Question 115 pts

1. Which of the following statements about activity-based costing is NOT true?

Group of answer choices

Activity-based costing is more likely to result in major differences from traditional costing systems if the firm manufactures only one product rather than multiple products.

Activity-based costing seeks to distinguish batch-level, product-sustaining, and facility-sustaining costs, especially when they are not proportionate to one another.

Activity-based costing differs from traditional costing systems in that products are not cross-subsidized.

Activity-based costing is useful for allocating marketing and distribution costs.

Flag question: Question 12Question 125 pts

1. The MOST likely example of a batch-level cost is

Group of answer choices

machine repairs.

utilities costs.

product-designing costs.

machine setup costs.

Flag question: Question 13Question 135 pts

1. Products S5 and CP8 each are assigned $50.00 in indirect costs by a traditional costing system. An activity analysis revealed that although production requirements are identical, S5 requires 45 minutes less setup time than CP8.

According to an ABC system, CP8 is __________ under the traditional system.

Group of answer choices

undercosted

overcosted

fairly costed

accurately costed

Flag question: Question 14Question 145 pts

Barnes Corporation manufactures two models of office chairs, a standard and a deluxe model. The following activity and cost information has been compiled.

	Number of machine setups	Number of components	Number of direct labor hours
Product
Standard	22	8	375
Deluxe	28	12	225

• Total overhead costs = $60,000 including $20,000 (machine setup costs) and $40,000 (costs of handling components)

1. Assume a traditional costing system applies the $60,000 of overhead costs based on direct labor hours. What is the total amount of overhead costs assigned to the standard model? ________

Flag question: Question 15Question 155 pts

Barnes Corporation manufactures two models of office chairs, a standard and a deluxe model. The following activity and cost information has been compiled.

	Number of machine setups	Number of components	Number of direct labor hours
Product
Standard	22	8	375
Deluxe	28	12	225

• Total overhead costs = $60,000 including $20,000 (machine setup costs) and $40,000 (costs of handling components)

1. Number of setups and number of components are identified as activity-cost drivers for overhead. Assuming an activity-based costing system is used, what is the total amount of overhead costs assigned to the standard model? _________

Flag question: Question 16Question 165 pts

The following information pertains to questions 16-18.

Wayland Manufacturing is using a job costing and normal costing system. The following information pertains to the 2019 operations.

Direct materials purchased	$ 75,000
Direct materials used	45,000
Direct labor used	65,000
Factory overhead incurred	73,000
Cost of goods manufactured	146,000
Cost of Goods Sold	128,000
Ending balance of direct materials inventory	83,000
Beginning balance of WIP inventory	32,000
Beginning balance of finished goods inventory	29,000
Overhead allocation rate is 125% of direct materials used

1. Beginning balance of direct materials inventory is $_________________________

Flag question: Question 17Question 175 pts

Wayland Manufacturing is using a job costing and normal costing system. The following information pertains to the 2019 operations.

Direct materials purchased	$ 75,000
Direct materials used	45,000
Direct labor used	65,000
Factory overhead incurred	73,000
Cost of goods manufactured	146,000
Cost of Goods Sold	128,000
Ending balance of direct materials inventory	83,000
Beginning balance of WIP inventory	32,000
Beginning balance of finished goods inventory	29,000
Overhead allocation rate is 125% of direct materials used

1. Ending balance of work-in-process inventory is $____________________________

Flag question: Question 18Question 185 pts

Wayland Manufacturing is using a job costing and normal costing system. The following information pertains to the 2019 operations.

Direct materials purchased	$ 75,000
Direct materials used	45,000
Direct labor used	65,000
Factory overhead incurred	73,000
Cost of goods manufactured	146,000
Cost of Goods Sold	128,000
Ending balance of direct materials inventory	83,000
Beginning balance of WIP inventory	32,000
Beginning balance of finished goods inventory	29,000
Overhead allocation rate is 125% of direct materials used

1. The over- or under-allocated overhead for 2019 is $________________

Flag question: Question 19Question 195 pts

1. Which of the following is most likely to be a product sustaining cost?

Group of answer choices

Product design costs

Machine setup costs

Utilities costs

Machine repairs costs

Flag question: Question 20Question 205 pts

1. The following design steps are included in the implementation of an ABC system:

1. Develop activity dictionary and list users of activities
2. Allocate costs of secondary activities to primary activities
3. Select resource drivers and unbundle general ledger accounts
4. Select activity cost drivers and allocate costs of activities to products and customers

In what order should these steps be completed?

Group of answer choices

1,3,2,4

1,2,3,4

4,3,1,2

1,4,3,2

2,3,1,4