cch). 1. Activity-based costing differs from a traditional costing system in all of the following aspects EXEPT: A) Direct materials, direct labor, and shipping costs are directly assigned to cost objects. B) Numerous overhead cost pools are used in ABC system. C) Most but not all manufacturing costs are assigned to products. D) Non-manufacturing as well as manufacturing costs may be assigned to products. 2. In activity-based costing, the activity rate for an activity cost pool is computed by dividing the total overhead cost in the activity cost pool by: A) the direct labor-hours required by the product. B) the machine-hours required by the product. C) the total activity for the activity cost pool. D) the total direct labor-hours for the activity cost pool. 3. The limitations of ABC include all the following EXCEPT: A) ABC does not conform to GAAP. B) Substantial resources required to implement and maintain. C) Desire to fully allocate all costs to products. D) Cross-functional teams should be created. 4. A Corporation has provided the following data from its activity-based costing accounting system: Activity Cost Pools Total Cost Total Activity Designing products ...... $1,526,916 8,436 product design hours Setting up batches......... $15.580 380 batch set-ups Assembling products.... $39,900 3,990 assembly hours The activity rate for the "designing products" activity cost pool is closest to: A) $124 per product design hour B) $181 per product design hour C) $55 per product design hour D) $1,526,916 per product design hour Page 1 of 3 ctivity-based costing its activity-based The following data have been provided by Leader Corporation from aunting sum: Factory supervision Indirect fetary labor 460,000 $ 220,000 Distribution of Resource Consumption across Activity Cost Pools: Activity Cost Pools Assembly Setting Up Other Total Factopupervision 10% 100% Indirect factory labor 60 20% 20% 100% 35% 55% How much factory supervision and indirect factory labor cost would be allocated in the first stage allocation to the other activity cost pool? A) $220,000 B) 590,000 C) SO D) $460,000 Question 2: (1.marks) Data concerning three of XYZ Corporation's activity cost pools appear below: Activity Cost Pool Assembling products Designing products Setting up batches Total Cost $ 150.300 $ 1,177,535 $ 14,400 Total Activity 8,350 assembly hours 7,597 product design hours 600batch set-up Required: Compute the activity rates for each of the three cost pools. Question 3: (2 marks) Best Corporation uses the following activity rates from its activity-based costing to assign overhead costs to products Activity Cost Pool Assembling products Processing Customer orders Setting up batches $ Activity Rate 8.90 per assembly hour 31.23 per customer order 43.72 per batch Duta for one of the company's products follow: Page 2 of 3 Product Uw Number of assembly hours Number of customer orders Number of batches Required: Using the activity-based costing system, compute the overhead cost that would be assigned to Product U9W Question (1.5 marks) Beta Corporation manufactures two products Product A and Product B. The company uses a plantwide overhead rate based on direct labor-hours. It is considering implementing an ABC system that allocates all of its manufacturing overhead to four cost pools. The following additional information is available for the company as a whole and for Products A and B Activity Cost Pool Machining Machine setups Product design General factory Activity Measure Machine-bours Number of setups Number of products Direct labor-hours Total Cost $95.000 $80.000 $96,000 $310,000 Total Activity 5,000 MHS 200 setups 2 products 10,000 DLHS Activity Measure Machine-hours Number of setups Number of products Direct labor hours Product A 2.000 150 Product B 3,000 3,000 7,000 Required: a. What is the company's plantwide overhead rate? b. Using the plantwide overhead ratie, how much manufacturing overhead cost would be allocated to Product B End of Owl2