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32.
Which of the following items would be classified as a batch-level cost in an activity-based
cost management (ABM) system?
33.
Which of the following items would be classified as a product-level cost in an activity-
based cost management (ABM) system?
34.
Which of the following items would not be used as the cost driver for a volume-level cost
in an activity-based cost management (ABM) system?
35.
In an activity-based cost management (ABM) system, facility-level costs are those that
are incurred to:
36.
McArthur Company has gathered the following data related to its production process of
two of its products for the week ended April 30:
Model
Item #B-
200
Item
#C440
Quantity produced
60
100
Unit-level material cost
$42,000
$100,000
Variable conversion
cost
72,000
300,000
Total direct costs
$114,000
$400,000
Indirect costs:
Indirect manufacturing
cost
163,200
272,000
Indirect operating cost
255,000
425,000
Total indirect costs
418,200
697,000
Total costs
$532,200
$1,097,000
37.
Fence Industries is preparing its annual profit plan. As part of its analysis of the
profitability of its customers, management estimates that the $12,000 for sales support
should be assigned to the individual customers from the information given as follows:
Customer
A
Customer
B
Units purchased
100,000
200,000
Purchase orders
(annual)
5
20
What is the amount of the sales support costs that should be allocated to Customer A
assuming Fence uses units purchased to compute activity-based costs?
38.
Fence Industries is preparing its annual profit plan. As part of its analysis of the
profitability of its customers, management estimates that the $12,000 for sales support
should be assigned to the individual customers from the information given as follows:
Customer
A
Customer
B
Units purchased
100,000
200,000
Purchase orders
(annual)
5
20
What is the amount of the sales support costs that should be allocated to Customer B,
assuming Fence uses units purchased to compute activity-based costs?
39.
Fence Industries is preparing its annual profit plan. As part of its analysis of the
profitability of its customers, management estimates that the $12,000 for sales support
should be assigned to the individual customers from the information given as follows:
Customer
A
Customer
B
Units purchased
100,000
200,000
Purchase orders
(annual)
5
20
What is the amount of the sales support costs that should be allocated to Customer A,
assuming Fence uses purchases orders to compute activity-based costs?
40.
Fence Industries is preparing its annual profit plan. As part of its analysis of the
profitability of its customers, management estimates that the $12,000 for sales support
should be assigned to the individual customers from the information given as follows:
Customer
A
Customer
B
Units purchased
100,000
200,000
Purchase orders
(annual)
5
20
What is the amount of the sales support costs that should be allocated to Customer B,
assuming Fence uses purchases orders to compute activity-based costs?
41.
Republic Industries decides to price delivery service according to the results of a recent
activity-based costing (ABC) study. The study indicates Republic should charge $8 per
order, 2% of the order's value for general delivery costs, $1.25 per item, and $30 for
delivery.
A year later, Republic collected the following information for two of its best customers:
Cost driver
Customer C
Customer D
Number of orders
18
8
Number of deliveries
10
10
Number of items
2,000
4,000
Order value
$120,000
$80,000
What are the total delivery costs charged to Customer D during the year?
42.
Republic Industries decides to price delivery service according to the results of a recent
activity-based costing (ABC) study. The study indicates Republic should charge $8 per
order, 2% of the order's value for general delivery costs, $1.25 per item, and $30 for
delivery.
A year later, Republic collected the following information for two of its best customers:
Cost driver
Customer C
Customer D
Number of orders
18
8
Number of deliveries
10
10
Number of items
2,000
4,000
Order value
$120,000
$80,000
What are the total delivery costs charged to Customer C during the year?
43.
Benton Company is preparing its annual profit plan. As part of its analysis of the cost of its
purchasing activity, management estimates that the $48,000 for purchasing support
should be assigned to the individual vendors from the information given as follows:
Vendor
A
Vendor
B
Units purchased
100,000
200,000
Purchase orders (annual)
6
24
Number of shipments
received
12
52
What is the amount of the purchasing costs that should be allocated to Vendor A,
assuming Benton uses units purchased to compute activity-based costs?
44.
Benton Company is preparing its annual profit plan. As part of its analysis of the cost of its
purchasing activity, management estimates that the $48,000 for purchasing support
should be assigned to the individual vendors from the information given as follows:
Vendor
A
Vendor
B
Units purchased
100,000
200,000
Purchase orders (annual)
6
24
Number of shipments
received
12
52
What is the amount of the purchasing costs that should be allocated to Vendor B,
assuming Benton uses units purchased to compute activity-based costs?
45.
Benton Company is preparing its annual profit plan. As part of its analysis of the cost of its
purchasing activity, management estimates that the $48,000 for purchasing support
should be assigned to the individual vendors from the information given as follows:
Vendor
A
Vendor
B
Units purchased
100,000
200,000
Purchase orders (annual)
6
24
Number of shipments
received
12
52
What is the amount of the purchasing costs that should be allocated to Vendor A,
assuming Benton uses purchases orders to compute activity-based costs?
46.
Benton Company is preparing its annual profit plan. As part of its analysis of the cost of its
purchasing activity, management estimates that the $48,000 for purchasing support
should be assigned to the individual vendors from the information given as follows:
Vendor
A
Vendor
B
Units purchased
100,000
200,000
Purchase orders (annual)
6
24
Number of shipments
received
12
52
What is the amount of the purchasing costs that should be allocated to Vendor B,
assuming Benton uses purchases orders to compute activity-based costs?
47.
Benton Company is preparing its annual profit plan. As part of its analysis of the cost of its
purchasing activity, management estimates that the $48,000 for purchasing support
should be assigned to the individual vendors from the information given as follows:
Vendor
A
Vendor
B
Units purchased
100,000
200,000
Purchase orders (annual)
6
24
Number of shipments
received
12
52
What is the amount of the purchasing costs that should be allocated to Vendor A,
assuming Benton uses number of shipments received to compute activity-based costs?
48.
Benton Company is preparing its annual profit plan. As part of its analysis of the cost of its
purchasing activity, management estimates that the $48,000 for purchasing support
should be assigned to the individual vendors from the information given as follows:
Vendor
A
Vendor
B
Units purchased
100,000
200,000
Purchase orders (annual)
6
24
Number of shipments
received
12
52
What is the amount of the purchasing costs that should be allocated to Vendor B,
assuming Benton uses number of shipments received to compute activity-based costs?
49.
Express Travel decides to price delivery service according to the results of a recent
activity-based costing (ABC) study. The study indicates Express Travel should charge $16
per order, 1% of the order's value for general delivery costs, $2.50 per item, and $45 for
delivery.
A year later, Express Travel collected the following information for three of its customers:
Cost driver
Customer
A
Customer
B
Customer
C
Number of
orders
18
8
12
Number of
deliveries
10
10
24
Number of
items
2,000
4,000
12,000
Order value
$120,000
$80,000
$100,000
50.
Express Travel decides to price delivery service according to the results of a recent
activity-based costing (ABC) study. The study indicates Express Travel should charge $16
per order, 1% of the order's value for general delivery costs, $2.50 per item, and $45 for
delivery.
A year later, Express Travel collected the following information for three of its customers:
Cost driver
Customer
A
Customer
B
Customer
C
Number of
orders
18
8
12
Number of
deliveries
10
10
24
Number of
items
2,000
4,000
12,000
Order value
$120,000
$80,000
$100,000
51.
Express Travel decides to price delivery service according to the results of a recent
activity-based costing (ABC) study. The study indicates Express Travel should charge $16
per order, 1% of the order's value for general delivery costs, $2.50 per item, and $45 for
delivery.
A year later, Express Travel collected the following information for three of its customers:
Cost driver
Customer
A
Customer
B
Customer
C
Number of
orders
18
8
12
Number of
deliveries
10
10
24
Number of
items
2,000
4,000
12,000
Order value
$120,000
$80,000
$100,000
52.
