Chapters 17, 22 Test Which of the following a) A com 1. A. companies would be best served by a plant-wide overhead rate? pany that manufactures many different products and whose operations are an equal mix of labor and mechanized work A company that manufactures many different products and whose operations are highly mechanized. company that manufactures few products and whose operations are labor intensive. c) company whose products use overhead resources in very different ways A company whose products differ in batch size and complexity and consume different amounts of overhead resources d) A e) The following is taken from Ames Company's internal records of its factory with two operating departments. The cost driver for indirect labor is direct labor costs, and the cost driver for the remaining items is number of hours of machine use. Compute the total amount of overhead allocated to Dept.2 using activity-based costing 2. Machine Use Hours DL Operating Dept.1 Operating Dept. 2 Totals $ 21,800 2,300 15,600 1500 $ 37,400 3,800 Rent and utilities Indirect labor Deprec.-Equipment S 12,900 11,220 8,000 $ 32,120 Total Factory OH $12,930 $18,720 $13,400 $19,190 $19,440 b) d) 3. Which of the following is not one of the control levels associated with activity-based costing a) Facility level activities are performed to sustain facility capacity as a whole and are not caused by any specific product. Batch level activities are performed only on each group of activities b) d) Product level actites are performed on each product line and are not affect the numbers of units or batches are performed on each product line and are not affected by either evel activities are performed on each product unit. d) e) All of the above are control levels