected to use the following printing services:

 

Activity              Money Managers              Hospital Systems

Pages              60,000              76,000

Design changes              10              2

Setups              20              10

Inspections              30              38

 

29) If manufacturing overhead costs are considered one large cost pool and are assigned based on 10 million pages of production capacity, what is the cost driver rate?

A) $0.750 per page

B) $0.240 per page

C) $0.670 per page

D) $0.091 per page

 

30) Under ABC costing, what is the inspection cost allocated to Xylon Corp.?

A) $190

B) $160

C) $150

D) $180

31) An activity-based costing system with many activities can become overly detailed and unwieldy to operate.

 

32) An activity-based costing system is necessary for costing services that are similar.

 

33) In activity based costing systems, limiting cost-allocation bases to only units of output strengthens the cause-and-effect relationship between the cost-allocation base and the costs in a cost pool.

 

 

 

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