ACCT 2023 CH7
If the activity rate for the customer order cost pool is $250 per order and the total for this cost pool is $425,000, the total number of customer order is:
$425000/$250=1,700
If the activity rate is $65 per per order with a total of 120 orders for product, the over cost assigned to the product is $____________
$65x120=7,800
A(n) ___________ cost system assigns costs of unused or idle capacity to products.
Absorption
All manufacturing costs are assigned to products in __________ costing.
Absorption
In ABC, any event that causes consumption of overhead resources is a(n) _____________.
Activity
A "bucket" in which costs accumulated that relate to a single activity measure in the ABC system is a(n)
Activity cost pool
Some manufacturing costs may be excluded from product cost when using:
Activity-based costing
Under activity-based costing, overhead includes:
All indirect costs
An activity measure is a(n) ___________ based in an activity-based costing system.
Allocation
Activity-based costing data
Can be easily misinterpreted
A cost including costs to entertain clients and make sales cells is a(n) ___________ activity.
Customer level
A cost pool including costs to entertain clients and make sales cells is a(n) _________ activity.
Customer-level
The first major step when implementing an ABC system is:
Identify the activities
ABC is generally used for __________ reporting.
Internal
External reports are _________ detailed than internal reports.
Less
Under activity-based costing, non-manufacturing costs:
May be allocated to products based on cause
Compared to traditional systems, activity-based costing uses _______ cost pools and unique measures of activity.
More
Costs that are totally unaffected by which products are made during a period are ________ costs.
Organization-sustaining
usually, traditional costing _________ high-volume products and __________ low-volume products
Overcosts; Undercost
Activity-based costing uses numerous ____________ cost pools.
Overhead
In activity-based costing, first-stage allocation assigns ___________ costs to activity cost pools.
Overhead
Comparing _______ is the basis of bench marking.
Performance within the same industry
Unit-level activities are:
Proportional to the number of units produced.
A reason that activity-based costing is NOT often used for external reporting is:
The ABC system may not conform to GAAP
Simple counts of the number of times an activity occurs are _______ drivers.
Transaction
power to run production equipment would be a(n) _________-level activity.
Unit
What level of activity is performed each time an item of a product is produced
Unit-level
Cost such as factory and power to run machines could be combined in a cost pool based on the number of:
Units produced
Designing and advertising a product are ___________-level activities.
product
Total estimated manufacturing overhead is $900,000 and total activity is 30,000 machine-hours. The plant wide overhead rate is $_____ per machine hour.
$900,000/30,000=$30
Activity-based costing is NOT used for external reporting because:
-ABC does not comply with GAAP. -External reports are less detailed than internal reports -It is difficult to make. changes in the existing accounting system.
In ABC, the greater number of activities, the:
-More costly the system to be designed. -More accurate the costs are likely to be.
Costs that can be easily traced to individual products include:
-Sales commission -Shipping cost -Warranty repair costs
In activity-based costing, what costs are NOT assigned to products.
-Unused Capacity -Organization-sustaining
In activity-based costing, what costs are NOT assigned to products?
-Unused capacity -Organization-sustaining
customer-level activities include:
-mailing catalogs -sales cells
Customer orders are considered to be a(n) _________-level activity.
Batch
Setting up equipment, placing purchase orders, and arranging shipments to customers are all examples of __________-level activities.
Batch
