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Barnes Boards manufactures two types of skateboards: A standard board and a long board. Currently, Barnes Boards uses a traditional cost accounting system where

 

Barnes Boards manufactures two types of skateboards: A standard board and a long board. Currently, Barnes Boards uses a traditional cost accounting system where direct labor hours are used to assign overhead. However, Barnes Boards is considering an activity based costing system that breaks overhead into 3 indirect cost pools: (1) setup cost, (2) machining cost, and (3) other overhead. Costs from these three pools will be assigned to products on the basis of setup hours, machine hours, and direct labor hours, respectively. Activity levels for Barnes Boards is as follows: Setup hours Machine hours Direct labor hours Standard boards Long boards 2,250 18,000 6,000 1,500 12,000 4,000 Compared to the traditional system, an activity based costing system would assign O A. less cost to both types of skateboards. OB. more cost to the long board and less cost to the standard board. OC. more cost to both types of skateboards O D. the same amount of cost to both types of skateboards O E. more cost to the standard skateboard and less cost to the long board. QUESTION Which of the following activity based costing techniques uses the Pareto principle (i.e., the 80/20 rule) to reduce the complexity of traditional activity based costing? O A. Time driven ABC O B. Duration based costing OC. Approximately relevant ABC OD. Equally accurate reduced ABC QUESTION Which of the following businesses are most likely to use a job costing system? OA skateboard manufacturer O A coffee roaster O A restaurant O A home builder O A drug manufacturer

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The detailed answer for the above question is provided below Answer 1 B more cost to the long board and less cost to the standard board Activitybased costing ABC allows businesses to identify and assi... blur-text-image

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