Module Three

Machine Maintenance (Machine hours) 400,000 (est.) 150,000(exp.) Machine setups (number of setups) 150,000(est.) 1,200(exp.) direct labor support (direct labor hrs) 920,000(est.) 200,00(exp.) based on this information, the activity rate for direct labor is $____.

4.60

what absorption cost system uses a volume-related allocation base for all the manufacturing costs?

Traditional

in activity based absorption costing, what causes the consumption of overhead resources?

activity

when a company creates overhead rates based on the actions it performs, it is employing an approach called: ____-____ costing.

activity based

an activity measure in activity-based absorption costing is used as a(n) ____ base.

allocation

activity based absorption costing:

assigns overhead based on events that consume overhead resources

setting up equipment, placing purchase orders, and arrangement shipments to customers are all examples of ____-level activities.

batch

an activity ____ pool related to a single activity measure in the activity-based approach.

cost

activity-based absorption costing uses ____ cost pools than a traditional approach.

more

activities such as research and development that are not dependent on the number of units or batches are ____-level activities

product

designing and advertising a product are ____-level activities

product

a multiple predetermined overhead rate system is more accurate than a plantwide overhead rate system because

reflects difference in how overhead costs are incurred within departments

the activity-based approach tends to:

shift costs from high-volume to low-volume products