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If a company used activity based costing, and each day produces different types of products requiring different machine set-ups, random inspecting of production would most likely be classified as: Product-level activity Facility-level activity Unit-level activity Batch-level activity Which of the following condition(s) favours not using departmental overhead rates, but instead a plantwide overhead rate? Different jobs or products use the departments to a different extent. Departments use a dissimilar amount of indirect costs. Manufacturing overhead represents a small proportion of total cost. Products spend different amounts of time in each department. Four basic steps are used in an ABC system. List the proper order of these steps, which are currently scrambled below: a. Identify the primary activities and estimate a total cost pool for each. b. Select an allocation base for each activity. c. Allocate the costs to the cost object using the activity cost allocation rates. d. Calculate an activity cost allocation rate for each activity. c,a,b,d a,c,d,b b,a,c,d a,b,d,c Philly Company manufactures antique-style clocks and uses an activity-based costing system. Each clock consists of 10 separate parts totaling $120 in direct materials, and requires 2.0 hours of machine time to produce. Additional information follows: What is the cost of materials handling per clock? $12.50 $3.00 $14.50 $5.00 Pittsburgh Company manufactures hand-crafted clocks and uses an activity-based costing system. Each cuckoo clock consists of 10 separate parts totaling $120 in direct materials, and requires 2.0 hours of machine time to produce. Additional information follows: What is the cost of machining per cleck? $25 $3 $10.50 1$5 Which of the following condition(s) favours not using departmental overhead rates, but instead a plantwide overhead rate? Different jobs or products use the departments to a different extent. Departments use a dissimilar amount of indirect costs. Manufacturing overhead represents a small proportion of total cost. Products spend different amounts of time in each department. High Fly Parachute Company manufactures parachutes. The company has the capacity to produce 15,000 units per year, but is currently producing and selling 10,000 units per year. The following information relates to current production: If the company accepts a special order for 200 sails at a price of $860 per unit, and fixed costs remain unchanged, how would operating income be affected? (NOTE: Assume regular sales are not affected by the special order.) If the company accepts a special order for 200 sails at a price of $860 per unit, and fixed costs remain unchanged, how would operating income be affected? (NOTE: Assume regular sales are not affected by the special order.) Increase by $19,000 Increase by $17,000 The correct answer is NONE of the other options. Decrease by $10,000
