Accounting 404 Chapter 6

full costing

Absorption costing is also referred to as

30/square foot

A company anticipates the cost to heat the building will be $21,000. Product A takes up 500 square feet of space, while Product B takes up 200 square feet. The activity rate per product using activity-based costing would be which of the following?

68,600

A company calculated the predetermined overhead based on an estimated overhead of $70,000, and the activity for the cost driver was estimated as 2,500 hours. If product A utilized 1,350 hours and product B utilized 1,100 hours, what was the total amount of overhead assigned to the products?

157,500

Active Frame, Inc., manufactures clear and tinted sport glasses. The manufacturing of clear glasses takes 45,000 direct labor hours and involves 1,700 parts and 115 inspections. The manufacturing of tinted glasses takes 115,000 direct labor hours and involves 1,400 parts and 450 inspections. The traditional method applies $560,000 of overhead on the basis of direct labor hours. What is the amount of overhead per direct labor hour applied to the clear glass products?

direct material, direct labor, and variable manufacturing overhead

Under variable costing, a unit of product includes which costs?

identify the cost drivers, identify the cost pools, calculate the overhead application rate for each cost pool, assign the costs to the products

What is the proper order of tasks in an ABC system?

compute a cost rate per production

Which is not a step in activity-based costing?

identify non-value-added costs

Which is not a step in analyzing the cost driver for manufacturing overhead?

estimated overhead for the activity/estimated use of the cost driver for the activity

Which is the correct formula for computing the overhead rate?

They want to improve the data on which decisions are made

Which of the following is a reason a company would implement activity-based costing?

the proportion of that product's use of the cost driver

Overhead costs are assigned to each product based on

$2.15 per direct labor hour

TyeDye Lights makes two products: Party and Holiday. It takes 80,900 direct labor hours to manufacture the Party Line and 93,500 direct labor hours to manufacture the Holiday Line. Overhead consists of $225,000 in the machine setup cost pool and $149,960 in the packaging cost pool. The machine setup pool has 52,000 setups for the Party product and 98,000 setups for the Holiday product. The packaging cost pool has 26,000 parts in the Party product and 39,200 parts for the Holiday product. Using the traditional cost method of direct labor hours, what is the predetermined overhead rate?

direct material, direct labor, and manufacturing overhead

Under absorption costing, a unit of product includes which costs?