Review Quiz Solution for Chapter 4

# Review Quiz Solution for Chapter 4 - Quiz Chapter 4...

This preview shows pages 1–3. Sign up to view the full content.

Page 1 Quiz – Chapter 4 - Solutions 1. Jennifer Company has two products: A and B. The company uses Activity-Based Costing. The estimated total cost and expected activity for each of the company's three activity cost pools are as follows: Estimated Expected Activity Activity Cost Pool Cost Product A Product B Total Activity 1. ............... \$23,500 400 100 500 Activity 2. ............... \$18,000 500 200 700 Activity 3. ............... \$34,600 600 300 900 The activity rate under the Activity-Based Costing system for Activity 3 is closest to: A) \$36.24. B) \$38.44. C) \$84.56. D) \$115.33. The correct answer is B. To calculate the activity rate for activity 3, you would divide: Estimated Cost / Estimated Driver \$34,600 / 900 \$38.44 2. Reach Consulting Corporation has its headquarters in Chicago and operates from three branch offices in Portland, Dallas, and Miami. Reach's headquarter activities are assigned to two activity cost pools: General Service and Research Service. These costs are then allocated to the three branch offices. Information for next year related to this Activity-Based Costing system is as follows: Activity Cost Pool Activity Measure Estimated Overhead Cost General service. ........ % of time devoted to branch \$700,000 Research service. ...... Computer time \$140,000 Estimated branch data for next year is as follows: % of time devoted to branch Computer Time Portland 30% 200,000 minutes Dallas 60% 150,000 minutes Miami 10% 50,000 minutes

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
Page 2 How much of the headquarters cost allocation should Dallas expect to receive next year? A) \$280,000
This is the end of the preview. Sign up to access the rest of the document.

## This note was uploaded on 07/14/2008 for the course MGMT 122 taught by Professor Saouma during the Spring '08 term at UCLA.

### Page1 / 6

Review Quiz Solution for Chapter 4 - Quiz Chapter 4...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online