41
61) Dobles Corporation has provided the following data from its activity-based costing system:
Activity Cost Pool
Total Cost
Total Activity
Assembly
$
228,060
18,000
machine-hours
Processing orders
$
34,068
1,200
orders
Inspection
$
125,560
1,720
inspection hours
The company makes 420 units of product D28K a year, requiring a total of 460 machine-hours,
80 orders, and 10 inspection-hours per year. The product’s direct materials cost is $48.96 per unit
and its direct labor cost is $25.36 per unit.
According to the activity-based costing system, the average cost of product D28K is closest to:
A) $95.34 per unit
B) $93.60 per unit
C) $74.32 per unit
D) $89.93 per unit
62) Kulka Corporation manufactures two products: Product F82D and Product T05P. The
company uses a plantwide overhead rate based on direct labor-hours. It is considering
implementing an activity-based costing (ABC) system that allocates its manufacturing overhead
to four cost pools. The following additional information is available for the company as a whole
and for Products F82D and T05P.
Activity Cost Pool
Activity Measure
Total Cost
Total Activity
Machining
Machine-hours
$180,000
9,000 MHs
Machine setups
Number of setups
$125,000
250 set-ups
Product design
Number of products
$125,000
2 products
Order size
Direct labor-hours
$260,000
10,000 DLHs
Activity Measure
Product F82D
Product T05P
Machine-hours
5,000
4,000
Number of setups
160
90
Number of products
1
1
Direct labor-hours
4,000
6,000
Using the ABC system, how much total manufacturing overhead cost would be assigned to
Product T05P?
A) $156,000
B) $303,000
C) $147,000
D) $304,500
63) Weissman Corporation manufactures two products: Product E16S and Product P17K. The
company is considering implementing an activity-based costing (ABC) system that allocates its
manufacturing overhead to four cost pools. The following additional information is available for
the company as a whole and for Products E16S and P17K.
Activity Cost Pool
Activity Measure
Total Cost
Total Activity
Machining
Machine-hours
$
220,000
11,000
MHs
Machine setups
Number of setups
$
240,000
400
setups
Product design
Number of products
$
74,000
2
products
Order size
Direct labor-hours
$
270,000
10,000
DHLs
Activity Measure
Product E16S
Product P17K
Machine-hours
7,000
4,000
Number of setups
270
130
Number of products
1
1
Direct labor-hours
3,000
7,000
Using the ABC system, the percentage of the total overhead cost that is assigned to Product
E16S is closest to:
A) 52.24%
B) 42.16%
C) 10.07%
D) 50.00%
64) Fletes Corporation manufactures two products: Product O95C and Product M31N. The
company uses a plantwide overhead rate based on direct labor-hours. It is considering
implementing an activity-based costing (ABC) system that allocates its manufacturing overhead
to four cost pools. The following additional information is available for the company as a whole
and for Products O95C and M31N.
Activity Cost Pool
Activity Measure
Total Cost
Total Activity
Machining
Machine-hours
$
207,000
9,000
MHs
Machine setups
Number of setups
$
140,000
350
setups
Product design
Number of products
$
98,000
2
products
Order size
Direct labor-hours
$
340,000
10,000
DLH s
Activity Measure
Product O95C
Product M31N
Machine-hours
6,000
3,000
Number of setups
190
160
Number of products
1
1
Direct labor-hours
4,000
6,000
Using the ABC system, how much total manufacturing overhead cost would be assigned to
Product O95C?
A) $392,500
B) $136,000
C) $399,000
D) $263,000
65) Annika Company uses activity-based costing. The company has two products: A and B. The
annual production and sales of Product A is 4,000 units and of Product B is 1,000 units. There
are three activity cost pools, with total cost and activity as follows:
Total Activity
Activity Cost Pool
Total Cost
Product A
Product B
Total
Activity 1
$
18,000
700
300
1,000
Activity 2
$
24,000
500
100
600
Activity 3
$
60,000
800
400
1,200
The activity-based costing cost per unit of Product A is closest to:
A) $20.40
B) $10.00
C) $18.15
D) $17.00
Rate
Activity 1
$
$
Activity 2
$
$
Activity 3
$
$
Activity 1
Activity 2
Activity 3
Total cost
66) Cambra Corporation manufactures two products: Product N70E and Product F54Y. The
company is considering implementing an activity-based costing (ABC) system that allocates its
manufacturing overhead to four cost pools. The following additional information is available for
the company as a whole and for Products N70E and F54Y.
Activity Cost Pool
Activity Measure
Total Cost
Total Activity
Machining
Machine-hours
$
171,000
9,000
MHs
Machine setups
Number of products
$
150,000
250
setups
Product design
Number of setups
$
78,000
2
products
Order size
Direct labor-hours
$
330,000
10,000
DLHs
Activity Measure
Product N70E
Product F54Y
Machine-hours
5,000
4,000
Number of setups
150
100
Number of products
1
1
Direct labor-hours
4,000
6,000
Using the ABC system, the percentage of the total overhead cost that is assigned to Product
F54Y is closest to:
A) 51.17%
B) 27.16%
C) 50.00%
D) 24.01%
53
67) Feldpausch Corporation has provided the following data from its activity-based costing
system:
Activity Cost Pool
Total Cost
Total Activity
Assembly
$
1,137,360
84,000
machine-hours
Processing orders
$
28,479
1,100
orders
Inspection
$
97,155
1,270
inspection-hours
The company makes 470 units of product W26B a year, requiring a total of 660 machine-hours,
50 orders, and 40 inspection-hours per year. The product’s direct materials cost is $40.30 per unit
and its direct labor cost is $42.22 per unit. The product sells for $118.00 per unit.
According to the activity-based costing system, the product margin for product W26B is:
A) $6,444.70
B) $4,679.20
C) $3,384.70
D) $16,675.60
68) Houseal Corporation has provided the following data from its activity-based costing system:
Activity Cost Pool
Total Cost
Total Activity
Assembly
$
613,250
55,000
machine-hours
Processing orders
$
46,170
1,500
orders
Inspection
$
146,110
1,900
inspection-hours
Data concerning one of the company’s products, Product W58B, appear below:
Selling price per unit
$
113.70
Direct materials cost per unit
$
48.14
Direct labor cost per unit
$
11.62
Annual unit production and sales
360
Annual machine-hours
1,040
Annual orders
60
Annual inspection-hours
30
According to the activity-based costing system, the product margin for product W58B is:
A) $3,668.60
B) $5,975.60
C) $5,515.40
D) $19,418.40
69) Pilkerton Enterprises makes a variety of products that it sells to other businesses. The
company’s activity-based costing system has four activity cost pools for assigning costs to
products and customers. Details concerning that ABC system are listed below:
Activity Cost Pool
Activity Measure
Activity Rate
Supporting assembly
Direct labor-hours (DLHs)
$
2.50
per DLH
Processing batches
Number of batches
$
101.80
per batch
Processing order
Number of orders
$
72.05
per order
Serving customers
Number of customers
$
2,533.00
per customer
The cost of serving customers, $2,533.00 per customer, is the cost of serving a customer for one
year.
Christoforou Corporation buys only one of the company’s products which Pilkerton Enterprises
sells for $21.65 per unit. Last year Christoforou Corporation ordered a total of 1,300 units of this
product in 3 orders. To fill the orders, 10 batches were required. The direct materials cost is
$6.60 per unit and the direct labor cost is $2.75 per unit. Each unit requires 0.15 DLHs.
According to the ABC system, the total overhead cost for this customer this past year was closest
to:
A) $4,254.65
B) $1,721.65
C) $12,155.00
D) $16,409.65
Overhead Costs:
unit × 1,300 units)
Processing batches ($101.80 per batch × 10 batches)
1,018.00
Processing orders ($72.05 per order × 3 orders)
customer)
2,533.00
Total overhead cost
4,254.65
70) Gould Corporation uses the following activity rates from its activity-based costing to assign
overhead costs to products:
Activity Rate
Setting up batches
$59.06
per batch
Processing customer orders
$72.66
per customer order
Assembling products
$3.75
per assembly hour
Data concerning two products appear below:
Product
K91B
Product
F65O
Number of batches
84
50
Number of customer orders
32
43
Number of assembly hours
483
890
How much overhead cost would be assigned to Product K91B using the activity-based costing
system?
A) $9,097.41
B) $81,146.53
C) $4,961.04
D) $135.47
Activity Rate
Setting up batches
per batch
4,961.04
orders
2,325.12
Assembling products
hours
1,811.25
Total overhead cost
9,097.41
71) Bertsche Enterprises makes a variety of products that it sells to other businesses. The
company’s activity-based costing system has four activity cost pools for assigning costs to
products and customers. Details concerning that ABC system are listed below:
Activity Cost Pool
Activity Measure
Activity Rate
Supporting assembly
Direct labor-hours (DLHs)
$
3.20
per DLH
Processing batches
Number of batches
$
103.80
per batch
Processing orders
Number of orders
$
98.65
per order
Serving customers
Number of customers
$
1,488.00
per customer
The cost of serving customers, $1,488.00 per customer, is the cost of serving a customer for one
year.
Yousif Corporation buys only one of the company’s products which Bertsche Enterprises sells
for $25.00 per unit. Last year Yousif Corporation ordered a total of 900 units of this product in 3
orders. To fill the orders, 11 batches were required. The direct materials cost is $8.20 per unit
and the direct labor cost is $7.65 per unit. Each unit requires 0.40 DLHs.
According to the ABC system, the total cost of the activity “Supporting assembly” for this
customer this past year was closest to:
A) $2,880.00
B) $1.28
C) $1,152.00
D) $360.00
72) Digerolamo Enterprises makes a variety of products that it sells to other businesses. The
company’s activity-based costing system has four activity cost pools for assigning costs to
products and customers. Details concerning that ABC system are listed below:
Activity Cost Pool
Activity Measure
Activity Rate
Supporting assembly
Direct labor-hours (DLHs)
$
3.55
per DLH
Processing batches
Number of batches
$
189.35
per batch
Processing orders
Number of orders
$
59.35
per order
Serving customers
Number of customers
$
1,159.00
per customer
The cost of serving customers, $1,159.00 per customer, is the cost of serving a customer for one
year.
Carlacci Corporation buys only one of the company’s products which Digerolamo Enterprises
sells for $18.85 per unit. Last year Carlacci Corporation ordered a total of 1,500 units of this
product in 4 orders. To fill the orders, 9 batches were required. The direct materials cost is $8.15
per unit and the direct labor cost is $2.60 per unit. Each unit requires 0.15 DLHs.
According to the ABC system, the total cost of the activity “Processing batches” for this
customer this past year was closest to:
A) $59.35
B) $1,704.15
C) $1,763.50
D) $189.35