Exam 2 review
Goldberg Company, a manufacturer of small appliances, had the following activities, allocated costs, and allocation bases: What is the cost per account for the account verification activity?
$0.66
The phone bill for a company consists of both fixed and variable costs. Refer to the four-month data below and apply the high-low method to answer the question. What is the fixed portion of the total cost?
$1790
Archid Inc., a manufacturer of spare parts, has two production departments-Assembling and Packaging. The assembling department is mechanized, while the packaging department is labor-oriented. Estimated manufacturing overheads for the year 2015 were $15,000,000 for assembling and $$10,000for packaging. Calculate the department- wide allocation rates if the total estimated machine hours were 30,000 and labor hours were 20,000 for the year.
$500, $500
The costs most easily traced to each product manufactured are
A. direct materials and direct labor
Stealth, Inc. produces two types of drones, rotary and fixed wing. Stealth estimated $1,210,000 of manufacturing overhead, and 55,000 machine hours for the year. The allocation base for overhead costs is machine hours. The rotary model actually consumed 26,000 machine hours, and the fixed wing type consumed 29,000 machine hours. How much overhead is allocated to the rotary model?
A.572,000
A furniture manufacturer has decided that its use of a single plantwide predetermined overhead allocation rate is no longer accurate. In making the transition to using multiple predetermined overhead allocation rates, which of the following statements is incorrect?
C) The allocation process changes because there are now multiple cost pools and multiple allocation bases.
An activity-based costing system is developed in four steps: a. Compute the predetermined overhead allocation rate for each activity. b. Identify activities and estimate their total indirect costs. c. Identify the allocation base for each activity and estimate the total quantity of each allocation base. d. Allocate indirect costs to the cost object. Which of the following is the correct order for performing these steps?
C. A,B,C,D
The just-in-time management system is a(n)
Cost Management System
Skipper Company manufactures toy boats and uses an activity-based costing system. Each boat consists of four parts, and the direct materials cost per boat is $ 7.21. There is no direct labor. What is the total manufacturing cost per boat? (Round any intermediate calculations and your final answer to the nearest cent.)
Direct material +Material handling +Assembling +Packaging =Total unit cost 22.84
North Shore Clothing Company provided the following manufacturing costs for the month of June. From the above information, calculate North Shore's total variable costs.
Direct materials cost+Direct labor cost +Packaging costs = Total variable costs $242,200
Tentacle Television Antenna Company provided the following manufacturing costs for the month of June. From the above information, calculate Tentacle's total fixed costs.
Equipment depreciation + Factory Insurance + Factory Manager's salary + Janitor's salary + Property Tax = Total Fized Cost $65800
Bag Ladies, Inc. manufactures two kinds of bags—totes and satchels. The company allocates manufacturing overhead using a single plantwide rate with direct labor cost as the allocation base. Estimated overhead costs for the year are $25,500. Additional estimated information is given below. Totes Satchels Direct materials cost per unit $34 $40 Direct labor cost per unit $54 $64 Number of units 530 390 Calculate the amount of overhead to be allocated to Totes. (Round any percentages to two decimal places and your final answer to the nearest dollar.)
Explanation: D) Direct labor Number Total direct cost per unit of units labor cost Totes $54 530 $28,620 Satchels $64 390 $24,960 Total $53,580 Predetermined overhead allocation rate = Total estimated overhead costs / Total estimated quantity of the overhead allocation base = $25,500 / $53,580 = 47.59% of direct labor cost. Manufacturing overhead cost allocated to Totes = $28,620 × 47.59% = $13,620
The common factor in all quality management systems is the desire to
Improve Performance
The activity-based costing system improves the allocation of
Indirect manufacturing cost
Which of the following statements is true of an activity-based costing system?
It uses separate predetermined overhead allocation rates for each activity.
Costs that have both variable and fixed components are called
Mixed Costs
Tungsten, Inc. manufactures both normal and premium tube lights. The company allocates manufacturing overhead using a single plantwide rate with machine hours as the allocation base. Estimated overhead costs for the year are $ 106,000. Additional estimated information is given below. Normal Premium Machine hours (MHr) 27,000 50,000 Direct materials $ 57,000 $ 460,000
Predetermined Overhead Allocation Rate = Estimated Overhead Cost / Total Machine Hours = $ 106,000 / ( 27,000 + 50,000) = $ 1.38 per machine hour Hence the correct answer is D. $ 1.38 per machine hour
Which of the following statements is true of the behavior of total fixed costs, within the relevant range?
They will remain the same as production levels change.
Room Chill Company manufactures ceiling fans and uses an activity-based costing system. Each ceiling fan has 20 separate parts. The direct materials cost is $ 90.00, and each ceiling fan requires 3.5 hours of machine time to manufacture. What is the cost of assembling per ceiling fan?
Total manufacturing cost = Direct materials + Materials handling + Machining + Assembling + Packaging = $125.00
Kim Airedale, a manager of Waggers, Inc., was reviewing the water bills of a dog daycare and spa. She determined that its highest and lowest bills of $3,200 and $2,000 were incurred in the months of May and November, respectively. If 400 dogs were washed in May and 200 dogs were washed in November, what was the variable cost per dog associated with the company's water bill?
Variable cost per unit= [Total cost at highest level-Total cost at lowest level]/(Highest level-Lowest level) = $6
Which of the following is a variable cost?
direct materials cost
Which of the following costs do not change in total despite changes in volume within the relevant range?
fixed costs
Which of the following would most likely be treated as an activity in an activity-based costing system?
machine processing
Which of the following is the most appropriate cost driver for allocating the cost of warranty services?
number of service calls
