Study on Overhead Cost Allocation and Activity-Based Costing

School: Florida Gulf Coast University - Course: ACG 6075 - Subject: Accounting

Which of the following is an allocation base commonly used underthe traditional methods for allocation of overhead costs? Direct labor-hours All of the following are differences between activity-based costing(ABC) and traditional absorption costing except _ABC allocates all manufacturing costs to products Match the term & definition:-Activity-Cost objects-Product-level-Activity-based costing accumulates costs for each ____. -Activity-based costing estimates the costs of the resources consumed by __. -Advertising is an example of a_activity. Shipping orders to a grocery store would be considered a(n) _Batch-level activity Ordering materials, setting up machines, assembling products, andinspecting products are examples of _ Cost pools Which of the following costs would not be allocated using ABC?Direct labor First-stage allocation of overhead costs to each cost pool isaccomplished using all of the following except_ Grouping batch and unit level activities Annual Overhead Costs of Max CorporationProduction overhead $800,000Selling and administrative overhead 400,000 Activity Cost Pools of Max Corporation Assembling UnitsProcessing OrdersSupportin g Customer sOther Productionoverhead40%35%10% 15 % Selling and administrativeoverhead 5%50%25% 20 % What is the amount of production overhead allocated to the assembling unit cost pool? The amount of production overhead allocated to the assembling unit cost pool = $800,000 × 40% =$320,000. The Beckham Company has the following information about theiractivity cost pools:Activity CostPoolsTotal Overhead CostTotal Activity MachineSetups$ 125,0005,00 0 setups CustomerOrders$ 200,0001,25 0 orders ProductDesign$ 300,000 2,500product design hours The activity rate for machine setups is_ Activity rate for machine setups = $125,000 ÷ 5,000 setups =$25 per setup In the second-stage allocation of overhead costs, weuse _________blank to assign costs to cost objects. Activity rates Activity Cost PoolTotalTotalActiviActivity The total overhead cost assigned to Product A

Activity Cost Pool TotalCostTotalActivityActivity RateSpecialprocessing$ 150,000 10,000MHs$ 15 permachine-hourGeneralfactory$200,00020,000direct labou r- hours $ 10perdirectlabou r- hour Totaloverhead costs$ 370,0 00 Assuming Product A used 100 setups, no special processing, and 10,000 direct labor-hours, what is the total overhead cost assigned to Product A? is$110,000. This is calculated as $10,000 for machine setups (calculated as $100 per machine setup × 100 setups) + $0 special processing (calculated as $15 per machine-hours × 0 special processing) + $100,000 general factory (calculated as $10 per direct labor- hour × 10,000 direct labor-hours). Which of the following costs would not be allocated to products orcustomers?Customer service Other Machine setup Product design The Princeville Company placed five (5) orders for Product 12Bfrom Brookston Corporation. Brookston has the followinginformation about Product 12B: Activity CostPoolsActivity RateProduct 12BActivityMachineSetups$12.00per Machinehour40MHs CustomerOrders$ 10.00 per Order5Orders What is the overhead cost assigned to Princeville for its five (5) orders of Product 12B? Princeville would be assigned overhead cost of$530. This is calculated as $480 for machine setups (calculated as $12.00 per machine hour × 40 MHs) + $50 for customer order (calculated as $10.00 per order × 5 orders). Which of the following is not a management report that is normallyprepared with ABC data? Customer margins Product ASales $500,000Direct costs:Directmaterials$ 175,000 Direct labor$ 75,000 Activity Cost PoolsTotal Cost Machine-setups$ 20,000 Special processing150,000 General factory200,000 Total overhead costs $ 370,000 Overhead Cost for Product AProduct profit margin = Sales of $500,000 − Direct materials of $175,000 − Direct labor of $75,000 − Overhead costs of $110,000 = $140,000

Why is this page out of focu