127) What is the product margin for Product W1 under activity-based costing?
A) $7,996
B) $23,356
C) -$12,800
D) $35,200
122
Scheuer Corporation uses activity-based costing to compute product margins. In the first stage,
the activity-based costing system allocates two overhead accounts—equipment expense and
indirect labor—to three activity cost pools—Processing, Supervising, and Other—based on
resource consumption. Data to perform these allocations appear below:
Overhead costs:
Equipment expense
$
55,000
Indirect labor
$7,000
Distribution of Resource Consumption Across Activity Cost Pools:
Activity Cost Pools
Processing
Supervising
Other
Equipment expense
0.10
0.70
0.20
Indirect labor
0.50
0.10
0.40
Finally, sales and direct cost data are combined with Processing and Supervising costs to
determine product margins.
Activity:
MHs (Machining)
Orders (Order Filling)
Product Q!
1,000
700
Product S6
19,000
1,300
Total
20,000
2,000
Finally, sales and direct cost data are combined with Processing and Supervising costs to
determine product margins.
Sales and Direct Cost Data:
Product Q1
Product S6
Sales (total)
$
134,600
$
186,300
Direct materials (total)
$
76,000
$
64,800
Direct labor (total)
$
40,800
$
78,400
128) How much overhead cost is allocated to the Processing activity cost pool under activity-
based costing in the first stage of allocation?
A) $3,500
B) $5,500
C) $9,000
D) $13,800
129) The activity rate for the Processing activity cost pool under activity-based costing is closest
to:
A) $3.10 per MH
B) $0.28 per MH
C) $5.00 per MH
D) $0.45 per MH
130) What is the overhead cost assigned to Product Q1 under activity-based costing?
A) $14,170
B) $450
C) $31,000
D) $13,720
131) What is the product margin for Product Q1 under activity-based costing?
A) -$13,200
B) $3,630
C) $17,800
D) $17,350
Provenzano Corporation manufactures two products: Product B56Z and Product D32N. 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 B56Z and D32N.
Activity Cost Pool
Activity Measure
Total Cost
Total Activity
Machining
Machine-hours
$
330,000
15,000
MHs
Machine setups
Number of setups
$
50,000
100
setups
Product design
Number of products
$
88,000
2
products
Order size
Direct labor-hours
280,000
10,000
DLHs
Activity Measure
Product B56Z
Product
D32N
Machine-hours
6,000
9,000
Number of setups
80
20
Number of products
1
1
Direct labor-hours
6,000
4,000
132) What is the activity rate for the Machining activity cost pool?
A) $55.00 per MH
B) $22.00 per MH
C) $36.67 per MH
D) $74.80 per MH
133) What is the activity rate for the Machine Setups activity cost pool?
A) $625.00 per setup
B) $500.00 per setup
C) $3.33 per setup
D) $2,500.00 per setup
134) What is the activity rate for the Product Design activity cost pool?
A) $9 per product
B) $88,000 per product
C) $44,000 per product
D) $880 per product
135) What is the activity rate for the Order size activity cost pool?
A) $18.67 per DLH
B) $46.67 per DLH
C) $70.00 per DLH
D) $28.00 per DLH
136) Reck Corporation uses activity-based costing to assign overhead costs to products.
Overhead costs have already been allocated to the company’s three activity cost pools as follows:
Machining, $11,700; Order Filling, $17,800; and Other, $13,500. Machining costs are assigned
to products using machine-hours (MHs) and Order Filling costs are assigned to products using
the number of orders. The costs in the Other activity cost pool are not assigned to products.
Activity data appear below:
MHs (Machining)
Orders (Order Filling)
Product P7
6,900
200
Product V8
3,100
800
The activity rate for the Order Filling activity cost pool under activity-based costing is closest to:
A) $43.00 per order
B) $7.50 per order
C) $6.00 per order
D) $17.80 per order
137) Reck Corporation uses activity-based costing to assign overhead costs to products.
Overhead costs have already been allocated to the company’s three activity cost pools as follows:
Machining, $11,700; Order Filling, $17,800; and Other, $13,500. Machining costs are assigned
to products using machine-hours (MHs) and Order Filling costs are assigned to products using
the number of orders. The costs in the Other activity cost pool are not assigned to products.
Activity data appear below:
MHs (Machining)
Orders (Order Filling)
Product P7
6,900
200
Product V8
3,100
800
What is the overhead cost assigned to Product V8 under activity-based costing?
A) $14,240
B) $3,627
C) $17,867
D) $21,500
Machining $1.17 per MH × 3,100 MHs
Order Filling $17.80 per order × 800 orders
Total
138) Wedd Corporation uses activity-based costing to assign overhead costs to products.
Overhead costs have already been allocated to the company’s three activity cost pools as follows:
Processing, $27,200; Supervising, $9,300; and Other, $9,500. Processing costs are assigned to
products using machine-hours (MHs) and Supervising costs are assigned to products using the
number of batches. The costs in the Other activity cost pool are not assigned to products.
Activity data appear below:
MHs (Processing)
Batches (Supervising)
Product O6
9,200
500
Product D7
10,800
1,500
Total
20,000
2,000
The activity rate for the Processing activity cost pool under activity-based costing is closest to:
A) $2.30 per MH
B) $1.35 per MH
C) $1.36 per MH
D) $0.40 per MH
139) Wedd Corporation uses activity-based costing to assign overhead costs to products.
Overhead costs have already been allocated to the company’s three activity cost pools as follows:
Processing, $27,200; Supervising, $9,300; and Other, $9,500. Processing costs are assigned to
products using machine-hours (MHs) and Supervising costs are assigned to products using the
number of batches. The costs in the Other activity cost pool are not assigned to products.
Activity data appear below:
MHs (Processing)
Batches (Supervising)
Product O6
9,200
500
Product D7
10,800
1,500
Total
20,000
2,000
What is the overhead cost assigned to Product O6 under activity-based costing?
A) $2,325
B) $23,000
C) $14,837
D) $12,512
Processing $1.36 per MH × 9,200 MHs
Supervising $4.65 per batch × 500 batches
Total
140) The controller of Hendershot Corporation estimates the amount of materials handling
overhead cost that should be allocated to the company’s two products using the data that are
given below:
Wall
Mirrors
Specialty
Windows
Total expected units produced
6,000
3,000
Total expected material moves
500
100
Expected direct labor-hours per unit
6
9
The total materials handling cost for the year is expected to be $6,123.60.
If the materials handling cost is allocated on the basis of direct labor-hours, the total materials
handling cost allocated to the wall mirrors is closest to: (Do not round your intermediate
calculations.)
A) $2,449
B) $4,144
C) $3,499
D) $3,062
Total expected units produced (a)
Expected direct labor-hours per unit (b)
Total direct labor-hours (a) × (b)
141) The controller of Hendershot Corporation estimates the amount of materials handling
overhead cost that should be allocated to the company’s two products using the data that are
given below:
Wall
Mirrors
Specialty
Windows
Total expected units produced
6,000
3,000
Total expected material moves
500
100
Expected direct labor-hours per unit
6
9
The total materials handling cost for the year is expected to be $6,123.60.
If the materials handling cost is allocated on the basis of material moves, the total materials
handling cost allocated to the specialty windows is closest to: (Do not round your intermediate
calculations.)
A) $1,021
B) $3,674
C) $3,062
D) $1,980
Total expected material moves
500
100
Angara Corporation uses activity-based costing to determine product costs for external financial
reports. The company has provided the following data concerning its activity-based costing
system:
Activity Cost Pool (and Activity Measure)
Total Cost
Machine related (machine-hours)
$
137,600
Batch setup (setups)
$
532,800
Order size (direct labor-hours)
$
105,300
Total Activity
Activity Cost Pools
Product X
Product Y
Total
Machine related
1,000
7,000
8,000
Batch setup
3,000
5,000
8,000
Order size
7,000
2,000
9,000
142) The activity rate for the batch setup activity cost pool is closest to:
A) $66.60
B) $106.60
C) $97.00
D) $177.60
143) The total amount of overhead cost allocated to Product X would be closest to:
A) $298,900
B) $533,000
C) $291,000
D) $387,850
144) Sorice Corporation uses activity-based costing to assign overhead costs to products.
Overhead costs have already been allocated to the company’s three activity cost pools as follows:
Processing, $20,200; Supervising, $11,000; and Other, $66,800. Processing costs are assigned to
products using machine-hours (MHs) and Supervising costs are assigned to products using the
number of batches. The costs in the Other activity cost pool are not assigned to products.
Activity data appear below:
MHs (Processing)
Batches (Supervising)
Product I9
4,800
200
Product W7
15,200
800
Total
20,000
1,000
The activity rate for the Supervising activity cost pool under activity-based costing is closest to:
A) $7.50 per batch
B) $6.00 per batch
C) $11.00 per batch
D) $98.00 per batch
145) Sorice Corporation uses activity-based costing to assign overhead costs to products.
Overhead costs have already been allocated to the company’s three activity cost pools as follows:
Processing, $20,200; Supervising, $11,000; and Other, $66,800. Processing costs are assigned to
products using machine-hours (MHs) and Supervising costs are assigned to products using the
number of batches. The costs in the Other activity cost pool are not assigned to products.
Activity data appear below:
MHs (Processing)
Batches (Supervising)
Product I9
4,800
200
Product W7
15,200
800
Total
20,000
1,000
What is the overhead cost assigned to Product W7 under activity-based costing?
A) $8,800
B) $15,352
C) $49,000
D) $24,152
Processing $1.01 per MH × 15,200 MHs
Supervising $11.00 per batch × 800 batches
Total
146) Dercole Corporation uses activity-based costing to assign overhead costs to products.
Overhead costs have already been allocated to the company’s three activity cost pools as follows:
Machining, $43,200; Order Filling, $13,900; and Other, $14,900. Machining costs are assigned
to products using machine-hours (MHs) and Order Filling costs are assigned to products using
the number of orders. The costs in the Other activity cost pool are not assigned to products.
Activity data appear below:
MHs (Machining)
Orders (Order Filling)
Product N8
7,300
600
Product Y4
2,700
1,400
The activity rate for the Machining activity cost pool under activity-based costing is closest to:
A) $7.20 per MH
B) $4.02 per MH
C) $5.00 per MH
D) $4.32 per MH
147) Dercole Corporation uses activity-based costing to assign overhead costs to products.
Overhead costs have already been allocated to the company’s three activity cost pools as follows:
Machining, $43,200; Order Filling, $13,900; and Other, $14,900. Machining costs are assigned
to products using machine-hours (MHs) and Order Filling costs are assigned to products using
the number of orders. The costs in the Other activity cost pool are not assigned to products.
Activity data appear below:
MHs (Machining)
Orders (Order Filling)
Product N8
7,300
600
Product Y4
2,700
1,400
What is the overhead cost assigned to Product N8 under activity-based costing?
A) $4,170
B) $31,536
C) $35,706
D) $36,000
Machining $4.32 per MH × 7,300 MHs
Order Filling $6.95 per order × 600 orders
Total
Abel Corporation uses activity-based costing. The company makes two products: Product A and
Product B. The annual production and sales of Product A is 200 units and of Product B is 400
units. There are three activity cost pools, with total cost and activity as follows:
Total Activity
Activity Cost Pools
Total Cost
Product A
Product B
Total
Activity 1
$16,660
600
100
700
Activity 2
$18,450
1,100
700
1,800
Activity 3
$9,731
60
160
220
148) The activity rate for Activity 2 is closest to:
A) $24.91
B) $26.36
C) $16.77
D) $10.25