ACCT 2023 CH7

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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


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