Question :
21. A good allocation base: A. drives the incurrence of direct material costs.B. drives : 1291675
21. A good allocation base: A. drives the incurrence of direct material costs.B. drives the incurrence of direct labor costs.C. drives the incurrence of overhead costs.D. drives the incurrence of administrative costs.
22. An allocation base that causes overhead costs to be incurred is called a(n): A. revenue driver.B. predetermined driver.C. cost driver.D. applied driver.
23. The key to allocating overhead costs is the determination of the ____. A. overheadB. cost driverC. direct laborD. product cost
24. Which of the following statements is true with respect to cost drivers? A. Overhead costs should only have one cost driver.B. In labor intensive companies, direct labor hours often serves as the cost driver.C. When using a cost driver, the same amount of overhead will be allocated to all products.D. Cost drivers are only used to allocate machine hours.
25. What should determine whether an allocation base is a good cost driver? A. Whether or not the base can be measured in terms of “hours”.B. Whether or not the base can be applied plantwide.C. Whether or not the base is unique to the overhead being allocated.D. Whether or not there is a cause-and-effect relationship between the base and the overhead cost.
26. Which of the following would probably not be a cost driver in a manufacturing environment? A. Machine hoursB. Direct labor hoursC. Direct labor costD. Indirect labor hours
27. Maria’s Custom Tailoring is very labor intensive. Therefore, Maria has decided to use direct labor hours as the cost driver for assigning overhead costs to specific jobs. During the month of February, the company incurred overhead costs of $4,800. Total direct labor hours during the month totaled 1,200. Out of a total of 45 different jobs worked on during the month, Job #115 required 16 direct labor hours to complete and Job #195 required 15 direct labor hours. The total amount of overhead allocated to these two jobs is: A. $124.00B. $187.50C. $137.50D. $ 31.00
28. Horatio Ltd. uses job order costing to measure and track product costs. Horatio has determined that machine hours drive its manufacturing overhead costs. During the month of June, the following data were available for Product #95:
Direct labor
350 hours at $10 per hour
Direct materials
40 square yards at $25 per yard
Machine hours used
1,000 hours
If total manufacturing overhead costs during the month totaled $10,000 when a total of 25,000 machine hours were used, what will be the total manufacturing cost of Product #95? A. $7,000B. $5,500C. $4,900D. $4,500
29. Presley Products Inc. is a manufacturer of limited edition dolls. They use operations costing to measure and track the costs incurred for specific product lines. While most of the products do require some machine time, Presley has determined that direct labor hours drive its manufacturing overhead costs. During the month of April, the following data were available for a particular line of dolls:
Direct labor
3,000 hours at $10 per hour
Direct materials
4,000 pounds at $2 per pound
If total overhead costs during the month totaled $25,000 when a total of 50,000 direct labor hours were worked, what will be the total manufacturing cost for this line of dolls? A. $40,500B. $44,000C. $63,000D. $39,500
30. Griffin Manufacturing uses job order costing to measure and track the costs incurred for specific jobs. Griffin has determined that direct labor cost drives its manufacturing overhead costs. During the month of August, the following data were available for Job #45:
Direct labor
200 hours at $15 per hour
Direct materials
90 gallons at $6 per gallon
Machine hours used
100 hours
If total overhead costs during the month totaled $4,000 when a total of $20,000 in direct labor costs were incurred, what will be the total manufacturing cost of Job #45? A. $4,140B. $3,580C. $7,540D. $3,540
