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67.
Which one of the following accounts is not used in an activity-based costing (ABC)
system?
68.
Which of the following would be a reasonable basis for assigning the materials handling
costs to the units produced in an activity-based costing (ABC) system?
69.
70.
Which of the following would be the most appropriate activity and cost drivers pairing for a
Purchasing Department?
71.
72.
9-46
73.
Flawless Cosmetic Company manufactures and distributes several different products. The
company currently uses a plantwide allocation method for allocating overhead at a rate of
$7 per direct labor hour. Loren is the department manager of the Makeup Department
which produces Products - Concealer (C) and Glow Cream (GC). Jennifer is the
department manager of the Hair Care Department which manufactures Product -
Shampoo (S). The product costs (per case of 24 bottles) and other information are as
follows:
Products
C
GC
S
Direct materials
$100.00
$72.00
$48.00
Direct labor
42.00
31.50
12.00
Overhead
28.00
21.00
14.00
$170.00
$124.50
$74.00
Machine hours
4
2
3
Number of cases (per
year)
300
500
600
Based on this information, if Flawless changes its allocation basis to machine hours, what
is the overhead rate per machine hour?
74.
Flawless Cosmetic Company manufactures and distributes several different products. The
company currently uses a plantwide allocation method for allocating overhead at a rate of
9-47
$7 per direct labor hour. Loren is the department manager of the Makeup Department
which produces Products - Concealer (C) and Glow Cream (GC). Jennifer is the
department manager of the Hair Care Department which manufactures Product -
Shampoo (S). The product costs (per case of 24 bottles) and other information are as
follows:
Products
C
GC
S
Direct materials
$100.00
$72.00
$48.00
Direct labor
42.00
31.50
12.00
Overhead
28.00
21.00
14.00
$170.00
$124.50
$74.00
Machine hours
4
2
3
Number of cases (per
year)
300
500
600
75.
Flawless Cosmetic Company manufactures and distributes several different products. The
company currently uses a plantwide allocation method for allocating overhead at a rate of
$7 per direct labor hour. Loren is the department manager of the Makeup Department
which produces Products - Concealer (C) and Glow Cream (GC). Jennifer is the
department manager of the Hair Care Department which manufactures Product -
Shampoo (S). The product costs (per case of 24 bottles) and other information are as
follows:
Products
C
GC
S
Direct materials
$100.00
$72.00
$48.00
Direct labor
42.00
31.50
12.00
Overhead
28.00
21.00
14.00
$170.00
$124.50
$74.00
Machine hours
4
2
3
Number of cases (per
year)
300
500
600
76.
Banc Corp. Trust is considering either a bankwide overhead rate or department overhead
rates to allocate $396,000 of indirect costs. The bankwide rate could be based on either
direct labor hours (DLH) or the number of loans processed. The departmental rates would
be based on direct labor hours for Consumer Loans and a dual rate based on direct labor
hours and the number of loans processed for Commercial Loans. The following
information was gathered for the upcoming period:
Department
DLH
Loans
Processed
Direct
Costs
Consumer
14,000
700
$280,000
Commercial
8,000
300
$180,000
If Banc Corp. Trust uses a bankwide rate based on direct labor hours, what would be the
indirect costs allocated to the Consumer Department?
77.
Banc Corp. Trust is considering either a bankwide overhead rate or department overhead
rates to allocate $396,000 of indirect costs. The bankwide rate could be based on either
direct labor hours (DLH) or the number of loans processed. The departmental rates would
be based on direct labor hours for Consumer Loans and a dual rate based on direct labor
hours and the number of loans processed for Commercial Loans. The following
information was gathered for the upcoming period:
Department
DLH
Loans
Processed
Direct
Costs
Consumer
14,000
700
$280,000
Commercial
8,000
300
$180,000
If Banc Corp. Trust uses a bankwide rate based on direct labor hours, what would be the
indirect costs allocated to the Commercial Department?
78.
Banc Corp. Trust is considering either a bankwide overhead rate or department overhead
rates to allocate $396,000 of indirect costs. The bankwide rate could be based on either
direct labor hours (DLH) or the number of loans processed. The departmental rates would
be based on direct labor hours for Consumer Loans and a dual rate based on direct labor
hours and the number of loans processed for Commercial Loans. The following
information was gathered for the upcoming period:
Department
DLH
Loans
Processed
Direct
Costs
Consumer
14,000
700
$280,000
Commercial
8,000
300
$180,000
If Banc Corp. Trust uses a bankwide rate based on the number of loans processed, what
would be the total costs for the Commercial Department?
79.
Banc Corp. Trust is considering either a bankwide overhead rate or department overhead
rates to allocate $396,000 of indirect costs. The bankwide rate could be based on either
direct labor hours (DLH) or the number of loans processed. The departmental rates would
be based on direct labor hours for Consumer Loans and a dual rate based on direct labor
hours and the number of loans processed for Commercial Loans. The following
information was gathered for the upcoming period:
Department
DLH
Loans
Processed
Direct
Costs
Consumer
14,000
700
$280,000
Commercial
8,000
300
$180,000
If Banc Corp. Trust uses a bankwide rate based on the number of loans processed, what
would be the total costs for the Consumer Department?
80.
Banc Corp. Trust is considering either a bankwide overhead rate or department overhead
rates to allocate $396,000 of indirect costs. The bankwide rate could be based on either
direct labor hours (DLH) or the number of loans processed. The departmental rates would
be based on direct labor hours for Consumer Loans and a dual rate based on direct labor
hours and the number of loans processed for Commercial Loans. The following
information was gathered for the upcoming period:
Department
DLH
Loans
Processed
Direct
Costs
Consumer
14,000
700
$280,000
Commercial
8,000
300
$180,000
81.
Banc Corp. Trust is considering either a bankwide overhead rate or department overhead
rates to allocate $396,000 of indirect costs. The bankwide rate could be based on either
direct labor hours (DLH) or the number of loans processed. The departmental rates would
be based on direct labor hours for Consumer Loans and a dual rate based on direct labor
hours and the number of loans processed for Commercial Loans. The following
information was gathered for the upcoming period:
Department
DLH
Loans
Processed
Direct
Costs
Consumer
14,000
700
$280,000
Commercial
8,000
300
$180,000
Banc Corp. Trust estimates that it costs $500 to analyze and close a commercial loan.
This amount has been included in the $396,000 of indirect costs. How much of the
$396,000 indirect costs should be allocated to the Consumer Department?
82.
Banc Corp. Trust is considering either a bankwide overhead rate or department overhead
rates to allocate $396,000 of indirect costs. The bankwide rate could be based on either
direct labor hours (DLH) or the number of loans processed. The departmental rates would
be based on direct labor hours for Consumer Loans and a dual rate based on direct labor
hours and the number of loans processed for Commercial Loans. The following
information was gathered for the upcoming period:
Department
DLH
Loans
Processed
Direct
Costs
Consumer
14,000
700
$280,000
Commercial
8,000
300
$180,000
Banc Corp. Trust estimates that it costs $400 to analyze and close a commercial loan.
What is the overhead rate if Banc Corp. Trust allocates the remaining indirect costs using
direct labor hours?
9-56
83.
Vanguard Corporation has provided the following data from its activity-based costing
system:
Activity Cost
Pool
Total
Cost
Total Activity
Assembly
$942,480
66,000
machine-
hours
Processing
orders
$85,050
1,800
orders
Inspection
$126,854
1,820
inspection-
hours
9-57
84.
Pinnocle Corporation has provided the following data from its activity-based costing
system:
Activity Cost
Pool
Total
Cost
Total Activity
9-58
Assembly
$1,114,920
57,000
machine-
hours
Processing
orders
$47,016
1,800
orders
Inspection
$107,328
1,560
inspection-
hours
9-60
85.
Donnati Corporation has provided the following data from its activity-based costing
system:
Activity Cost
Pool
Total
Cost
Total Activity
Assembly
$383,180
23,000
machine-
hours
Processing
orders
$50,798
1,100
orders
Inspection
$106,110
1,620
inspection-
hours
Data concerning one of the company's products, Product A43V, appear below:
Selling price per unit
$124.60
Direct materials cost per unit
$22.08
Direct labor cost per unit
$45.77
Annual unit production and sales
210
Annual machine-hours
320
Annual orders
80
Annual inspection-hours
10
According to the activity-based costing system, the product margin for product A43V is:
