Ch. 17

Ben Gordon Inc manufactures 2 products, wheels, and seats.

a. $41,250

Which of the following is a Value-added activity?

a. inventory storage B. MACHINING c. building maintenance d. bookkeeping

Sanborn Industries. activity based costing, the overhead application rate for ordering and receiving is

b. $240 per order

An example of a cost which would NOT be assigned to an overhead cost pool is?

b. freight-out

Daffodil Company produces two products, Flower and Planter. Flower totals 20,000 units annually. Planter 6,000 units. Flower requires 1 hour of DL. planter require 2 hrs of DL. annual total DL are 32,000 (20,000+12,000). expected annual manufacturing cost are $640,000. under Traditional costing system. Each unit of Planter would be assigned overhead of ?

c. $40.000 (annual over head cost (640,000)/(Direct Labor hrs 32,000)=20 20x(2 hrs)= $40.00

For its inspecting cost pool, Davidson, Inc. expected overhead cost of $200,000 and 4,000 inspections. The actual overhead cost for that cost pool was $240,000 for 5,000 inspections. The activity based overhead rate used to assign the costs of the inspecting cost pool to products is?

c. $50 per inspection

Clemson Co. incurs $350,000 of overhead cost each year in its three main departments. machining ($200,000) , inspections ($100,000) and packing ($50,000). The machine department works 4,000 hrs per year, there are 500 inspections per year and the packing department packs 500 order per year. if traditional costing based on DL hrs is used. How much overhead is assigned to product X this year?

c. 170,000

Johnstone Company manufactures two products. Over head applied to case 165 using activity based costing is?

d. $3,000,000