119.VelCraft allocates costs from its payroll department and the maintenance department to its production departments using the direct method of allocation. Payroll department costs are allocated based on the number of employees in the department and maintenance department costs are allocated based on the number of square feet that the production department occupies within the factory. Information about the departments is presented below:
Number ofNumber of Square
DepartmentCostsEmployeesFeet Occupied
Payroll $150,000 2 2,000
Maintenance $220,000 8 64,000
Molding 75 100,000
Finishing 50 60,000
Packaging 25 40,000
When the maintenance department costs are allocated, what amount will be charged to the molding department? (Round your intermediate calculation to two decimal places)
A.$44,000
B.$82,707
C.$110,000
D.$52,932
120.The manager of the molding department at the Category Products Company is evaluated based on the profit performance of his department. Personnel costs at Category Products are estimated to be $40,000. These costs are allocated based on the number of employees in each production department. The welding department has 40 employees, and the molding department has 60 employees. The personnel department actually incurred $52,000 in personnel costs. The profit of the molding department is down this year because the molding department’s share of allocated personnel costs is much higher than last year. The allocation of personnel costs to the molding department is higher in the current year. This is most likely due to
A.the increase in the company’s total production costs.
B.allocating actual personnel costs to the production departments.
C.more number of efficient employees in the welding department.
D. more number of employees in the molding department.
121.Vystar Credit Union has six service departments (human resources, duplicating, janitorial, accounting, graphic design, and food services) whose fixed costs are allocated to the company’s two subsidiaries (Vystar Personal Banking and Vystar Business Banking) on the basis of their relative revenue. What type of costs will the president of Vystar Business Banking subsidiary perceive the allocated service department costs to be?
A.Fixed costs
B.Opportunity costs
C.Direct costs
D.Variable costs
122.Unique Finds sells fine collectible statues and has implemented activity-based costing. Costs in the shipping department have been divided into three cost pools. The first cost pool contains costs that are related to packaging and shipping. Unique has determined that the number of boxes shipped is an appropriate cost driver for these costs. The second cost pool is made up of costs related to the final inspection of each item before it is shipped and the cost driver for this pool is the number of individual items that are inspected. The final cost pool is used for general operations of the department and the cost driver is the number of orders. Information about the activities is summarized below:
Cost PoolEstimated Total CostsCost DriverEstimated Annual Activity
Packaging and shipping$ 67,200Number of boxes shipped16,000 boxes
Final inspection200,000Number of individual items inspected100,000 items
General operations85,000Number of orders10,000 orders
During June, 2,100 boxes were packed and shipped. How much is the packaging and shipping cost for each box shipped?
A.$0.24
B.$7.62
C.$4.20
D.$32.00
123.Unique Finds sells fine collectible statues and has implemented activity-based costing. Costs in the shipping department have been divided into three cost pools. The first cost pool contains costs that are related to packaging and shipping. Unique has determined that the number of boxes shipped is an appropriate cost driver for these costs. The second cost pool is made up of costs related to the final inspection of each item before it is shipped and the cost driver for this pool is the number of individual items that are inspected. The final cost pool is used for general operations of the department and the cost driver is the number of orders. Information about the activities is summarized below:
Cost PoolEstimated Total CostsCost DriverEstimated Annual Activity
Packaging and shipping$ 67,200Number of boxes shipped16,000 boxes
Final inspection200,000Number of individual items inspected100,000 items
General operations85,000Number of orders10,000 orders
During June, 4,000 items were sold reflecting 800 orders that were packed and shipped in 2,100 boxes. What amount is allocated to each order for general operations of the department?
A.$4.20
B.$29.53
C.$8.50
D.$10.00
124.Unique Finds sells fine collectible statues and has implemented activity-based costing. Costs in the shipping department have been divided into three cost pools. The first cost pool contains costs that are related to packaging and shipping. Unique has determined that the number of boxes shipped is an appropriate cost driver for these costs. The second cost pool is made up of costs related to the final inspection of each item before it is shipped and the cost driver for this pool is the number of individual items that are inspected. The final cost pool is used for general operations of the department and the cost driver is the number of orders. Information about the activities is summarized below:
Cost PoolEstimated Total CostsCost DriverEstimated Annual Activity
Packaging and shipping$ 67,200Number of boxes shipped16,000 boxes
Final inspection200,000Number of individual items inspected100,000 items
General operations85,000Number of orders10,000 orders
An order is shipped to a retail customer who has ordered 6 individual items. This order will be shipped in 3 separate boxes. What is the packing and shipping cost that will be allocated to the order?
A.$4.20
B.$4.03
C.$25.20
D.$12.60
125.Unique Finds sells fine collectible statues and has implemented activity-based costing. Costs in the shipping department have been divided into three cost pools. The first cost pool contains costs that are related to packaging and shipping. Unique has determined that the number of boxes shipped is an appropriate cost driver for these costs. The second cost pool is made up of costs related to the final inspection of each item before it is shipped and the cost driver for this pool is the number of individual items that are inspected. The final cost pool is used for general operations of the department and the cost driver is the number of orders. Information about the activities is summarized below:
Cost PoolEstimated Total CostsCost DriverEstimated Annual Activity
Packaging and shipping$ 67,200Number of boxes shipped16,000 boxes
Final inspection200,000Number of individual items inspected100,000 items
General operations85,000Number of orders10,000 orders
A new customer orders two items that can be shipped in a single box. What is the total shipping department cost that will be allocated to this order?
A.$16.70
B.$14.70
C.$8.20
D.None of these answer choices are correct.
126.Unique Finds sells fine collectible statues and has implemented activity-based costing. Costs in the shipping department have been divided into three cost pools. The first cost pool contains costs that are related to packaging and shipping. Unique has determined that the number of boxes shipped is an appropriate cost driver for these costs. The second cost pool is made up of costs related to the final inspection of each item before it is shipped and the cost driver for this pool is the number of individual items that are inspected. The final cost pool is used for general operations of the department and the cost driver is the number of orders. Information about the activities is summarized below:
Cost PoolEstimated Total CostsCost DriverEstimated Annual Activity
Packaging and shipping$ 67,200Number of boxes shipped16,000 boxes
Final inspection200,000Number of individual items inspected100,000 items
General operations85,000Number of orders10,000 orders
During the period, the Eastern sales office generated 240 orders for a total of 3,560 items of which were shipped in 1,200 boxes. What amount of shipping department costs should be allocated to these sales?
A.$9,480
B.$5,040
C.$14,200
D.None of these answer choices are correct.
127.Fox Hunting Gear manufactures two products: camouflage jackets and camouflage hats. The company makes 50,000 jackets and 20,000 hats each year. Information for overhead costs and for the two products appears below.
ActivityDriverEstimated Total
Overhead CostJacketsHats
Setups# of setups$ 200,000500 setups1,500 setups
Ordering parts# of parts300,00060,000 parts40,000 parts
Machining# of machine hours600,00012,000 machine hrs.6,000 machine hrs.
Inspections# of inspections400,00010,000 inspections40,000 inspections
Shipping# of shipments300,00010,000 shipments10,000 shipments
Total overhead$1,800,000
Assume that all overhead is assigned to products using machine hours. How much overhead will be assigned to each jacket?
A.$100,000 per jacket
B.$24 per jacket
C.$150 per jacket
D.$17.20 per jacket
128.Fox Hunting Gear manufactures two products: camouflage jackets and camouflage hats. The company makes 50,000 jackets and 20,000 hats each year. Information for overhead costs and for the two products appears below.
ActivityDriverEstimated Total
Overhead CostJacketsHats
Setups# of setups$ 200,000500 setups1,500 setups
Ordering parts# of parts300,00060,000 parts40,000 parts
Machining# of machine hours600,00012,000 machine hrs.6,000 machine hrs.
Inspections# of inspections400,00010,000 inspections40,000 inspections
Shipping# of shipments300,00010,000 shipments10,000 shipments
Total overhead$1,800,000
Assume that activity-based costing is used. What is the rate per setup that should be used to assign setup cost to hats?
A.$100 per setup
B.$200,000 per setup
C.$133.33 per setup
D.$900 per setup
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