| Yellow Industries decides to price delivery service according to the results of a recent activity-based costing (ABC) study. The study indicates Yellow should charge $16 per order, 10% of the order's value for general delivery costs, $9.25 per item, and $38 for delivery. A year later, Yellow collected the following information for two of its best customers: | Cost driver | Customer C | Customer D | | Number of order | 26 | 16 | | Number of deliveries | 18 | 18 | | Number of items | 2,800 | 4,800 | | Order value | $200,000 | $160,000 | | What are the total delivery costs charged to Customer D during the year? A) $60,656. B) $45,340. C) $61,084. D) $61,340. 3. | BC Enterprises' quality control report for August contains the following items. | | Gathering ,analysis, and reporting quality data | $11,000 | | Inspecting raw materials received from vendors | 12,000 | | Testing and inspecting finished products | 3,000 | | Visiting customer sites to test products | 14,000 | | Designing product to reduce production problems | 6,000 | | Repairing and/or replacing products under warranty | 16,000 | | Maintaining the equipment used to gather quality data | 17,000 | | Cost (net) of material wasted during production | 18,000 | | What would be the total of the prevention costs on the August quality control report for BC Enterprises? | A) $37,000. B) $15,000. C) $31,000. D) $46,000. 5. | BC Enterprises' quality control report for August contains the following items. | | Gathering ,analysis, and reporting quality data | $ 8,000 | | Inspecting raw materials received from vendors | 10,000 | | Testing and inspecting finished products | 11,000 | | Visiting customer sites to test products | 4,000 | | Designing product to reduce production problems | 9,000 | | Repairing and/or replacing products under warranty | 5,000 | | Maintaining the equipment used to gather quality data | 6,000 | | Cost (net) of material wasted during production | 7,000 | | What would be the total of the conformance costs on the August quality control report for BC Enterprises? | A) $33,000. B) $48,000. C) $40,000. D) $15,000. | 6. QC Enterprises quality control report for August contains the following items. | Liability costs associated with defective products | $ 3,000 | | Disposal costs of defective products failing inspection | 5,000 | | Disposal costs of raw materials failing inspection | 6,000 | | Quality training provided to workers | 7,000 | | Lost sales due to poor quality and defective products | 8,000 | | Advertising costs to offset perception of poor product quality | 9,000 | | Raw materials used to correct defects before product was sold | 10,000 | | Testing and inspecting a sample of finished goods | 11,000 | | What would be the total of the prevention costs on the August quality control report for QC Enterprises? A) $13,000. B) $22,000. C) $14,000. D) $21,000. 10. | Sullivan Inc. reports the following information about resources. At the beginning of the year, Sullivan estimated it would spend $182,000 for materials, $44,000 for purchasing, $37,000 for setups, and $38,000 for repairs. | | Cost Driver | | | Rate | Volume | | | | | | Resources used | | | | Materials | $12/lb | 18,450 lbs | | Purchasing | $252/purchase order | 162 purchase orders | | Setups | $550/setup | 82 setups | | Repairs | $38/job | 800 jobs | | | | | | Resources supplied | | | | Materials | $202,950 | | | Purchasing | 55,350 | | | Setups | 36,900 | | | Repairs | 33,000 | | | Compute unused resource capacity for repairs for Sullivan A) $11,350. B) $7,600. C) $2,600. D) $5,000. | | | | | |
