7. The controller of Sensor Co., after taking Managerial Accounting, has decided to implement an ABC system in the assembly department. She identifies the following three cost pools and cost drivers: What is the allocation rate for the setup of machines? 50 2,000 10,000 100 10. Accounting firm XYZ provides audit, tax, and general accounting services. It estimates it will have 773 auditing, 500 taxation, and 1,000 other service engagements. The company uses an ABC system with the following three cost pools and cost drivers to allocate its indirect costs: How much total overhead cost will be allocated to audit services? 304,000 322,500 146,500 386,500 1. Accounting firm XYZ provides audit, tax, and general accounting services. It estimates it will have 773 auditing, 500 taxation, and 1,000 other service engagements. The company uses an ABC system with the following three cost pools and cost drivers to allocate its indirect costs: What is the overhead cost per engagement for audit services? $417.21 $500.00 $393.27 $189.52 Shown below is the flow of costs through financial statements, with the flow through the inventory account broken down a bit further. In July, the beginning balances of raw materials, work-in-process, and finished goods are all 0 , and the ending balances of RM, WIP and FG are all $10,000. Which of the following statements is correct? If $75,000 of inventory is completed and moved to finished goods during the month, then product costs are $65,000 If $75,000 of finished goods are sold, then $65,000 of inventory is completed and moved to finished goods during the month If $30,000 of raw materials is purchased during the month, then direct material is $20,000 If product costs are $75,000, then $65,000 of finished goods are sold In June, Company A incurs the following costs: Direct Material: $40,000 Direct Labor: $25,000 Manufacturing Overhead: $50,000 Non-manufacturing Costs: $45,000 How much is the increase in inventory during the month? (Assuming sales of inventory are not considered) 3. T-Shirt Co. makes two products: A and B. In the cutting department, budgeted information is as follows: Budgeted manufacturing overhead: $400,000 Budgeted machine hours: 80,000 Budgeted units produced: 50,000 The company allocates overhead based on machine hours. The actual number of machine hours spent on product A is 50,000 and 40,000 units of product A are produced. How much is the manufacturing overhead of product A in the cutting department? 150,000 320,000 570,000 250,000 6. Sensor Co. makes two products: A and B. Each product goes through the assembly department and the testing department. Budgeted information is as follows: The company allocates overhead incurred in the assembly department based on direct labor hours and allocates overhead in the testing department based on machine hours. How much manufacturing overhead is allocated to product A? 50,000100,00040,00060,000 9. The controller of Sensor Co. has also decided to implement an ABC system in the testing department. She identifies the following three cost pools and cost drivers: What is the cost of quality control for product B? 18,00030,0008,4008,000 Incorrect Incorrect. If you chose this option, you probably calculated the cost of quality control for product A. You may review by returning to the "Activity-Based Costing" video. 8. The controller of Sensor Co., implementing the ABC system in the assembly department, identifies the following three cost pools and cost drivers: What is the cost of machine setups for product A ? 6,000 10,000 7,500 4,000 Incorrect Incorrect. If you chose this option, you probably calculated the cost of receiving and handling of materials. You may review by returning to the "Activity-Based Costing" video. 5. Elevator Co. makes two product models, A and B, and provides both installation and inspection services for its customers. Budgeted information is as follows: The company uses a departmental method to allocate overhead in each of the two cost pools - installation and inspection. How much overhead is allocated to product A if the company uses direct labor hours as the allocation base? 140,000 290,000 300,000 220,000