B 264 c 293 d cso 1d2c los 1d2h the chocolate baker

Info icon This preview shows pages 93–97. Sign up to view the full content.

View Full Document Right Arrow Icon
b. $264. c. $293. d. $305.
Image of page 93

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

View Full Document Right Arrow Icon
94 235. CSO: 1D2c LOS: 1D2h The Chocolate Baker specializes in chocolate baked goods. The firm has long assessed the profitability of a product line by comparing revenues to the cost of goods sold. However, Barry White, the firm’s new accountant, wants to use an activity-based costing system that takes into consideration the cost of the delivery person. Listed below are activity and cost information relating to two of Chocolate Baker’s major products. Muffins Cheesecake Revenue $53,000 $46,000 Cost of goods sold 26,000 21,000 Delivery Activity Number of deliveries 150 85 Average length of delivery 10 Minutes 15 Minutes Cost per hour for delivery $20.00 $20.00 Using activity-based costing, which one of the following statements is correct ? a. The muffins are $2,000 more profitable. b. The cheesecakes are $75 more profitable. c. The muffins are $1,925 more profitable. d. The muffins have a higher profitability as a percentage of sales and, therefore, are more advantageous.
Image of page 94
95 236. CSO: 1D2c LOS: 1D2h Atmel Inc. manufactures and sells two products. Data with regard to these products are given below. Product A Product B Units produced and sold 30,000 12,000 Machine hours required per unit 2 3 Receiving orders per product line 50 150 Production orders per product line 12 18 Production runs 8 12 Inspections 20 30 Total budgeted machine hours are 100,000. The budgeted overhead costs are shown below. Receiving costs $ 450,000 Engineering costs 300,000 Machine setup costs 25,000 Inspection costs 200,000 Total budgeted overhead costs $ 975,000 Using activity-based costing, the per unit overhead cost allocation of receiving costs for product A is a. $3.75. b. $10.75. c. $19.50. d. $28.13. 237. CSO: 1D2c LOS: 1D2h A profitable company with five departments uses plantwide overhead rates for its highly diversified operation. The firm is studying a change to either allocating overhead by using departmental rates or using activity-based costing (ABC). Which one of these two methods will likely result in the use of a greater number of cost allocation bases and more accurate costing results? Greater Number of More Accurate Allocation Bases Costing Results a. Departmental Departmental. b. Departmental ABC. c. ABC Departmental. d. ABC ABC.
Image of page 95

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

View Full Document Right Arrow Icon
96 238. CSO: 1D3a LOS: 1D3e In practice, items such as wood screws and glue used in the production of school desks and chairs would most likely be classified as a. direct labor. b. factory overhead. c. direct materials. d. period costs. 239. CSO: 1D3b LOS: 1D3c Young Company is beginning operations, and is considering three alternative ways in which to allocate manufacturing overhead to individual units produced. Young can use a plantwide rate, departmental rates, or activity based costing. Young will produce many types of products in its single plant, and not all products will be processed through all departments. In which one of the following independent situations would reported net income for the first year be the same regardless of which overhead allocation method had been selected?
Image of page 96
Image of page 97
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern