Review Questions: ABC
1 0. A major reason why low -volume products are often overcosted is that they require less
support per revenue dollar, but this is not recognized in the costing system.
16 -18, 45. ABC Hospital uses a job cost system for
Chapter 12 Pricing
Direct manufacturing labor -hours
Direct manufacturing labor per hour
Direct materials per unit
Variable manufacturing o
Fixed manufacturing overhead costs
Marketing and distribution costs
1 of 1
The company's expected direct labor-hours during the current year is computed as follows:
Using these hours as a base, the predeter
1 of 4
We use the total project approach to calculate the net present value of the decision to
replace forklifts with the AMMS based on the original estimates Rolland gave to
Forrest. The NPV analysis favors of investing in the AMMS.
Falcon Corporation Solution
1 of 1
Units to be produced
Raw Materials budget
Cama Products Solution
1 of 1
Direct Labor Hours per unit
Variable costs per unit
1. Companies that make sales return adjustments based on broad averaging potentially reduce the
accuracy of the individual product revenue amounts they report.
2. Many of the issues discussed with revenue tracing and sales returns al
Review Questions: Chapter 4 - Job Costing
1 . The computation of the budgeted indirect manufacturing cost rate is identical to the
budgeted indirect cost rate for service organizations.
Similar jobs can be recorded on the same job cost recor
C hapter 2 Review Questions
3 ,4,9 to 12. Consider the following data of the Ridgeport Company for the year 19x1:
$ 1 0 , 0 0 0 Leasing costs - plant
1 0 0 , 0 0 0 Depreciation - equip.
Coolants & lubricants