ACC2070 Test 2

Causal factors

The activities or variables within a producing department that provoke the incurrence of support costs are called:

when the same resource is used in the output of two or more outputs

A common cost occurs

Fixed : 75,000 Variable : 90,000

A company incurred $120,000 of common fixed costs and $180,000 of common variable costs. These costs are to be allocated to Departments XX and YY. Data on capacity provided and capacity used are as follows: Dpmt capacity provided in hrs capacity used in hours XX 500 400 YY 300 400 Assume that common fixed costs are to be allocated to Departments XX and YY on the basis of capacity provided and that common variable costs are to be allocated to Departments XX and YY on the basis of capacity used. The fixed and variable costs allocated to Department XX are

by-product

A secondary product recovered in the course of manufacturing a primary product during a joint process is called a:

product size, setup times, product complexity.

Products might consume overhead in different proportions due to differences in

# of inspection, # of setups, # of material moves.

all of the following are non-unit-based activity drivers

40,000 6000/8000= x/48000

Andover, inc., has two producing departments. Each producing department is held responsible for a share of the costs of a support department. Actual and budgeted date are as follows: Support department hrs used: dept X 12,000 dept Y 4,000 tot hrs 16,000 Support department costs: actual support dpmt costs $48,000 budgeted fixed dpmt costs 20,000 budgeted variable rate/hr $2.50 Normal support dpmt usage is 8,000 hrs each for dept X and dept Y. Assuming the DM is used and the purpose is performance evaluation, support dpmt costs allocated to dpmt X are

units produced, direct labor hours, machine hours

Common measures of production activity include

$3,000

Cumadin Corporation, which manufactures products W, X, Y, and Z through a joint process costing $18,000, has the following data for 2014: product units produced sales value at split-off W 10,000 5,000 X 6,000 2,500 Y 16,000 3,000 Z 8,000 4,500 What is the amount of joint costs assigned to product X using the sales-value-at-split-off method?

maintenance, personnel, data processing.

Examples of support departments include all of the following

facility-level activity

If activity-based costing is sued, insurance on the plant would be classified as a

joint products

If the Products with substantial value which are produced simultaneously by the same process up to a split-off point are called:

50/130

McHugh company allocates common Building dept costs to producing departments (P1 and P2) based on space occupied, and it allocates common personnal department costs based on the number of employees. space occupancy and employee data are as follows: building personnel dept P1 dept P2 space occupied 2,000 10,000 120,000 70,000 employees 6 10 80 50 If McHugh company uses the sequential allocation method and the support dpmt with the highest % of interdepartmental services is allocated first, the ratio representing the portion of personnel departmnet costs allocated to department p2 is

24,000 direct labor hours.

Tarot company has a predetermined overhead rate of $6 per direct labor hour. last year the company incurred $156,600 of actual manufacturing overhead cost and the account was $12,600 underapplied. How many direct labor hours were worked during the year?

Manufacturing overhead 3,000 Cost of goods Sold 3,000

Thaisom company applies manufacturing overhead. at the end of the year the following date was available:\ actual manufacturing overhead : $ 115,000 estimated manufacturing overhead: 120,000 applied manufacturing overhead: 118,000 What is the journal entry if the amount of under- or over-applied is considered small?

481,250.00

The following information is provided for the year:\ actual direct labor hours worked : 27,500 Budgeted overhead $525,000 Budgeted direct labor hours : 30,000 Actual overhead costs incurred : 481,250 If normal costing is used, the amount of overhead applied for the year is

150%

The following information pertains to white stone industries for 2014: estimated total overhead cost for 2014: $37,500 estimated direct labor costs for 2014: 25,000 actual direct labor costs : 22,500 actual overhead costs : 36,000 activity base : direct labor costs what is the predetermined overhead rate for whitestone industries for 2014?

activity-based costing

The system first traces costs to activities and then to products is called:

overhead costs are traced to departments, then costs are traced to products.

Unit-based product costing uses which of the following procedures?

direct materials and direct labor directly to products and assigns overhead to departmental pools which are assigned to products using predetermined overhead rates based on unit-level drivers.

Unit-level product costing assigns

weighted average method

Which joint cost allocation method is described by the following statement? "each product is assigned a weighting factor which is multiplied by the number of units. Joint cost is prorated to the products on the basis of each product's share of total weighted units."

personnel

Which of the following cost categories would most likely use the number of employees or new hires as its activity driver?

physical units method

Which of the following methods allocates joint production costs based on the pounds of product produced?

sales-value-at-split-off method

Which of the following methods allocates joint production costs based on their proportionate share of eventual revenue less further processing costs?

direct allocation method, reciprocal allocation method, sequential allocation method

Which of the following methods allocates support department costs?

# of setups, # of orders placed, # of machine hours

Which of the following quantities is an example of an activity driver in activity-based costing?

square feet

Which of the following would be the most appropriate base for allocating the costs of the housekeeping department?

facility-level activity

if activity-based costing is used, security is and example of a

allocated arbitrarily.

joint costs are

allocated to work in progress, finished goods, and cost of goods sold.

material amounts of underapplied or overapplied overhead should be