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
