GNBExam08

# GNBExam08 - GNB 12e Practice Exam Chapter 8 1 Sargent...

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GNB 12e Practice Exam – Chapter 8 1. Sargent Company uses activity-based costing to determine the costs of its two products: A and B. The estimated total cost and expected activity for each of the company's three activity cost pools are as follows: Expected Activity Activity Cost Pool Estimated Cost Product A Product B Total Activity 1 \$32,000 2,200 1,800 4,000 Activity 2 \$28,000 400 300 700 Activity 3 \$37,600 800 300 1,100 Part (a) What is the activity rate under the activity-based costing system for Activity 2? The activity rate for Activity 2 would be determined as follows: \$28,000 ÷ 700 = \$40.00 Part (b) How much total cost will be assigned to Products A and B for Activity 2? The product cost allocations for Activity 2 would be determined as follows: Product A cost allocation for Activity 2: 400 x \$40 = \$16,000 Product B cost allocation for Activity 2: 300 x \$40 = \$12,000 2. Fey Company has two products: A and B. The annual production and sales level of Product A is 18,188 units. The annual production and sales level of Product B is 31,652. The company uses activity-based

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GNBExam08 - GNB 12e Practice Exam Chapter 8 1 Sargent...

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