App08B - Appendix 8B, Using a Modified Form of...

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Unformatted text preview: Appendix 8B, Using a Modified Form of Activity-Based Costing to Question Type Difficulty LO1: ABC concepts LO2: First-stage allocation LO3: Activity rates LO4: Second-stage allocation LO5: Product and customer margins LO6: Action Analysis (Appendix 8A) LO7: ABC absorption costing (Appendix 8B) Other topics Professional Exam Adapted ID Origin CMA/CPA origin 8B- 1 1-4 Multipart M/C M- H x New,4/23/95,B2 E.N. 8B- 2 5-6 Multipart M/C M x 4/20/2006 Multi MC Qa2 E.N. 8B- 3 7-8 Multipart M/C M x 4/20/2006 Multi MC Qb2 E.N. 8B- 4 9- 10 Multipart M/C M x 4/21/2006 Multi MC Ra2 E.N. 8B- 5 11- 12 Multipart M/C M x 4/21/2006 Multi MC Rb2 E.N. 13 Problem H x New,4/24/95,A4 E.N. 14 Problem M x New, 4/21/2006, Ua2 E.N. 15 Problem M x New, 4/21/2006, Ub2 E.N. 16 Problem M x New, 4/21/2006, Va2 E.N. 17 Problem M x New, 4/21/2006, Vb2 E.N. 8B-1 Appendix 8B, Using a Modified Form of Activity-Based Costing to Multiple Choice Questions Acton Company has two products: A and B. Annual production and sales are 800 units of Product A and 500 units of Product B. The company has traditionally used direct labor-hours as the basis for applying all manufacturing overhead to products. Product A requires 0.3 direct labor hours per unit and Product B requires 0.2 direct labor hours per unit. The total estimated overhead for next period is $92,023. 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 poolsActivity 1, Activity 2, and General Factory with estimated overhead costs and expected activity as follows: (Note: The General Factory activity cost pool's costs are allocated on the basis of direct labor hours.) 1. The predetermined overhead rate under the traditional costing system is closest to: A. $37.46 B. $21.60 C. $13.17 D. $270.66 2. The overhead cost per unit of Product B under the traditional costing system is closest to: A. $54.13 B. $7.49 C. $4.32 D. $2.63 8B-2 Appendix 8B, Using a Modified Form of Activity-Based Costing to 3. The predetermined overhead rate (i.e., activity rate) for Activity 1 under the activity-based costing system is closest to: A. $28.97 B. $13.17 C. $83.66 D. $24.15 4. The overhead cost per unit of Product A under the activity-based costing system is closest to: A. $86.97 B. $70.79 C. $81.20 D. $11.24 8B-3 Appendix 8B, Using a Modified Form of Activity-Based Costing to Look Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on direct labor-hours (DLHs). The company has two products, N06D and M09K, about which it has provided the following data: The company's estimated total manufacturing overhead for the year is $2,532,200 and the company's estimated total direct labor-hours for the year is 44,000....
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App08B - Appendix 8B, Using a Modified Form of...

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