LMN, Inc. uses a 5,400 square foot factory space that it rents for $3,300 a month for all its manufacturing activities. Linden has decided to switch to an activity-based costing system, and has identified its activities as follows: Preparation and Setup, Machining, Finishing, and Quality Control. 2,900 square feet of the factory are used for machining, while 1,000 square feet (each) are used for Preparation and Setup and Quality Control. Finishing uses 500 square feet. When assigning indirect costs to each activity, how much factory rent should be assigned to the Preparation and Setup cost pool? Multiple Choice $1,100 $2,200 $275 $611 If a company uses a predetermined overhead rate, which of the following statements is correct? Multiple Choice Manufacturing Overhead will be debited for estimated overhead. Manufacturing Overhead will be credited for estimated overhead. Manufacturing Overhead will be debited for actual overhead. Manufacturing Overhead will be credited for actual overhead. Hahn, Inc. produces two different products (Product A and Product X) using two different activities: Machining, which uses machine hours as an activity driver, and Inspection, which uses number of batches as an activity driver. The activity rate for Machining is $130 per machine hour, and the activity rate for Inspection is $580 per batch. The activity drivers are used as follows: Machine hours Number of batches Product A Product X Total 1,900 3,100 5,000 67 49 18 What is the amount of Inspection cost assigned to Product X? Multiple Choice $38,860 $28,420 $247,000 $10,440 Karnes, Inc. produces two different products (Standard and Luxury) using two different activities: Machining, which uses machine hours as an activity driver, and Inspection, which uses number of batches as an activity driver. The cost of Machining is $176,000, while the cost of Inspection is $44,000. Standard uses 25% of total machine hours and 60% of total batches. What is the total activity cost assigned to Standard? Multiple Choice $70,400 $26.400 $149,600 $44,000 Thich of the following is the best example of a unit-level activity? Multiple Choice Human resources Research and development Painting a final product Product testing Which of the following is not true of activity cost drivers? Multiple Choice They are measures of the underlying activity that occurs in each activity cost pool. They ideally have a cause and effect relationship with underlying activities. They are strictly volume-based allocation measures. They are used in Stage 2 cost allocations