81. Determine the activity-based cost for each tape drive unit. A. $97.73B. $232.69C. $394.12D. $103.84
82. Which of the following is a cost pool used with the activity-based costing method? A. total selling and administrative overheadsB. direct material dollarsC. total factory overheadsD. production setups
83. 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.
84. Shubelik Company is changing to an activity-based costing method. They have determined that they will use three cost pools. They are setups, inspections, and assembly. Which of the following would be used as the activity base for assembly? A. number of direct labor hoursB. number of setupsC. number of inspectionsD. number of units to be produced
85. Given the following information, determine the activity rate for setups.
Activity Pool
Activity Base
Budgeted Amount
Setups
10,000
$60,000
Inspections
24,000
$120,000
Assembly (DLH)
80,000
$400,000
A. $58.00B. $6.00C. $.75D. $5.09
86. The Skagit Company manufactures Hooks and Nooks. The following shows the activities per product and total activity information:
Setups
Inspections
Assembly (DLH)
Hooks – 4,000 units
1
3
1
Nooks – 8,000 units
2
2
3
Activity Pool
Activity Base
Budgeted Amount
Setups
20,000
$ 60,000
Inspections
24,000
120,000
Assembly (DLH)
28,000
420,000
Calculate the total factory overhead to be charged to each unit of Hooks. A. $33B. $50C. $11D. $61
87. The Skagit Company manufactures Hooks and Nooks. The following shows the activities per product and total activity information:
Setups
Inspections
Assembly (DLH)
Hooks – 4,000 units
1
3
1
Nooks – 8,000 units
2
2
3
Activity Pool
Activity Base
Budgeted Amount
Setups
20,000
$ 60,000
Inspections
24,000
120,000
Assembly (DLH)
28,000
420,000
Calculate the total factory overhead to be charged to Nooks. A. $300,000B. $400,000C. $488,000D. $600,000
88. The Dawson Company manufactures small lamps and desk lamps. The following shows the activities per product and the total overhead information:
Setups
Inspections
Assembly (DLH)
Small Lamps – 3,000 units
8,000
9,000
16,000
Desk Lamps – 6,000 units
16,000
15,000
12,000
Activity Pool
Activity Base
Budgeted Amount
Setups
24,000
$60,000
Inspections
24,000
$120,000
Assembly (DLH)
28,000
$280,000
Calculate the total factory overhead to be charged to desk lamps. A. $306,667B. $235,000C. $230,000D. $225,000
89. The Dawson Company manufactures small lamps and desk lamps. The following shows the activities per product and the total overhead information:
Setups
Inspections
Assembly (DLH)
Small Lamps – 3,000 units
8,000
9,000
16,000
Desk Lamps – 6,000 units
16,000
15,000
12,000
Activity Pool
Activity Base
Budgeted Amount
Setups
24,000
$60,000
Inspections
24,000
$120,000
Assembly (DLH)
28,000
$280,000
Calculate the overhead per unit to be charged to small lamps. A. $75.00B. $39.17C. $38.33D. $17.50
90. The Bonnington Company manufactures small lamps and desk lamps. The following shows the activities per product:
Setups
Inspections
Assembly (DLH)
Small Lamps – 4,000 units
4,000
15,000
6,000
Desk Lamps – 8,000 units
16,000
7,000
20,000
Using the following information prepared by the Bonnington Company, determine the total factory overhead to be charged to small lamps.
Activity Pool
Activity Base
Budgeted Amount
Setups
20,000
$80,000
Inspections
22,000
$132,000
Assembly (DLH)
26,000
$416,000
A. $314,000B. $209,333C. $202,000D. $104,000
91. If selling and administrative expenses are allocated to different products, they should be reported as a A. product costB. factory overhead costC. period costD. cost of goods sold
92. Activity-based costing for selling and administrative expenses can also be beneficial in allocating expenses to various products. Which of the following is the best allocation base for help desk costs? A. Number of callsB. Square footage of the help desk officeC. Number of products soldD. Number of employees
93. Which of the following is not a reason for banks to use activity-based costing? A. to determine the amounts charged to customers for services providedB. to determine service qualityC. to determine profitability of services providedD. all of the above
94. The Beauty Beyond Words Salon uses an activity-based costing system in its beauty salon to determine the cost of services. The salon has determined the costs of services by activity as follows:
Activity
Activity Rate
Hair Washing
$3.00
Conditioning
$3.50
Chemical Treatment
$25.00
Styling
$10.00
Hair Washing
Conditioning
Chemical Treatment
Styling
Hair Cut
1
1
0
0
Complete Style
1
1
0
1
Perms
2
3
1
1
Hi-Lights
3
4
2
1
Calculate the cost of services for a hair cut. A. $3.00B. $6.50C. $3.50D. $16.50
95. The Beauty Beyond Words Salon uses an activity-based costing system in its beauty salon to determine the cost of services. The salon has determined the costs of services by activity as follows:
Activity
Activity Rate
Hair Washing
$3.00
Conditioning
$3.50
Chemical Treatment
$25.00
Styling
$10.00
Hair Washing
Conditioning
Chemical Treatment
Styling
Hair Cut
1
1
0
0
Complete Style
1
1
0
1
Perms
2
3
1
1
Hi-Lights
3
4
2
1
Calculate the cost of services for a perm. A. $51.50B. $41.50C. $44.50D. $25.00
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