Ch. 3 LS ACCT

_____-level activities are incurred for each product produced and are not dependent on the number of unties or batches.

product

What are reasons that companies are moving away from a plantwide overhead rate like direct labor?

1.)Direct labor is no longer directly correlated to overhead for many products 2.)Many tasks are now done with automated equipment. 3.)A variety of products are made by companies.

A technique that attempts to assign overhead costs more accurately to products called _______ ________ _______

Activity Based Costing

A(n) _____ is a cost bucket in which costs related to a particular activity measure are accumulated. a.) Activity measure b.) Activity cost pool c.) activity d.) Activity rate

b.) activity cost pool

In activity-based costing an activity measure is: a.) a measure of material costs b.) a pool of labor costs c.) an allocation base d.) another name for a predetermined overhead rate.

c.) an allocation base

Activity-based costing improves the accuracy of product costs by: a.) Using cost pools that are more homogeneous than departmental cost pools. b.) Using a variety of activity measures to assign overhead costs to products. c.) Increasing the number of cost pools used to accumulate overhead cost. d.) Highlighting the activities that could benefit the most from improvement initiatives.

A, B, and C

Using an ABC system, a company has estimated overhead of 2,100,000. They expect to use 1,000,000 machine hours and 500,000 labor hours. ABC has identified this as a machine-hour related activity. The activity rate for this activity using ABC is: a.) 2.10 b.)4.20 c.)0.476 d.)21%

a.) 2.10 b/c 2,100,000/1,000,000= 2.10 per machine hour

Match: a.)Running processing equipment b.)Processing a purchase order c.)Maintaining inventory parts for products d.)Factory management salaries 1.)Unit-level activity 2.)Batch-level activity 3.)Product-level activity 4.)Facility-level activity

a.) goes with 1.) b.) goes with 2.) c.) goes with 3.) d.) goes with 4.)