ch 17

A method of assigning overhead costs to a product using a single overhead rate is:

Plantwide overhead rate method.

The cost object of the departmental overhead rate method is:

The production departments in the first stage and the unit of product in the second stage.

All of the following are examples of facility sustaining costs except:

Costs of sampling product quality.

Angle Max Industries produces a product which goes through two operations, Assembly and Finishing, before it is ready to be shipped. Next year's expected costs and activities are shown below. Direct labor hours: 100,000 DLH 140,000DLH Machine hours: 300,000DLH 60,000MLH Overhead costs: $300,000 $420,000 Assume that the Assembly Department allocates overhead based on machine hours, and the Finishing Department allocates overhead based on direct labor hours. How much total overhead will be assigned to a product that requires 1 direct labor hour and 2.5 machine hours in the Assembly Department, and 3.5 direct labor hours and 0.5 machine hours in the Finishing Department?

$14

Tarnish Industries produces miniature models of farm equipment. These collectibles are in great demand. It takes two operations, molding and finishing, to complete the miniatures. Next year's expected activities are shown in the following table: Direct labor hours: 75,000 DLH 160,500 DLH Machine hours: 98.000 MH 81,500 MH Tarnish Industries uses departmental overhead rates and is planning on a $1.80 per direct labor hour overhead rate for the finishing department. Compute the estimated manufacturing overhead cost for the finishing department given the information shown

$205200

K Company estimates that overhead costs for the next year will be $2.900.000 for indirect labor and $800,000 for factory utilities. The company uses direct labor hours as its overhead allocation base. If 80.000 direct labor hours are planned for this next year, what is the company's plantwide overhead rate?

$46.25

Peterson Company estimates that overhead costs for the next year will be $6.520.000 for indirect labor and $550,000 for factory utilities. The company uses machine hours as its overhead allocation base. If 140,000 machine hours are planned for this next year, what is the company's plantwide overhead rate? (Round your answer to two decimal places.)

$50.50 per machine hour

Lake Erie Company uses a plantwide overhead rate with machine hours as the allocation base. Next year, 600,000 units are expected to be produced taking 0.75 machine hours each. How much overhead will be assigned to each unit produced given the following estimated amounts?

$8.17

Compute Aztec's departmental overhead rate for the mixing department based on machine hours.

0.75

Compute Aztec's departmental overhead rate for the mixing department based on direct labor hours.

1.50

K Company estimates that overhead costs for the next year will be $2,900,000 for indirect labor and $800,000 for factory utilities. The company uses direct labor hours as its overhead allocation base. If 80,000 direct labor hours are planned for this next year, how much overhead would be assigned to a product requiring 4 direct labor hours?

185.00

Which of the following would not be considered a product cost?

Cost accountant's salary.

Which of the following costing systems is more accurate for overhead cost allocation and most likely to allow managers the ability to make better pricing decisions?

Activity-based costing

Which of the following statements is true of activity-based costing?

An activity cost pool collects costs related to the same activity.

Overhead costs:

Cannot be traced to units of product in the same way that direct labor can.

Which types of overhead allocation methods result in the use of more than one overhead rate during the same time period?

Departmental overhead rate method and activity-based costing.

which of the following statements is true with regard to the departmental overhead rate method?

It is logical to use this method when overhead resources are consumed by various products in substantially different ways throughout multiple departments.

A company uses activity-based costing to determine the costs of its three products: A, B, and C. The budgeted cost and activity for each of the company's three activity cost pools are shown in the following table: Activity 1 $70,000 6000 9000 20,000 Activity 2 $45,000 7000 15,000 8000 Activity 3 $82,000 2500 1000 1625 Which of the following statements is true regarding this company's activity rates?

The activity rate under the activity-based costing system for Activity 2 is $1.50.

Consider the following activities that take place in a veterinary clinic. (a) Cleaning cages. (b) Heating and air conditioning the clinic. (c) Sending blood work to a lab. (d) Dispensing medicine. Which of the following statements is true?

heating and air conditioning the clinic is a facility level activity

Consider the following activities that take place in a medical clinic. (a) Cleaning exam rooms. (b) Heating and air conditioning the clinic. (c) Sending blood work to a lab. (d) Dispensing medicine. Which of the following statements is true?

sending blood work to the lab is a batch level activity

The cost object of the plantwide overhead rate method is:

unit of product