Chapter03 - Chapter 3 Systems Design Activity-Based Costing...

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Chapter 3 Systems Design: Activity-Based Costing Multiple Choice 14. Which of the following would be classified as a product-level activity?  D) Testing product prototypes. 15. Would the following activities be best classified at a manufacturer of canned soup as unit-level, batch- level, product-level, or facility-level activities? D)  D above 16. Guerra Electronics manufactures a variety of electronic gadgets for use in the home. Which of the  following would probably be the most accurate measure of activity to use for allocating the cost of  inspecting the finished products at Guerra?  C) Inspection time 17. Designing a new product is an example of a:  C) Product-level activity. 18. Assembling a product is an example of a:  A) Unit-level activity. 19. Product engineering is an example of a:  C) Product-level activity. 20. In an activity-based costing system, activity rates are used to:  A) debit Work In Process. 21. In activity-based costing, the total overhead cost in an activity cost pool can be computed by:  B) multiplying the total activity in the activity cost pool by the activity rate for the activity cost pool.  22. In activity-based costing, unit product costs computed for external financial reports include  manufacturing overhead computed by:  C) multiplying the activity rate for each cost pool by the corresponding amount of activity required per  unit of the product. 23. All other things the same, the unit product costs of high volume products will decrease and the unit  product costs of low volume products will increase when switching from a traditional costing system to  an activity-based costing system if:  B) the activity-based costing system includes at least one batch-level cost. Brewer, Introduction to Managerial Accounting, 3/e 108
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24. In an activity-based costing system:  D) overhead can be either overapplied or underapplied. 25.  Jasmine Company uses activity-based costing. The company has two products: A and B. The annual production and sales of Product A is 10,000 units and of Product B is 4,000 units. There are three activity cost pools, with estimated total cost and expected activity as follows: The cost per unit of Product A under activity-based costing is closest to: B) $9.70 26. Belsky Corporation has provided the following data from its activity-based costing system: The company makes 490 units of product Q19S a year, requiring a total of 1,080 machine-hours, 60 orders, and 20 inspection-hours per year. The product’s direct materials cost is $46.42 per unit and its direct labor cost is $20.22 per unit.
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