Question
Please check these and correct, explain a little too please. 1.) Which of the following condition(s) favors using departmental overhead rates in place of a
Please check these and correct, explain a little too please.
1.) Which of the following condition(s) favors using departmental overhead rates in place of a plantwide overhead rate?
a. Different departments incur different amounts and types of manufacturing overhead.
b. Different jobs or products use the departments to a different extent.
c. Both of the above are true.
d. Neither of the above are true.
I think it's c.
2.) Bond Industries uses departmental overhead rates to allocate its manufacturing overhead to jobs. The company has two departments: Assembly and Sanding. The Assembly Department uses a departmental overhead rate of $20 per machine hour, while the Sanding Department uses a departmental overhead rate of $15 per direct labor hour. Job 542 used the following direct labor hours and machine hours in the two departments:
Actual results | Assembly Department | Sanding Department |
Direct labor hours used | 4 | 3 |
Machine hours used | 9 | 5 |
The cost for direct labor is $25 per direct labor hour and the cost of the direct materials used by Job 542 is $1,200. What was the total cost of Job 542 if Bond Industries used the departmental overhead rates to allocate manufacturing overhead?
Select one:
a. $1,500
b. $1,375
c. $1,600
d. $1,425
3.) Green Bags Company manufactures cloth grocery bags to be sold to grocery stores and other retailers. Green Bags Company sells the bags in cases of 1,000 bags. The bags come in three sizesLarge, Medium, and Small. Currently, Green Bags Company uses a single plantwide overhead rate to allocate its $7,141,100 of annual manufacturing overhead. Of this amount, $1,875,000 is associated with the Large Bag line, $2,992,500 is associated with the Medium Bag line, and $2,273,000 is associated with the Small Bag line. Green Bags Company is currently running a total of 37,000 machine hours12,500 in the Large Bag line, 13,300 in the Medium Bag line, and 11,200 in the Small Bag line. Green Bags Company uses machine hours as the cost driver for manufacturing overhead costs. The plant-wide manufacturing overhead rate would be closest to:
a. $50.68 per machine hour.
b. $225.00 per machine hour.
c. $193.00 per machine hour.
d. $150.00 per machine hour.
4.) Green Bags Company manufactures cloth grocery bags to be sold to grocery stores and other retailers. Green Bags Company sells the bags in cases of 1,000 bags. The bags come in three sizes: Large, Medium, and Small. Currently, Green Bags Company uses a single plantwide overhead rate to allocate its $7,141,100 of annual manufacturing overhead. Of this amount, $1,875,000 is associated with the Large Bag line, $2,992,500 is associated with the Medium Bag line, and $2,273,000 is associated with the Small Bag line. Green Bags Company is currently running a total of 37,000 machine hours: 12,500 in the Large Bag line, 13,300 in the Medium Bag line, and 11,200 in the Small Bag line. Green Bags Company uses machine hours as the cost driver for manufacturing overhead costs. Which product line(s) have been overcosted or undercosted by using the plantwide manufacturing overhead rate?
a. Large, Medium, and Small Bags have all been overcosted.
b. Large Bags has been undercosted; Medium and Small have been overcosted.
c. Large Bags has been overcosted; Medium and Small have been undercosted.
d. Large, Medium, and Small Bags have all been undercosted.
5.) In using an ABC system, which of the following steps is NOT performed before the company's year begins?
a. Select an allocation base for each activity.
b. Allocate the costs to the cost object using the activity cost allocation rates.
c. Calculate an activity cost allocation rate for each activity.
d. Identify the primary activities and estimate a total cost pool for each.
6.) The use of which of the following costing systems is most likely to reduce cost distortion to a minimum?
a. Activity-based costing
b. Departmental overhead allocation rates
c. Plantwide overhead rate
d. Traditional costing system
I think it's D
7.) Machine set-up would most likely be classified as a:
a. unit-level activity.
b. batch-level activity.
c. product-level activity.
d. facility-level activity.
Think it's B..
8.) Research and development would most likely be classified as a:
a. unit-level activity.
b. batch-level activity.
c. product-level activity.
d. facility-level activity.
Think it's D.
9.) Using factory utilities would most likely be classified as a:
a. unit-level activity.
b. batch-level activity.
c. product-level activity.
d. facility-level activity.
Think it's D.
10.) Which of the following describes how, in ABC, the activity allocation rate is computed?
a. You take the total estimated activity allocation base and subtract the total estimated total activity cost pool.
b. The total estimated activity cost pool is divided by the total estimated activity allocation base.
c. The total estimated activity allocation base is multiplied by the total estimated activity cost pool.
d. The total estimated activity allocation base is divided by the total estimated activity cost pool.
11) Pittinger Company manufactures cuckoo clocks and uses an activity-based costing system to allocate all manufacturing conversion costs. 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:
Activity | Allocation Base | Cost Allocation Rate |
Materials handling | Number of parts | $1.25 per part |
Machining | Machine hours | $2.50 per machine hour |
Assembling | Number of parts | $0.50 per part |
Packaging | Number of finished units | $1.50 per finished unit |
What is the cost of assembling per cuckoo clock?
a. $4.50
b. $12.50
c. $3.00
d. $5.00
Can you explain this?
12.) Durable Engines Company uses ABC to account for it manufacturing process.
Activities | Indirect activity budget | Allocation base (cost driver) |
Materials handling | $ 36,000 | Based on number of parts |
Machine setup | $ 19,200 | Based on number of setups |
Assembling | $ 6,000 | Based on number of parts |
Packaging | $ 12,800 | Based on number of finished units |
Durable Engines Company expects to produce 2,000 engines. Durable Engines Company also expects to use 12,000 parts and have 16 setups. The allocation rate for materials handling will be:
a. $6.40.
b. $5.28.
c. $3.00.
d. $18.00.
Can you explain how to get solution..?
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