1. St. James, Inc., currently uses traditional costing procedures, applying $800,000 of overhead to products Beta and Zeta on the basis of direct labor hours. The company is considering a shift to activity-based costing and the creation of individual cost pools that will use direct labor hours (DLH), production setups (SU), and number of parts components (PC) as cost drivers. Data on the cost pools and respective driver volumes follow.? The overhead cost allocated to Zeta by using traditional costing procedures would be:

a. $240,000

b. $356,000

c $444,000

d. $560,000

e. some other amount.

2. Cartwright Graphics uses a special purpose paper on 80% of its jobs. The paper is purchased in 100-sheet packages at a cost of $100 per package. Management estimates that the cost of placing and receiving a typical order is $15, and the annual cost of carrying a package in inventory is $1.50. Cartwright uses 2,600 packages each year. Production is constant, and the lead time to receive an order is 1 week. The economic order quantity is approximately:

a. 203 packages

b 225 packages

c. 228 packages

d. 565 packages

e.631 packages.

3. During a recent accounting period, Marty's shipping department processed 26 orders. Each order typically takes four hours to complete; however, the average time increased to five hours because of various departmental inefficiencies. If shipping labor is paid $14 per hour, the company's non-value-added cost would be:

a. $0.

b. $56.

c. $364.

d. $1,456.

e. $1,820.

4. Burgoon uses an economic order quantity model and has determined an optimal order size of 500 units. Annual demand is 10,000 units, ordering costs are $50 per order, and holding costs are $4 per unit. The company's annual ordering and holding costs total:

a. $2,000.

B. $3,000

c. $21,000.

d. $41,000.

e.some other amount.

5. The following tasks are associated with an activity-based costing system: 1