final exam pt 3

Which two are the most common allocation bases for factory overhead?

Direct labor hours and machine hours

Everest Co. uses a plantwide factory overhead rate based on direct labor hours. Overhead costs would be overcharged to which of the following departments?

a labor-intensive department

Common allocation bases are

direct labor dollars, direct labor hours, machine hours

Activity rates are determined by

dividing the cost budgeted for each activity pool by the estimated activity base for that pool.

Activity based costing for selling and administrative expenses can also be beneficial in allocating expenses to various products. Which of the following is the best allocation base for help desk costs?

number of calls

Shubelik Company is changing to an activity-based costing method. They have determined that they will use three cost pools. They are setups, inspections, and assembly. Which of the following would be used as the activity base for assembly?

number of direct labor hours

If selling and administrative expenses are allocated to different products, they should be reported as a

period cost

Using multiple department factory overhead rates instead of a single plantwide factory overhead rate:

results in more accurate product costs

All of the following can be used as an allocation base for calculating factory overhead rates except:

total overhead costs

Which of the following is not a factory overhead allocation method?

traditional costing