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Unformatted text preview: Chapter 8 Practice Test -Acctg 203 T F 1.Activity-based costing is a costing method that is designed to provide managers with product cost information for external financial reports. Use the following to answer questions 2-5: Adelberg Company has two products: A and B. The annual production and sales of Product A is 500 units and of Product B is 1,000 units. The company has traditionally used direct labor-hours as the basis for applying all manufacturing overhead to products. Product A requires 0.4 direct labor hours per unit and Product B requires 0.2 direct labor hours per unit. The total estimated overhead for next period is $68,756. The company is considering switching to an activity-based costing system for the purpose of computing unit product costs for external reports. The new activity-based costing system would have three overhead activity cost pools--Activity 1, Activity 2, and General Factory--with estimated overhead costs and expected activity as follows: Estimated Overhead...
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This note was uploaded on 02/14/2010 for the course ACCT 203 taught by Professor King during the Winter '09 term at Shoreline.
- Winter '09