Question 1

TyeDye Lights makes two products: Party and Holiday. It takes 80,900 direct labor hours to manufacture the Party Line and 93,500 direct labor hours to manufacture the Holiday Line. Overhead consists of $225,000 in the machine setup cost pool and $149,960 in the packaging cost pool. The machine setup pool has 52,000 setups for the Party product and 98,000 setups for the Holiday product. The packaging cost pool has 26,000 parts in the Party products and 39,000 parts for the Holiday product. Using the traditional cost method of direct labor hours, what is the predetermined overhead rate?

$2.30 per direct labor hour

$2.15 per direct labor hour

$3.80 per direct labor hour

$1.50 per direct labor hour

Question 2

Overhead costs are assigned to each product based on __________________________

a predetermined overhead rate for a single cost driver

the proportion of that product's use of the cost driver

price of the product

machine hours per product

Question 3

Which is the correct formula for computing the overhead rate?

estimated overhead of the product/estimated use of the cost driver for the activity

estimated overhead for the activity/estimated use of the cost driver for the activity

estimated use of the cost driver for production/estimated overhead for the activity

estimated use of the cost driver for production/estimated overhead for the activity

Question 4

A company calculated the predetermined overhead based on an estimated overhead of $70,000, and the activity for the cost driver was estimated as 2,500 hours. If Product A utilized 1,350 hours and Product B utilized 1,100 hours, what was the amount of overhead assigned to the products?

$30,800

$35,000

$68,600

$37,800

Question 5

What is the proper order of tasks in an ABC system?

identify the cost drivers, assign the costs to the products, calculate the overhead application rate for each cost pool, identify the cost pools

assign the costs to the products, identify the cost drivers, calculate the overhead application rate for each cost pool, identify the cost pools

identify the cost pools, identify the cost drivers, calculate the overhead application rate for each cost pool, assign the costs to the products

identify the cost drivers, identify the cost pools, calculate the overhead application rate for each cost pool, assign the costs to the products

Question 6

Which statement is correct?

Activity-based cost systems are more accurate than traditional cost systems

activity-based cost systems provide the same data as traditional cost systems

activity-based cost systems are less costly than traditional cost systems

activity-based cost systems are easier to implement than traditional cost systems

Question 7

Activity-based costing is preferable in a system:

with a large direct labor cost as a percentage of the total product cost

where management needs to support an increase in sale price

when multiple products have similar product volumes and costs

with multiple, diverse products

__________________________________________________________________________________

Question 8

Which of the following is an operating budget?

cash budget

production budget

tax budget

capital budget

Question 9

Which of the following is most likely to result in employee buy-in to budget?

top-down approach

bottom-up approach

total participitation approach

basin the budget on the prior year

Question 10

Which of the following is true in a bottom-up budgeting approach?

surpervisors tell departments their budget amount and the departments are free to work within those amounts

departments budget their needs however they see fit

departments determine their needs and relate them to the overall goals

Every expense needs to be justified

Question 11

Which of the operating budgets is prepared first?

cash payments budget

production budget

cash received budget

sales budget

Question 12

Which of the following isnotan operating budget?

direct labor budget

cash budget

production budget

sales budget

Question 13

The units required in production each period are computed by which of the following methods?

adding budgeted sales to the beginning inventory and subtracting the desired ending inventory

adding budgeted sales to the desired ending inventory and subtracting beginning inventory

adding beginning inventory to budgeted sales and subtracting desired ending inventory

adding beginning inventory, budgeted sales, and desired ending inventory

Question 14

Whichisnota section of the cash budget?

cash disbursements

cash receipts

allowance for uncollectible accounts

financing needs