Question
Beckley Corporation has provided the following data from its activity-based costing accounting system: Indirect factory wages $ 28,000 Factory equipment depreciation $ 205,000 Distribution of
Beckley Corporation has provided the following data from its activity-based costing accounting system:
Indirect factory wages | $ | 28,000 |
Factory equipment depreciation | $ | 205,000 |
Distribution of Resource Consumption across Activity Cost Pools:
Activity Cost Pools | Customer Orders | Product Processing | Other | Total | ||||
Indirect factory wages | 42 | % | 41 | % | 17 | % | 100 | % |
Factory equipment depreciation | 64 | % | 26 | % | 10 | % | 100 | % |
The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs that are not assigned to products.
Required:
a. Determine the total amount of indirect factory wages and factory equipment depreciation costs that would be allocated to the Product Processing activity cost pool.
b. Determine the total amount of indirect factory wages and factory equipment depreciation costs that would NOT be assigned to products
6. An activity-based costing system that is designed for internal decision-making will not conform to generally accepted accounting principles because:
a.under activity-based costing some manufacturing costs (i.e., the costs of idle capacity and organization-sustaining costs) will not be assigned to products.
b.under activity-based costing the sum of all product costs does not equal the total costs of the company.
c.activity-based costing has not been approved by the United Nations International Accounting Board.
d.activity-based costing results in less accurate costs than more traditional costing methods based on direct labor-hours or machine-hours.
7.Batch-level activities are performed each time a unit is produced.
a. true
b. False
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