QUESTION 9

1. The formula for the overhead rate using an Activity-Based Costing system is:

   		overhead cost divided into labour hours.
   		overhead cost divided into relevant cost driver.
   		overhead cost divided by the number of products.
   		overhead cost divided by relevant cost driver.

1 points

QUESTION 10

1. Which of the following can be a cost object?

   		A product
   		A geographic location
   		A service unit
   		All of the options can be cost objects.

1 points

QUESTION 11

1. The focus in Activity Based Costing is on:

   		activities.
   		services.
   		direct costs.
   		products.

1 points

QUESTION 12

1. Use information below to answer the following questions. Osborne Ltd manufactures a wide range of leather suitcases. The following costs are expected to be incurred by the company during May: Indirect labour cost $28,000 Direct labour time 10,000 hours Depreciation on equipment $20,000 Rent and Rates $13,000 Direct labour costs $98,000 Heating, lighting and power $ 4,000 Machine time 8,000 hours Indirect materials $ 5,000 Consumables $ 2,000 Direct materials used $50,000 Production estimate 1,000 suitcases Refer to the table above. The overhead rate (rounded), using direct labour hours as the allocation base is:

   		$5.90 per DLH.
   		$7.20 per DLH.
   		$3.90 per DLH.
   		$7.00 per DLH.